MS. DIANE REHMThanks for joining us. I'm Diane Rehm. As summer begins, and the excitement of graduation begins to fade, a panel of experts joins me for a conversation about young people and money, what challenges they face as they transition toward financial independence.

MS. DIANE REHMHere with me, Michelle Singletary of the Washington Post and Annamaria Lusardi at The George Washington University. Joining us from New York, Ron Lieber of the New York Times. I do invite you, as always, to be part of the program. Give us a call, 800-433-8850. Send an email to drshow@wamu.org. Follow us on Facebook, or send us a tweet. And welcome to all of you.

MS. MICHELLE SINGLETARYOh, it's good to be here, thank you.

MS. ANNAMARIA LUSARDIGreat to be here.

MR. RON LIEBERThank you for having me.

REHMRon Lieber, I'll start with you. I love the title of your book, "The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money." You also write the "Your Money" column for The New York Times. Set the stage for us. What are the biggest financial challenges young people today are facing?

LIEBERWell, I think it starts with the fact that the majority now, even really the vast majority, are coming out of college with some kind of student loan debt. And as parents, we want to help them sort of get on the straight and narrow with paying that back. Even if they have no income or very little at all, they can get themselves into federal programs for their federal student loan debt that will help them pay according to what they earn. What we want to avoid is having them default or forget or to lose track because that can make a mess of their credit, and we want to help get them on the right track into adulthood and into financial adulthood.

REHMAnd Michelle, how is this different from what's been the case in years past?

SINGLETARYYou know, people like to talk about the surveys that show how little people know about personal finances, as if oh, those dumb consumers aren't doing their job. But the fact of the matter is, personal finance is extremely complicated these days. As Ron just said, you know, people have got student loans, and in those student loans there are different types of ways to pay it back.

SINGLETARYAnd then they've had multiple loans. People think it's just one loan, but they get one each semester. So they got (unintelligible) for that. Then there's a 401 (k) and 403 (b) and Roth, and what is that, and IRA, and I heard something about insurance. Should I have life insurance? And there's, you know, there's no just the 30-year mortgage, there's a, you know, 15-year mortgage, there's arms. You know, I mean, there's a lot to consume. And so I think that's what's so different. It's not your grandfather or grandmother's finances anymore, where they just had a simple savings account, a pension and Social Security. It's much more complicated than that, and it's hard to keep track of all of that.

REHMAnd Annamaria, what does the research tell us about what young people know today and how they're dealing with these challenges?

LUSARDIWell, what we know from the research, it's actually that young people know very little. So I have to echo what Michelle said earlier. You know, both when we look at people at high school, and this is actually a very important time because students have to make one of the most important decisions of their life, whether or not to go to college and how to finance that education, but just recently we saw that the data from the OACD program for international student assessment that actually evaluates financial literacy among 15-year-olds actually tell us that, you know, around the world, really, young people know very little.

LUSARDIAnd then when we look, you know, further in the older ages, for example we look at the millennials, and they face so many financial challenges, they as well really show very little financial literacy.

REHMSo it would seem that what you're saying is that once you graduate from college, that's a bit late to start learning about financial literacy.

LUSARDIYeah, it is late in my view because, first of all, you have made a lot of decisions already, and we see that students already engage in a lot of financial decisions in college, you know, and they have student loans, and they had already made decision on the student loans, and they have other opportunity to borrow during the college years. So it is late, in a sense, to learn. There, of course, it's never too late to learn. It's always important. But I think if we really think of financial education, we should think of financial education much earlier on, before we make these decisions.

REHMRon Lieber, talk about student debt for a minute. How much student debt do these young people actually have?

LIEBERWell, it's something on the order of $1.2 trillion, that's trillion with a T now. That's more than the outstanding credit card debt in America. Now, a lot of people who get into debt have a reasonable amount of debt, they take out the right kinds, and they pay it back. This debt can be good for them if it allows them to get an education that they would not otherwise get. But the fact of the matter is that it is incredibly complex. And just to echo Michelle's point, not only is it complex, but we are heaping ever more amounts of financial responsibility at young people at ever young ages.

REHMHow so?

LIEBERIt is a national disgrace that we are asking teenagers at 17, 18, sometimes 16, to make these six-figure decisions about where to go to college and how much to borrow, and we are not preparing them for that moment. And to the professor's point, we absolutely have to start earlier, not at 16 but at six.

REHMBut Michelle, you wrote a column recently about the role parents play early on.

SINGLETARYYes, you know, I love what Ron said, that these young folks are making decisions, and we have co-opted parenting earlier. So now when it comes to college, we say to them, well, let them go wherever they want, but they're not paying for it. And even when you go to orientation, it's all geared towards, well, they're adults now, and yet the bill comes to me. And I'm the one, my husband and I are the ones paying the bills.

SINGLETARYAnd so what I wanted to do in the column for the Post was to say it's okay to help these young adults until they are able to fully launch. The old wisdom that once they get 18, let's kick them to the curb, and they need to learn all this stuff, well, you know, that's not going to help them launch in a safe way. So if they have a lot of student loan debt, and it's possible, they should come back home, not pay rent and channel almost all of their income to getting rid of that debt.

SINGLETARYIf they, you know, have been out and having trouble, let them come back, but again, you've got to watch it and parent and make sure they're doing it. But I don't -- I just subscribe to this idea that just, let's kick them out, and they'll learn on their own, and they're struggling. That's something that we should behold as a great attribute.

REHMAt the same time, going back to this decision-making process about college itself, I mean, if you've got a very bright student who gets scholarship help, who gets all kinds of financial aid, that's one thing. But if your child has visions of going to an expensive college, putting the burden on you, the parent, I mean, how should those kinds of discussions take place?

LUSARDIYou know, these are complex decisions, and I think there is clearly an important role for parents in the financial socializations of students. You know, when we speak of student loan now, the amounts are indeed very large, and so I think, you know, in a sense, students have some responsibility for that, but, you know, clearly there is an important role for the parents, as also the book by Ron really shows.

LUSARDIYou know, and I think because the student, in a sense, are so young and know so little, I think just leaving that decision on that shoulder I think is just going to jeopardize them. You know, we have to be aware of the difficulties of that decision, and I feel we even have to help the parents make that decision. So actually let's share, I think also, that burden, for example with the school, the school counselor and the university, as well. You know, these are not -- these are very consequential decisions, and they are very complex.

REHMAnd Ron, if a young person says, well, I want to go to an out-of-state college, an Ivy League college, and I'll take on all this debt, and somehow I'll pay it back, or mom, dad, will you take on this debt, I mean, that conversation really has to take place.

LIEBERAnd it has to take place early, and it has to take place often. The complicated part of this college financing process is that it's a really big number, and you're not getting your answers from the school, quite often, until March, maybe even the end of March, possibly the beginning of April. Maybe you appeal some of the financial aid decisions. And then you have a couple of weeks, maybe a matter of days, to weigh these offers against one another. It's often possible that the quote-unquote expensive private school turns out to cost less than the state school once financial aid is taken into account.

LIEBERSo you need to be thinking well in advance about what are we going to do in each of the following possible scenarios, what might it mean in terms of debt and what that might mean when you are 22 or 23 in terms of how much money you might have to pay if you choose to take it on.

REHMRon Lieber, he's the "Your Money" columnist for The New York Times and author of the book titled "The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money." And when we come back, we're going to talk about even younger people and how to best teach them good thoughts about handling money. Short break, right back.

REHMAnd we're talking about young people and money, and as I talk about young people, I don't just mean college age and onward but even the very young. And we'll talk in this segment about how to help very young people learn good rules about how to handle money. With me today, Annamaria Lusardi, she's professor of economics and accountancy and academic director of the Global Financial Literacy Excellence Center at George Washington University. Ron Lieber is the "Your Money" columnist for The New York Times, author of "The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money." And Michelle Singletary, syndicated columnist of "The Color of Money" for the Washington Post.

REHMMichelle, what is the best way to approach, and at what age, your youngster about the value and how to use money?

SINGLETARYPeople often ask me at what age should you start teaching children about money, and I said the very first time they start to ask for something, they point at it at the store, that is the moment that you start teaching them about money. And even if you don't think that they're going to understand it, I mean, I was talking to many of my kids when they were three and four, and we're in the car, and we're passing a fast food restaurant, and they're, like, mommy, mommy, and I say really, I got two words for you, college fund.

SINGLETARYAnd they're looking back at me in their little car seat not understanding what in the world I'm talking about, but I knew what I was talking about.

REHMOf course.

SINGLETARYAnd I tell you, there was one story, I don't like the word just before any amount of money. Like people will say just a dollar or just 50 cents. So I taught my children never to say that because every penny counts.

REHMCounts.

SINGLETARYAnd so I would give them a lecture every time they used it before that. And my little one, Jillian, we were in the car with my son Kevin, and he went to say just a dollar, and she was about three, and he was maybe about five, and she said Kevin, no, don't say just before money, oh my goodness. And then of course I gave them a lecture for about an hour about the (word?) of money.

REHMOf course. What are your thoughts?

LUSARDII think as soon as possible is clearly also the answer, but I would also like to add financial literacy in the schools. You know, I think it's really important that they also see it in an institution for learning, and I think this also gives an opportunity for everybody to learn. And so as we do it for every other topic and every topic which is complex, let's add it to the curriculum as early as possible.

REHMAre you talking then about elementary school?

LUSARDIElementary or even earlier.

REHMEven earlier? What do you think of that, Ron?

LIEBERI think it's a fine idea. I'm, you know, a little reluctant to heap ever more responsibility on our nation's public school teachers. They already have a lot they're contending with.

REHMI agree.

LIEBERI'm a little bearish on the prospect of it happening, although I would like it to, and I agree with the professor. But in the meantime, it is on us as parents...

REHMParents.

LIEBERTo build our own curriculum, to do this ourselves, to start early and to give kids practice. You know, I think allowance and money, we ought to see it as a tool for learning, and kids should have ever more money and ever more responsibility as they age so we can get them ready for that big decision that they are going to participate in when it's time to think about college.

REHMSo would you include -- do you think it's wise to include quite young people, even elementary school people, in the fact of, say, monthly bill paying?

LIEBERI think we should. You know, I think it starts with letting them handle their own money. The three jar approach for allowance is tested and true, and it works for a lot of families.

REHMThree jar?

LIEBERThree jars, save and spend and give. So it lets them practice spending money in the moment and maybe feeling, you know, regret or also pride in what they're able to purchase for whatever it is that they have. Saving, you know, patience in a world that conspires against waiting in children. This is a skill that we need as grownups, to be able to save for a down payment or retirement. And then giving, you know, the recognition that if we're lucky enough to have a little bit left over, that we are obligated and that it feels good to throw the rope back for others. So practice.

REHMAnnamaria, what do you think about that three jar approach?

LUSARDII love it, and actually I read it in the book of Ron, as well. So I think it really does teach, you know, important skills to the young people. But I want to warn yet again that, you know, if we leave it to the parents alone, not every parents, right, has the skills. And actually if I look at the three jars for the parents, you know, we see little savings. Often we see a lot of spending. And, you know, I don't know how much giving we are really seeing. So, you know, I think it's critically important, of course, that the parents do this, as well, but, you know, if we don't have an opportunity for every child I think to really experience, to really acquire these skills and, you know, to really be able to listen and to discuss about money, you know, even outside the house, I think we might not be able to really reach a large number of those young people.

REHMIt's interesting to me to recall that on weekends, my late husband used to pull out the big checkbook, and one of those two children would be at his shoulder almost, saying, well, what's that for, dad, and where's this money going, dad. And, you know, just by observing, they both gained a literacy that I certainly never had a young adult. Michelle.

SINGLETARYI think that's absolutely right. It's actually not an either-or situation. It has to be both, you know, what we can get into the schools and what we can teach parents. And I think that all of us who are in this financial literacy arena, Ron, Anna, myself, you know, we need to be out there showing folks how do that. I mean, I have a program at my church called Prosperity Partners Ministry, where I teach people how to handle their money.

SINGLETARYYou know, my husband and I volunteer in prisons to teach inmates who are about to be released how to handle their money.

REHMHow wonderful.

SINGLETARYTheir money and their children's because they're coming from a situation where they weren't in their children's lives, and there's going to be a lot of demands. And so it has to be a conversion of all of this, all of us working together. But it is absolutely true that children live and learn what they see, and they're going to practice, good or bad, what they see in the home. So even if we get it into the schools, we need to bring along the parents. So when we have PTA meetings, instead of them going over what the agenda is and what, you know, stuff that we can find on the web, let's have some financial education programs for the parents so they can reinforce what the children are learning in the school because if the parents don't reinforce it, it's not going to happen, most likely.

REHMAll right, and Annamaria, I want to go back to that column that Michelle wrote about helping out your children when they are in need, perhaps before they've gotten a job, whether you as a parent are justified in asking them for rent, asking them to help out with the expenses of the house, or if there is no job, helping out in other ways. What are your thoughts?

LUSARDIYou know, I think there are good reason for people to actually start taking financial responsibility. So I think one of the, you know, good positive aspects of asking young people to do that is actually it teaches them what it is like, you know, to run a house, you know, to, you know, to have an apartment, the expenses connected to that and so on. You know, and I think it's really very much up to the parents to decide, you know, how much the young people have to contribute and, you know, it very much depends on the situation of the parents and what they want to teach to that.

LUSARDIYou know, many, many financial decisions have, in my view, a lot to do about the future. And I think, you know, we really want to instill in people that sense as well, that, you know, they for example have to think of, like, future events, (unintelligible) and they have to, you know, for example, think about buying a house or, you know, their own retirement or, you know, plan for other future events. And, you know, it's important to start early.

REHMAt the same time, Ron, I'm thinking about the number of people who are near retirement and do not have an idea of how much money they're going to need in retirement.

LIEBERIt's true. It's a difficult thing to figure out because we don't know how long we will live, we don't know how long physically we will be able to work, and if we have an employer, or even if we have clients, and we have our own business, we don't know how long they will want us around. And so it becomes a very tricky decision vis-à-vis how much we can feel like we can afford to help our kids with financial support and for how long.

REHMAnd for how long. That's a good question, for how long. How long do you think parents should be willing to help their children, Michelle?

SINGLETARYI think you'd look at each individual child, and if the child has been very responsible but needs some little bit of time, you know, I think you help as long as they need it, and it could be to their mid-20s, it could be to their early 30s. I mean, I have a niece who went to Columbia University. She's a social worker, I mean, a therapist, and I just gave her -- my husband and I agreed to give her money to help take her next licensing exam. We paid for her books while she was in grad school. And while she was starting as a young adult, we gave her a monthly allowance to buy her subway pass in New York.

SINGLETARYAnd so some people think, oh, she should do it herself, but she was showing us that she was doing her part, and we gave her a little bit of freedom. And to this day, she still doesn't have a credit card. So she's managing her money well, but it's tight in New York. And I think that's what you do. Now if you've got a trifling kid that is just spending money and laying around, then yes, you charge them rent, you give them a, you know, a time period where they have to get out if they're not going to do what they're supposed to do. But each child you help according to their need and what they are doing.

REHMRon, do you see that young people today expect more help than, say, my generation did?

LIEBERWell, I hesitate to ascribe particular feelings of expectations or even entitlement to an entire generation. I think so much depends on how they were raised and whether their parents, you know, taught them from the earliest possible age that they bear more than their fair share of responsibility for making things happen in their academic life and then making things happen in their professional life. So I'm not sure I'm ready to write them all off.

LIEBERBut the facts are the facts, as we have been discussing. The cost of college is much higher than it used to be, even adjusted for inflation. Things are just different.

REHMAnd how do you see it, Annamaria?

LUSARDIYou know, there are more needs, as Ron said. You know, contrary to the generation in the past, you know, today young people start their economic life in debt, right, and so that's very different than the past. So in a sense, they really do need, with respect to previous generation, you know, perhaps more help or more guidance, you know, more -- there is so much more to decide. And also I think there are so many more opportunities to be wrong and more opportunity to go down, you know, the wrong path and really pay high consequences.

REHMAnd you're listening to the Diane Rehm Show. But that raises the question of whether people are, young people, making decisions that are not in sync with the reality of their financial abilities. And we talked a lot on this program about college, how important it is in terms of getting jobs but at the same time, the need to think in terms of realistic amounts that you can spend for college, realistic ways to think about the job ahead, and I wonder whether those are out of sync, Michelle.

SINGLETARYIt's absolutely out of sync. We have given everyone the message that you've got to go to college, and for most people that is true, although there are some people who, you know, just, college is not for them, and there are other ways for them to earn income. But absolutely, and we've told people, college at any cost. We've said things like college debt is good debt, as if debt is good. It's never good. It's always a monkey on your back.

SINGLETARYAnd people will say, well, if my kid gets into X school, I have to let him go. Oh my God, if they don't go to an Ivy League or something, they're going to -- they're not going to meet people to get a job. You know, I work at the Washington Post, one of the best newspapers, no offense Ron, in the world.

SINGLETARYYou know, and I went to a state school, University of Maryland, go Terps, and I sit across from a guy who went to Harvard. And guess what? We both ended up at the Washington Post. I came from a low-income background. He came from a background with wealthy parents. And so I think the message should be go where you can afford to go because if you're a bright kid, you're going to succeed wherever you go.

SINGLETARYThe message should be let's not take on debt, zero debt. Start from that point of view and take on -- if you're going to decide, I don't think you should, but if you're going to go that route, take on as little as possible. That may mean going to a community college for two years and transferring to a four-year university. That means staying at home and commuting. And again, you could qualify for more aid at a school, but when we look at the student loan debt, we think, people will say, oh, it's still kind of manageable. But we're not looking at the people who went to college and didn't finish and still have debt. And we also are not looking on the amount of student loan debt parents are taking on.

SINGLETARYSo that $1.2 trillion figure does not take into account all those others, and it's particularly jeopardizing for me as an African-American because there's so many minorities who have taken on debt and are not finishing, and then you don't get the income to service that debt. So, you know, I'm an anti-college debt person, and I'm not going to apologize for that because I think if you start from that point of view, then people will take on less, and there will be less pressure on the children and the families because we're talking about legacies created of debt that we have got to stop.

SINGLETARYAnd so absolutely, we are totally out of sync. And I -- you know, my husband and I manage our kids' expectations for college. We said listen, go -- apply wherever you want, but if you don't get enough free money to match the money that we save, you cannot go to that school. And we had that situation. My daughter wanted to go to UNC, and, you know, we said we can't afford it. And she's at Maryland, and she's happy. She's doing well. She just got on the dean's list. She's going to be good. She's going to get out of my house so I can have time with my husband. That's the message that I think we have to say. Stop selling college at every cost, at any cost.

REHMVery interesting. What do you think, Annamaria?

LUSARDIYou know, I love what she said. You know, personal finance is truly personal. You know, that's where the name comes from. And, you know, in a sense, financial decisions are decisions that should take into consideration the personal circumstances. And that's why there is no, you know, one size fits all, you know, one size fits one. And so this idea, you know, college at any cost is really, in a sense, you know, an empty statement.

REHMAnd yet, too many young people have gotten into that mentality, as well as their parents. All right, short break here. When we come back, it will be time to open the phones. I want to hear what our listeners have to say about all this. Stay with us.

REHMAnd welcome back. It's time to open the phones. What are you doing about teaching your children about money? How well are they learning and at what age did you start? Let's go first to Jim in Rockford, Illinois. You're on the air.

JIMYes, thank you very much for taking my call. You've touched on one of my bigger pet peeves as a Gen X, Baby Boomer customer dealing with millennials and younger, and their parents, is the sheer ignorance of basic, like, things like consumer protections or, you know, uniform commercial code in dealing in transactions. What's an offer? And I can give you some examples, if you like.

REHMVery briefly, sir. We've got lots of callers waiting.

JIMHere's a really good one. You know, one of the most common financial instruments used today are credit and debit cards. Most people that I, I would say, 60 to 70 percent of the people that I deal with in transactions don't understand that this is a service company. It's not issued by your bank. It belongs to Visa, Mastercard and so on. And they have contracts. And if you don't follow the contract, then you can't use the instrument. And people will try to impose their will or impose what they think should be instead of what the contract language is.

JIMAnd then, they wonder why they have all sorts of, you know, credit card fraud.

REHMAll right. Michelle, do you want to comment?

SINGLETARYWell, I'm not quite sure his point, but you are right that people don't necessarily understand all of the particulars about debit and credit cards.

REHMRight.

SINGLETARYBut let's be mindful of how these things get into folks' hands. There is a masterful marketing machine to encourage people to use plastic instead of cash. Well, we know that studies show that when you use plastic, debit or credit, you spend more than cash. So, it's not entirely the fault of consumers that they fall trap to these instruments, because they've been subliminally told, commercial after commercial after commercial that money -- why would you, you're a crazy person if you carry around cash.

REHMWhat do you think, Ron? Are you aghast?

LIEBERI'm inclined to agree with Michelle on that. You know, I think the danger that a lot of younger people get into, in particular, is that they're just not aware of how the math works, if you don't pay your credit card bill in time. And they're not aware of just how many fees you can rack up if you overdraw on your debit card, if you spend more than what is in the bank. And so, you know, we are told, and kids are told through the marketing, that these are sort of slick instruments that give you rewards, they make life easier. And the downsides you only find out about the hard way.

REHMAnd don't some parents give their children debit cards with a certain amount of money on that debit card? And then, when you run out, you run out.

LUSARDIYeah, I mean, in a sense, one can teach (unintelligible) children and, you know, the debit card, for example, is easier and perhaps a better teaching tool than the credit card, of course. I agree, I think, with the person who was speaking, to say that, you know, we give this financial instrument to everybody. These are complex instruments and, you know, most of the people really don't know how they work. You know, don't know that, you know, what are the interest charges on that?

LUSARDIAnd, you know, all of the fees and so on, and so I think that ignorance combined with the capacity to, for example, borrow so much can be, you know, quite a dangerous situation.

REHMTo Tony in Tulsa, Oklahoma. You're on the air.

TONYThank you, Diane, for taking my phone call.

REHMSure.

TONYI come from Tulsa, Oklahoma, and I can, from firsthand, tell you it's very difficult to teach students to grasp the importance of financial literacy. I think they really want to understand, but not all the schools within all the districts have the programs that make it available to students to learn from these things. And I think one of your panel said earlier, there's a lot on teachers' backs already, and I do agree. We have a lot we have to teach, and financial literacy is just one of those things.

TONYI think, you know, we see cuts in schools. We see things that schools have to make, you know decisions, and sometimes financial literacy is one of those things that schools, with everything else we have piled on our backs. It's just, we're not able to make it into schools, but I understand that the parents have played their important role in this, and we as teachers try to fill in the gaps where we can. But just emphasizing the difficulty there is to teach...

REHMI totally understand, Tony. Here's a tweet from Ethan, which sort of backs up your statement. He says, "financial ed. can't just be on parents' shoulders. That will only advance inequality as educated parents pass that on when others can't." Michelle.

SINGLETARYYeah. Again, we keep talking about an either/or situation, and I think to Anna's point, we have to do both. As best we can, incorporate financial literacy in a math course. If you're going to be teaching percentages, why not talk about percentage offs and the percentage on credit cards, and incorporate it in the lesson, so that it's real life. And also encourage schools to have forums and after school activities for parents to do financial literacy. Because I think to the caller's point of view, they can teach this, but if it's not being practiced at home.

SINGLETARYIf it's not being modeled at home, then those lessons are going to fall on deaf ears. I don't know about you, but I took a lot of classes, and the moment I took that final exam, that stuff was out of my head and on to something else. But my husband and I try to model and practice constantly and I understand that we are more higher income and so we're going to probably teach our kids a little differently. But again, it's got to be a twofold thing, parents and in the school.

REHMRon.

LIEBERYeah. To Michelle's point, you know, I think that the way a lot of grown-ups learn about money is that they pick it up on an as needed basis. Right? And to what Michelle was saying about it going in one ear and then out the other the moment the course is over, what I really wish we saw more of in the schools that we barely see at all is that if they would sit down the second semester juniors and the first semester seniors, in math class or in economics, or wherever they want to do it. And give them a 12 week long mini-course on exactly how the college financing system works.

LIEBERLooking at the FAFSA, rehearsing how you're going to ask your parents for their financial information that you need to put on that financial aid application. Evaluating the loans, the different kinds of loans, how a grown-up budget works when you're 22 or 23 or in college. That's giving them the information when they need it, when it will make the most sense, and when they can put it to use right away.

REHMLet's go to St. Petersburg, Florida. Jaclyn (PH), you're on the air.

JACLYNHi Diane. Thanks for taking my call.

REHMSure.

JACLYNI am 23, so I am the millennials that you guys are talking about. I graduated college a year ago, and when I was 18, my dad told me that he would not let me get any student loans. And I was incredibly angry at him, because, you know, all my friends are going to whatever school they want, taking out loans, and that caused a lot of tension between him and I. But now, on the flip side, my first year out of college, I am eternally grateful to him for not letting me take out any loans.

JACLYNBecause I'm the only one of my friends that doesn't have debt. I mean, I have a car loan, right? But I don't have 60, 70, 80,000 dollars in debt. Meanwhile, my friends whose parents let them do whatever they want, are struggling on, you know, 30,000, 40,000 dollar salaries trying to pay back all these loans from going to their dream school. Which really didn't get them a higher paying job in the end, anyway.

REHMGood for you, Jaclyn.

SINGLETARYJaclyn, Jaclyn. Is your dad still with us? He's still alive, right?

JACLYNYes.

SINGLETARYAnd what are you going to do for him for Father's Day? No, I'm totally serious. I just wrote a column about this. I want you, Jaclyn, and when you finish listening to the show (unintelligible), I want you to write a letter to your father, and everything you've just said to us, put that in a letter. You can get a dollar card, in fact, don't even buy a card. Print it out on your computer. And I want you to write that and laminate it and send it, or give it to your father.

REHMI think that's a great idea.

SINGLETARYBecause he gave you such a great gift.

REHMHe sure did.

SINGLETARYAnd he ought to know what he did for you.

REHMThanks for calling, Jaclyn. That's a great story. Now, here's an email from Larry in (unintelligible) North Carolina who says, "when our kids were young, they didn't have chores or an allowance," something we haven't talked about. I want to get to that. "They did jobs, jobs when they wanted money. We paid them on a sheet. The sheet had two columns, one for spending, one for savings, the third, one third went for savings, the rest for spending. When they fought, they lost money from the spending side. When we, the parents, cussed, the kids got a quarter from the spending column."

REHM"That seems to have taught them to save. The biggest problem was when they turned 18, found out their saved hundreds of dollars didn't buy them a mansion or a yacht. But they seem to be adjusting." Things cost a lot more these days, don't they, Ron?

LIEBERThey do. And, you know, if you're lucky enough to be able to afford to hand over a little bit of money, or in the very least, a lot more decision making authority with the parents' money, I think you ought to do it, to give them that practice. Now, as far as allowance and chores go, you know, I'm glad that system worked out for that family. I'm not a big fan of turning our households into, you know, forums for financial transactions. I think kids ought to do chores, and they ought to do a lot of chores.

LIEBERAnd they ought to do them for free, because that's what the grown-ups do, and that's how we show that we care for one another. To me, allowance is something different. Money is for practice, it's a teaching tool, like books or art supplies. If you hand those over to your kids for free, I think you ought to hand them money, too. Because we want them to get good at it.

REHMAll right. To Cincinnati, Ohio. Hi there, Stephanie. You're on the air.

STEPHANIEHi. I work at a public high school here as a college counselor and we have the whole socio-economic range and academic range. So, there are kids that are always PELL eligible, kids with very low GPAs up to 4.0. We beat our heads against the wall every year in dealing with this financial piece. And it's clear to me this does need to start very early. We are talking to kids about careers in elementary school. I think the financial literacy should be a part of that, as well.

STEPHANIEAnd our district, if you are PELL eligible when you graduate, you can get an additional grant from the local university that provides free tuition and a 1200 dollar a year book stipend. I can't tell you the kids that walk away from that every year. And because it's local, they want to be out of town. The new norm is now that you have to go out of town, be in a dorm, and people don't seem to have the filter of, we can't afford that. We see kids, we've seen this pattern of kids starting out going out of town, contacting us a year or two later. Send my transcript to the local two year school.

REHMWow.

STEPHANIEYou know, because they've taken on the debt.

REHMSure.

STEPHANIESo, we have stepped up our conversations, our meetings, but you know, junior and senior year is too late for that. We have, the fall of our junior year, our students have a two week, post-secondary intersession, and we deal with that then. Two, and it happens earlier at our school, in high school, but I think this needs to be a consistent message from the time they're very young. We also have a high percentage of first generation students every year, 30 to 40 percent, and if you don't have any knowledge background, you know, to base your decisions on, that's a very difficult conversation.

STEPHANIEWe offer to meet with the families, you know, show us your financial aid package. We'll compute the monthly payment over 10 years, 20 years to show you how much you're gonna pay. And, you know, we have meetings. We don't have the turnouts we want.

REHMParents don't show up?

STEPHANIEIt's difficult, especially for -- yeah. I mean, well, but in their defense, these are parents that are often single parents.

REHMSure.

STEPHANIEBy poverty. It's hard. It's difficult.

REHMOf course.

STEPHANIEThis is difficult in urban districts.

REHMAll right. Annamaria.

LUSARDII completely agree with this caller. I mean, this needs to start really early. First of all, I also think that financial literacy, as I think she hinted to, is also about knowing, you know, where to search. You know, knowing the information that is out there. And all of the rights and responsibilities that you have. You know, there are all of these grants, these Pell grants and other opportunities, really, to do this. And also, you know, we need to start early to make this decision.

LUSARDIYou know, you can't think about going to college when you are 17 and you have not saved anything for it.

REHMAnd you're listening to The Diane Rehm Show. Well, here's a cautionary word from Courtney in Baton Rouge. She says, "I'm 39 years old. I still have student loans from undergrad. Then, I went on to school. I have to pay that back, as well. At the moment, I'm spending 700 dollars a month to pay back all the loans. This is the same amount of money that has been projected as what I should be saving a month at my age in a 401K. At the rate I'm going," she says, "I'll be finished with paying it all off in my late 50s."

REHM"I've stopped paying my student loans on three separate occasions. I was just worn out. It just feels like there's no point sometimes. Congress needs to really come together on this issue and abolish the interest." Well, that ain't gonna happen.

SINGLETARYThat's not gonna happen. You know, we've been talking so much about this burden of debt, and I don't want folks to go away from the program feeling like Courtney, that it's just too much or there's no hope. There's always hope. Even if you're burdened with debt, if you're a kid and you haven't saved and it's time for college, there's always hope. But to Anna's point, you just, and Ron, you just have to think differently about it.

SINGLETARYSo Courtney, I really don't want you to feel like there's no hope. You might have to make some different decisions. Maybe you don't have a roommate. Or maybe you've got a spare room in your house. Maybe, for a while, you might have to take a little second job to kind of get a handle on this. But there is always hope. You know, and all of us make bad decisions, so don't go away from this program thinking, just throwing up your hands. And certainly don't go away thinking Congress is going to save anything. For goodness sakes, that's not going to happen.

REHMYeah. For sure.

SINGLETARYSo, you know, help, and Courtney, talk to other folks, you know, tell your story to other families and friends and people you know to prevent them from going into the same situation that you went into.

REHMAnd maybe they'll have some other ideas.

SINGLETARYAnd maybe, that's exactly right.

REHMAnything you want to end on, Annamaria?

LUSARDIYou know, I also, I continue to be bullish on education, so we should also remember that the student loans are taken out, you know, in order to be, to achieve more education. This actually leads to better jobs and so on. So again, the student loan is certainly a burden, and I think, I'm worried too, that this burden is really delaying people for saving for retirement and making a lot of other decisions. And that’s why I think it's really urgent that we consider this situation. But at the same time, I think that people who are in debt, I think, should really be very proactive and try to, you know, do their best.

REHMLast word, Ron. Very quickly, please.

LIEBERYeah, again, I don't want anyone walking away from this show thinking that all hope is lost, that you should not go to college. Or even that borrowing, you know, a little bit of the right kind of loan is going to cause terrible problems. But we need to start talking with our kids sooner than we do now.

REHMEarly.

LIEBERTo get them ready to make the right decisions.

REHMAll right, we'll leave it at that. Ron Lieber of the New York Times. Annamaria Lusardi of George Washington University. Michelle Singletary of the Washington Post. Thank you all. And thanks for listening. I'm Diane Rehm.