Good business sense and financial acumen are no longer just for silver-haired respectable citizens. Every adult, from the freshest high school graduates to centenarians, are affected by the economy and need to know how to make smart financial decisions.
Thus Moneythink, the first financial organization meant specifically for younger people was born.
Moneythink's Ted Gonder took a moment to answer our questions about the concerns specific to younger people entering the business world for the first time, as well as impart useful wisdom for anyone trying to save a penny regardless of their age.
For people who are not aware of Moneythink, can you describe your organization a bit? How did you get started, and what were your goals for starting Moneythink?
Moneythink is the only movement of young people restoring the economic health of the United States through youth financial education. Since we started in 2008 right after the economic collapse, we've trained over 1,000 college leaders to serve as financial mentors to over 10,000 low-income teens. In the last two years, we've also begun building mobile technologies that help economically-challenged young adults make better financial decisions and build healthy financial habits for long-term success. When we started the organization, we wanted to change individual lives through mentorship and financial education; but we also wanted to build an organization that would solve a problem, not just exist to protect its own platform. So we set out to make financial capability a social norm in the United States by 2030. Our organization has a deadline for its mission.
Moneythink is the only group of young people restoring the economic health through financial education. Can you talk a bit about why that's important?
The economy collapsed because people all the way from Wall Street to Washington to Main Street didn't know how to manage money. We saw a lot of solutions being implemented to help struggling adults and aid the economy at large (such as the stimulus package and earned-income tax credits), but there wasn't a lot happening to ensure that consumers could build long-term resilience against future economic crises. We thought "How can we help prevent the next collapse from here in our dorm rooms as college students?" and high-impact volunteer work building real relationships around money topics seemed to be the answer. It's unfortunate that we're the "only group of young people" doing this; hopefully, our bold action will inspire other groups to emerge so that we can build an ecosystem of efforts striving to restore and cultivate the economic health of this country. Because everyone knows the future will be full of challenges (if student loan debt and rising tuition costs for higher education are any indicator).
What do you mean by financial education, and what are some ways that you go about this? You've also stated that financial education has the power to restore economic health in America. How will financial education bring that about?
You can't just hope to repair everyone's finances once they're already broken. You have to start upstream. You have to start with young people and empower them to feel like they own their money, rather than being okay with the feeling that their money owns them. We have to combat the social narrative that music videos and celebrity spending create for youth (teens especially). Girls don't need to keep up with the Kardashians, and boys don't need to lease hot cars. At Moneythink, we bring relatable college students and exciting mobile technologies into the classroom to get kids pumped up about truly boring things like saving, spending mindfully, and long term goal-setting. We use pop culture examples to ignite discussion; then we meet our students where they are, personalize our curriculum, and invite them into a self-generative participatory community that glorifies and rewards smart everyday financial decisions in a public classroom setting. So far, it's working pretty well, but we have a lot to learn and we're just getting started.
Moneythink uses an action-based curriculum to help students internalize new habits. What are a few of these activities, and why is it important to practice these tactics?
We focus on goal-setting from day one. Our mentors get to know their students and ask them what their dreams are. Then we put dollar signs next to those dreams and show our students that what they want in life is indeed possible but will take effort, and that the effort can be really fun. To show that it can be fun to work toward what you care about, we issue challenges to our students through our mobile application, which encourages students to take pictures when they're making smart financial decisions and post them to a classroom newsfeed. Their pictures earn them points and rewards, and their peers and mentors encourage their behavior with likes and comments. We have 12 weekly modules to encourage behaviors that align with our curriculum.
See, the problem with most youth financial education efforts is that they happen in the classroom, where none of a student's financial decisions occur. Our program meets students where they are in the classroom, but really engages them in between class sessions so that they can learn by doing.
Moneythink uses a mentor program to leverage teachers who can better relate to the state that young people are in. What are a few things that young people specifically should be focusing on to get their finances in order? What are some ways that older folks can use the values you teach as well?
Often, the most crippling factor for young people is that they don't believe they can afford their future, so they don't try to make a plan. The second is that it's not cool or appropriate or acceptable to talk about money in a constructive way - one that embraces possibilities and potential. In many families, money is so associated with greed, insecurity, and pain that it's become a taboo subject. Our program focuses on bringing it back to the table, creating a safe open space to discuss it, then getting teens excited to own their relationship with money and use money as a tool to express their values.
Older folks can apply many of the same principles.
- It's never too late.
- Step by step adds up fast.
- Short term rewards make easier long term behavior.
There's been a lot of speculation recently questioning the idea of social mobility in America. What are some ways that this situation is manifesting currently, and what are some things that young people can do to not become trapped in their circumstances?
Structural barriers like unemployment, broken families, community barriers, racism, and crippling debt are not to be underestimated in terms of just how difficult they can make upward mobility. And all too often, these factors do ruin lives and limit dreams. So let's just get that out of the way. We're never going to claim that financial education or mentorship is some kind of panacea to poverty.
What we do believe, however, is that every human being has unlimited potential inside of them; and that with the right combination of experiences, friends, role models, knowledge, and tools, dreams are achievable. And when you hold everything else equal for the kid who IS on fire, who HAS found a belief in herself, who HAS had that teacher who encouraged her, who DID watch that video online that made her believe she could be who she wants to be and who DOES want to go to college or DOES want to start a business... guess what the biggest obstacle is? Money. So that's where saving for emergencies, understanding the difference between a grant and a loan, knowing where to find scholarships, watching daily spending, and understanding how to get and hold down a job come in. Economic futureproofing. That's what we're in the business of.
What are some things that young people in particular should watch out for, including common mistakes or misconceptions?
Vending machines. They fleece you and charge you several times what you'd pay for the same bag of chips across the street at the drug store. You can use all that extra money for a new pair of awesome shoes, a prom ticket, or college books.
Check cashers. Go open a bank account at a local credit union and cash your checks there. Don't just cash checks at the check casher because it's familiar. They take so much of your money it's not even funny.
Make a LinkedIn profile for yourself. I promise you that no other 15- or 16-year old trying to get a job at that Starbucks or Walgreens you're applying to is sending a follow-up email to the manager who interviewed them that includes a LinkedIn profile. It doesn't matter if your only accomplishment is how advanced you are in World of Warcraft or how many points you scored at your most recent basketball game. The point is that you're signaling to your employer that you CARE more than the other applicants. That's what will get you the job. Stand out. Show that you care. Show that you get it.
How important is organization to getting and staying out of debt?
Fairly important. But less important than you'd think - only in the sense that getting and staying out of debt isn't as complicated as most people think. You don't need to be an Excel wizard or have some crazy software program or pay a financial advisor a ton of money. You just need to know how much you owe, make sure you've negotiated the terms to be as favorable as possible, and have a monthly plan to pay it off. Using an app like Mint can really help, too. But you know, the best way to get out of debt is to stay out of it in the first place.
Can you list some essential reading or viewing, for the basics of financial education, regardless of age?
Our Moneythink Resources Page recommends several awesome books, articles, apps, and downloadable tools that can help you build or fix your financial life instantly.
Do you have any quick tips to help people enjoy a decent lifestyle, while still managing to get and stay out of debt?
Use money as a tool to express your values. Think about what you stand for and ask yourself how what you spend your money on helps you engage with the world in a way that makes your actions speak for your character. It's easier said than done, but it gets much easier to do after a while. Each decision piles up and becomes a habit, and habits become character. And as Aristotle said, character becomes destiny.
Ted Gonder is a member of the U.S. President's Advisory Council on Financial Capability for Young Americans and the co-founding CEO of Moneythink. His work has been featured in MTV, the WSJ, and Crain's, and in January 2015 he was recently named to Forbes' 30 Under 30 list.