'Burning Money' gets young people fired up about finances

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The Chicago Tribune
By: Humberto Cruz
October 1, 2010

In promoting the online educational game "Financial Football" from Visa and the National Football League, New Orleans Saints quarterback Drew Brees has told of money lessons learned the hard way. The Super Bowl Most Valuable Player amassed a dozen credit cards while in college and neglected to pay his cell-phone bill for "quite a while," mistakes that hurt his credit score and raised the interest rate he paid on his first mortgage.

Too bad Brees went to school before there was "Burning Money," a series of videos and interactive lessons put together by young people for young people. I found them far more instructive -- and real -- than the Visa-NFL's well-publicized but simplistic game in which you advance the ball by answering multiple-choice questions correctly.

Available free to all high schools in the country from the financial literacy group FoolProof, the "Burning Money" series "shows young people why budgeting and saving are skills they want," said Remar Sutton, a veteran consumer advocate and writer who serves without pay as FoolProof's board chairman.

In "Burning Money," students play a "reality game." The goal is to have money left over after living on their own for a month.

Students learn about the money "burned" or wasted by careless spending and impulse buying. They learn that nearly maxing out their credit cards and being late with a payment, regardless of the amount or excuse, lowers their credit score. That low score wastes more money through a higher interest rate for a car loan, a higher insurance premium and higher rent and phone-line deposit.

"It is tough; it is honest," Sutton said of the series.

FoolProof's programs have been endorsed by the Consumer Federation of America and National Association of Consumer Advocates. The organization uses credit unions as Web hosts to offer free online financial-education programs.

"Burning Money" can teach adults a few things, too -- and anybody can watch the videos at http://www.foolproofteacher.com/

You are in control of your money and your credit. Keeping track of your money is essential. Students must record every dime they earn or spend every day for seven days, and they are graded on the detail and accuracy of their records.

Students learn to recognize the difference between wants and needs: You need water when you're thirsty. You may want "fancy water," as a video says, but all you really need is water. Students also learn the difference between fixed and variable expenses: The rent or mortgage is generally fixed. The food and electric bills are variable expenses that you can take steps to lower.

Most importantly: Success with money isn't luck -- it is a skill. The four habits of young millionaires are to think ahead, pay themselves first, learn how to make smart decisions a habit, and learn how to put their money to work.

Paying yourself -- or setting aside money for savings every time you get paid -- is "the most important and hardest habit to learn," the series teaches.

"Make it as automatic as breathing," it recommends, such as depositing part of your paycheck automatically into a savings account. In between the lessons, "videogame breaks" keep "Burning Money" fun as well as educational.

But, best of all, the program challenges and teaches.

"It really was very helpful," said Shawn M.A. Miranda, a 17-year-old high school senior from Gillette, Wyo., who went through the program. "I learned so much my head feels five pounds heavier."

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This page contains a single entry by CFED published on October 1, 2010 3:52 PM.

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