High school students are getting a financial reality check.
A recent wave of credit union-hosted fairs are popping up in gyms across the country to teach teenagers about budgeting, handling a checking account and the value of a dollar. At these events, students take on roles designed to simulate what it’s like to live within your means and make money decisions.
Often called reality fairs, they’re typically put on for specific schools, but some are open to the general public. Credit unions organize the events individually or through larger programs such as the Credit Union National Association’s Mad City Money, America’s Credit Union Museum’s CU 4 Reality and Connecticut Financial Reality Fairs. Each organization runs the events its own way, but the overall goals are similar: teach kids financial literacy.
Learning by doing
In Connecticut, students start the day at the fair by getting a random credit score, a credit card with a balance and spending limit, a checking account and a budget with taxes and student loan payments deducted. Each has chosen a career ahead of time and gets a realistic salary to match.
Across the country at Redwood Credit Union’s “Bite of Reality” fairs in California wine country, students take on personas such as being a police officer who takes home $2,358 a month and is married to a landscaper bringing in $2,100. The couple has a 4-year-old named Juan. The officer has $2,109 in credit card debt, owes $100 a month on student loans and pays $100 a month for a family medical insurance policy.
Students spend two hours visiting various booths to spend their income on necessities like housing, food, transportation, clothing and more. Some optional stations, such as the pet and shopping booths, are designed to tempt them with items they might buy on impulse.
Five TVs
One Connecticut teen bought five big-screen televisions, including one for each of the four bedrooms in his fictional house, says Fred Brown, a financial reality fair organizer and the president of the Hartford chapter of the Credit Union League of Connecticut.
After spending their fantasy income, students try to balance their household budgets. Then they review their experience with a financial counselor. After a fair concludes, Brown says he hears these common reactions from students: “I can’t believe it costs this much,” and, “I didn’t know insurance was that expensive.”
At Bite of Reality fairs in California, teens can backtrack and correct purchasing mistakes, such as laying out big amounts for a five-bedroom mansion, a sports car or a trip to London, after consulting the credit union booth for advice.
“In the real world, you don’t just get to return your house, but here they do,” says Lee Alderman, the assistant vice president of training and financial literacy at Santa Rosa-based Redwood Credit Union. “It’s a conversation. It’s not us lecturing them.”
Building financial literacy
About 39% of U.S. adults say they budget and keep track of their spending, according to the 2014 Consumer Financial Literacy survey. The fairs are part of a larger attempt by credit unions to boost that number by teaching kids basic financial literacy. The participants don’t always get that education at school or at home.
A third of parents would rather talk to their kids about smoking, drugs and bullying before money, and only 17 states, including Texas, Florida and New Jersey, require personal finance classes in high school, according to a 2014 Council for Economic Education survey.
“I don’t think many students get this type of reality check,” says Anthy O’Brien, a Bite of Reality volunteer at San Marin High School in Novato, California. “I wish my kids could have had it. It would have sparked questions.”
At least 1,050 financial reality fairs have been held nationwide with about 104,000 participants since 2010, the National Credit Union Foundation estimates. The group is working to make the fairs more widely available.
“Hopefully any kid in high school can have an opportunity to go to a reality fair and get this experiential learning about what it costs to be an adult and what it costs once you get out of school,” says Gigi Hyland, the foundation’s executive director.
Stretching a dollar illustration via Shutterstock.
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