I mentioned before that I am volunteering for an organization called Operation Hope. They have a program called Banking on Our Future. The objective is to go to high schools and junior high schools, mostly in lower income neighborhoods, and teach the kids about money, basics of banking, credit and investments.
I went to my first class this week, and really had an amazing time. So, here's the story.
They are a ninth grade class. The program is set for four sessions. The first is "basics of banking and money" and we talk about things like what purpose do banks serve, budgeting, and what is money and why do we have it (as opposed to barter, for example).
Getting to the high school, I found myself pretty nervous. All I knew is that there would be about 38 kids, and they were all freshmen in a "Life Skills" class. I have given numerous seminar presentations in front of groups both big and small of adults considering our firm's investment management program. I am never as nervous doing that as I was pulling up to the high school. It was kind of weird. Just outside of my comfort zone, I guess.
So, I go through the security, and get my visitor's pass. I find the classroom, having to ask a couple of students along the way. I speak briefly with the teacher to get a sense of what they are studying, what level the kids might be at. She told me that I should start from true basics. She left the classroom to use the restroom before the class started, and as kids began to enter, I could hear them saying, "cool, we have a sub today?"
Before the bell rang, and kids were taking their seats, I started chatting with some of the kids near the front. "What are you studying, etc." They were learning about filling out job application and job interview skills. That was a perfect lead in to what we were doing. Obviously, if they get a job, they'll have their first paycheck, and will need to know what to do with it.
I asked the kids what they want to be after school is done. I got two future doctors, one future lawyer, one future truck driver and two undecideds. I was very impressed with the focus of these kids. Well, most of them. There was, of course, the class clown, and his friend who egged him on. I thought I handled them reasonably well, given my lack of experience in this area, but, of course, the teacher stepped in and took care of them.
We talked about the origins of money, the need due to the limitations of bartering, and made that real fun. We talked about how you could trade a cow for some crops a long, long time ago, but what if you only needed half a cow's worth of crops. You couldn't trade half a cow.
We got into money printing, counterfeiting (and I strongly warned them not to), the difference between check cashing, banks, credit unions. I introduced them to the idea of compounding interest, and in fact, the very idea of earning interest at all. I explained how the bank makes money through interest rate spreads, but how they provide a valuable service to their customers.
We began to get into credit and mortgages, but didn't go too deep, as that is lesson three. It was interesting to me that they seemed to be most interested in this area. They asked a lot of questions about building credit, and what happens if you don't pay your bills. I was able to tie a few concepts together at the end in a way that I was pretty happy with. One kid was obsessed with the idea of getting a high paying job. Another with credit. And I had the compounding interest example on the board. I showed them that with only $100/month at 5% for 20 years, they would have over $41,000. We'll use bigger numbers when we get into the investment lesson in the fourth class. But I explained that if you have a decent income, take care of your credit, and save some money, like $41,000 as on the board, they will be able to buy a house.
I really did see them learning and getting some of what we were talking about. It really was one of the most awesome things that I have done in a long time. The next class isn't until the beginning of June. I'll be sure to post updates.
Man, that sounds awesome! I tutored before, and when I see the kids "get it" or just get interested, it's the best feeling in the world! Nice work!
Posted by: financial freedumb | May 12, 2006 at 05:23 PM
I think it's a great service you are providing for those kids. Many people in lower income areas do not trust banks, and do a lot of money transactions at Check Cashing establishments or Money Order services, which charge fees. The FDIC actually put out a free educational program for adults called Smart Money to educate people about the basics of banks. Check out their site, you can get copies of worksheets and their curriculum, you might be able to use some of it for your class. http://www.fdic.gov/consumers/consumer/moneysmart/index.html
Posted by: G | May 12, 2006 at 10:02 PM
Thanks G, that's a good resource.
Posted by: lamoneyguy | May 13, 2006 at 10:10 AM
If you're working with a class with a lot of ESL students, you may want to bring in a translation of a "Bank Account Sign-Up" form. The first time I lived in a foreign country I received a monthly paycheque, cashed it and hid it around my room because the thought of going to the bank and trying to open an account really stressed me out. I just didn't have the language skills. After about eight months I finally opened an account (only because I was too scared to leave ALL my money in my apartment when I went on vacation), used it regularly, and later closed it... but even by the time I closed the account I didn't understand half of what the bank employee was saying!
Posted by: Student Teacher | May 13, 2006 at 08:19 PM
That's so cool! Those kids will have such an advantage. Keep up the great work!
Posted by: Cecilia | May 14, 2006 at 10:03 AM
The information you are giving these kids is invaluable. Not only do kids from lower income families need this education but middles class kids as well. If every school had a similar program we might be able to raise a financially literate country.
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