Seniors at Ursuline Academy in Wilmington took a break from traditional classroom learning recently to participate in a Financial Literacy Reality Fair sponsored by the Franklin Mint Federal Credit Union (FMFCU).
The FMFCU provided the supplies as well as several of its financial advisors. Additional assistance came from volunteers, including parents and Ursuline faculty and leadership.
This was the first time Ursuline held this type of event, and the enthusiasm was evident. “This event aims to equip students with practical knowledge about managing personal finances,” said Donna Kinzel, director of finance at Ursuline. “You can see that these students are engaged and interested in what’s going on.”
The event was a real-world Game of Life, a hands-on, paper-and-pencil exercise for the students. Each participant was given a profile that included an educational background, a job, children, a monthly income and a FICO score. They were then tasked with creating a balanced budget depending on what they would spend on real-life expenses, including housing, auto, food, childcare, healthcare, utilities, insurance, etc. The students worked through 15 different stations, each of which presented a range of options, giving students the opportunity to prioritize their spending.
Before balancing their budgets, each student had to spin the “Wheel of Reality,” where “life happened” to them. For some it meant a bonus at work, for others, an unexpected expense. Students could spin twice, but the first spin continued to count.
The lesson: Life is expensive, and not all young people understand or are prepared to meet the financial challenges they’ll face in adulthood.
“They can find a great apartment, but they may not have considered that those apartments require security deposits, along with furniture and the need to pay for utilities and insurance,” said Maureen McAleenan, upper school dean of academic studies.
An awareness of real-world finances can also prompt students to reconsider their post-high school educational and career choices, said Kinzel.
Senior Caroline Peach soon learned the difference between “must- haves” and “nice-to-haves” as she worked to balance her budget. Peach started with a bachelor’s degree, a job in finance and a $6,000 monthly income. She was also a single mom with two children, a 13-year-old daughter and a five-year-old son. She had priorities: premium healthcare for her kids, healthy food choices and paying down her credit card balance.
But even with the mid-range options she chose, including a two-door car, she still found herself $1,574 over budget and needing to make serious cuts. First, she downsized to a townhouse in a family-friendly neighborhood. It had fewer amenities than her original choice, but still featured a large backyard for her kids. She also opted to shop for “pre-owned” furniture.
She further cut expenses by choosing residential childcare over a childcare center. She boosted her income by taking a part-time tutoring job, and taking a second spin of the “Wheel of Reality” which awarded her a month’s worth of free gas.
She then canceled the cable and streaming services. “The kids can watch things on YouTube” she said.
She also decided to defer some expenses, like postponing work on her master’s degree until after she paid off her credit card.
When finished, Peach was not only on budget, she had a $2 surplus which she donated to charity. “This was fun, but it was hard,” she said. “I wish I were better at setting priorities.”
At the close of the event, students met with a representative from FMFCU who evaluated their choices. Marc Ernest, vice president & chief relationship officer, told Peach, a future investment banker, that she did a “spectacular” job of paring down that $1,574 deficit. “Maybe you’d like to be my financial advisor,” he quipped.
Ernest summed up the importance of the event. “We don’t expect the students to be perfect money managers when they leave the fair,” he said. “The goal is to get them thinking about priorities and about money and how they might spend and save it.
