"We spend so much time teaching people how to make money but don’t teach them what to do with it once they make it,” says Samantha Cross, founder of Square One Financial Education, a two-year-old consultancy dedicated to “financial education 101 for those at the beginning of their independent lives.”
Cross, a former banker with UBS in Stamford and Deutsche Bank in New York who saw “a need [among her peers] for education on the basics of handling financial affairs,” also shares what she knows with area youth. She is a financial literacy educator with the state’s Department of Consumer Protection and sits on the board of Connecticut JumpStart, a coalition of organizations that aims to improve the financial literacy of the state’s youth. Cross also works with schools and nonprofits teaching personal finance.
Cross believes that learning how to budget and save should begin in high school and be familiar by college, when students “are suddenly deluged with multiple credit card offers.” A recent project backed by Signature Bank did just that by placing her in front of students at the Boys & Girls Club and Future 5 in Stamford. As of this writing, based in part on an invitation by the BGC to return, Cross expects the project will repeat in the spring. “If people learn about the management of their personal finances early, big mistakes are more avoidable, and they can significantly increase their chance of financial success,” she says.
Tips for Parents of Kids Headed to College
1 CHECK THEIR CREDIT REPORT
Kids younger than eighteen are prime targets of identity theft; go to annualcreditreport.com and make sure their credit report is clean and accurate.
2 STUDENT LOAN PAY-OFF
Talk about repayment. There are student loan repayment calculators online that can help you identify what your future monthly payment will be based on the terms of your loan. Unless you plan to help your child pay off his (or her) loans, make sure their major has an expected annual salary that can cover this expense.
3 CREDIT CARD EDUCATION
Get them a credit card and teach them how to use it responsibly. College students, particularly those not living at home, are offered many opportunities to get credit cards in the early days of college. If they already have a card, they will be less likely to sign up for one on their own.
4 MAKE A BUDGET PLAN
Start talking about budgeting. Whether your child will be working during the school year or receiving an allowance, make sure they understand how to track purchases and the implications of overspending.