Misinformed Youth

How is it June already? I’ve spent the last couple days working on some month-end stuff and that question has continually popped into my head.

We’re nearly halfway through the year, and if you have kids in elementary or high school, this month is going to fly by and take us to July faster than you can pack their lunches. I’ve been feeling a little nostalgic about this month approaching, as it’ll be filled with Baby Bro’s final days as a high school student. He’ll be crossing the stage on the 26th, moving to Alberta for school in August, and then all three of us will be grown up! (Well, almost, haha.)

I like to think each of us received a good education at our respective high schools. However, in the past, I’ve been pretty vocal about how little we’re (high school students in B.C.) taught about even the basics of personal finance. Yes, I’m aware it’s part of the Planning 10 course, but Grade 10 is not the only time we should be talking to our kids about how to manage their finances. The real “fun” begins the minute we graduate, and start working, paying for post-secondary and taking on debt.

Speaking on behalf of my two siblings and I, I have to say we should be extremely grateful our parents talk to us about money all the time. I’m sure Baby Bro and Sis will make a few mistakes with their finances (hopefully not the way I did), but I’m still confident we’re all equipped with the tools we need to make informed decisions (or know who to talk to, if we have questions). However, I had a conversation with another high school student this week that left me both shocked and worried.

While talking about which university they decided to go to, the student said their parents were likely going to pay for everything – but that they were going to get student loans anyway. Their reasoning: “Why not? My teacher told me student loans are interest-free.

SAY WHAT? Or as Gail would say, Lord love a duck.

I’m actually going to give that teacher the benefit of the doubt, and suggest they perhaps mentioned student loans are interest-free while you’re a full-time student with no detailed explanation of what happens after. But the fact that this student is leaving high school misinformed about student loans should sound some alarm inside all of us. We know millennials are graduating with more student debt than any other generation, but is it possible they are taking on some of that because they aren’t educated on how student loans actually work? The answer for some is at least partially yes.

I obviously talked to this student and explained how the interest will add up one day, and that it could take them years to pay off any student loans they take out. Let’s just say they were wide-eyed. I hope our conversation helped them think twice about their decision, or at least understand that nothing about loans is “free”. However, I can’t help but wonder what information their peers are leaving high school with this month…

Is there anything re: money you felt misinformed about when you were younger?

avatarAuthor Bio ~ Cait (48 Posts)

Cait is a twenty-something personal finance blogger living just outside of Vancouver, B.C. At 25, she found herself completely maxed out with more than $28,000 of consumer and student debt. In less than two years, she paid it all off (and saved a little too!) by using some of Gail's techniques, as well as receiving continuous support from the personal finance blogging community. Cait is now saving for her future and is passionate about getting personal finance a bigger spot in B.C.'s Education IRPs. You can read more of her posts on her personal finance blog Blonde on a Budget.

6 Responses to “Misinformed Youth”

  1. “Is there anything re: money you felt misinformed about when you were younger?”

    Not really, Cait, because our parents weren’t all that well off when we were growing up, such that we learned early about the value of a buck. In looking back, I guess we were careful in our spending and saving but, because there wasn’t much income in the house, we really had no concept in the area of money investment – one needs $$$ to make $$$ – which is why you often hear the old saying: “the rich get rich while the poor get poorer”. Fortunately, for me, I took it upon myself to educate myself on financial matters that my parents had no concept of, all to my financial benefit later on. Sadly however, things didn’t turn out that way for my siblings, such that, even today, they both tend to live from pay cheque to pay cheque.

  2. That’s scary to think that they thought student loans were 0% interest. With the Occupy Movement, I think more people are aware of how bad student loans can be, but who knows how much is actually sinking in.
    My darling sister is graduating from High School next weekend and I’ve been doing my best to help her be aware of the financial picture she has in front of her. Student loans are expensive, but its also very expensive to set off on your own. I’m sure she’ll make some mistakes along the way, but hopefully she’ll know that if she needs help, she can always come to me.

  3. avatar Samantha Says:
    June 2, 2014 at 11:07 am

    I think one of the biggest misconceptions out there is that you need to go to university in the first place. There are some university degrees that will make you stinking filthy rich, and there are others that will leave you in the poorhouse.

    I have always been of the opinion of why would you go to university if you can get the same thing through college, apprenticeship, or work experience. Much less costly.

    I think that there is a lot of university fear mongering out there, pushing kids into degrees which they feel luke warm about. The drop out rate is astronomical – and the school love it! Kids sign up, get half way through, and the university gets to keep most (if not all) of the amount paid! If you are living away from home, one year could be a 15k mistake!

  4. Samantha – good point. University is not for everyone, neither is college and maybe the student needs to work a little to pay for their education so that they appreciate it more.

  5. I thought having a “mortgage” meant you were one of the “smart, responsible young adults” who having made it through your university bachelor degree to get your first full time career job meant you were successful and one of the good kids.” After my husband (then common law boyfriend) and I inadvertently got drawn into a “let’s just see how it goes” meeting at the kindly older gentleman’s real estate office where he was to be both the seller’s agent and our agent (can you say dumb inexperienced naive first time home buyer)…we were being drawn into signing up for a huge mortgage and thankfully we stopped the process before signing an offer sheet he said to sign just to “feel out” the sellers who were sitting in the other office room. We low balled the offer. Cannot imagine what we would have done next if they actually accepted the offer. We were totally unprepared.

    My advice to young grads… Don’t get suckered in to sign your life away to a giant mortgage before you really know what that means. Just because you are young does not give anyone the right to make you feel inferior or to challenge your ego to sign up for something you are not ready for. Life is not a race. Having a “mortgage” by putting 5% down does not mean you are a responsible grown up. At 24 years old with only a business bachelors degree in hand we thought we were smart. LOL! Not so! did not even realize that having a mortage meant having debt. I thought it meant I was the “smart good kid” who could afford a townhouse.

    Good luck new grads. Be smart and take your time to truly understand what you are getting into for financial matters. It’s not a race.

  6. When I was in school I once had a fellow student ask me why I was working through the school year?

    I asked what were his parents paying for, the answer was tuition and residence. I was paying for those things with the help of student loans. All my mom could afford were the occasional groceries and my dad paid for my car insurance. The car was free given to me by my sister.
    I went to college in mind of a career/job and one that would pay well. And it has paid off.

    I was on Skype with my sister not that long ago and I can remember the look on my nephews face when he realized that he would have to pay for school himself. Apparently he hadn’t clued in that my sister would not have money to pay for Uni, especially in the US.

    @Samantha, the push for students to go to university in the US is unbelievable. And the cost is a lot more even instate. There is hardly a mention of trade or vocational schools. ie colleges. Because of that we are trying to encourage my nephews to attend school in Can.

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