Spokane teens get lesson in finance
Teenagers have many tricky issues to navigate as they grow up – their individual identity, school, relationships and family.
One thing few of them think about is their relationship to money.
Having strong knowledge of personal finance and how to manage money can make life a whole lot less stressful and more rewarding, experts say.
In response, Numerica Credit Union offers a year-old program to teach financial skills.
Last week, the credit union’s administrative office hosted about 15 teenagers from a summer leadership program at the Martin Luther King Jr. Family Outreach Center.
The participants, ages 13 to 18, learned basics of personal finance – and at the same time were encouraged to consider the financial industry as a career choice.
“Numerica is committed to educating and helping kids,” said Katie Schofield, who was hired a year ago as the financial literacy program administrator.
Jennifer Lehn, chief operating officer at Numerica, said the tour was a great opportunity for the students to see how a financial institution works.
With $1.4 billion in assets and 18 branches, Numerica offers services ranging from credit and debit cards to loans and identity theft protection.
One of the students couldn’t resist what might seem like an obvious question: “Who gets to see all of the money?” the young man said.
While the question elicited laughter, it also came with an explanation that the administrative office has no cash and that most of the $1.4 billion in assets are held electronically and on paper.
“It’s gotten so that cash is a lot less of what we do,” Lehn told the teenagers.
The tour group learned ways to keep an eye on their credit report and how to protect against identity theft.
Numerica gets about 90 fraud cases a month in a problem that has been worsening over time, officials said.
One case involved the theft of the identity of a 7-year-old. In that case, more than $300,000 was obtained in fraudulent loans using the child’s Social Security number, officials said.
Criminals are targeting unsuspecting children, and the tour group was warned to protect their credit by checking with credit agencies annually or possibly freezing their credit until they grow up and need to borrow money.
On the subject of borrowing, the tour group learned that maintaining a good credit score will lead to lower interest rates on future loans, saving them money in the long run.
But some of the concepts like good credit and lower interest rates are difficult for teenagers to absorb.
Randy Bush, credit underwriter, made it simple. “The main thing in your life is to establish credit and keep it as good credit.”
Other aspects of the financial literacy program involve financial goals, budgeting, saving money, investing, the power of compounding interest and the relative value of different occupations.
Tay Davis, 16, a junior at Lewis and Clark High School, said the tour helped open his eyes to financial matters. “You learn a lot of skills you can use in real life,” he said.
The King center has offered the two-month teen leadership program during nearly 20 summers, Executive Director Freda Gandy said.
She said the goal is to give participants a better idea of what their future will look like, including an emphasis on postsecondary education.