Roy Paul, Executive Director at Cents Ability, Inc. met with #BoldBiz to discuss financial tips for teens. #BoldTV
Posted by BoldTV on Monday, July 23, 2018
Roy Paul, executive director of Cents Ability, empowers and educates high school students to achieve their goals through prudent and informed management of their financial resources. The nonprofit was founded in 2004 by two Harvard grads who, having themselves struggled with finances, figured that younger people of lower socioeconomic demographics must be struggling twice as much. As the two Harvard grads — Alexa DuPont and John Moore — gained wealth, they decided that they wanted to give back.
Paul said he believes “we are starting to evolve with our thinking on how we educate young people.” It is not just from the home but from the school as well. That is why financial literacy curriculum is starting to arise state by state throughout the nation.
Advice Paul gives teens
Paul, contrary to popular current opinion, said he believes that high schoolers should not eschew summer jobs for studying. He believes that summer jobs are very important, whether it is mowing lawns or something more entrepreneurial. Basic principles like starting a budget and saving are ways to help high schoolers get in touch with their needs and wants as well. It is important to learn skills “because it may start out with just a $200 check, but it will become bigger — like a $2,000 dollar check — and you need to know how to spend it.”
Paul said he teaches students to save 20 percent of a check for savings and debt repayment and 50 percent for “your needs and the things that you absolutely have to spend money on” and then 30 percent on the things that you want, like going out to the mall. But the 20 percent comes first.
Paul said that “everything has to be geared toward what your future is.” People need to think ahead — especially students — and though many know that they are going to college, they are not thinking ahead as to what their monthly payment will be out of school or even what their jobs will be. This level of short-sightedness, Paul said, is bad news. And planning ahead is key.
Paul’s biggest finance mistake as a teen
Paul took out too many credit cards, and “then had five credit cards at one point before [he] graduated college and was spending money on all the cards.” He did not realize that the debt would affect him for the rest of his life. Thankfully, he had a repayment plan in place and he got out of the debt before it became too much to handle.
Many people, Paul said, wonder why financial literacy is not taught in school. And partially that reasons boils down to (at least, Paul said he believes) profit: People are making money off of other people’s ignorance in things such as student loans, which is a $1.5 trillion industry. We should definitely be teaching students about planning their future earlier so they can get what they want more often. “If you don’t start learning financial literacy principles, your upkeep will be your downfall,” Paul concluded.
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