Even with preparation, middle school students are surprised to see how tight real-life budgets can pull.
By Samantha Cristobal
As part of its benefits package, Callahan & Associates offers employees eight hours of volunteer time off. I started at Callahan last year and was eager to take a day to learn about a financial literacy program available for DC-area youth and contribute to a cause about which credit unions, Callahan, and I, feel strongly.
I volunteered this Spring with Junior Achievement of Greater Washington, a financial literacy organization that works to bridge what students learn in the classroom with what they learn in their lives. According to the group’s website: “We can make learning relevant to every student's future by infusing authenticity, business connectivity, and real role models into the everyday learning experience.”
Specifically, I spent time with the JA Finance Park, a program that uses a classroom-style 14-lesson curriculum to teach financial literacy to middle school students. The curriculum is split into four sections: income; savings and investment; debit and credit; and budgeting. Once students complete the program, they put their classroom knowledge to the test in an interactive environment called “the park.” I volunteered for this interactive portion by heading my own small class of students, helping them navigate through the park and offering financial advice.
No Walk Through The Park
When students visit the park, they are randomly assigned different profiles. For example, a student might have to build a budget for a high school teacher that earns a salary of $35,000 a year, who has $20,000 in debt, and has a 2-year-old son.
Students start their journey in the park by taking out taxes from their salary and calculating their net monthly income. On the day I volunteered, many were shocked to discover how little they had left to spend after taxes.
Next, students allocate money into different savings buckets — retirement, emergency savings, and other savings. Instructors recommend students save at least 10% of their monthly income, and the students were even more shocked to see the effect that additional decrease had on their spending money.
Students must conduct research before building their budget, which means exploring the park to learn more about life’s expenses. Then, they budget for their expenses based on their monthly household income and their character’s profile, which includes details like number of children, spouse support, career, debt, and more.
The students I worked with started the simulation thinking shopping would be the most fun part of the day. However, they quickly realized it was the most stressful. If they prioritized items like furniture or clothing, they found that they had little to no money left to pay for a house or a car.
The Role Of Volunteers … And Credit Unions
Volunteers at JA Finance Park offer instruction throughout the day and advise students on their finances. Because of their preliminary lessons, the students know a lot about savings and budgeting, but they still have a lot of questions. For example, I saw that students were surprised when they had to budget for babysitting or for a spouse’s transportation costs and found it difficult to give up luxury items like concert tickets or a king-sized bed in exchange for healthcare and groceries.
My class was stationed at the Apple Federal Credit Union ($2.5B, Fairfax, VA) booth, which provided an information stop about mortgages and retirement savings. Besides helping my own class with their finance simulation, I offered insights on credit unions, credit scores, retirement savings and mortgage loans to other students passing by our booth.
Credit unions can help inspire financial responsibility in their communities by sending volunteers to programs like JA Finance Park and creating similar programs on their own. BECU holds three or more annual financial literacy fairs for local high schools. Read more about those here. Earlier this year, Callahan contributor Sharon Simpson wrote about how she accidentally raised money-smart teens and how credit unions can support parents in doing the same. Read that here. Over the holidays last year, CreditUnions.com profiled two credit unions that use themed communications to keep members on the right spending track. Read that piece here. And last year, CreditUnions.com celebrated Financial Literacy Month — that’s April, by the way — with a roundup of inspiring stories from credit union land. Read that here. We did the same for 2018 — read that one here.
Many credit unions, like First Financial Credit Union ($519.7M, Albuquerque, NM), link parents and children to the Kirby Kangaroo Club, an online program that encourages children to play games and learn about finances. Pennsylvania State Employees Credit Union ($5.1B, Harrisburg, PA) offers suggestions on finance-themed board games that parents and children can play together. This is a wonderful way to show children what credit unions are all about and potentially grow future members.
As of September 2017, 22.4% of credit unions reported offering Financial Literacy workshops, and 37.5% offered some type of financial education program to members. Unfortunately, these fields are no longer available on the 5300 Call Report, but they have been increasing for years. I hope the trend continues even if we can’t track it.
There are JA Finance Park locations across the country. If you want to get involved, start by visiting myja.org/volunteers/signup and registering to volunteer. If your credit union conducts its own financial literacy parks or offers another kind of financial literacy program, please tell me and the readers of CreditUnons.com about it in the comments below.
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