I’d heard about stuff like this before but this was my first real exposure to it. $300 in overdraft fees.
In response to my question, “What are some of your experiences with money?” Josh, a 19-year old in my young adult money class answered, “I cut up my debit card.”
That’s when he told us of his overdraft experience. He didn’t realize that the bank would continue to pay for his debit card purchases even though there was no money in his account. Enter the fees. And a very lucrative way for banks to cash in.
Josh is one of seven kids in my group. He, along with the others, grew up in the foster care system. He doesn’t have a lot of money. So it really irks me when I hear these kinds of stories. It’s expensive to be poor, I tell the kids. And it stops now.
My goal is to give these young adults the information they missed growing up. And to help them set up personal plans for financial success. I’ve never worked with “kids” this old so this is all new to me. I’m not sure what my own plan to get them there is, but you can bet that when I hear stories like Josh’s, I’m going to figure it out.
They were all fascinated by the power of compound interest. Not one of them had heard of it before. But they all want in. And that’s the power of knowing. It gives us choices.
These kids have jobs. And checking accounts, and some savings. One of the girls even has a little 4 month old. I read a statistic this morning that said it costs around $221,190 to raise a child to age 18. Here’s another stat: The average personal wealth of a 50-year old American including home equity is $50,000.
Yup. $50,000. Including home equity.
Ever heard a high school kid ask, “When are we ever going to use this stuff in real life?”
If the subject is personal finance, the answer is, “Every day.”
Driving home this afternoon really made me think about why kids are not learning these things and what we need to do to make it happen. I’m not sure. But if we don’t want our kids to pay $300 before they learn how to keep track of money in a registry, we’d better figure it out.