Two students take first steps into the financial world


Everyone recognizes important days of the calendar. Dec. 25 is Christmas. Jan. 1 is New Year’s Day. But Apr. 15?

While most students think of it as an ordinary day, for the real world, it’s the day when hard-working people give up portions of their paychecks for the benefit of the federal, and often state, government. Tax day.

But surprisingly, the world of taxes, finances, investments, and money has traveled down to young adults. MVHS students speak of their experiences with handling money, how it effects them as students, and what it showed them about life outside of high school.

One foot in the field

Senior Deepa Chandhrasekhar has already taken her first steps in the real world, having started working as a lifeguard in the summer of 2009. After working for around 40 hours per week, she decided to try to file her own taxes.

“I got a 1040 tax form,” said Chandrasekhar. “Since I’m dependent on my mom, she filed it, but I did all the work.”

A 1040 form is a tax return form that individual workers fill out, providing the government with information related to their income and employment. When filing taxes, workers have to file for the federal tax and state tax. Usually, if they’re within a lower tax bracket, making a lower income, they should get all of their money back.

“I lost about a grand to taxes but only got 200 back for federal tax,” said Chandrasekhar. “For state tax was even worse. I only got a dollar back.
But, to her, it’s more the experience rather than the money that is important.

“People don’t realize that there are going to be bumps in the road in the future and you have to get as much experience as you can outside of where you are,” said Chandrasekhar. “And that’s why I feel like there’s a huge culture shock between high school and college for some MVHS students who don’t get out in the community and do work.”

Chandrasekhar realizes that working gives you more than just financial security. It gives you experience.

“Not everyone you work with is going to be a straight A, overachieving student,” said Chandrasekhar. “The faster you learn that there’s different types of people and how to get along with these people, the easier it is for you to integrate yourself into society once you get into college.”

Raking in the dough

But doing taxes and having a job isn’t the only way to be financially independent. Sophomore Alok Singh may not do either, but he is taking money into his own hands. Singh focuses more on investments, working on commission with his parents and their friends.

“In my parents case, they set up a separate account put some amount of money in it and I play around with it,” said Singh. “I put it into the investments I want. And whatever percent of profit I make, I get 5 percent of that.”

Throughout his financial endeavors for the past three to four years, Singh has come to believe in the concept that it doesn’t matter how much money you start out with if you end up losing half of it in the end.

“There are plenty of people who seem to think that it’s okay to lose 40 to 50 percent of your income if you’re in a higher bracket. There’s nothing good about that at all,” said Singh.

Singh focuses more on ultimate gain—the idea that, in investing, one must try to profit as much as possible.

“If your best investment lags behind another investment, it’s not the maximum you could’ve made and you’ve actually lost money,” said Singh. “Basically, it’s unrealized potential. And since people don’t try to maximize their income, they end up in a [financial] rut.”

To any other budding investors, Singh suggests starting out with http://www.investopedia.org like he did. The Forbes backed website provides the basics of investing and economics. Singh says it will point out common misconceptions people tend to have.

“Some people seem to think that if they made 5 percent profit is a good thing,” said Singh. “But it’s not a good thing if they could’ve made the 10 percent. Because they basically lost the 5 percent by not taking that option.”

Both Singh and Chandrasekhar agree that taking advantage of parental presence in high school to learn about financial issues they will ultimately have to face is something that every MVHS student should understand.

“A lot of people seem to think studying Is the only thing that’s necessary,” said Singh. “ But being able to do your finances is a basic thing.”

“They don’t realize that studying is temporary,” said Chandrasekhar. “You’re only going to be studying till you’re, maximum, 24. The majority, 80% of your life, is going to be work.”

Laying Down the Law

Gov Team debates Young Adults Financial Literacy Act, which will fund business education programs for college and high school students.

El Estoque: Could you describe the bill you’re debating?

Senior Olivia Li: So the bill that we’re debating is HR 300, the Young Adults Financial Literacy Act, and what it does is provide funding for either community organizations, schools, or anyone else who wants to create a financial literacy program for young adults. What it does is give [the organizations] $2 to 5 million and, as long as they follow the guidelines, they will be able to get funding for their programs.

EE: What is financial literacy?

Senior Sean Hughes: Financial literacy is basic knowledge about finances: debt and things of that nature. This [bill] is aimed toward ages 15 to 24, right around the same age group which studies have found that has some of the largest credit card debt, so the issue is relevant to them.

EE: Why do you think this bill is necessary?

SH: It’s astonishing how much credit card and household debt that an American has. And it’s pretty bad when you compare it to another country, so I think it’s definitely relevant and should be discussed.  I think it’s something like 70 percent of parents [in a survey] said they had discussed financial literacy issues with their kids, but only 30 percent of the kids reported that their parents said that. Obviously, there’s a disconnect.

EE: Why is this bill directed toward high school and college students?

Senior Sylvia Li: From high school to college is where you’re really growing. At this time is when you start making decisions like where to get a job and you start living independently and getting your own bank account and everything like that. If you want to fix things and make things better, you don’t start when the problem’s already created, but you address the issue right away.

EE: Do you think this applies to MVHS?

SL: I think here, in general, the academic environment is just more competitive so I’d say, on average, students have more knowledge about these kinds of things. But also, the economic situation here is definitely above average so maybe there is some sort of leeway we have. But, I think, given the economy, outsourcing, globalization, and all of this sort of stuff, it’s just important for everyone to know.

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