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Smart Advice From Teens in the OC

A group of kids in California share their thoughts on saving, spending and managing their money.

Recently I had the pleasure of traveling to Costa Mesa, Cal., to deliver the keynote address at a conference sponsored by WISE, Women Investing in Security and Education. WISE is dedicated to the financial education of women and girls, and after speaking to the women I conducted a special session for teens (mostly girls plus a few guys).

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I'm used to adults, who crave financial information, peppering me with questions. Talking to teens, on the other hand, can be a challenge. But the session was a big success, and the Costa Mesa kids offered some surprising glimpses into finances in the heart of the OC. Here's what they had to say about:

SAVING MONEY. When I asked if any of them had ever saved for a goal, one young woman said she had bought her own car.

Years before, her father had told her he would finance half the cost of a car if she saved the other half. To earn money, she had been babysitting since she was nine. Last spring, she finally bought her wheels -- a used Mustang. I told her she (and her dad) deserved a round of applause.

MANAGING A BANK ACCOUNT. Many of the kids had their own accounts, and keeping them in balance was a common problem. One young woman had run up more than $700 in overdraft charges. I offered a few tips:

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  • Throw yourself on the mercy of the bank. It may be willing to excuse a new, young customer.

  • Keep a running tally of your balance, either online or in your check register.

  • Keep an extra $50 or so in the account (and round up when you subtract an amount so that you always have a buffer).

  • Don't use your bank card to buy a $3 latte or a bottle of shampoo. Pay cash.

SHOPPING. How to avoid getting carried away at the mall? "Don't tell yourself you're just going to 'look,'" advised one young man. "Looking means spending." (Avoiding temptation is a great piece of advice that works in other situations as well.)

I would add that if you must "look," take a fixed amount of cash and leave the rest at home -- along with your parent's credit card.

BUYING A HOME. When I asked if the kids had any questions, one wise guy asked how he could invest in real estate using someone else's money. I told him plenty of people had tried to do just that with zero-down-payment mortgages and now they were in danger of losing their homes.

My advice: Don't be snookered by books or TV shows that promise easy rewards in real estate using other people's money. Always save for a down payment.

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