Just months after graduating from law school, purchasing a luxury car, and leasing a high-end apartment, Suzette Schand was in so much debt she could barely buy food.
Suzette Schand is a fictional character created by a 17-year-old senior at Boston’s John D. O’Bryant School of Mathematics & Science — named Suzette Schand. The flesh-and-blood Schand is a student of Early Investors, a Boston-based nonprofit organization that teaches financial empowerment to kids, and by imagining herself in the future, the real-life Schand was able to forsee the challenges that lay ahead.
At a time when the economy has lurched back to pre-recession levels, experts say it’s imperative that this generation of almost-adults figures out how to manage money to avoid contributing significantly to more recession a few years from now.
Four hundred Boston public high school students have gone through Early Investors, which has a formal partnership with Boston Public Schools, since it launched in October 2010, taking 13- or 26-week courses on their school campuses on topics ranging from saving to interest rates and investing.
‘At the individual level, educating students to responsibly manage their personal finances prepares them to enter their adult life without the burdens of excess debt or poor credit.’
Early Investors was created by Nislo Galvao, a baby-faced 33-year-old financial adviser, with the help of operations director Rob LoRe, another finance pro. Both men have funded the program out of their pockets. And none of the more than dozen volunteer instructors takes a salary.
And while Early Investors’ money handling lessons run the gamut from spending to saving to borrowing, if there’s a topic of urgency these days, it’s student loans.
The Federal Reserve Bank of New York reported recently that 35 percent of Americans under 30 were seriously late on student loan payments, compared with 21 percent in 2004.
“It’s important to note that a majority of our students have and will continue to rely heavily on loans to pay for college,” Galvao says. “But we teach alternative ways to pay for college, like work study, which no one talks about anymore, grants, because they’re are underutilized, military . . . and the two-and-two plan, two years at community college and two years at state school.”
Before Early Investors, Schand says she had never thought about any of this.
“I have heard adults — even my own mother — say, ‘You need to know the value of a dollar,’ but until a couple years ago, money was for spending on clothes and other nice things.
Until she met Galvao.
His family emigrated from Cape Verde and settled in Boston. By the time he was 9, Galvao became aware that his family had a money problem and set aside “kid stuff” to help. By 13, Galvao says he was managing the family’s money — balancing checkbooks, paying the mortgage and other bills, because his parents simply weren’t very good at it.
His financial prowess carried over to college, and in his senior year at Bryant University in Smithfield, R.I., Galvao purchased his first house, which he and a buddy repaired and flipped for a profit two months later.
“Listening to the kids talk about money, it was clear to me they just didn’t understand it,” Galvao says. “And that’s sometimes a difficult point to make. It’s in our nature to get defensive, because your instinct is to think, ‘What’s there to know?”
In recent Early Investors classes, led by Galvao and LoRe, current events segments have centered on spending on unnecessary high-priced name brand items, like $179.99 Nike Lebron X sneakers.
The lessons always come back around to the practical stuff, Galvao says. “We decided from the beginning, the lessons we gave for Early Investors were going to be real-world.”
Indeed, Schand’s real-world lesson was to project ahead several years to her older self graduating from college and starting the career she intends to pursue. In essence, she created herself in the future to understand what real life, and real bills, feel like.
“I want to be a corporate lawyer, so that’s what I projected,” Schand says. “Nislo and those guys had me actually looking through real estate listings for the place I really wanted. They had me making calls and getting prices. Same for car and all of that stuff.”
So she began living the high life on paper.
Schand lasted a few good months before the reality of bills, student loan payments, and credit card debt from eateries and shopping sprees began to catch up with her, forcing her to sell the luxury stuff, get a roommate, start shopping with coupons, and take the T. Ultimately, she still had to move to a smaller place.
That frightened her, Schand says, because it hit close to home.
When she was in elementary school, Schand, her two siblings and her mom were forced to move from their Dorchester home to a two-room apartment in Quincy, after her parents divorced and her mother learned that all the household bills had been in her name only.
Gary Bigley, an Early Investors volunteer instructor and managing director at BlackRock, the world’s largest financial management firm, says he’s convinced the average high school kid isn’t ready to handle money.
“The extent of what I learned when I was in high school was how to write a check,” Bigley says. “Outside the kids in this program, the same seems to be true today. This is woefully inadequate preparation for when these young adults graduate and enter the real world of credit card offers in the mail every other week, how much a car really costs, how much comes out of their paycheck in taxes. and how to deal with the on-campus offers of a free T-shirt if they sign up for a credit card.”
Elijah Smith, an 18-year-old freshman finance major at the University of New Haven, who took Early Investors’ 26-week course in 2011 while a high school junior in Hyde Park, says he thought about Bigley when the credit card offers started coming. He didn’t accept any.
Smith even figured out how to save his family $2,880 annually just by learning a new skill: cutting hair.
“I realized that my two brothers, father, and I got our hair cut every weekend for $15 each. So instead of spending $240 a month on haircuts, I learned how to cut hair and cut their hair,” he says.
Smith’s rejection of the credit cards is music to the ears of Timothy J. Coffin, senior vice president of Breckinridge Capital Advisors, in Boston.
Coffin, an Early Investors volunteer, teaches a course on understanding interest rates and how they affect personal finances.
“At the individual level, educating students to responsibly manage their personal finances prepares them to enter their adult life without the burdens of excess debt or poor credit,” he says.
And on a group level, this generation of teens could potentially alter the economy — for the better — permanently, Coffin says, if they can develop “a more sustainable perspective on finance, both as future consumers of financial products and as investors. . . . That would be a great legacy for them.”
Meanwhile, Schand says she’s righted her future self’s ship, with the help of Early Investors.
“I’ve gotten her not fully out of debt, but in a model and lifestyle that she can maintain comfortably,” she says. “It works out on paper. And I believe if I were there already — out of law school and working — it would work for real. The goal was to make her money work for her and not the other way around. I think I’m getting there.”