Students learn about credit card usage

One of the questions asked in a day-long life skills workshop for seniors at St. Paul’s School by presenter Eric Dunavant was, “If you have a choice between $5 million or every day for 31 days doubling your money starting with 1 cent, which would you take?”

The answer should be the penny doubling in value every day. At the end of 31 days, it would be worth $21,474,836. Dunavant used this example to explain compound interest to seniors to illustrate the hazards of credit cards and debt in general.

His presentation was one of five offered during the workshop. The St. Paul’s Renaissance Board, a business/education partnership begun by Bro. Gale Condit eight years ago, sponsored the workshop to prepare seniors for the real world post high school.

Dunavant continued his presentation on credit cards and the power of using cash. He said people who pay with cash spend 15 to 20 percent less, because paying out cash hurts. He also said that of the top 400 wealthiest people in the country, 70 percent of them are debt free.

Sam Walton, founder of Wal-Mart and one of the wealthiest men in the world, during his lifetime, took his lunch to work every day and drove an old Ford pickup truck, said Dunavant.

Some hints for money management from Dunavant include buying a used car, because new cars depreciate in value quickly, and when paying off debt pay off the smallest debt first — this often gives one the encouragement to pay off larger debts.

He also suggested that students who may receive credit cards when they go to college should always know what their balances are and pay them off every month before the grace period ends.

Other ways to ensure debt free living are to pay more then the minimum payment on your card, cut expenses, live within your means and realize that your parents have spent 20 years to have the lifestyle they have. Be patient and don’t try to reach their level overnight, he said.

Dunavant suggested that students take a part-time job to either reduce debt or keep from going into debt, and remember that the borrower is the slave of the lender. In today’s world, it’s normal to be in debt; instead, be weird, even if it means not having the latest iPhone, he said.

The seniors listened attentively to his points, asking questions and commenting on some of his statements and suggestions.