TEXT OF INTERVIEW
TESS VIGELAND: When it comes to money, kids are more often than not utterly clueless.
Cher Horowitz, in the movie "Clueless": Did I show you the loqued-out Jeep Daddy got me? It's got four-wheel drive, dual side air bags and a monster sound system. I don't have a license yet, but I need something to learn on.
Not all kids are that clueless, but money isn't a topic they learn much about in school or at home. Why? It's a question we're addressing over the next few weeks. Kids and money. How we teach it. What they think of it. All leading up to a special live show in Portland, Ore. next month.
Donald Faison's first big acting gig was in "Clueless" -- before going on to star in the hit TV series "Scrubs." And clueless describes his own money management early in his career. He recently hosted a PBS special to get the word out on financial education. We sat down to talk with him about it.
Donald Faison: Until Scrubs, I didn't have a business manager. I learned everything on my own -- and I learned the hard way. And also, nobody ever taught me how to manage my finances, and I don't think there's a class in high school now that you can take, sit in and learn how to make it so your money works for you. And so because of that I wanted to get involved. That, and I get off on being in front of a camera.
Vigeland: Well, I'm sorry we can't provide that for radio.
Faison: I get off on being in front of a mic too, so don't worry about it.
Vigeland: Tell us a little bit about some of the mistakes that you made.
Faison: You know, I did a movie called "Clueless" when I was first starting out. And with that paycheck I went and bought a car, which I had no use for, because I lived in New York City, where you can take a train for a dollar anywhere. But instead, I bought a $20,000 car with a $12,000 check. You know what I mean? So by the time the third payment came around, I didn't have the money to pay for the car. And I had to borrow money from my parents and from a bunch of people -- that's one of the bigger mistakes that I made.
That and then I bought a house. "Clueless" the television series ended and I was having kids at the time and I thought the best thing for me to do right is to buy a house to put my kids in a house, which is an admirable thing to do.
Faison: But I wound up buying a house that I spent all my money on the down payment alone. So I bought a house that I really couldn't afford. And here comes month three, the mortgage is due and I didn't have enough money for that. If I would've saved that money from the car and from the house, I probably would've been better off later on in life. I would've been more prepared for other financial problems that came my way. And I wasn't.
Vigeland: So, how did you get yourself out of that pattern?
Faison: I hired a business manager.
Faison: Now I have somebody who yells at me anytime I make an outlandish purchase.
Vigeland: I think we all could use that, someone yelling at us.
Faison: Yeah, it's great, because just to hear, "If you spend your money on this, you're going to go broke!" scares you enough. "Well, I don't need to buy that then!" And I'm sure there's times when my business manager exaggerates, like "Look dude, you spend money on this and I promise you, you're going to regret it." When really it'll be all right, but you know, I still have to listen at the end of the day.
He manages my money completely, to be honest with you. Which is in a lot of ways, you know, not a good thing, because you're supposed to know where your money's going and what you're doing with your money. But I'm so bad at it, like I have issues.
Vigeland: What do you mean?
Faison: Like, I can't keep it in my pocket. I get it, and it's gone.
Vigeland: You talked earlier about how you didn't really have a lot of money education growing up, and I think that's the case for most kids in this country.
Faison: Well yeah, they never tell you how to save your money. No one tells you. We've been trained to spend money since we were born with all these commercials with toys and G.I. Joes and Transformers. But there's so many things in the supermarket, there's so many things on television that automatically when you turn it on are saying "Buy! Buy! Buy! Buy! Buy! Buy! Buy!" And no one's ever saying, "Save! Save! Save! Save! Save! Save! Save! Save!"
It's trickery. They're trying to trick us into spending our money. And really the best way out of it is to save your money.
Vigeland: How did you broach it with your children? Did you just say, "OK, we're going to sit down and talk about money?"
Faison: Yeah. "You guys are going to start saving your money." I'm trying to make sure that when my kids are 18, 16, when they start making money and stuff, that they know what to do with their money. I started giving them allowance and they all have bank accounts now.
Vigeland: So when did you start talking to them about money.
Faison: Recently, actually. Once they started getting allowance, which was about a year ago. At first, you know, they get their allowance and go and buy the new Pokemon card or the new, you know, stuff that they didn't need. That started to change when I started saying, "I'm not going to buy you this video game. If you want the video game, you're going to have to buy it yourself." From that a bank account was created. These guys are proud to say -- which is funny to hear -- "I have 60 bucks in my bank account." Good for you, that's a lot of money for a pre-teen.
Vigeland: Why do you think we don't talk to our kids?
Faison: Because we're so caught up in our own situation that we don't talk about it. And for a long time, I don't think it's been a child's conversation to have. But nowadays, I think it's very important that children are involved in financial conversations. Now's the time to teach your 5-year-old kid about financing.
If they can add, I suggest that you start teaching them about saving that money. And how their money can add up in the future. I think the more you prepare your children for the future, the better off they'll be. Because my kids for some reason think I'm rich and this is like, "No, daddy's not rich. Daddy saves his money and this is how he saved his money and this is what you're going to learn how to do."
Vigeland: Actor Donald Faison sat down with us to talk about kids and money.