KELOWNA, B.C. — Want to engage teens in a discussion about financial literacy?
Crank up the hit song I Want to be a Billionaire So Fricking Bad at a high-school assembly billed “Funny Money.”
The catchy tune by Travie McCoy featuring Bruno Mars is one teens can relate to with lyrics like: “Uh, I wanna be on the cover of Forbes magazine/Smiling next to Oprah and the Queen.”
At Rutland Senior Secondary School in Kelowna, B.C., 200 Grade 12 students packed the gym recently to hear from unlikely financial life skills educator James Cunningham, who’s a standup comedian.
He broke the ice with: “I’m a Canadian comedy superstar, which means you’ve never heard of me.”
But seriously, Cunningham is funny and has headlined shows Just for Laughs, Comedy Central and Last Comic Standing as well as hosted events with former U.S. president Bill Clinton and Virgin CEO Richard Branson.
The Funny Money presentation, sponsored by the Investor Education fund and the Investment Industry Regulatory Organization of Canada, was billed as a 45-minute crash course on finances for teens.
It covered three main bases — know your money flow, control what you owe and invest some dough.
First Cunningham gauged his audience’s level of brokenness by asking for applause answers to seven rapid-fire questions:
l Have you ever had to roll change to buy something?
l Have you bought a birthday present at the dollar store?
l Have you ever put just $2 worth of gas into the car?
l Or better yet, do you take the bus, which is a great place to meet other broke single people?
l Have you broken into your little brother or little sister’s piggy bank for cash?
l Do you think Kraft Dinner is one of the four basic food groups?
l Do you freak out in delight when you find $5 in the pocket of a pair of jeans you haven’t worn in a while?
According to the applause to these queries, most of the teens are broke.
And that’s not a surprise because teens still live with their parents and heavily rely on them for money.
Cunningham threw out the statistic that teens in North America spent about $100 billion in 2009, but only $5.6 billion of it was money actually made by teens.
That means parents subsidize teen spending to a crazy degree and the average teen spends 20 times more than they make.
In other words, a recipe for disaster when teens and young adults start to take over their financial futures.
“Most teens have no idea what things cost,” said Cunningham.
“They think school supplies cost them $50 a year, when that doesn’t even cover the ink that goes in the printer. Same goes for transportation. They think if their parents give them a car it’s free transportation. Even with no car payments a car costs $2,700 to $5,000 a year for things like gas, insurance, maintenance and repairs.”
Cunningham stressed a budget is essential in outlining incomings and outgoings.
The most common expenses for a teen or student in postsecondary school are tuition, books, rent/residence, food, transportation, cellphone, school supplies, clothes and entertainment.
The most common streams of income are parents, student loans, part-time and summer jobs, scholarships and birthday and graduation gifts from relatives.
“Know your flow,” preached Cunningham.
“Learn how to budget in high school and it will serve you well the rest of your life.”
While it’s not glamorous, Cunningham also suggested teens wean themselves slowly of their financial dependency on parents, work for money, live within their means and use credit cards only for emergencies.
On his tour of British Columbia, Toronto-based Cunningham did his Funny Money routine for students at eight high schools.
Here’s some free advice — and, really, it’s worth it
Amar’e Stoudemire and Patrice Peyret write a finance column for the Huffington Post. No surprise, their advice for gaining financial success for young people is pretty much the same as for everyone.
Except teens have a lot more time to make small advances pay big dividends, for a saver with some discipline.
Here’s their formula:
Earn some money — Besides gift-money or money you get from your parents, earn some more from a summer or part-time job that does not interfere with your school work.
If you are creative, come up with your own things to sell. I (Amar’e) used to shovel snow in the winters in New York and babysit neighbourhood kids to earn some extra dollars.
Save some — You are going to work really hard cleaning up an office, babysitting or helping a family friend to make the money you earn, so save what you can.
It’s called paying yourself first, and doing this can work for you all your life.
We know money is tight right now and it may seem like you should spend it while you have it. We suggest saving most of it so that you can have money for something you really want in the future.
Money used to burn through my hands as a teenager until I (Amar’e) realized that I liked the feeling of having money in my bank account in case I needed it.
Go ahead, spend some — Buy what you need. But those purchases represent a lot of effort on your part, so look around for the best deals, look online, decide which options are best for you.
Don’t borrow — You may have no choice later, but avoid going into debt for as long as you can.
There is no benefit for you in owing your parents or your friends money, unless it’s for something important such as college or starting your own business as I (Patrice) did.
And remember, credit cards are about the most expensive debt you can carry. If you don’t pay your entire credit card bill (not just the minimum payment!) each month, you’ll soon be working more hours for the bank, than for yourself.
Watch out — Most cheque-cashing services charge too much, and bank accounts and cards can be loaded with fees.
There are plenty of comparison sites that can tell you what the lowest cost accounts and cards are, without having to read all the fine print.
One example we can both recommend is www.bankrate.com.