Teens Learn Finance Firsthand at Their Own Credit Union

Quitman County, Miss., is one of the poorest regions in the country, with annual per capita income languishing below $6,500. The unemployment rate--and teen pregnancy rate--is naggingly high. Generation after generation of families survives on welfare.

But two years ago, the Quitman County Development Organization opened a credit union solely for children and it began to nurture teens like Kenya Parks. Parks is now president of the Quitman County Youth Credit Union--an unpaid post that takes up most of her after-school hours.

At the ripe old age of 15, she’s doing her best to encourage her peers to save money. About 350 kids have opened savings accounts at the credit union, and together they have socked away a bit more than $12,000. She writes for a monthly credit union newsletter that encourages thrift and volunteerism. She organizes fund-raisers for the credit union, which offers incentives, such as T-shirts, for substantial depositors--those with more than $25 in the bank.

Getting her friends and schoolmates to be fiscally responsible is sometimes an uphill battle, Parks acknowledges. But the lesson has stuck with her.

“A lot of the children open accounts and then take money out for petty things, like tennis shoes, when they could be saving it for college,” says Parks. “I don’t really withdraw any money. I’m saving for college because I want to go to Ohio State and be a journalist someday.”

The U.S. savings rate has been languishing in the 3% to 5% range for several years. No longer content to simply bemoan the sorry savings rate and the fiscal ineptitude of adults, experts are increasingly turning to children to help solve the problem. In the last few years, a raft of products, ranging from allowance systems to coloring books, have been designed for and aimed at the 4- to 18-year-old set--a group that, despite recessions and downsizing, appears to have rapidly rising affluence and fiscal influence, according to studies at Texas A&M; University.

In addition, January marks Financial Literacy for Youth Month, during which programs to develop financial competence among adolescents in a number of states, including California, Illinois and New York, will be kicked off. This April, the American Bankers Assn. is also celebrating National Teach Children to Save Day, which will involve more than 5,000 bankers visiting elementary schools across the country to talk about the importance of saving.

Although there are plenty of programs aimed at teaching adults fiscal responsibility, the relatively new focus on youth has its roots in a single thought: Financial health is something you achieve over the course of a lifetime. The younger you start, the bigger an impact it can have. Those who develop good money habits when they’re young can change the course of their lives.

“A lot of times what kids hear about money is really negative. They hear about things they would like but can’t afford. Their parents might have disagreements about money,” says Elizabeth Schiever, director of the high school financial planning program at the National Endowment for Financial Education, a nonprofit financial education and advocacy organization. “We want to show them that money is a tool that can help them accomplish many of the things that will provide them with rewarding lives.”

In Quitman, the goal of the kids’ program (one of about a dozen youth credit unions nationwide) is even more ambitious. Sponsors hope to reverse family patterns that have been in place for generations in an effort to pull future generations out of poverty.

“We started to look at ways to stem the tide of poverty, and we felt that maybe if we addressed some youth issues and some money issues that it might be a way,” says Robert L. Jackson, chief executive of the Quitman County Development Organization and treasurer of the Quitman County Federal Credit Union. “We believe that no matter how poor people are, if they have any access to money, they can save some of it. If they can do that, they can use money to improve their lives.”

Fortunately, for parents and teachers who hope to help their children manage money effectively, there has never been a better time. Books explaining money concepts line several shelves in bookstores and libraries. Free information is also available via the Internet at Web sites ranging from the government’s publication arm at https://www.pueblo.gsa.gov to https://pages.prodigy.com/kidsmoney/, a Web site apparently put together by a father of five, which includes hot links to other sites related to kids and money.

In addition, the National Endowment for Financial Education has a comprehensive, six-unit high school financial planning program that leads kids through the process of setting goals, tracking their money and learning about ways to save. The program, which is free to schools, includes instruction books for teachers and workbooks for children.

Teachers who would like to participate should write to Elizabeth Schiever at NEFE, 4695 S. Monaco St., Denver, CO 80237. They should include their name, school, address, phone number, number of students and when they’d like to start the program, and NEFE will send the necessary materials.

“This is about so much more than financial planning,” Schiever says. “We are talking about money, but really we’re talking about life. We’re trying to tell these kids to take a look at their lives and decide what they’d like to make happen. Teaching them about money helps kids realize that they have control. Whatever they want out of life, they can make it happen.”

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Kathy M. Kristof welcomes your comments and suggestions. Write to her in care of Personal Finance, Business Section, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053, or e-mail to kathy.kristof@latimes.com

Financing your children’s education is one of 30 panels to be offered at the Los Angeles Times Investment Strategies Conference on Feb. 22-23. To register, call (888) TIMES97.