The other day my sister called me upset because there are so many financial related things she doesn't know about or how to do. I feel bad for not teaching her these things. I learned a lot from my dad before he passed, and I learned a lot from my job as a retail manager (because I had to balance drawers, go to the bank, write checks daily, and so on). With her job, she doesn't manage money at all because she is a CNA.
I do believe schools should require personal finance classes (at least basic financial topics) and I think her high school required half a credit or something very small. A lot of schools don't offer any type of finance class, whereas I think it should be required just like Art or cooking.
I think a personal finance class would be one of the most valuable (if not the most valuable) class that could be offered. How many classes did you go to where you didn't remember a thing? I think if it affected you personally, then you would remember.
A class that I had to take that was required (it was either I take this or wood shop (?) class), and that was Home Planning. Kill me, I seriously did not want to go to this. One thing we had to do was create our dream wedding. Talk about a joke of a class. I don't know how this benefited me at all. I think I married Tom Welling in my dream wedding (hey I was a big Smallville fan in high school! Leave me alone). This dream wedding project took the WHOLE semester. I honestly can't remember anything else that we did in this class. So this is proof that I believe a personal finance class would've been better.
- How to open and close a bank account. She recently told me that she has been keeping all of her money ($2,500 in CASH) in hiding spots around her room. Long story short but someone had been draining her bank account (you all know who), so she resorted to just keeping a little in the bank and the rest hidden in her bedroom. She recently had to close her account and I told her to open a new one so that no one would have access to it. She had no clue what to do. I told her just to go up to her bank with her information and they'll help her.
- Writing a check. She has no clue how to fill one out. I'm going to go over to her house and show her. I think she's just intimidated by the whole thing since she's never done it herself.
- How to switch her bill pay accounts. She has bills such as her cell phone, car payment and car insurance. When she closed her account and opened a new one, she didn't know how to transfer it herself.
- Taxes. These eat up a lot of every paycheck. And she didn’t realize this until she got her first major paycheck after working about 100 hours in 2 weeks. She was amazed. I’m glad she learned this now though before she moved out and got her own place. So many new graduates get so fixed on their new salary and don’t figure taxes in, are shocked once they get their first paycheck, and even more so when they file their first income tax return. They also have bills mounting on the side because they thought it would be higher.”
- How to apply for colleges and FAFSA. This is something she will not stop bugging me about. She is 18 and graduated last year, but took the year off because she wasn't sure what she wanted to do and wanted to clear her head. She's been working full time since. Now she's afraid to go to school because she won't be able to work 80 hours a week and bring in as much money. She's going to go anyways but isn't sure how to apply and also FAFSA scares her. She's afraid she's going to input something wrong on her FAFSA and then go to jail (any false information leads to jail or like a $20K fine). So I'm going over there to help her fill everything out.
My sister is very responsible with her money. She works hard and works several hours (sometimes up to 80 in one week) and makes decent money for a person her age (18). However, up until recently, she thought she was getting paid wrong whenever her paychecks came. So I added and multiplied everything, and her check was correct. She was shocked at how much less she was being paid because of taxes.
I would also like to teach her how to efficiently use her credit card in a way similar to how I do. I don't want her to get caught up though and rack up credit card debt, so that will probably wait.
Credit score. She needs to understand how this will effect her life. She has a horrible rate on her car loan (I can't remember what it is, but it's around 8% I think. I can't believe she did that. She needs to understand that a better credit score will save her money.
If kids were better able to understand their money, they would of course be better with managing their money. It's as easy as that. A class would help so many and most information would not be forgotten. At least that's what I think.
P.S. She text me early this morning asking how she can get cash out of her new account since her debit card hasn't arrived yet. I had no clue what she was asking. I told her to go inside. And she said “then what?” Are you joking? She didn't know how to go inside and get cash out, she just always uses the ATM I guess. So I had to explain the process for her. Ughhhh