Part 1: Young & In Debt.  Avoid The Real Life Drama of Financial Frustration.

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Free Often Comes with a Fee.
Teaching Teens How to Avoid Unnecessary Costs.

Let’s face it, life is not free. Banking and managing money is a service that consumers have to pay for. Take my teenagers for example. They hadn’t a clue of what life really costs until we opened their own saving and checking accounts, and they had to start paying for themselves.

What they’ve discovered is along with financial freedom comes the responsibility aspect, which in this case, I used fees to help demonstrate how better management, preparation and knowledge in regards to their accounts can pay off. For example, at my credit union, we are charged a small fee for debit card transactions. Every bank, credit union, and financial institution charges fees, either boldly in your face or in very small legal print. This fee really represented a great learning opportunity for my kids:

1. READ YOUR NOTICES! My credit union regularly sends out notices to their members regarding account updates. My kids receive these notices and often discard them or neglect to read them. If they had read them, they would realize that to avoid debit fees, all they would have to do is pay with credit and sign for their purchase versus typing in their PIN – a great option that they can use almost everywhere! And, they earn rewards points by signing.

2. PLAN AHEAD! Moreover, they can plan ahead and budget. My kids were tapping into their accounts sometimes 10 times per day! Minimizing their transactions by forecasting their week’s activities helped them spend less.

In the years to come, most money gurus have predicted that fees will only continue and perhaps even rise as banks and financial institutions try to compensate for the new credit card legislation. For the future, kids need to better understand fees, learn about them and even accept them. The whole idea of “Fees aren’t fair” – well my response . . . “Life’s not always fair.” You can either huff and puff or learn some stuff.

As was in my kids’ case, just by being more educated about their account, they avoided a fee completely!

One day, not too far off, Gloria, my eldest, will most likely be heading off to college. Beyond the liberating and exciting stuff college has to offer, like dorms, new friends, parties (don’t even want to think about it) and college sports, graduates are faced with the real world reality of how to pay for it all and student loans and credit cards are usually in the mix. Now, in today’s tough economy, for our kids in college, once they are 18, their credit history plays a huge part in their future success. You can have the grades, extracurricular activities, internships and a great personality, but if you’ve been irresponsible in the money arena, it can prevent you from starting a career. Graduates are faced with the real world reality and challenge of trying to find a job in a jobless market. Talking to your kids about managing money while away from home is more important than ever; a poor credit history is just one less obstacle they will have to hurdle. Check out these scary stats:

According to the National Association of Colleges and Employers, in 2009 only 19.7% of college graduates have found a job – that’s just 1 in 5 – compared to 51% in 2007.

The average college senior owes $21,000 in student loans upon graduation.

What are the statistics for young adults without a college education?

Unemployment is 20.6% for those with just a high school diploma according to the U.S. Bureau of Labor Statistics. (If that isn’t a statement for the value of a college education what is?)

These are harsh realities that need to be discussed. So, I set out on my continuous quest for knowledge about teens and money by visiting the local bookstore.

First, I encourage you to check out The Motley Fool Investment Guide for Teens. This clever book gives sound advice for teens to see how saving and investing can be fun. It’s filled with pages of work sheets, information in the credit card department and real world investment advice. Best of all, they talk the language of teens.

A few topics to expect from this book:
- How to gain financial independence
- Ask questions when it comes to managing your money
- Save cash for college, for investing and for fun
- Dodge the spending and savings pitfalls that have trapped many adults
- Get started with investing today
- Discover and learn how to identify up-and-coming businesses that could be future blue chips (what’s a blue chip? That too is explained in the book).

Fast forward to young adults and I found another great book, GradSpot.com’s Guide To Life After College.
This book helps twenty-somethings take a step into the real world with advice on finding a first apartment, first job, office politics, managing finances, paying taxes and so much more.

The book’s authors create a punchy comparison between college antics and fiscal responsibility pointing out there are those mistakes you can make now that won’t affect you when you’re older… and there are those that will. As they so aptly put it, “Between credit scores and compound interest, the American financial institution is designed to reward long-term saving and responsibility. So while a booze-soaked week in Acapulco hopefully won’t be held against you when you’re 65, your money and the people you owe it to are the proverbial elephants in the room. They are big, powerful, and have very good memories.”

I couldn’t have said it better myself. Buy the book or visit the website www.gradspot.com for great advice by college graduates for college graduates.

Here’s a real world tip… get started today! Visit www.U224U.com to learn more about GTE Federal Credit Union’s U22 checking account for 12 to 22 year olds. “Because learning about money is important, no matter what your age!”