My earliest memory of mismanaging money is in the lunch line. I was a big spender. If Dad slipped me an extra quarter, I'd use it to pick up a Little Debbie Star Crunch instead of stockpiling those quarters to splurge on the snack pièce de résistance: The Choco Taco.
I knew nothing about saving or budgeting and even less about investing or taking out loans. It took me an embarrassingly long time to scratch the surface of personal finance. To think of all the Choco Tacos I could have had.
Luckily, there's a new way to learn about personal finance that's as easy as texting.
Now that we've grown up, the implications of being clueless about money extend much further than the lunch line. Seventy percent of college seniors graduate with student loan debt, averaging $29,400 in 2013, and 36% of recent college graduates are mal-employed, meaning they work in positions that don't require a degree, like on a wait staff or in the service industry. There is a monumental gap between the average college graduate's debt and their financial ability to pay — and much of it can be attributed to an inability to understand and make tough financial decisions.
The average American spends 15% of their household income on non-essential items. For a typical 25-year-old, that's anywhere from $5,000 to $8,000 a year – $8,000 a year that, frankly, we aren't making in today's job market.
For the second year, DoSomething.org, the largest not-for-profit for young people and social change, is combating that issue and informing young people on financial education through a text-messaging experience in partnership with H&R Block Dollars and Sense. The experience, called Would You Rather, uses text messaging to challenge young people to make decisions about how they'd manage their money and provides real world financial tips. Last year, 44,238 young people participated in the campaign, delivering 62,435 tips to their friends.
Here's how it works:
You receive a text message like this: "What would you rather do to save $? A) Share your spring break hotel room w/ your entire extended family OR B) Not go on spring break."
If you respond: "A"
You'll receive: "Hope the bathtub is comfy!"
After this and throughout the game, you can receive actionable financial tips relevant to the question, such as: "Going on spring break? Create a travel budget so you come back from vacation with happiness and a tan, rather than regret."
Young people have the opportunity to send this game to friends, compare answers, and share valuable financial tips directly relevant to their lives. Focusing financial education on short-term decisions and small behavior changes with big impact is an effective and impactful way to get young people thinking about their financial futures, even beyond Choco Tacos.