October 20, 2014

Teens learn saving over spending

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Colin Ryan talks to teens at a financial literacy seminar at New England Federal Credit Union. (Observer photo by Rachel Gill)

Colin Ryan talks to teens at a financial literacy seminar at New England Federal Credit Union. (Observer photo by Rachel Gill)

By Rachel Gill

Observer correspondent

Saving money is all about marshmallows.

“To talk about money you have to talk about marshmallows,” said Colin Ryan, addressing about a dozen teens and their parents during “Economy of Me,” a finance workshop for Vermont teens. Ryan, a financial literacy speaker for the Association of Vermont Credit Unions and a standup comedian, spoke at an April 10 workshop at The New England Federal Credit Union in Williston.

“What I am really talking about here is saving your money,” Ryan said. The marshmallow theory came from a psychological study of 4 year olds, Ryan said, known as the Marshmallow Test. Organizers took a group of 4 year olds and gave them each one marshmallow. The organizers left the children alone in a room and said they could either eat the marshmallow now or wait until the organizers returned, when they would get two marshmallows.

“It’s not easy to not indulge in what’s right in front of you, this is all about spending or saving,” Ryan said. “It’s just about saving your money to pursue the dream of what you want to do with your life.”

To do this, the first step is to indentify your marshmallow.

“Figure out what you spend your money on but probably should not be,” Ryan said. “This is about controlling impulse so you can manage the money in your pocket.”

Ryan instructed the students to begin by making a list of all expenses—everything from food costs to cell phone plans—and estimates on how much is spent on each. The result is the cost of each item per month and per year.

Avery Caterer, a senior at Champlain Valley Union High School and workshop attendee, said his marshmallow is clothing.

“It was frightening to learn how much money I spend on clothing, it adds up really quick,” Caterer said. “This helped show me how to save money instead.”

Over the last three years, Ryan has talked to 30,000 teens all over Vermont about money. He’s found that expenses add up: gas averages $1,648 a year, cell phone plans $799 a year and clothes about $1,300 a year.

“This can change,” Ryan said. “There are ways to reduce spending.”

One way to slash spending is to track it.

“Write everything down,” Ryan said. “One tool is, using Mint.com, you enter all your expenses and it alerts you via email when you have gone over your budget.”

Aside from accountability, Ryan said to drive like the rich.

“Less than 25 percent of millionaires drive new cars,” Ryan said. “Most drive used cars. Repairs are cheaper and it gives them the freedom to do what they want with their money.”

Jill Lang of Williston agreed. It’s college over a car for her son.

“I think we should wait until after college to buy my son a car,” she said. “He may be the only senior riding the bus, but it will let him use that money for more important things. That’s easier said than done though.”

Buying used also goes for clothes.

“Used clothes shops can make for a huge savings,” Ryan said. “Buying new things is not a real solution for making us feel better, but our culture tells us it is.”

Another money saver is cooking at home.

“Go out to eat less, you will save money every month for the rest of your life,” Ryan said. “For 10 bucks you can cook 12 spaghetti dinners and (make) 22 peanut butter and jelly sandwiches.”

Ryan said that doesn’t mean resigning yourself to a lifetime of sandwiches and spaghetti.

“Just bringing your lunch to work or school will be a big money saver,” Ryan said.

No matter how you spend your money, getting advice on saving is a good idea.

“I liked the charts, it let me see how things add up,” said Sydney Langdeau of Milton, one of the workshops’ teen attendees.

Landgeau’s dad, Gary, said he appreciates Ryan’s message.

“It’s nice to hear someone else say the things a parent would say to their kids. That reinforcement really helps,” he said.

Ryan hopes his message gives teens the ability to pursue anything and everything.

“There’s so much pressure to be a consumer and that can take a major toll,” Ryan said. “I hope these teens come away with a sense of hope that they have the ability to manage their money and to do what they want to do in life.”

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