The importance of mistakes

by Brenda Campbell, President and CEO, SecureFutures


I hope the teens in our Money Coach program make some mistakes.

Whenever I say this to people who want to learn more about SecureFutures, they’re surprised. Why would I want teens to mess up? Isn’t the whole point of financial literacy to avoid making mistakes with money?

I’ll use my daughter Alyx as an example again. When Alyx started her freshman year of college, she was solely responsible for her finances for the first time. She’d done a good job of managing her own checking account all through high school, but since I was on the account too, she always had someone looking over her shoulder.

In her first month away from home, Alyx overdrew on her checking account. She had made five small purchases, all items for less than $5 each – like a slice of pizza, a binder, and a bottle of shampoo. She wasn’t tracking her purchases the way Mom had taught her – a common mistake for young adults. The fees she accumulated amounted to $39 per item for a total of $195. Instead of $5, that bottle of shampoo would end up costing her $44.

Alyx called me in a panic. I suggested she call the bank and, because it was her first time overdrawing, some of her fees were forgiven. I worked with her to figure out how to plan and manage her account so she didn’t make the same mistake again. She also had a savings account, so she transferred some money so she could get by until her next paycheck.

Alyx was lucky to have both a safety net and caring adults in her life who could guide her and make sure she didn’t dig herself into a deeper financial hole. However, many of the students in our programs don’t have this kind of support, particularly those who come from underserved Milwaukee communities.

 14.1 million adults in the US don’t have a bank account, and this is true of many of the parents of the teens who participate in our programs. These teens grow up believing the system isn’t for them, and they don’t have people in their lives to guide them through it. A minor mistake can be incredibly costly, leading to a financial spiral with lifelong consequences.

A big part of the reason our Money Coach program is so unique is that it specifically creates a space for teens to safely experiment with money management and yes, even make mistakes. The scholarship that Money Coach participants earn as they reach program benchmarks, as well as the guidance of a caring coach, allows teens to learn from minor mistakes while the price tag is low, and before they’re out on their own without that safety net.

The longitudinal study we’ve been conducting since we launched Money Coach in 2013 shows that it’s working. Six years out, 98% of our Money Coach alumni who are now young adults still have a bank account, and 86% are still actively tracking expenses. They’ve developed habits that stick with them into adulthood.

Our goal is to give teens ownership in the system, to help them get in the game. We want them to make mistakes in a safe, supportive environment so they can learn from those mistakes and continue on the path to lifelong financial capability.

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