63% of surveyed teens think they'll be rich someday

In a recent survey conducted jointly by The Washington Post, the Henry J. Kaiser Family Foundation and Harvard University, teens age 14 to 18 were asked various questions about their view of the future. While only 46% of the 570 teens surveyed said they had a full or part time job, 63% of them said that it is likely they will be rich someday. It’s interesting that someone who has no job experience and no concept of earning money, budgeting or the cost of living would just assume they will be rich in the future.

I can relate to that way of thinking. When I was a teenager, I didn’t necessarily think I’d be rich, but I thought I’d be better off than my folks. Even though I didn’t have a job yet and didn’t have to pay any bills, I was sure it would be easy to make more than my parents for 2 reasons: I would go into a higher paying profession and salaries would rise astronomically by the time I got out of college. I didn’t take into account cost of living increases or the economy or inflation or anything like that. I didn’t realize that that buying a car means not only having a car payment, but also paying for insurance, gas and regular maintenance. I also blanked on the fact that in addition to rent I’d have to pay for utilities, renter’s insurance, internet service and furniture.

I think it’s great for kids to be optimistic about their future. I also think parents have an obligation to teach them about the real costs of living before they get out into the "real world". Armed with the right information, there is no reason why these teens can't one day be rich. So, let's make sure they get it. Here are some resources for parents and teens:
1. Schools sometimes offer budgeting or personal finance classes, but they are typically reserved for upperclassmen as an elective and may be hard to get into. Neighborhood centers also offer these kinds of classes on occaison.
2. Credit unions offer free Basic Budgeting and Intro to Credit classes. Verity held a “Girls Just Wanna Have Funds” class this year which was very successful. Contact us if you are interested in these kinds of classes.
3. Credit University is a financial literacy program sponsored by credit unions that reaches teens in King and Pierce county schools. If you would like for Credit University to visit your child’s school, I can give you contact information.

Keep the Change

I just read about this new promo that a national bank is doing called “Keep the Change”. Here’s the deal: they have this new debit card that automatically rounds up your purchases and puts the difference into a savings account for you. For example, I spent $4.92 at Starbucks with my debit card on Monday. So, if I was using their new debit card I would see a charge for an even $5.00 and the 8 cents would automatically go into a savings account.

The bank is promoting this as a way for people to save without really knowing it. In theory it is a good idea, so I went ahead and looked at the purchases I’ve made with my debit card to see how much I could’ve saved this week. I rounded up each of the charges and added up the difference for a total of $3.54. I only made 6 charges on my card this week, which is a little less than usual, so let’s just say that over the course of the year I’d save about $5.00 a week on average. Five dollars multiplied by 52 weeks is $260. That’s how much I would have in my savings account at the end of the year. Hmmmm…it doesn’t seem like much, but I guess it’s more than I would have otherwise.

I think it’s easier to just transfer an even amount out of my checking to my savings each month. I definitely wouldn’t rely on my debit card to save me a substantial amount of money. In fact, the argument that consumer advocates are making about this new debit card is that it could ultimately end up costing consumers more money in the long run. This is because the retailer pays the bank a fee for each transaction made with the card (called a point-of-sale fee). The more consumers use their debit cards, the more fees the retailers end up paying. In the end, retailers could decide to raise the prices of their goods to make up for this increase.

Considering that Americans tend to spend more than they save, this card might be a big hit. My opinion is that if you can’t manage to put away $250 on your own each year, then you need to talk to a financial counselor and get some help with your budget. Just my two cents.

Teacher of the Week

So, I just got back from my second Teacher of the Week presentation. Each Friday we send someone to the presentation where they meet up with the Washington State Dairy Princess and a radio “talent” from Star 101.5 FM to surprise the winning teacher. The kids get milk and cookies and bags of goodies – they love it! The teacher gets gifts and a plaque from Applebee’s, as well as a $100 check from Verity Credit Union. We present them with one of those giant foam-board checks so that it looks super impressive.

Today it was a fourth grade classroom at a Catholic school. After the teacher was presented with all his gifts, the kids started chanting “Mr. Lacktrup rocks” over and over again. They were absolutely psyched. Star provided all the kids with T-shirts, which they put on over their uniforms. Then they posed for pictures, like one big happy family. Teachers from other classrooms even stopped by to sing “For He’s a Jolly Good Fellow”.

It was a great way to end the week. I think every workplace should have a celebration on Friday afternoons. People should bring their kids and pets. There should be music, dancing and food. We should decorate with streamers and balloons. Then, after we come down from our sugar highs we can go back to filling out our expense reports and returning sales calls.

Are your kids financially savvy?

I’d like to start off by saying that I’m hesitant to write about kids because I don’t have any. But then again, I used to be a kid, so maybe I’m more qualified to write about them then I think. In any case, I am genuinely interested in kids and their relationships with money. The first blog I wrote covered this very topic. I guess as I get older, my appreciation for how my parents raised me grows. It’s because of them that I understand the value of saving.

This article, Is your kid a spoiled brat?, from CNN Money offers some great advice for parents. Here are their five suggestions:

1) Give them an early start -- the earlier the better
2) Give them boundaries -- don't buy them everything they want
3) Give them responsibility -- let them make their own financial decisions
4) Give them allowance -- but make them work for it
5) Don't give in -- they'll thank you in the long run

I'd also like to add my own thoughts. I don't want to call it advice exactly, because I don't have kids and wouldn't dream of telling someone how to raise theirs.

1) Set a good example. It's probably not a great idea to lecture your kids about saving and delayed gratification and then go blow your paycheck on a new television when the one you have works perfectly fine. If you do want a new TV, at least show your kids the research and decision-making that goes into the purchase.

2) Teach them to recycle. I admit that I am one of those people who washes their Ziploc bags and reuses them. Hey, it saves me money and it makes less trash for the environment. There are plenty of ways to recycle or reuse household items. Be resourceful and creative. If you can't find a use for it, someone else probably can. Before you just throw things away, try donating them to a local school or shelter.

3) Practice feng shui. Ok, don't be scared. I'm only suggesting that you control clutter which means that every time you buy something new, get rid of something old. Don't just accumulate massive amounts of stuff. If you buy new clothes, donate some old ones to a shelter. Buy a new book and lend an old one to a friend. This will show kids that in order to have something new in your life, you need to make room for it.

4) Make friends with your neighbors. Growing up, I remember my parents and our neighbors borrowing each others tools, sharing leftovers or garden vegetables and doing favors like dogsitting or housecleaning. Just think of how much money that can save! Not to mention you'll be creating a closer knit community.

In times of disaster, direct deposit can be as basic as food and water

In the wake of Hurricanes Katrina and Rita, thousands of Gulf residents continue to struggle to get “the basics” to survive—water, food, clothing and shelter. Thanks to the efforts of relief efforts like The American Red Cross and other local and national organizations, these needs are being met.

But what about their money? Where do you go when your credit union or bank is one of the many buildings damaged or washed away in the wake of the hurricanes? What about those who collect Social Security or pension checks? How do they continue to receive their benefits?

The best way to alleviate this worry is to use Direct Deposit. In a recent Dear Abby column, Dick Gregg, an official with the U.S. Department of the Treasury, wrote in saying that signing up for direct deposit into a bank or credit union account offers much needed peace of mind.

“Direct deposit is completely predicable. It gives people access to their money wherever they are, whenever they need it. It also means no lost or stolen checks because the payment goes straight into a person’s account.

The U.S. Department of the Treasury and the Federal Reserve Bank, as part of our Go Direct campaign, are encouraging all people—whether affected by the hurricane or not—to use direct deposit.”

Arranging direct deposit into your accounts is easy. Just call your financial institution to obtain the necessary forms to have your paycheck direct deposited into your account. (Verity members can call Member Services at (206) 440-9000 or (800) 444-4589. They can also send us an email.) In the case of direct depositing Federal benefit checks, you can call 800-333-1795 or visit www.GoDirect.org for more information.

Direct deposit has long been marketed for its convenience and speed. Now we can add “disaster preparedness” to its list of features-- and add "arrange Direct Deposit" to our personal disaster preparations at home.

Lending My Support

I just learned that Scott Marlow has launched his website and I'm going to give him a plug in our employee blog (can I do this? I don't know... we'll see!).

Scott approached me years ago to partner with Cascade Bicycle Club. He came with creative ideas and has always been a joy to work with. Verity developed our Cascade Bicycle Club VISA because of Scott. We've had a few bike rodeos and gained some great business because of him.

Now he is giving it a go to make it on his own. Since I always tip my hat to entrepreneurs, I'll see if I can't send a bit of business his way.

Check out his website and if you need any marketing assistance, try him out.

www.marketingbymarlow.com