Hello and welcome. I'm Drew Guthrie,
Chief Operating Officer of FoolProof.
I'm here with Mike Sheffer,
Director of Education of FoolProof.
We're here to talk about critical thinking and really
what that means and what that
really means to kids as well.
Let's just start off by defining
critical thinking really simplistically.
It is the objective analysis and
evaluation to form a judgment. Pretty simple.
But let's talk about why that is so difficult.
Did you know over
$250 billion a year
is spent on marketing in the US alone?
Of that 250 billion,
over 15 billion is aimed at kids,
marketing designed directly to target kids.
What we're talking about in critical thinking
is everyone's trying to sell you something.
What do you do as a parent?
How do you protect yourself?
That's what we're here to talk about and I'd like to
flip it over to Mike so he
can give you a little introduction.
Thanks Drew. Like Drew said,
I'm Mike Sheffer or the Director of
Education for the FoolProof Foundation.
I'm a retired teacher,
32 years in teaching
personal finance economics in New York State,
and the original FoolProof teacher.
We've seen a lot of it in
the classroom with parents and with kids about
their understanding of critical thinking
and how to be a healthy skeptic
and the things that I tried to bring to my classroom,
and then of course, as we started to develop FoolProof,
was, where's the process?
For instance, I grew up in
a lower middle-class home
that money skills were discussed with my parents,
so I learned a little bit from my parents going forward.
I remember the envelope story
as a young kid where my mom would put
my dad's paycheck in each envelope and at
the end envelope was one that had a Smiley face on it,
and a Smiley face was if there was
any leftover money in that week,
we would go get ice cream.
That stuck in my head as
an educator and growing up and everything else.
Then as I started teaching
personal finance skills to students through those years,
what the students would teach me.
As we go further into this presentation,
we're going to give you some skills that
you're able to use with
your kids and then how they can
relate to see what they're being taught in school,
and of course, the idea of how they can
become critical thinkers and have the skeptics.
Because in reality, they are being bombarded
every single day to spend money or to,
as we say, think about where
they would be if they had that product.
The one thing that we want to do is we want to make
sure that we're protecting the kids.
I'm a parent, I'm a former teacher and
now financial literacy person with FoolProof,
we are in the process
of trying to give you skills that you can use.
Mike, my story that you know is,
when I graduated high school
I had that end of high school mentality,
thought I knew everything,
so right when I got to college,
I started signing up for every
credit card offer I could get.
I thought they were the foolish ones for giving
an 18-year-old thousands of dollars worth of credit.
Who is a fool on that one?
Absolutely. It's all about,
what you know, and what you don't know, you don't know.
I think that's really funny because my parents
tried to instill some good financial habits in me,
but frankly, they didn't have them growing up,
so how are they supposed to teach
me if they didn't know themselves?
It's an unfortunate situation that really leads to
that generational poverty and
that cycle, that multi-generational poverty.
What we do at FoolProof is really
look at what the base is because,
not to throw another stat at you,
but according to one marketing research firm,
kids have over one trillion dollars of
marketing influence over what they
buy and what their parents buy every year.
There marketers just constantly trying to
get to those kids to help build that influence,
make it shiny happy and like,
hey, this is going to totally improve your life.
But are they really selling that idealistic view?
In process too as you look at it,
it's multi-generational because my parents
didn't see it growing up like I saw growing up.
My children didn't see it
growing up like I saw it growing up.
Then of course, in the classroom,
you have a tremendous amount of students that are coming
from all over the aspect
of what do they know about money,
what have they been taught about money,
what are their fears about money,
and all those different things.
If the school doesn't have
the financial literacy requirement to graduate,
which only a few states do,
or they're not teaching a personal finance class,
where are they getting this information?
Here's a crazy stat.
I'm going to follow up with Drew's one.
Sixty-four percent of parents would
rather talk to their kids about sex than money.
Now, I have a son and a daughter.
I'm telling you that talk about, hey,
the birds and the bees kept me up for weeks on end.
We talked about money all the
time because their dad taught money.
I was a school teacher and there was a ton of
money and it was just all these different things.
If you go back and you talk to
my kids, they would remember,
certain meals and certain weeks,
but they're always remembered on
pay day as a teacher every second week,
we would go out and have pizza.
I took that same thing from
my parents with the envelopes to
take care of all the things that I
wanted when there was a little bit left,
we would be able to go do those things.
The idea is that there
are so many things that we can pass on to
our children in the process of
teaching them about making a good,
healthy critical thought and
be in a healthy skeptic is going through it.
There's so many habits that parents
can start to build in their kids.
It's all about what works best for you.
If Mike's envelope strategy works, fantastic.
But there are a bunch of other things that you can start
off doing to give your kids that sense of ownership.
First of all, read the fine print,
get your kids to start thinking about that fine print.
This is an ad that sell all the great things.
Well, what do their lawyers make them say?
What is the difference between
what's in the big bold print,
the shiny ad, versus what the actual reality is?
Getting kids to start realizing what the actual truth
is in the advertising in
that fine print is a tremendous first step.
But the biggest part is don't be
afraid to ask questions not only for yourself,
for your kids, but to
anyone who's trying to market to you,
trying to sell you a product or service.
There's no such thing as bad question.
So many people that we work with get hung
up on the fact I don't want to
act like a fool in
front of a banker or someone trying to sell me a car,
this is probably a stupid question.
There's none of that.
This is all about you,
your lifestyle, and your welfare.
Don't think about any taboo topics.
There are no taboo questions.
Do your research in advance before you get
into a situation where
someone's trying to sell you something.
But Mike, do you have any other habits
that would be helpful?
Well, it's funny because in
the classroom when you're dealing
about money skills and you're
going through the process of again,
kids are coming in with predetermined ideas or no ideas,
or they're scared to death or they're enthusiastic.
I was very lucky to be able to teach money skills
every single day because I
always believed it was about them.
That was the key part of it.
Each student will grab onto that,
kids will grab onto that
because they're trying to look at themselves.
This is a really good time in their life to
actually be selfish and take a look at the process of,
"This is going to be my life."
A couple of things that we did in the classroom
that you can do with your kids at home too is,
do a spending journal,
take a one-week spending journal and just have them write
down every single thing that they spent.
We start to see trends.
The trends are, they're buying a lot of stuff if they're
driving at the convenience store or the gas station,
and they're going into buying the crackers,
they're buying a soda,
they're buying a water,
and then what I tell the kids is listen,
"This is how much you've spent on this.
This is your hard-earned money."
Then there's other ways to do it.
Can you go to the grocery store and buy it in bulk?
Are your parents a member of one of
the big clubs where they can get the crackers
that are about 27 cents each
a pack instead of two dollars?
It's funny when I walk into the store,
and I travel a lot for FoolProof and
I'm on a road and I'll stop and get a coffee,
I say to myself, "Man,
I should have got that coffee coming out of
the hotel because it's free",
or I have crackers in my bag.
I mean, it's one of those things that we
just take forward as we go.
The other thing is create shopping lists for your kids.
At a younger age, they start forming
money skills around the age of seven.
When you have them make out the shopping list for you,
have them look at unit pricing,
have them look at the process of what it's going to cost.
All those different things go into the idea.
But it really is be open to discussion.
It is multi-generational.
If you're a parent watching this,
talk to your parents,
they don't see it the way you do.
They may look at how you spend
money and their head may spin.
I look at my 28 and 25 year-old,
I've got a 28 year-old
that sometimes I look at him and go,
"Thank God, you don't ask me for anything",
because I'd be like, "Oh my God,
I can't even do the things you do."
As compared to a 25-year-old,
our daughter is so conservative,
we have to [NOISE] It's okay to
be in the economic system, those types of things.
Every kid's different. As a parent,
you have different personalities in your children,
of course, as an educator,
you're coming in with 25 or
35 different personalities at all times.
Well, it's getting back to your story example,
Mike, that sense of ownership is so important to kids.
It helps build them that confidence to
make those critical thinking decisions
when they don't have a parent or
an adult helping them through that process.
That sense of ownership is really important.
Relating back to my stat of
over a trillion dollars of influence that kids have,
why don't you leverage that?
Why don't we leverage that as a society and get
them involved in that thought process?
They'll have influences from any kind of marketing,
TV, social media that they might be on.
But as an adult, you can go in there and say,
"Okay, how does that affect you as a person?
Are they trying to sell you
some idealistic viewpoint or
some lifestyle that doesn't fit into you personally?"
If we can start instilling
those critical thinking elements into kids early,
they start building that confidence,
and all of a sudden that becomes a habit
where they're faced with some marketing material.
They'll say like, "Okay, wow,
this sounds really cool, but wait a second,
that free phone requires me to sign up for
a couple years worth of
a plan that'll cost thousands of dollars.
Is that phone really free?"
I mean, just simple things like that.
Being able to leverage their influence,
not only gives them that sense of ownership,
it helps them grow up and have that part of the term,
by adulting, what does it feel like to be an adult?
Have them help pay the bills,
show what the actual time value of a dollar is.
One of the greatest lessons,
one of my favorite lessons in
FoolProof is actually looking at a fee.
You get charged a $10 bank fee,
or three dollars from an ATM, something like that.
How long does it take you to
earn enough money to take home that amount?
We're not talking gross pay, we're talking net pay.
How long does it take you?
Translating real dollars into time and effort,
being able to spend at
a job or doing chores around the house,
any type of way to earn income,
that relates it right back to that time value of money,
that is so important to kids because as they get older,
they're going to start realizing
the value of time that they have,
that time is a commodity as well,
and it will give them those tools to build those habits,
to be able to move forward and be able to have
those critical thinking skills and make
right decisions for their part in life.
But do you have any other ideas for
habits that you can help those kids build, Mike?
Yeah, I think as a peer,
and even as an educator,
you really want an independent resource.
I mean, it's really important that if you do
a Google search and you look at
the difference between renting,
or leasing a car, or buying a car,
and you go ahead and punch that in,
the first six you're going to
get is for probably leasing,
this next six you're going to get for financing
your car or using a credit union or a bank,
they all have their agenda.
The one thing you really want is you
want that independent resource.
Don't be that 64 percent of
the parents that don't want to
talk to their kids about money.
If we all have those conversations,
the nice thing too is,
when your child comes back to you from school and if they
take a personal finance class or
they're taking a business class economics,
and they want to come back and talk to you about it,
if you're not sure what they're talking about,
because hey, we're never
really sure what they're talking about,
feel good about going in and looking it up.
Go to FoolProofMe.org, or go somewhere to get
the information so you can have that conversation.
That's the key.
My daughter just went out and bought her second car.
She graduated from college early,
and we helped her buy the first one.
Of course, she's got a great job,
but she didn't have a lot of credit.
We had to go through the whole thing,
and I said, "You're finance major,
you're a FoolProof kid",
and she goes, "I know dad,
my credit though isn't high
enough because I don't have any."
We had to go through and look at how to
build her credit together.
Now, to me, fantastic,
I had a great time and I didn't have to sign.
[LAUGHTER].
The idea is that it's just one of
those things that as a parent,
not everything is teaching,
a lot of it as you start
developing money skills with your children,
you become more of an advisor,
which is really cool.
That's great, Mike. Yeah, it's
all about those independent resources.
Obviously, we love FoolProofMe.org,
but also look for other sites out there.
Look for places that have sponsored content
where an advertiser is actually paying for
an article to be published.
That's a big red flag there.
Look for those little cues out there to be able
to make sure that you are
truly giving independent research.
Hey, here's to being a healthy skeptic.
[MUSIC].