Some people believe a lack of financial savvy on the part of home buyers is at the root of the foreclosure crisis that’s plaguing communities from New Jersey to California.
Maybe that’s an overstatement, but it’s likely true that a better understanding of money, banking, and the credit system could have prevented some of the bankruptcies and foreclosures that are still making headlines every day. And perhaps the next generation won’t repeat those mistakes.
The Secaucus Public Library and Business Resource Center occasionally hosts financial literacy workshops for young people. Some of these workshops target teens who may already have a summer or part-time job, while others are designed for young children who aren’t even old enough to get an allowance.
They plan to bring the workshops back this summer.
“We have a flexible curriculum that we use that allows us to structure the workshop around specific age groups,” said Saundra Wilford, senior customer service representative at TD Bank. Wilford leads the bank’s financial literacy workshops at the library.
For younger children, Wilford said, she introduces the concept of saving by having kids list items they need and want.
Starting very young
“I try to get them to understand the distinction,” Wilford said last week. “Money that you set aside for school lunch is different than money you may save for an Xbox. Food is something you need; the Xbox is something you want. Then we can discuss the importance of prioritizing what they’re saving for.”
She added that even adults can have difficulty spending too much money on items they want, which can leave them short of cash when it comes to basic necessities and living expenses.
Wilford also introduces younger children to the basics of writing a check – even though online and debit card payments are becoming more common.
“I’ll teach the children about DAMPER,” she said. “It’s an acronym that stands for date, amount, payee, endorsement, and routing number. It’s a handy way to teach kids about the most important things that are on check before it’s put in the mail to pay a bill. I then encourage them to sit with their parents while their parents write checks for the household bills, so they can see DAMPER in practice in the home.”
Once children reach their pre-teen years, she said she starts talking about the No. 1 consumer tool that trips up millions of Americans: credit cards.
Avoiding credit card pitfalls
“With older kids, I teach more advanced concepts – the credit system, the banking system,” Wilford said. “We talk about some of the typical problems that people have, the traps that people can fall into, a failure to budget properly and overspending being two of the biggest traps. And, of course, I try to focus on ways to avoid those traps.”
The goal, she said, is for kids to develop discipline and good habits while the only money in their pocket is cash from babysitting jobs and bat mitzvah gifts. The hope is that by the time they’re earning bigger paychecks in the working world, these habits have sunk in enough that they won’t become the bankruptcies and foreclosures of the future.
But Wilford acknowledges that a one-hour workshop at the library can only go so far. Wilford encourages parents to seek out fun and interesting games that can help their children deepen their understanding of the lessons learned in the workshop.
For more information about upcoming financial literacy workshops at the library, call (201) 330-2083.
E-mail E. Assata Wright at awright@hudsonreporter.com.