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    • MSE Martin
    • By MSE Martin 22nd Oct 04, 1:30 PM
    • 8,116Posts
    • 42,310Thanks
    MSE Martin
    5 Things Teens Should Be Taught About Money
    • #1
    • 22nd Oct 04, 1:30 PM
    5 Things Teens Should Be Taught About Money 22nd Oct 04 at 1:30 PM
    What's new?

    I've revisited this thread as it's a gooden and turned it into a Great Hunt. Click reply to add your ideas.

    Back to my original post...

    I was woken this morning by Sky News. They were planning to do a piece of personal finance education in schools.

    Scratching my head in dreary sleep talk, they asked me what five rules would you tell a kid about money. Hastily I came up with the following five, admittedly none are things I've not said before and don't come up in the Money Diet, but it was an interesting exercise.

    After you've read my five, I'd be fascinated to read any rules you think kids can be taught. If there's some good ones, I may turn it into an article from the site 'wisdom from an older generation'....

    So let me start it off:

    A company's job is to try and make profit from us

    The sooner people understand society is adversarial, and companies care about profits the better. That way a skeptical eye can always check, why are they doing this?, how do they gain? a good way to prevent problems?

    Interest Compounds

    Compound interest is very powerful. When you're saving, as you earn interest on the interest your savings grow more quickly over time. When you're borrowing, as you're charged interest on interest your debts increase rapidly. Be aware of the impact of compounds.

    Always check three

    I'm not a big fan of the 'shop around' mantra. Generally I believe 'think through the logic' is a better start position. However, whatever you do or buy, checking three sources to ensure you're getting a good deal is a golden rule.

    Pay off debts with savings

    Understanding that debt and savings are just opposite sides of the same coin is a must. If you've 1,000 of savings earning 3% after tax, that's 30 a year gained. If you've 1,000 of debt at 18% that's a cost of 180. If you paid off the debt with the savings you'd be 150 better off.

    Of course, the more sophisticated understand that if the debt is cheaper than the saving you can profit, yet in most lives this is rarely the case, so pay off expensive debts with underperforming savings and you're doing well.

    Bank accounts lie

    Your bank account is just a snapshot of your current finances. It doesn't look at what money is due to come in and go out. It doesn't look at your spending over a year. All ii does is give you a picture of an instant in your account. You couldn't take one still frame of action from Eastenders and know the entire programme script, a bank account is just that; a 'freeze frame picture' - don't trust it. (see Budget the way)

    That's my starter, now over to you....

    See the full Financial Education Campaign section for lots more info.

    Last edited by MSE Researcher; 20-01-2011 at 6:39 PM.
Page 10
    • colsten
    • By colsten 15th Apr 15, 8:08 AM
    • 11,167 Posts
    • 10,440 Thanks
    1.No matter how friendly, or trendy, or cool, or welcoming they appear, every single company exists for the sole purpose of making money off you.
    Originally posted by andyfromotley
    1A. Companies also exist to provide you and millions of other people with jobs so you can earn a living
    1B. You are allowed to set up your own company if you so desire.

    2. Every single pound paid in interest is your past stealing from your future.
    Originally posted by andyfromotley
    2A. Every single pound you make in interest helps to stave off the effects of inflation
    2B. There is good and there's bad debt. Play the quiz.

    3. Giving to charity gives rewards far beyond the cost.
    Originally posted by andyfromotley
    3A. Charity begins at home.
    • FireWyrm
    • By FireWyrm 15th Apr 15, 10:38 AM
    • 6,432 Posts
    • 12,163 Thanks
    The Micawber Principle. Learn it.

    "Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery."
    Debt Free! Long road, but we did it
    Meet my best friend : YNAB (you need a budget)
    My other best friend is a filofax.
    Do or do not, there is no try....Yoda.

    • enjoyyourshoes
    • By enjoyyourshoes 15th Apr 15, 10:49 AM
    • 1,062 Posts
    • 1,312 Thanks
    1. The financial realities of the 'marriage contract'
    2.Tracking your money daily & staying in the black
    3. Accruing for none weekly/monthly costs
    4.How compound interest works
    5. Psychology of spending
    Debt is a symptom, solve the problem.
    • Pincher
    • By Pincher 15th Apr 15, 1:22 PM
    • 6,516 Posts
    • 2,491 Thanks
    Money is an illusion.

    Having a swimming pool just means you have to pay somebody to maintain it. It's much better to just turn up and use somebody else's. How much time can you spend on a super yacht anyway?

    Once you accumulate beyond a certain point, you become a slave to it. You spend all your time just to avoid paying tax.

    You need to give it away before you die anyway, otherwise the 40% inheritance tax really takes the biscuit.

    So, the best strategy is to be fabulous beautiful, become a celebrity, and get invited to obscenely rich parties that somebody not so good looking has to pay for.

    The young have already figured all of this out, which explains the religious attendance at tanning salons, nail parlours, and cosmetic surgery clinics.
    • Djene
    • By Djene 15th Apr 15, 6:40 PM
    • 85 Posts
    • 12 Thanks
    Coming from someone who left their teens a few years ago here's mine. Sorry if they may be a bit of a repeat of some already posted.

    1. Teens should be taught what debt is and how it's works. Too many people I know are thousands into overdrafts paying daft apr for things they probably didn't need. Same with credit cards, how they can be a great tool to build your credit history, but also a negative if you spend too much on them. Especially a high apr card that teens will get.

    2. If you have money, never, ever let anyone know you do. Since I was 18 I've always had a few thousand tucked away, but I never let friends or anyone, know that I do. Money can make people very jealous, and some may try and take advantage at best. Act broke.

    3. If you are a student, just because the bank offers you an account with a massive overdraft, that doesn't mean it's free money to be exploited for nights out and items you do need.

    4. Saving is key, and one of the most important parts of personal finance. Always try and save what you can, and don't see left over wages or student money (sorry not sure what the name is EMA or SAAS I think) as money to be splurged on rubbish.

    5. Don't fall for finance traps. Such as new cars or even silly expensive phone contracts. Just because you don't have to pay anything down, doesn't mean it's not going to be expensive, especially since they last for 2-5 years.
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