Retired bank executive Marjorie Anderson calls on her business and financial experience to help young people navigate their financial paths in The Key: Wise Money Choices for Teens.
Anderson keeps the text in The Key simple and offers, at the end of each chapter, “Questions and Exercises” that reinforce concepts while opening them to a wider discussion. The chapters cover ways to earn money, budgeting, credit cards, and calculating net worth, and provide samples of fictional teens’ budgets, as well as blank worksheets for readers to enter their own information. A helpful glossary of financial terms is also included.
As part of her research, Anderson surveyed over 100 middle- and high-school students, asking them questions about their financial status and plans. While an excellent concept, the survey (printed near the back of the book) is brief and doesn’t probe very deeply.
Anderson does an excellent job explaining the basics in plain, straightforward language, but there are a few occasions where the concepts are a bit oversimplified, as when she explains mutual funds: “Mutual funds tend to pose a slightly lower risk than some other investments. Over time, you can see your money grow considerably. If you put $100 a year into a mutual fund that has a 12% interest rate, you will earn [..]”
Anderson continues with an excellent example of the power of compounding, but her discussion of risk is extremely broad, and a mutual fund’s earnings (usually a combination of interest, capital gains, and/or dividends) would be best described as “total return.”
These are relatively minor quibbles, since in a book for teens, such detailed distinctions could distract from the larger issues. Anderson’s personal beliefs on giving to charity and buying American-made products are made plain and may not resonate with every reader. But overall, The Key is a helpful introduction to personal finance for teens.
Also available as an ebook.