Financial Literacy/Advice

[cdif911]

I'm trying to put together a 1 day presentation on financial literacy and advice for HS Seniors

just seeing if anyone has something that they wish they knew after leaving but maybe found out the hard way?

Things I have so far:

Reading a paystub
Ways to pay: cash, credit, check - advantages and disadvantages of each (if anyone has a cc story they would like me to share, I'm happy to use it)
Retirement options (401k, pensions, Roth IRA)
Housing options - rent vs. buy (vs live in your parents basement)
Budgeting

Other ideas or things people would include from personal experience?

Thanks blog =)

[Donoghus]

Tax planning.

I can't tell you how many people I've dealt with who end up with a big tax bill at the end of the year either due to lack of withholdings taken or getting nailed with the self-employment tax. 

With high school kids, this might be less of an issue right now but it could be down the road.

[cdif911]

Tax planning.

I can't tell you how many people I've dealt with who end up with a big tax bill at the end of the year either due to lack of withholdings taken or getting nailed with the self-employment tax. 

With high school kids, this might be less of an issue right now but it could be down the road.

ah the self-employment tax, good call - so would you say the average person college worker should declare themself as a 0 on their W-2?

[Thruthelookingglass]

The one thing:  earn it. 

The second thing:  prepare for a rainy day.  It will come, and if you are not prepared, the cure will likely cost you much more. 

Man, so many kids (even into their 30's) live on the edge.  Barely make rent, cards, car payment or whatever.  And when something happens (like they are too hungover to make it to work one day), they suddenly can't make rent or gas money and then beg, borrow or steal which costs them credit and friends.  Even family.  It's a nasty, selfish way to go through life.

[Celtics17]

You can always tell them about the one tenet of investing that always works--"buy low, sell high". Beyond that, saving and showing them how compounding of interest works. A great general rule that will help them understand is the "rule of 72" which says you take the number 72 and divide it by the interest rate you are expecting to receive ( or for that matter the appreciation rate) and that tells you how long it will take their investment to double. Example, if you are earning 5% interest on a CD then you divide 72 by 5 and get 14.2 years to double. It's not exact but its close enough.

[cdif911]

good advice so far, I've done the rule of 72 with them, but may re-emphasize it - not only with investing but also debt accumulation

I like that bad credit/financial mistakes can lead to personal problems, good stuff - keep it coming!

[Big Ticket]

Possibly something related to interest payments, using a car loan as an example.  Show different scenarios (i.e..... for a $10,000 car, show the total cost when putting $2,000 down and financing $8,000, $5,000 and $5,000, or $8,000 and $2,000) just to give them a real world example of how much extra money they will spend by financing most of it.

Hammer home that credit cards are not a license to carry debt.

Maybe a basic overview of the financial markets (not that it's a great time to be hyping investing.... or maybe it's the best time??)

[CoachBo]

I'm trying to put together a 1 day presentation on financial literacy and advice for HS Seniors

just seeing if anyone has something that they wish they knew after leaving but maybe found out the hard way?

Things I have so far:

Reading a paystub
Ways to pay: cash, credit, check - advantages and disadvantages of each (if anyone has a cc story they would like me to share, I'm happy to use it)
Retirement options (401k, pensions, Roth IRA)
Housing options - rent vs. buy (vs live in your parents basement)
Budgeting

Other ideas or things people would include from personal experience?

Thanks blog =)

Hard and fast rule: One credit card only, NEVER carry a balance. Credit banks are bigger crooks than loan sharks, aided and abetted, of course, by the government - until now.

[Big Ticket]

I'm trying to put together a 1 day presentation on financial literacy and advice for HS Seniors

just seeing if anyone has something that they wish they knew after leaving but maybe found out the hard way?

Things I have so far:

Reading a paystub
Ways to pay: cash, credit, check - advantages and disadvantages of each (if anyone has a cc story they would like me to share, I'm happy to use it)
Retirement options (401k, pensions, Roth IRA)
Housing options - rent vs. buy (vs live in your parents basement)
Budgeting

Other ideas or things people would include from personal experience?

Thanks blog =)

Hard and fast rule: One credit card only, NEVER carry a balance. Credit banks are bigger crooks than loan sharks, aided and abetted, of course, by the government - until now.

I disagree with the "one credit card only" sentiment.  I 150% agree that it's bad to carry a balance outside of extreme situations, but being balance free on multiple cards is not a bad thing. 

Example... I have one card that I use for gas because I get 5% cash back up to the first $100 in gas I buy every month (which usually covers all of it).  Any other purchase, I will use my airline miles card to gain points towards free plane tickets.  I don't have one, but you can also get a card that pays like 2% cashback on a restaurant/grocery purchases.  If you can handle paying off 3+ cards every month and remembering what you've charged on each, you can actually carve out some decent "returns".... there's a thought, make the credit card companies pay you to use their card!

[CoachBo]

Too many traps with credit cards. I spend time in class with my kids teaching them to use only one, and pay it off.

Credit cards are one of the worst government-endorsed ripoffs in the history of the nation.

[guava_wrench]

You can always tell them about the one tenet of investing that always works--"buy low, sell high". Beyond that, saving and showing them how compounding of interest works. A great general rule that will help them understand is the "rule of 72" which says you take the number 72 and divide it by the interest rate you are expecting to receive ( or for that matter the appreciation rate) and that tells you how long it will take their investment to double. Example, if you are earning 5% interest on a CD then you divide 72 by 5 and get 14.2 years to double. It's not exact but its close enough.

The only problem is how do you tell if it is high or low yet? "Buy low, sell high" works in retrospect.

[Eja117]

Yes the credit card you get at college for a t-shirt is a classic

Also I'm pretty decent at saving money and I made a spread sheet at one point where I put every item I bought and I was pretty amazed at how many impulse items and whatnot I was buying

Also I think it's good to know about investments and just planning good habits.

Like for example.

I have one of those stop and shop sale card things. So I use that, and buy the stuff on sale using a cash back credit card that I always pay off on time, then I put the stuff in a freezer so i can buy something on sale today and use it later, then I use the reusable bag and get 5 cents off on that each time and try to use the closest place to save gas and I know the cheapest place to fill up.

Saving and finances has to be a life style of good habits and well thought out plans. I think a lot of people don't realize that.

[guava_wrench]

Yes the credit card you get at college for a t-shirt is a classic

Also I'm pretty decent at saving money and I made a spread sheet at one point where I put every item I bought and I was pretty amazed at how many impulse items and whatnot I was buying

Also I think it's good to know about investments and just planning good habits.

Like for example.

I have one of those stop and shop sale card things. So I use that, and buy the stuff on sale using a cash back credit card that I always pay off on time, then I put the stuff in a freezer so i can buy something on sale today and use it later, then I use the reusable bag and get 5 cents off on that each time and try to use the closest place to save gas and I know the cheapest place to fill up.

Saving and finances has to be a life style of good habits and well thought out plans. I think a lot of people don't realize that.

Great point. It isn't a list of 10 things to do. It is often about how forward thinking an individual is, and how focused on instant gratification. Also, people will high material expectations and a lack of self control are doomed. And even if they actually do get rich, they are running on a treadmill.

[Big Ticket]

Saving and finances has to be a life style of good habits and well thought out plans. I think a lot of people don't realize that.

Because it's not really the "American way".  There is a reason why advertising and banking/financing/credit cards are two of the biggest industries around. 

[Thruthelookingglass]

Saving and finances has to be a life style of good habits and well thought out plans. I think a lot of people don't realize that.

A silly habit I have is that when I see something in a store that I want but had not intended to purchase, I will leave the store.  On big ticket items I wait at least a day.  If I want it bad enough then, it should be worth at least a trip back to the store.  Turns out many things aren't worth the trip, let alone the money.