OCC 2014 College Financial Reality: Maybe A Cruise Was A Bad Idea

ARTICLE COURTESY OF THE ASBURY PARK PRESS

Candice Kuipers, an Ocean County College student from Berkeley, speaks at a financial reality fair with Matt Brazinski, business development manager for First Financial Federal Credit Union. (Photo: BOB BIELK/STAFF PHOTOGRAPHER).

 

Candace Kuipers sat down at a table with a calculator, lined up her wages with her expenses, and came up $1,260.09 short.

It was going to be a tough month.

“Probably the cruise,” said Kuipers, 18, of Berkeley. “Shouldn’t have gotten the cruise. Bad idea. And the car. I shouldn’t have gotten a new car.”

Kuipers was one of about 200 Ocean County College students who attended a financial literacy forum here Thursday that was sponsored by First Financial Federal Credit Union.

It was a tough lesson for a generation that has grown up with mixed messages. They have watched their parents struggle in the aftermath of the Great Recession; and they have been bombarded with images of reality stars who live the high life with no discussion about how they pay for it.

A recent survey by the National Foundation for Credit Counseling found only two in five consumers have a budget and keep close track of spending.

Education lacking

“The key is financial education,” said Issa Stephan, president and chief executive officer for First Financial. “That’s what we have been lacking in this country. Since the 2008 problem, there has been more (emphasis on financial literacy) than at any other time. Financial education is the key.”

Students were given a worksheet with the salary they could expect, based on their major. They took out taxes, health insurance and retirement savings to calculate their take-home pay. And then they walked from station to station to see what the world had to offer.

There were new cars and baseball games, yoga classes and pets, mortgage payments and gadgets. And there were unexpected, budget-busting items such as car repairs and parking tickets. Students learned they really can’t have it all — at least, not without going deep in debt.

“I was going to get a house, but instead I got an apartment,” said Isaiah Brown, 18, of Manchester. “Food was $400, now it’s $200. And clothes. Instead of suits, go more casual.”

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Ocean County College students Gabi Tartaglione (left) Brick, and Nicole Flesche, Toms River, participate in the financial reality fair sponsored by First Financial Federal Credit Union. (Photo: BOB BIELK/STAFF PHOTOGRAPHER).

 

Better career paths

The event was part of a course called Student Success that’s designed to prepare students for what awaits them. And educators have found that students who learn these lessons early in their college careers are more likely to graduate and improve their career paths, said Maureen Reustle, dean of academic services at Ocean County College.

The goal is to get them to say, ” ‘Oh my gosh, I have to think about this,’ ” Reustle said.

The students could have been forgiven for losing all hope in their future. Their salaries weren’t nearly as much as they expected. Even a non-luxury automobile could cost nearly $25,000. And how were they going to find money for a security deposit, much less pay their rent?

But Candace Kuipers wasn’t discouraged. The cruise can wait.

“I’m still learning,” she said.

Original article written by Michael Diamond of the Asbury Park Press.

3 Effective Uses of an Allowance

allowanceFor many families, using an allowance to encourage children to do chores is an effective means of both teaching responsibility and money management. For other families, linking chores to an allowance means that the children only learn to help out around the house in exchange for payment. It is important for parents to sit down and talk about what they hope their children learn from the experience of getting an allowance. Here are three common methods you may wish to consider implementing:

The “You’re Part of the Family” Strategy

This strategy hinges on a few things: adult family members must always set a good example when it comes to their own chores, and the chores given to a child must bring them closer to the whole family. Family work days are effective ways of making this strategy work. The downfall of this strategy is that it can often be harder to track what, when and how well a child completes their given tasks.

The “Must Work for Your Pay” Technique

This technique links each separate job with an amount of pay. The benefit of this style is that it can make keeping track of completed tasks much easier. To make this work, very clear expectations must be set both with a timetable and in regards to how to correctly carry out each task. The downside is that since the children link a task to a certain amount of money, they may decide the amount is not worth the work required to complete the task. This can cause friction and frustration with parents and children.

The “Request as Needed” Method

This method involves you allowing your child to make requests to you for the things they want, which can allow you to help your child verbalize why what he or she wants, is important to them. It also builds their ability to negotiate and be persuasive. The downside of this method, however, is that you will constantly be having your child ask for and negotiate for what he or she wants.

Whatever method you use, there are some universal tips for every allowance strategy:

  • Help your child learn to give and save by encouraging them to put 1/3 in a savings jar, 1/3 in a giving jar where they choose where that money will go every so often, and 1/3 in a spending jar that they can use whenever they want.
  • Begin early. Most experts suggest beginning to help children work with their own money around the time they enter Kindergarten.
  • You will need to clearly define that allowance money goes to what your child wants and not what they need.
  • Raises should be given at birthdays and can also be linked to an increase in responsibilities.
  • Keep good track of responsibilities completed so that confusion and arguments do not occur over the job being completed.
  • As a child grows, it is OK to give extra money for larger jobs completed, like bigger seasonal work around the house.

Learning to work with money is an important childhood milestone. Giving an allowance can be a positive event that brings the family together instead of creating arguments.

ATTENTION PARENTS: Please bring your children in to take full advantage of our First Step Kid’s Savings Account* – a unique product that was specifically designed for young people, with a focus on education and fun and it’s a great way to encourage your kids to save every penny! We also offer our Dollar’s for A’s Program** and our annual Summer Reading Contest which additional ways your children can earn money while having fun doing it – for more information, visit our website.

This article written by our friend, Marcia Hall of GoNannies.com.

*As of 12/12/2012, the First Step Kids Account has an annual percentage yield of 0.05% on balances of $100.00 and more.  The dividend rate may change after the account is opened. **Offer applies only to report cards for most recent school terms. Letter grade “A” or 90%+. No back rewards available for prior semesters or marking periods. Available for First Financial members between 1st and 12th grades. Qualifying report cards must be submitted within 45 days from the date of issue. Child must be present and a $5.00 deposit to a First Step Kids Account is required to receive the Dollars for A’s incentive. Parent or guardian must bring both the child’s birth certificate and social security card when opening a First Step Kids Account at any branch location. Parent or guardian will be a joint owner and must also bring their identification. A First Financial Membership is open to anyone who lives, works, worships or attends school in Monmouth or Ocean Counties.