To describe my main objective in writing this series, Teen Money 101, An Introduction to Teen Money Management, Teen Money 102, An introduction to Teen Entrepreneurship, and the relevant Teacher’s Guides; I must recount the following story.

In 2008 I was a Financial Advisor and was on vacation visiting a longtime friend, let us call her Ann. Upon arrival in the Cayman Islands Ann informed me that she was taking early retirement. Ann was from Barbados, I met her at the University of the West Indies (UWI).

When Ann told me that she was going to retire I told her that I wanted to look at her retirement funding to see how she would live during retirement. She had worked in three countries, her homeland of Barbados, in Nassau, Bahamas and in Grand Cayman, Cayman Islands. Therefore, she should have had three sources of retirement income.

During the week of my visit, Ann put off holding the retirement funding conversation. On the last night of my stay, I told Ann that we were going to look at her retirement funding whether she went to sleep or not. I should not have said that.

After dinner, I opened my laptop and started asking questions. The first area we looked at was her Income and Expenses. Ann had no idea of what her income would look like in retirement. She had no idea of her total cash flow. What was her monthly retirement income from Barbados, the Bahamas and the Cayman Islands? She had no concrete numbers.

OK, in Ann’s case there was no identified steady income. But there were expenses. The normal expenses of running a home, a car, health insurance etc. Added to this, she planned to return to Barbados and retire in her homeland. This plan added moving expenses.

The numbers of her Income and Expense statement were transferred to a Cash Flow statement. The Cash Flow Statement showed an imbalance. There was more money going out to pay bills than was coming in in the form of income. At this point in our discussion, there was no concrete idea of income, and an estimate of expenses, not a good picture.

We next looked at Ann’s Balance Sheet. Ann had little cash but had some real estate holdings in Barbados. She did not plan to liquidate her real estate holdings since she planned to build a new home on the land that she owned.

At a quick glance, we had another picture where there were assets, but not liquid assets. Ann expected to incur some liability when she built her new home. The new home will increase her liabilities but will also increase her assets. At his point it was unknown if there will be a balance and if her wealth picture (Assets minus Liabilities equals Net worth) would be positive. Ann had insurance but she was unsure if she had term or whole life insurance or if there was a cash out option or the amount if there was one.

So, Ann’s personal financial picture continued to look bleak.

Next, we looked at her plans for the next 6 months. The cost of a move back to Barbados and the funding of that move which would absorb her available cash.

The next day when I saw Ann, she told me that she did not sleep during  the night due to the negative financial picture that had been depicted. On my side, I did not sleep also because ‘there but for the grace of God’ my situation could have been the same.

As Ann drove me to the airport we chatted about her situation, and I informed her that based on what I had seen from her finances she would have to continue working. She had already resigned from her job as a teacher in the government sector. Ann had a Master’s degree in mathematics and like most people she had never looked at her personal financial situation. Ann  now had to look for a job in the parochial sector.

She had this question, and the question was ‘where was this knowledge when we were growing up?’

We were both very well educated, but we had never had a financial literacy class and basically a lot of our finances were not up to par.

With this burning question from Ann reverberating in my ear,  I got to the airport, and I had three hours of wait time.  So, what did I do with this time?

I had a laptop with me, I had three hours and I decided to make use of this time. I started to write a love letter to my niece and nephew. I started the  chapter of what became Chapter 4 of Teen Money 101, Income and Expense. This category was fresh in my brain, Ann had at this time no income but many expenses.

From that ‘love letter’ the book took structure and what started as a love letter to my niece and nephew, was built upon and later became Teen Money 101.

The main  objective of this book Teen Money 101 and this Teachers Guide is embodied in Ann’s story. The main objective is to impart knowledge of personal finances and money management to enable teenagers to become financially aware and to make educated financial decisions as a life habit.

MAIN OBJECTIVE:

To never hear anyone say: ‘Where was this knowledge when we were growing up?’

I personally wish that I had had this book and financial literacy education while growing up. I would have made  different and financially educated life decisions. Therefore, my passion is to educate global youths.