A lot of people know very little about personal finance, which is a problem because it’s not very hard and it has a huge effect on their lives. It’s a lot like cooking – you can make it hard if you want to, you can spend a lot of time on it if you want to, but if you can make a few basic dishes, you’re set. Hence, the need to teach people the basics of financial advice.
I use a three-part outline and then tailor the specifics for each audience. The most recent group to have me were some teenage Girl Scouts, who invited me to Camp CEO. The girls’ needs are different from those of parents of school-aged children, whose needs are different from those of young single women. Of course! The basics are the same, but the details change.
The outline has three parts:
- Figure out three goals, which should be a mix of short-term and long-term and include something fun.
- Keep track of your finances.
- Make compound interest work for you.
For the Girl Scouts, the sample goals were a dress for homecoming, sports equipment, and college. I discussed the envelope system and talked about the importance of recording debit card withdrawals. As for compound interest, I emphasized the dangers of credit cards.
The girls were surprised to learn that Bloomingdale’s doesn’t give you 20% off your first purchase with their card to be nice. They do it because they expect to make that and more from the interest.
Do you have the basics down?
