A penny saved is a penny earned

By STEFANIE GREENBERG, Staff Writer

Saving pennies and depositing allowance money will not solve any national economic problems. It will, however, ease the stress of a car payment or first-year’s tuition at college.

Teaching good savings habits is the focus of many banks here in the Valley. With the help of a parent as a co-signer, youths may open accounts with some saved allowance or birthday money. Many banks are throwing in a higher interest rate, prizes and “kids only” club-member status to sweeten the deal. And it is a trend that has already proven successful.

In 1999 Government Agencies Federal Credit Union implemented a youth program. It has two focuses — a “Saving Safari Club” for kids ages 0-12 and a “Star Account” for kids ages 13 to 17.

“We are interested in the youth in the community and we want to encourage them to save,” said Erika Gonzalez, membership development coordinator at the El Centro GAFCU.

For the younger crowd at GAFCU a birthday card is thrown into the deal and for the teens monthly raffles are done for items such as movie tickets, gift certificates and school supplies are included.

Similar programs are being implemented in other banks around the Valley.

First Imperial Credit Union offers a “Coyote Kids Account” in which tokens redeemable for prizes are given in return for making deposits.

In about two years the program has already garnered a couple hundred accounts, according to Kathy Gonzalez, business development worker at the credit union.

“We encourage the young kids of today to start saving for the future,” said Gonzalez.

Wells Fargo offers a “ClubWF1” account for its younger customers with an option of getting an official “membership card.”

Despite a trend of many parents opening accounts for their children, Jennifer Castillo, Valley Independent Bank relationship banking officer in El Centro, said the bank has made several presentations at schools in the Valley.

She said the presentation encourages kids to go to the bank and open the accounts themselves. She also emphasizes the importance of making deposits and not withdrawals, allowing money for future expenses such as college, purchasing a vehicle and “helping Mom and Dad pay for school clothes.”

Some banks are trying to take things one step further and institute a “bank day” program in the schools.

Washington Mutual’s “Wamoola” program provides interested schools with the hardware, software and teaching materials for a bank day program but “nobody has taken advantage of it here,” said Celia Alvarado, assistant manager at the El Centro branch.

The program is for kindergarten through eighth-grade students.Washington Mutual offers a “minor account” for youths under age 18, Alvarado said kids often come in and tell her about their deposits.

“You’d be surprised,” she said, referring to the deposits of $10 to hundreds of dollars young people make with money earned themselves.

Such an earning potential is celebrated next month with a National Financial Literacy for Youth Month.

The nonprofit Institute of Consumer Financial Education of San Diego, a partner in the national Jump$tart Coalition for Personal Financial Literacy, joins with other leaders in the finance industry to sponsor Financial Literacy for Youth Month in April 2002.

“This nationwide, month-long, effort of the national Jump$tart coalition, its statewide coalitions and partners, will draw attention to the need for children and young adults to master the basic skills in personal finance of spending, saving and the wise use of credit,” said Paul Richard, RFC, registered financial consultant and ICFE executive director.

“The key is for parents to become actively involved (in) their youngsters financial education and begin with establishing the difference between needs, wants and wishes,” he added.

One feature on the ICFE Web site is especially for kids. As part of Financial Literacy for Youth month, youths will be able to print out or download both a “Young Spender’s Profile” and a “Credit Risk Profile” to better understand how a potential lender might view them.

The ICFE offers tips for youths and their financial habits. Read below for the “10 Commandments of Personal Finance for Young People in 2002.”

1. Manage your expenses so they don’t exceed your income.

2. Spend money thinking of your future as well as your present.

3. Begin saving early to take advantage of compound interest.

4. Avoid collecting credit cards and using them for borrowing.

5. Always honor your debts and other financial obligations.

6. Project your income and expenses for the next 12 months and track variances.

7. Focus on the relationship between the risk and projected return of investments.

8. Maintain organized records for tax and general financial planning purposes.

9. Have a plan and a purpose for your investing.

10. Obtain a financial education to be in a position to make intelligent financial decisions.

>> To access the ICFE Web site visit www.icfe.info

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