July 24, 2008 — If a 22-year-old invested $500 a year for the rest of her work life, by age 67, she would likely end up with more than $1 million, and maybe even a lot more.
That kind of example can make a big impression on teenagers who have barely begun earning money, and it shows them the importance of saving and setting financial goals now.
A group of University of Virginia students have formed a volunteer organization, Financial Literacy for Youth, to promote sensible financial habits to 14- to 17-year-olds. Following a successful six-week program at Charlottesville High School in the spring, they offered a four-day, intensive summer seminar on Grounds July 21-24.
Four members, or counselors, of Financial Literacy for Youth worked with a dozen high-schoolers from Richmond and Lynchburg on ways to use money: spending, saving, investing and giving it away. Among a range of topics, they discussed the hazard of using credit cards and benefits of budgeting. The leaders advised not giving in to short-term satisfaction — instead thinking ahead about long-term rewards.
"Why is saving important now when you're young?" asked Christopher McMichael, who will be attending the Commerce School's master's program in the fall. "Because it's paying yourself first for later use, and because it sometimes gets harder to save" when different stages of life might force you to change plans.
But the counselors didn't just describe the stock market and investing to rake in the big bucks. They also talked about why giving money away deserves to be a top priority.
McMichael tossed out to the students this aphorism, "Pigs get fat, and hogs get slaughtered," to illustrate that you can do well in life, but you can't take it with you when you die.
"Don't just think of yourself. Think of how your actions affect others around you," said Brian Freeman, who co-founded the group last year with McMichael. Joined by Amber Pinn and Ivana Johnson, they asked the teens to think of other reasons for being charitable. Yes, helping others makes you feel good, but that's not all, they said.
"If you have the ability to help, within reason, it's to your advantage," Freeman said. If you help someone, he or she is more likely to be willing to help you when you need it, but you don't do it expecting that, he stressed, with the other counselors echoing him.
Allen Pinn, who took the workshop on his sister Amber's advice, said to the counselors, "You're giving away your time to teach us all this." Pinn said it was a good experience to learn more in depth about saving.
"The younger you start, the better off you'll be in the future," he said.
Allen Pinn's schoolmate from Lynchburg, Alicia Moore, added, "It teaches you how to be financially educated … I plan to invest in my future."
Both rising high school seniors said the summer class was a good opportunity to check out U.Va. for college. The high school students and counselors stayed in a dormitory and toured the University. Visitors from U.Va. Career Services and Wachovia Bank also gave presentations.
The U.Va. students decided to start the class because they had found it difficult when they were younger to learn about money management, they said.
And they wanted to help other young people.
McMichael also said he saw one of his older siblings have trouble, like running up credit card debt. Freeman and Amber Pinn learned the basics from Commerce School professor Karen Bonding's course on personal finance for nonbusiness majors. Freeman also got some tips from his twin brother who majored in economics.
The group plans to run two more six-week courses at CHS in the fall and spring of the upcoming school year. The organization has received funding from the U.Va. Office of Diversity and Equity, the Office of African-American Affairs, the Parents Committee and the IMP Society, which gives fellowships for community service. McMichael said he would like to turn it into a nonprofit organization in the future.