ROCHESTER — Alison LeChase landed her first job when she was 14 years old, and soon found out that she could spend her hard-earned cash just as fast as she could make it.
"I didn’t put anything away for later until I was close to my senior year in high school," recalled LeChase, director of youth ministry at Peace of Christ Parish. "If I had only known then what I know now, I would have put money away."
LeChase later learned that her credit score and budgeting habits would have a significant effect on her ability to get a car loan, an apartment and a job. That’s why she recently organized a roundtable discussion on financial responsibility for members of her youth group, hoping to help them stave off money problems by introducing them to financial-literacy skills at a young age. The Jan. 17 event was led by Judge John Ninfo, a Rochester bankruptcy judge. In March, LeChase and Ninfo planned to offer another financial-literacy roundtable discussion that will be open to the Rochester community.
Through the Credit Abuse Resistance Education program that he founded in 2002, Ninfo has traveled around the country speaking to youths about handling money effectively. The program, which is used in all 50 states and in the District of Columbia, is led by experienced members of the bankruptcy community, and is primarily aimed at high-schoolers and college freshmen. According to CARE’s Web site, these age groups are most at risk "because, as hungry consumers, they are aggressively marketed by the credit card industry at a time when they carry a very low Financial I.Q."
Sticking true to his promise to make his lecture interesting for the Peace of Christ program, Ninfo used video clips to highlight his points. A crowd favorite was a 2006 "Saturday Night Live" skit in which Chris Parnell uses the fictional book Don’t Buy Stuff You Cannot Afford to explain money management to Steve Martin and Amy Poehler. Ninfo also shared anecdotes about community members with high academic IQs who are in debt because they had not been given enough information about finances.
At the beginning of the discussion, Ninfo handed out to each participant a credit-card-sized "Credit Smart Card." The card outlined five financial rules to follow in order to stay out of debt:
1. Don’t use credit cards to buy stuff you can’t afford.
Ninfo stressed that the balance on a credit card should be paid off at the end of each month, so the cardholder never begins to accumulate interest charges.
2. Cash is king.
According to Ninfo, those who purchase with cash rather than credit cards spend less, adding, "If (the purchase) is under $20 or you can eat it or drink it, use cash."
3. You need a good credit history or credit score or there will be consequences.
Ninfo said he does not believe anyone should use a credit card until they are 21 years old and a college senior, a member of the military or a full-time worker. Until then, he said, "you can develop a good credit score by using a debit card or making monthly car payments on an affordable car."
4. Budget to control your spending or it will control you.
Ninfo said he is a big believer in budgeting. In an article he wrote for CARE’s Web site, he said, "A budget is simply the comparison of all of your expenses to the funds you have available to pay for those expenses. If your expenses exceed your available funds and you want to stay out of debt, your only choice is to balance your budget by either increasing your available funds or decreasing your expenses."
5. Save if you want to do priceless things and live richly.
"We have this conception of this plastic society. It’s so easy to use a credit card," LeChase noted. "Youth don’t realize the cons (of using credit) until they’re in over their heads."
Although Ninfo has worked extensively in high schools and colleges, he said that he enjoys presenting to the faith community, where members already have a concern with wellness.
"We talk about spiritual wellness, physical and mental wellness," Ninfo observed, "but we don’t talk about financial wellness, which is just as important."