Americans soak up knowledge to shore up finances

The Dallas Morning News (MCT) - Water cooler conversations, the symbolic purveyors of societal small talk, now include the words "derivatives," "Ponzi schemes" and "subprime mortgage."

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Welcome to America's new lexicon.

Financial seminars, workshops and expositions are sprouting up as years of excessive consumption and the subsequent economic downfall have forced people to admit their business ignorance and become more financially savvy.

This shifting mentality is reshaping how Americans view money, but it may most greatly influence a younger generation that has been reared in a climate of precipitous spending rather than calculated need.

"This is going to have a lasting impact," said Theodore Daniels, president and CEO of the Society for Financial Education and Professional Development, based in Arlington, Va.

"People want to understand more so they don't experience the same trap that other people are playing into."

The YWCA of Metropolitan Dallas has nearly doubled the number of financial empowerment classes it's offering compared with previous years. The Federal Reserve Bank of Dallas can't meet the demand for workshop requests and has printed thousands of copies of its "Building Wealth" publication on avoiding identity theft and controlling debt.

An online exhibit, "Finance Lessons," by the Dallas Women's Museum chronicles American women and money - and is getting 300 more hits a month than usual. And one of Amazon.com's 10 best-selling books this month is about protecting savings.

People are lining up to learn how to create a personal budget, manage their investments, reduce spending, maintain good credit and get out of debt. Sitting in the foreground of deflating balloons at El Centro Community College's business export recently, 20-year-old Leanna Camacho explained her own fast-forward lesson in economics.

"Before I didn't worry," she said, "Mom was always there to pay the bills."

Now, she pays rent on the Irving home where she grew up. She's substituted her car for mass transit, puts $50 more into her savings account monthly, has cut down on her softball games because they cost extra, and swaps shoes with her sister. She's chosen a career in radiology for the financial assurance, a safe decision rather than a passionate one.

"I am definitely more aware," she said, going back to her math homework.

The newly attentive are largely student groups, Daniels said. A growing number are contacting him to conduct college seminars.

Daniels' organization led workshops at 60 colleges two years ago. This year it will host at least 74, with Prairie View A&M University and Texas Southern University scheduled this month.

Young people "are saying, 'Our parents don't know this,' and transferring it back to the household," he said, noting that many adults who grew up after the Great Depression lack the financial lessons forced upon their parents.

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"We spend most of the time at school giving people knowledge and skills on income. Very little time is spent learning how to use financial resources" like accessing credit reports or managing budgets, said Daniels, who is also a member of the President's Advisory Council on Financial Literacy.

The desire for financial know-how has gone well beyond the classroom.

A cluster of people _ young black men, middle-aged Hispanic couples and elderly white women _ gathered for a recent financial empowerment class.

Mike Franco had driven back from Houston at dawn to make the Saturday morning class in Dallas.

"This has motivated me to fill in some gaps when it comes to resources and knowing what's available," said the 44-year-old investment support clerk. He plans to convey his newly acquired knowledge about spending plans to his son and the Latino youth he ministers.

"I notice they take things for granted," he said.

He said his son calls him the "Coupon King" because he tallies his savings from Internet specials. Franco has persuaded some of his son's friends to compile similar worksheets.

Over a three-hour period, the class examined how the participants' monetary values developed and explored methods to combat external and internal financial obstacles. The YWCA matches a year's worth of savings up to $1,500 for people who complete the 12-hour class and meet certain low-income requirements.

Mario Johnson, a 30-year-old floor installer, flipped through a handbook on money management and said he wished he'd learned it years ago.

"I'm always thinking schools didn't teach people how to survive _ financial literacy," he said. "I ruined my credit early and it's hard to fix. This would have prevented me."

Reeta Wolfsohn has been pushing financial behavioral change for more than a decade. The founder of the Center for Financial Social Work in North Carolina, she travels across the country giving seminars about changing the way Americans perceive money.

"Finance is something that a majority of people don't want to deal with whether they have a lot of money or a little money," she said. "It's the last great secret. We speak about sex before we speak about money."

About 200 people participated in her recent webinar, a sign she hopes indicates altered perspectives.

"In the future, children and grandchildren might come back and say, 'Where were you in 2008 when all of this started to fall apart?' "

But only time will reveal whether the current financial focus has lasting impact, she said: "I wish I were convinced that was the truth. I'm not."

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David Clark, a 24-year-old fashion student at El Centro, believes it will. He took a business course last semester and is teaching himself about 401(k)s and how to avoid financial fraud. He says he's more conscious about the way he spends his money, especially after two years of credit card debt.

"My generation will definitely understand and hopefully be the wiser for it," he said.

"I'm not wasting anything," he added, polishing off the last half of his turkey sandwich.

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CHANGE YOUR FINANCIAL OUTLOOK

To change your long-term financial outlook:

_Track your cash spending for three weeks. This is the simplest and quickest method for discovering where to alter your spending.

_Identify two spending triggers. These are conditions when you are more likely to spend - such as being sad, lonely, tired, etc.

_Create a strategy for coping with your spending triggers. Write a list of at least five alternatives to shopping or spending when you experience those triggers. Examples: Go for a walk or bike ride, call a friend, listen to your favorite music.

_In 25 words or less, write about your relationship with money. The healthier the relationship, the better your financial circumstances will be.

_Create a money mission statement in 50 words or less. This becomes your personal financial commitment to yourself and helps you align your spending with your desired financial outcomes.

SOURCE: Reeta Wolfsohn, Center for Financial Social Work

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© 2009, The Dallas Morning News.