Money mastery starts with young

Personal Finance

Six financial experts reveal how they learned to handle money

December 31, 2006|By Eileen Ambrose | Eileen Ambrose,Sun Columnist

We aren't born knowing how to balance a checkbook, compute compound interest or invest in the stock market.

If you're lucky, a knowledgeable parent or teacher will show you the ropes. But some of us learn on the job, or by trial and error. Or, it seems, we pick up financial habits by osmosis.

As it turns out, people who make a living dealing with finances are no different from the rest of us. Here are the stories of how six pros learned personal finance, and how they believe younger generations should be taught.

Brian Rogers, Company: T. Rowe Price Group, Position:chairman, Age: 51

Brian Rogers' parents opened a passbook savings account for him at the Danvers Savings Bank in Massachusetts when he was 6. Each week, he faithfully deposited the 10 cents his parents gave him.

Today, he's 51 and manages T. Rowe Price's largest mutual fund. And he still has his Danvers savings account.

If that account developed a lifelong savings habit, then a series of jobs in his younger years taught him the value of a dollar earned.

He got his first job at age 16, clerking in an office supply store. He saw his $1.65 an hour pay turn into $1.25 an hour after taxes and FICA. "That was my first lesson in economics," he says. While in college, his jobs included mail carrier, janitor, bartender, newspaper carrier and, the most grueling, roofer.

Rogers remembers taking out a student loan to pay for his education at Harvard College and wondering how he was going to make the $54.61 monthly payments.

"I always had a relatively conservative bias," he says. "I knew how hard I worked to end up where I was."

Rogers believes that people have an instinct to save, despite the current consumption boom. "When you work hard at something, you want to at least save a portion of the fruits of your labor," he says.

The best way for kids to learn personal finance is from family and a job, if children are able to work, he believes. He's against carving out a spot in the curriculum for personal finance if it comes at the expense of the basics.

"It's much more important for kids to learn about writing and math in school," he says.

Sonya Smith-Valentine, Company: Valentine Legal Group, Position: certified public accountant and consumer lawyer Age: 37

During her four years as a consumer lawyer in Greenbelt, Sonya Smith-Valentine has seen the toll that credit-card debt can take.

"I see lots of people who live beyond their means, and that's where the spiral starts," she says. "There is kind of an instant gratification because they have a credit card ... with no thought of when the bills come in how will they pay it."

Like many others her age and younger, the 37-year-old was greeted by an avalanche of credit- card offers when she hit the college campus years ago. She managed to ignore them.

"I didn't have two, three or four and run amok with debt," the New York native says. "I think it was a combination of banking class and my mom."

Smith-Valentine's mother immigrated from Jamaica with little money in her pockets and taught her daughter to save and understand financial trade-offs. If Smith-Valentine saw a new toy she wanted, her mother would counter, "You decide. You saved up for it. If you buy that, you won't be able to get something else."

Smith-Valentine was among the first to participate in a new program at her high school that taught banking, accounting and insurance during junior and senior years. These classes sparked her interest in accounting.

She says that ideally, personal finance would be taught at school and home, the way she learned. "People must be much more willing to talk about finances," she says.

Sometimes she sounds like her mother when she talks to youngsters. For instance, when she goes to the mall with her girlfriend's 15-year-old daughter, the lawyer will point out that if the teen buys designer jeans, she won't be able to afford a jacket, too.

"I am my mother's child."

Jack Brennan,Company:Vanguard Group Position: chairman, Age: 52

Jack Brennan remembers the day he made his last student loan payment.

"June 30, 1990. It was 10 years and one month after I graduated. For $58.22," he says. "And it felt great."

Before attending Harvard Business School, Brennan had never borrowed money.

"I'm a total debt foe. For me it's a personal thing. Being debt-free creates financial and psychic freedom," he says. "Credit card debt is the most insidious thing in America."

Brennan became a saver at an early age. His father was president of a Boston bank, where Brennan had a passbook savings account. On top of that, his elementary school offered interest-bearing savings accounts.

"I thought every one had one," the 52-year-old says of his school's bank.

Brennan says he was shoveling snow and mowing lawns when he was in first or second grade. The money went into the bank.

There were no allowances in the Brennan household. Money from summer jobs had to last the rest of the year. That taught Brennan to budget.

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