Real World Finance$

I’m going to be stopping by a bank in my neighborhood this evening when I get home from work.  I’ll be talking with the bank manager about a possible joint-venture type of deal between them and our neighborhood association to offer free financial education classes.

I’ve met the manager on several occasions (they hold our association account) and I posed the question to him a few weeks ago.  He said they were in the middle of budgeting for next year and did have plans to put on some sort of community classes next year.  He said they’ve done some in the past and  would welcome the help in promoting and providing them.

Have you ever been to any kind of classes at a bank before?  If not, what kind of class could they offer that would make you show up?

I’ve been teaching part-time now for a little over a year.  Most of that has been MBA level courses to working professionals at night.  The university I teach for uses the Cohort system for their evening classes.  That means a group of students start their first class together and take every class together for the entire program.  They have class the same night every week from start to finish.

The concept sounds like a great idea.  It allows the students to get to know each other and get used to working together.  They work in teams for projects in nearly every course, including mine.  The students tend to become like family.  That includes the bickering and arguing.

I have a range of students in my classes.  Some are there to better themselves and learn something new, but aren’t concerned deeply about grades, performance, or getting ahead at work.  Others are there because work will pay for it and they will get a raise just for finishing.  The last group I’ve seen seem to be there to try and impress someone else.  They want the resume padding and want people to treat them differently because of their new degree.

The problem comes in when each of these people project their own expectations onto the performance of others.  I’ve seen some sort of conflict between group members in nearly every class when two people have different expectations.  Even to the extent of calls, emails and letters to University administration on more than one occasion.

As someone who also got an MBA at night while working, I have some advice for those of you who are thinking about pursuing one.

1. Know WHY you are getting your degree and keep yourself focused on that end goal.
2. Don’t let the behavior of others keep you from reaching YOUR goal.
3. Be prepared for the time for your degree.  Expect to spend an extra 8-10 hours a week per class on top of your work schedule.
4. Just because you will have an MBA, don’t expect people to treat you like you are some Harvard brain (unless, of course, your MBA is from Harvard).
5. Regardless of your performance while getting your MBA (grade wise), the MBA itself is really only helpful for the first 1-2 jobs after getting it.  After that, you better be performing like someone who has Mastered Business Administration, otherwise you’ll be hard pressed to find it makes a difference.
6. Know that, regardless of your classmates performance, they will face the wrath of #5 if they really aren’t up to snuff, and you’ll stand out if you perform well.

Basically, if you do your job well, you will be better off in the long run than your underachieving classmates.  If you are going to go through the trouble of getting an MBA, then make sure you are getting your full value out of it and putting it to work for you.  If you want to get one and don’t have any real use for it, then why are you spending the money?

A post over at Get Rich Slowly a while back let me know that April is Financial Literacy Month.  I had started working on putting together my own set of financial education courses, so I was excited to see all the links on financial education.

I followed around from one link to the next and eventually ran across a program sponsored by the FDIC called Money Smart.  They offer a complete course, 10 sessions of 1-2 hours from the basics of banking, to savings and retirement and home buying.  The best part is that the information is free!  You can sign-up online and they will send you free CD/DVD of not only the participant paperwork, but everything needed to present the program to others (including PowerPoint slides, handouts and promotional fliers).  They even have a free disk on “training the trainer” or learning how to teach the program.

I signed up to get the instructor guide and material (it includes the handouts and information to give to students) and the train the trainer video.  I got both disks in the mail over the weekend.  I’ve looked through them a little and they are very comprehensive with all the learning material you need.  All the handouts and printable stuff is in PDF format and there are Power Point slides for a presentation.  I haven’t gotten a chance to watch the video on the training yet, but I will be doing that soon.

Now I just need to take some time to get more familiar with the stuff and then work on finding a location to give some classes.   There are several locations in my neighborhood I believe will work and probably available for something like this.  Between them and our neighborhood association, I can probably get some pretty good help promoting the class as well.  I think I’ll shoot for the fall to start something to wait for people to be done with their hectic summers first.

For the last several months we’ve been working with our son to balance a “check book” for his allowance.  Instead of giving him cash (which we never have) we gave him a check book register and he has to keep track of how much he spends and the allowance he gets in there.  We try to sit down a couple times a month to keep up to date.

After 5-6 months of seeing his balance number dropping down and down I was hoping he would notice and figure out he needed to stop spending so much on games and Legos.  Well, he saw his end of month balance last week and said, “I’m not buying ANYTHING for a while until I get my money back up where it was before!” 

It was good to hear, I just hope he sticks to that.  One help is that he is travelling with grandparents for about a week and a half, so that will keep the temptation of him spending his own money down for a while.  We’ll just see what he’s like when he gets back. 

Just yesterday, the local paper here in St. Louis ran a story by Bill Poole, the current (and retiring) President of the Federal Reserve Bank of St. Louis.  His commentary was entitled Financial Education is the Key.

In the story he cites the root cause of the current financial crisis in the US on three distinct groups of people.  (more…)

Coming up here soon this blog will be 6 months old.  I started this as a way to hold myself accountable for actually making a difference in our finances.  As I’ve put together our plan and started implementing some of the changes it has been quite refreshing to have this outlet. 

As my own financial plan has evolved so have my goals for my blog as well.  More and more I am realizing what an outlet I have to help teach others the real basics about personal finances.  Considering that I have been teaching college level courses part-time for about a year now, I think this could be a great tool for me. 

More than that though, I believe there is a real opportunity to extend the learning beyond the web into my own community.  I see a real need in my community for some very basic instruction on personal finance.  Understanding that, you are going to start seeing some changes to this blog.  I am going to use this as a sounding board topics and strategies for teaching personal finances in small groups.  You’ll still see a lot of the stuff you see here presently, but I am going to add some new posts along the way. 

Over the remainder of this year, I would like to build up a considerable amount of teaching/training materials that I can put to use in community classes. 

I’ve looked around and found a few of these types of programs around my area.  However, I haven’t seen any that really focus on reaching the people.  The programs are mainly available to other community groups and organizations if they ask for it.  I would like to build an organization that has a primary mission of reaching people in the community for this singular purpose.  My vision is to have some developed course and find a local place where I can offer classes.  Even if I have to stand out in front of any one of my local pay day loan places to try to draw in students, that’s what will be done. 

Here are a few topics I know I want to start working on:

• Opening and Managing Bank Accounts (Checking and Savings)
• Creating a Budget You Can Live With
• Preparing to Purchase a Home
• How to Save Before You Spend
• Plan For Your Retirement

I know there will be several other topics I’ll want to put together over time, but these are going to give me a good place to start.

Now I ask the rest of the PF Blogging community out there.

• Is anyone else involved in teaching PF within their local community?  If so, what is the organization and how do you go about it?
• Do you have any ideas of other topics that could be covered as well?

I look forward to getting some feedback on my ideas!

I read an article this morning on Kiplinger titled Financial Milestones for Kids.  The author, Janet Bodnar, list some financial awareness that kids should have at different ages.  I tend to agree with her on most points and thought I would share her thoughts with you.

• Preschool:  Basic awareness, know that money can be used to trade for things and the difference between the different types of money (pennies, nickels, etc.)
• Ages 6-7:  Great time to start a basic allowance.  Kids are also learning basic math by this age and should learn that 2 nickels make a dime and 4 quarters make a dollar.  At this point they will also start to notice how much things cost and make some of their own buying decisions.
• Ages 8-9:  Here she suggest opening a savings account.  We’ve had one for our son for much longer than this, but he’s just now starting to understand how it works (he’s 8).  We’ve also been training him to bargain shop at the grocery store and compare prices.  He loves popcorn, so his goal is to always find the best deal on that when we need to get more. 
• Ages 11-12:  She suggests expanding allowance to include extra for chores around the house to learn the effort involved with earning money and to consider learning about investing in stocks.  We’ll likely start the stock investing with our son a little before this age, but probably not much.
• Ages 14-15:  Start thinking about your kid getting a summer or part-time job.  Since we homeschool, it doesn’t have to be limited to the summers.  She also suggests an ATM card at this age.  I’m not so sure I’ll agree with that at this age yet.  That depends a lot more on their responsibility with money than just their age.  The point of giving them easy access to their own money in the bank is not a matter to take lightly I think.
• Ages 16-17:  Here she suggests they definitely have a summer job as well as a checking account with a debit/ATM card.  I can see this much more at this age as they are getting closer to college and will need some experience managing and handling their own money.  She also suggest giving them full access to their clothing allowance for school and letting them make the decisions of what/how much to buy.
• Age 21:  Now she says they are finally ready to apply for a credit card.  In today’s world, good luck getting them to wait that long.  Expect them to have one when they come home from their Freshman year if not by Christmas that year.  I know I had one well before now, and was very responsible with it during college.  I never carried a balance on it during school.  It was after graduation that I started down my path of debt.

While much of this might seem to be sound advice, again, it’s more about your own child and their awareness and responsibility.  If they are interested in learning about money and eager to take on those responsibilities, give them a chance and see how they do.  Set up some safety nets to make sure they can’t spend more than they have.  That way you can make sure they learn a lesson should they go “hog wild” once they have control. 

Have you started educating your child on finances?  Ours is involved in the family finances when we review our budget and goal status from the month and understands what we are trying to do with getting out of debt.  He also has a checkbook register he uses to keep track of his spending money we have set aside in an E*Trade account for him.  He doesn’t have direct access to his money there, but we will spend for him when he picks out something, then balance his register.  At the end of the month we “re-balance” the online account to match what he has left to spend.  We even let him keep the interest!