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Encouraging financial literacy

Central Lakes College student Anna Backberg (left), Shelly Sowada from Frandsen

Balancing a check book.

Budgeting expenditures.

Using electronic banking. 

In these economic times, skills in handling money matters may never have been more important. At Central Lakes College, a student survey found education on banking basics scored high on a list of desired education topics.

Shelly Sowada, a member of the Frandsen Bank and Trust marketing team, said three years ago the bank started hearing more about the need for financial literacy for high school students and those moving on to college. Frandsen developed its own information for a Banking Boot Camp. Mid-Minnesota Federal Credit Union is another area financial institution offering financial literacy programs. And other organizations, such as Junior Achievement, provide financial literacy for young people. 

Sowada said young people are often oblivious to what costs their parents cover or how much of their income goes to a mortgage or vehicle insurance. 

“It’s really a reality check,” Sowada said. 

Sowada said CLC has been an important partner in bringing information to students. She had full classrooms at a winter session at CLC. 

The workshops have brought in a few surprises. Sowada said one student who attended a session with financial questions spoke openly to the class about going through bankruptcy. 

Sowada encourages students to think about what they are spending on their iPod, on a Big Mac, specialty coffee or pizza. In her workshop handouts, Sowada notes it’s all too easy to overspend or get an unexpected bill — such as a car repair or maybe a cell phone bill with texts that exceeded the plan. 

A budgeting for beginners handout tells students learning to budget is a stress-buster as they avoid debt and live within their means. 

Suggestions to help young people learn more about budgeting before they are on their own are to get them involved. Activities include sending a teenager grocery shopping with a list, a certain amount of money and an incentive. Allow the teenager to keep any money left over after all the shopping is completed. Coupon use, comparison shopping are encouraged with the exercise, while impulse buying is not. 

Sowada said the tips discussed during the workshops ,basics such as check writing, balancing check books, online banking and identity theft, help educate students and often their parents. 

From the basics, the workshop goes into detail on more complex issues such as the difference between having checks stolen to being the victim of identity theft. 

For students, another eye-opener may come with overdraft or late fees and what that can do to a credit rating. 

Sowada hopes to reach more teenagers before they reach college by offering to be part of high school presentations. 

“That is definitely the demographic I’d like to see,” Sowada said. “We want this to be looked at as a community service effort. We are here for education.” 

She said an effective teaching tool comes in a simple visual presentation using four jars. For two months, students divide a sum between savings, taxes and spending. It helps them see what is leftover at the end of a month between wants and needs. Students get a budget worksheet to play with and Sowada goes over an amortization schedule to show the class how much interest people pay on credit cards if they only pay the minimum each month. 

Part of Sowada’s workshop talks about the obligation to pay bills people agree to when they sign a mortgage or a vehicle loan.  

“You get to learn a lot about what they don’t know,” Sowada said of the workshops and interaction with students. 

For students, major topics of interest have been identity theft and online banking. Nineteen-year-old Anna Backberg, Central Lakes College student, was interested in how to establish a credit history and build a credit score. 

Sowada said: “What we are trying to do is plant the seed for education.” 

RENEE RICHARDSON may be reached at or 855-5852.