Teaching kids to be financially literate
Adriene Hill: April is Financial Literacy Month. To some of us, financial literacy is about budgeting and saving. To others, it's about setting aside money for retirement or coming up with an investment plan. But financial literacy is also about building up community and opportunity.
Next week, April 29 is the 20th anniversary of the L.A. Riots. Twenty years since the police officers accused of beating Rodney King were acquitted. And 20 years since thousands of people protested and looted and burned blocks of L.A..
It's also been 20 years since the birth of Operation Hope. It's a movement designed to rejuvenate the city and educate people about finance. Kedisa Johnson runs an Operation Hope project called Banking on Our Future, which focuses on kids.
Kedisa Johnson: I want to see young people thrive. I want to see a young person, at age 13, go and open a bank account. So by the time they are 20, they are in this zone, they're in this frame of mind that I can save. I can look at other ways when I think about college to finance my education.
Everett Courtney: The thing about money is that it's important, am I correct?
Courtney: Because everything costs what?
Students, in unison: Money!
These kids are in sixth grade at John Adams Middle School in central L.A. They're learning about all-things money from a Banking on Our Future volunteer, Everett Courtney.
Courtney: So it's important for us to know what to do with money, right?
Courtney: We don't want you to do the wrong thing with money because money is very, very important in our daily lives.
The kids are super into it. They're waving their hands with answers, scribbling notes. One of the most enthusiastic is Christopher Gonzalez. I pull him aside and ask him what he does with his money.
Christopher Gonzalez: I save it in my piggy bank. I have my wallet and I have my piggy. In my piggy, I save and in my wallet I spend.
In his piggy, he's saving for college. I ask him what he thinks of people who maybe don't quite save as well as he does.
Christopher: They are suckers, because they can't control their willpower of holding their money and they spend it all. And then later they are going to be in the streets asking for money, because they don't have no more money.
Back in the classroom Everett is on to banks.
Courtney: What is one of the main reasons you know your money is safe in the bank? Anybody know? Yes?
Christopher: Because they have a big safe that is almost impenetrable?
Courtney: OK, great, anybody else?
And from there, he moves right on to the FDIC.
Courtney: Anybody knows what those four letters stand for?
It takes a while. One of my favorite guesses: The Federal Department in California. It's got a ring to it, right? But Everett gets them there.
Courtney: FDIC, the Federal Deposit Insurance Corporation. Now this is a key word, right here, "insurance."
The kids have questions, really good questions.
Christopher: Someone robs a bank and then they run off with a whole lot of money. You still get your money back, the loss of the money?
Courtney: Yeah, because the federal government insures that branch.
Student: What if you save and it goes over $250,000, does the bank cover the rest or just the $250,000?
Courtney: Right now the limit is $250,000. So anything over that, then you would be reasonable for the loss. But what smart people do is they protect themselves by starting another account.
Everett's not a teacher, he's not an accountant or an economist. Everett's an entrepreneur in south central L.A. His finance degree comes from what he calls "RWU," Real World University.
Courtney: I truly truly hope that they understand the importance of earning money and doing the right thing with money. And knowing how to do the right thing. Oftentimes, people want to do the right thing, but they're not taught how to do the right things. They begin to emulate some of the things they see other people do and oftentimes, it's a cycle that winds up in poverty.
And he wants kids to understand money is about more than buying things; it's about getting some place. Moving from point A to point B. Getting a degree, starting a business.
Courtney: If you open up a cleaners or if you open up a juice store or an ice cream store, if you open up a UPS store, any type of business where you're able to provide jobs, that's building up a community as opposed to tearing it down.
And you can tell these kids while they might not yet have down the intricacies of mutual funds or retirement accounts or stock portfolios, they're well on their way.
Courtney: So what are some things you can save money for?
Student: An emergency.
Courtney: Yes! Anybody else want to give one more thing we can save money for?
Student: For babies?
Courtney: For babies? Yup, you don't have 'em, you better start saving. 'Cause I tell you what, they are expensive.
Everett says he keep coming back to the classroom to help drive home a simple lesson, one that he says is essential.
Courtney: Everywhere we go in America, we're bombarded with material that says debt is good, debt is good, debt is good. On every advertisement, spend, spend, spend. And we spend till we become consumed. And everybody wants to be consumers, as opposed to savers. And I think that's one of the key attributes that we need to re-iterate consistently to this generation, to save for whatever it is that you want and earn your money, start a business. Because when you start a business, not only are you creating one job, you could be creating 10 jobs, 100 jobs 20,000 jobs when you create a business.
This coming week, on Marketplace and the Marketplace Morning Report, our Wealth and Poverty desk takes a look at what economic mobility looks like in South Los Angeles. Mitchell Hartman reports on life in Los Angeles 20 years after the Riots.
Daisy Alvarez: What do I think about money? I think money is that it's not an ordinary piece of paper that you can just rip up into pieces and play with. It's something valuable that you can use to trade for something.
Daniel Cano: What do I think about money. I think money is something that you need to save it, in case of emergency or if something happens.
Jessica Perez: What do I think about money. I think money is paper that could buy you the whole wide world.
That's Daisy Alvarez with Jessica Perez and Daniel Cano. They're students at The John Adams School in Central Los Angeles, and part of the Banking On Our Future program.