Learning the 'Reality of Money'

Students participate in a budget simulation.
Oct. 31, 2013 @ 05:32 AM

Students at East Rutherford High School got a glimpse into their financial futures on Wednesday.

The State Employees' Credit Union (SECU) put on a 'Reality of Money' exercise at the school for over 200 students that are enrolled in career and technical education classes (CTE). The exercise was developed by the North Carolina Credit Union Development Educator (NCCUDE) workgroup and is an interactive, financial education simulation designed for high school students. During the exercise students learn about the effects their choices make on their budget and lifestyle.

"There are several reality programs out there but we developed this one with North Carolina in mind and our professions, income levels and our issues," said Kim Hollifield, senior vice president of the Forest City SECU branch. "One of our focuses is to prepare kids for their futures financially. The credit union is interested in furthering the financial literacy of all the kids in North Carolina."

For the simulation, each student pretended they were 25 years old and were given a profile. The profile told them their profession, education level, credit score, whether they were single or married, if they had children and their net income. Their goal was to make it through a month on that income.

"I think this is a great exercise because it's realistic. It gives them a reality check and introduces them to the responsibility of handling money," said Rayford Johnson, principles of business and finance teacher at East. "It's a fun exercise but it shows them that money doesn't grow on trees."

During the exercise students were required to visit 11 expense stations that included housing, transportation, groceries, entertainment, childcare and others. Volunteers from SECU, the McNair Educational Foundation, Communities in Schools of Rutherford County, the Local Government Credit Union, teachers and counselors from East worked with the students to help them decide the right amount of money to spend at each of the stations. Students had to decide how they wanted to spend their money and make sure that their spending did not outweigh their income.

"We are here today to provide students with a glimpse of what their life might be like when they are 25. This way, if they see something here and realize they need to start making changes in their career paths or education path they can start making those changes now," said Jimmy Goodrum, SECU senior vice president of member education and outreach. "We want our volunteers to emphasize several learning points we have like living within their means."

There was also a special expense station called stuff happens. This station was all up to chance and the students could either receive something that boosted their income, like winning the lottery, or an even greater expense, like having a wreck and having to purchase another vehicle.

"I hope this helps me learn how to live in life later on," said student Jori Whiteside. "I hope I'll learn how to somewhat manage my money."

At the end of the exercise, students made it to the last pay day and were informed whether they had stayed within their budget or if they had failed and went into debt.