ASBURY PARK - With summer jobs and first paychecks on the way, a group of 11 teenagers gathered at the Boys & Girls Club here to learn the basics of building wealth.
It sounded easy enough. Open a bank account, tuck away a little each month and earn interest. But for the strategy to work, they would need to show financial discipline that even adults have trouble with.
It's tough not to spend your paycheck right away, said Nabee Griffin, and 18-year-old Neptune High School student. "There's a lot of things that come around. Stuff you may look at now, but you really can't get it because of my other responsibilities and other things you have to handle yourself."
Griffin was among the students participating in the financial literacy program that was organized by Food for Thought by the Sea, a nonprofit group founded by restaurateur Marilyn Schlossbach that tries to build a pipeline between underserved communities and jobs in the culinary industry.
The financial literacy component of the program could have a big payoff. Teenagers working this summer can learn how to dress, how to interact with co-workers and customers, how to carry themselves with confidence. Just as important? What to do with the money they are paid.
'Maybe I'd have more money in the bank'
"I wish I had some of this as a child, as a young adult, and maybe I'd have more money in the bank," Schlossbach said with a laugh. "It's their future, and we're here to support that, not skills per se like how to fix a car or how to cook a meal, but how to really be confident in who you are, what you can be and what you want."
The students sounded a step ahead. Zahiir Amos, 15, who attends Asbury Park High School, said he took a financial literacy class last year, a common response from a new generation that is required by the state to learn about financial literacy before they can graduate.
They are skills that are sure to come in handy. With summer nearly underway, students face a financial services landscape that can seem like the Wild West.
They will need to decide what to buy; how much to save; where to invest; how to avoid ATM and mobile payment fees; how to get cash in a pinch; and the dangers of credit cards. They will need to know how to protect their identity and prevent scam artists from getting access to their hard-earned money.
Schlossbach, who owns the Whitechapel Projects restaurant in Long Branch, had help driving home the message. Her nonprofit and the Boys & Girls Club received a $100,000 grant from Impact 100 Jersey Coast, a philanthropy, to create a unique workforce training program for underprivileged students that included gardening and surfing.
She expanded the program this year to include financial literacy, enlisting Communities First Initiative, a nonprofit, and Santander Bank to walk students through the basics of banking.
It was a chance for traditional banks like Santander, facing more competition from financial technology companies, to remind students about their old-school benefits: deposits that are insured by the federal government up to $150,000; access to loans that can help buy a home or car; a branch office with employees who can answer questions.
"Understand the power of understanding finances," Turney "Toby" Singh Baba, senior associate of community partnerships at Santander Bank, told the students. "Most of the wealth in this country has been created through homeownership or owning a business."
Most Americans can't answer basic financial questions
Financial literacy is not consumers' strong suit. Fewer than 30% of Americans in 2021 correctly answered three questions commonly used to test their financial knowledge, one study found. You can take the test below.
Consumers with lower financial literacy scores spend more than their income; have less money saved for emergencies; and are less likely to have retirement accounts, according to the FINRA Foundation National Financial Capability Study.
Phyllis Salowe-Kaye, a long-time consumer advocate who now is executive director of Communities First Initiative, said she has seen the impact financial missteps can have on people's bids to own a home and build wealth. It can take months to repair credit scores.
For the students at the Boys & Girls Club, the goal "is to avoid problems in the future, put more money into their pockets and establish good habits," she said.
Financial literacy could spell more opportunity down the line. Nabee Griffin said he wants to be a YouTube influencer, but if that doesn't work out he has his eye on going into construction, perhaps owning his own company one day.
In that event, he will need to lean heavily on a bank.
"There's no point in just not having the information," he said. "You should be more active in involving yourself in these types of situations and giving yourself more knowledge about banking and financial literacy."
How much do you know about money?
1. Suppose you had $100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow?
A)More than $102
B)Exactly $102
C)Less than $102
2. Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After one year, would you be able to buy —?
A)More than today.
B)Exactly the same as today.
C)Less than today.
3. Do you think that the following statement is true or false? "Buying a single company stock usually provides a safer return than a stock mutual fund."
A) True
B) False
Answers: 1. A; 2. C; 3. B
Michael L. Diamond is a business reporter at the Asbury Park Press who has been writing about the New Jersey economy and health care industry for more than 20 years. He can be reached at mdiamond@gannettnj.com.
