Exercise gives high-schoolers a dose of financial reality

May 5, 2009

By Kim Barto - Bulletin Staff Writer 

Hundreds of high school seniors recently learned how little luxuries, from restaurant meals to cable bills, can eat up their budgets. About 420 area students got a hands-on lesson in budgeting and credit at the Dollars & Sense Reality Fair at the National Guard Armory. The event is sponsored by the United Way of Henry County and Martinsville’s HOPE Initiative in partnership with Henry County and Martinsville schools.

The high-schoolers were given jobs and salaries and then tried to stay within their means as they paid for real-world expenses. About 50 adult volunteers manned tables where the students could choose different kinds of housing, cars, clothing, food and other purchases.

HOPE Initiative Director Alicia Solomon was pleased to see that most of the students chose wisely. “I’m so proud of the students,” Solomon said. Despite the temptation to blow their budgets, “they cut back on a lot of those expenses,” she said. “I think the nature of the economy has helped students take a good, hard look at this activity.”

HOPE, which stands for Helping Others Progress Economically, was formed in 2006 to teach financial literacy and money management. The pilot Dollars & Sense event was held last spring. Contributions from the Lacy Foundation and the Cash Coalition of Richmond have now made it possible to offer the reality fair twice a year, Solomon said. “For most students, this is their first real look at money,” Solomon said.

Many participants were surprised to find out how bills such as utilities, phone service, Internet and cable can add up, she said. Student loan payments made up another big part of many budgets, and income tax “has been a shock” for a lot of students, she said.

Bassett High School student William Blackwell was pleasantly surprised to find himself with $705 left over in his monthly budget when he finished the activity. He said he accomplished this on his $45,000 registered nurse’s salary by “just paying for the essentials.”

“I got the cheapest of everything,” said William, who picked out a used car and chose to live without a land line phone and Internet. “I got the cheapest of everything, too, but I’m still in debt,” countered Christopher McBride, also a Bassett student. Christopher ended up earning $21,000 as a county clerk and tried to make it last by choosing the cheapest house and groceries, not taking a vacation and cutting his own hair. However, “the credit card really got me,” he said.

In a change from last year’s event, students were randomly assigned a credit card balance, said Brendan Vigorito from the Centers for Financial Education in Roanoke. In preparation for the workshop, Vigorito visited the schools to discuss how to use credit responsibly. Consumer credit card debt now totals more than $2 trillion, or an average of $12,000 per household, he said, and many students will begin racking up this debt soon.

“By the time students graduate from college, the average credit card debt is more than $3,000, and that number is constantly rising,” Vigorito said. The event’s goal is “making sure they have a plan for their money” and “understand the consequences of getting themselves into debt,” he said.

Martinsville High School student Ebony Walton said she enjoyed the activity so much that she wants to come back next year and do it again. “When I got a credit card, I maxed out, but everything else I did OK with,” said Ebony, who was assigned a job as computer services technician earning $27,000.

“I learned to stay in school so I can get a better job,” she said, adding that the volunteers emphasized “the importance of staying in school to make more money.”  Bassett student Anthony Penn earned $35,000 as an accountant but ended up with only $16 left in his budget. “I thought I had more money than that,” Anthony said. His downfall was paying $1,000 a month for a house.In real life, he said, “I would get a cheaper house. Then, I would’ve had a couple hundred dollars left over.”

Three friends from Martinsville High School — Ayesha Keith, Brittany Thomas and Jessenia Morales — lined up at one table to buy their cars. “Ayesha got the best car, but she’s in debt,” said Brittany, who bought a used 2000 Honda. She added the exercise taught her “the importance of managing money.” Ayesha said what gave her the most trouble in the simulation was not the car she bought, a 2005 Chrysler, but her $500 credit card bill. She ended up $349 in debt and had to get a part-time job on top of her full-time job. “Be careful with your money, and don’t just throw it around,” Ayesha warned.

Pastor John Campbell of Bethel United Way of the Cross played one of the “car salesmen” in the simulation. “It’s a good reality check,” Campbell said. “Several have come back and downsized” after realizing they could not afford a new luxury car, he added. Students who have never owned a car do not realize “it’s more than just the car payments — it’s also the gas and the insurance,” he said.

Staff from the Martinsville-Henry County Coalition for Health and Wellness ran the food and health insurance stations. At one of the tables, Tara Martin explained the students were given the option of eating in restaurants two, four or six times a week. Then they saw how much their choices would cost, ranging from $120 to $360 a month in restaurant bills.

Students also chose between grocery baskets loaded with junk food, name-brands or generic items. The name brands would cost them $350 a month versus $150 for the generics, Martin said. “It shows them there’s a huge difference,” Martin said. “It’s cheaper if they eat at home more often, and it’s also better nutritionally.”


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