When a rock band takes the stage, the last thing likely going through anyone’s mind is financial literacy.
Which was certainly the case when the band, Gooding, a rock group whose spicy Spanish guitar licks and powerful vocals have been featured on National Public Radio, various Hollywood film soundtracks and national commercials, serenaded the Rawlins High School auditorium Tuesday.
It was a homecoming treat for the students.
Amid the cheers and overall high-spirited atmosphere of the student body, however, the performance became more than just a rock concert.
Lead vocalist and guitarist – who simply goes by the name “Gooding” – used his encore to teach students about fiscal responsibility.
When his band members left the stage, he went into a “solo performance” of economics.
“I know it doesn’t sound really rock and roll for me to come up here and talk to you about financial literacy,” he said through the microphone, “but to me, the most rock and roll thing in the world is for you guys to have a fair shot.”
Using a slide show, Gooding highlighted a multitude of financial difficulties America’s younger generation faces, from credit card debt and bad credit scores to poor spending and bankruptcy.
According to Gooding, only four percent of the country’s population under the age of 35 makes more than $35k a year, while 76 percent live paycheck to paycheck, and 75 percent of divorces happen due to qualms over financial instability.
In addition, Gooding noted, in 1946, household debt was 22 percent. Now, “it’s 110 percent,” he said.
Eventually, Gooding asked students to raise their hands if later in life they wanted to purchase things like a vehicle, a home, or even get married.
In unison, most students raised their hand yes.
“Financial literacy is going to help you get those things,” Gooding said. “Understanding a credit score is going to help you get those things.”
First, Gooding distinguished what “fixed” and “variable” expenses were, saying variable expenses “are the crap we buy that we don’t actually have to have.”
Which, Gooding highlighted, is why high school students shouldn’t necessarily aspire to be their favorite icons without knowing the nuts and bolts of money.
According to Gooding, 78 percent of retired NFL players, as well as 60 percent of retired NBA players, are broke. Even famous actor Johnny Depp is currently dealing with money issues, Gooding noted, since he’s spends $200,000 a month on private planes.
“If you are spending more than you are making, you’ll suffer,” Gooding said.
To prevent debt, Gooding emphasized the benefits of opening an Individual Retirement Account (IRA) once students reach the age of 18.
With the accumulation of interest – or money making money for you – Gooding coined the term “slipper checks” – money you collect from your mailbox, without having to throw on street clothes.
“Fifty dollars a week, at six percent interest… by the time you withdraw to retire, it’s $678,000,” Gooding said. “It’s crazy, right? I wish I had known that at your age. You put away $75 a week on that return, you’d be a millionaire.”
It’s no wonder Gooding said, “It’s an easy way to make money.”
Another reckless way of spending students may face – especially once they hit college – is the prevalence of credit accumulation.
According to Gooding, some people may choose to acquire a loan from same day lending institutions, in which they incur a 400 percent interest rate.
With that, all that money becomes siphoned.
“How much money is leaving our communities?” Gooding asked the crowd. “You do not need a credit card if you haven’t had a debit card yet.”
Possessing a credit card void of a checking account comes all the headaches of dealing with a bad credit score.
So, said Gooding, when someone is in the market to purchase one of those “fixed” assets – which are necessary in life – and they have a bad credit score, interest rates are incomparable to those with good credit.
A 730 credit score will warrant about a two percent interest loan, while a person who tries to acquire that same loan – this time with a 599 credit score – will incur about a 15 percent interest rate, Gooding noted.
The lead singer, keeping in mind that some students may shrug the lesson off and crack a few jokes, reminded everybody that, sometimes, they’re the types of people who need the most future fiscal help.
Said Gooding: “Those same people will be asking you for a job in 10 years. I promise.”
Tuesday’s benefit was in accordance with Funding for the Future, a 501©(3) nonprofit aimed at promoting financial awareness and responsibility amongst America’s student population.
Additional fiscal tidbits amongst America’s youth (provided by FF):
n Seventy percent of Millennials are stressed about saving for retirement.
n Thirty-nine percent of Millennials worry about their financial future once per week.
n Eighty-three percent of HR professionals say personal financial challenges have a large impact or some impact on overall employee performance.
n Unbanked individuals spend an average of $40,000 during their lifetime on check-cashing fees.
n More than one third of the wealth inequality could be accounted for by disparities in financial knowledge.
n Sixty percent of Americans want to be more financially secure but don’t know how to get there; this is 70 percent for 18-39 year olds.