Twenty-five Macon County eleventh grade students are part of a mentoring program with ten Auburn University students and graduate assistant Raven Conwell. The project is funded in part by the Appalachian Regional Commission, and the work these students do together revolves around workplace and college readiness.
Tonight was an experiential financial reality check for students, thanks to a program coordinated by Diana Simpson of the Alabama Cooperative Extension Service. Using eight different stations representing real life expenses and one station for a part-time job if a student’s expenses exceeded income, Pleasant Grove Church was transformed into an experiential classroom where decisions had to be made and costs had to measured.
Ms. Simpson asked students to complete an “Envision Your Life” worksheet, one where students had to pretend they were 25 years old and the primary support for their household. They were asked to report their monthly salary, whether they would rent or own a home, type of car they’d like to drive, and other questions related to finances.
Then came the reality check. Students were randomly assigned an adult identity, including a vocation or profession, monthly salary, marriage situation, and whether or not they had children. As they entered “real life,” they were greeted by college students, one parent, and Pastor Clark, each of whom were assigned to stations representing Realville’s realty, utilities, insurance, daycare, grocery and clothing store, and car sales. Students carried with them a checkbook register with their assigned take-home pay and had to decide among different choices at each station.
Students had to weigh the costs of renting vs. buying, types of clothes, which car to purchase, etc. Some expenses require little choice, they learned, especially daycare, utilities, groceries, and insurance. And if money ran tight, they could apply for a part-time job, but that meant working evenings delivering pizza or cooking Realville hamburgers, taking time away from family and sometime requiring additional childcare. Students calculated expenses in their check register, and some were surprised at how quickly they were in the red. Loans and credit cards were available, but students were not interested in acquiring debt for living expenses. I tried to talk some students into a loan so they could drive a Hummer instead of a Corolla, but no one was willing to take on more debt for a bigger set of wheels.
During the activity debrief, Ms. Simpson led the group to think about real-life expenses they encountered, and then she talked about the value of saving money. She introduced us to the “rule of 72,” how to estimate an investment’s doubling time. A few of our students currently have savings accounts, and many more are interested in obtaining one. We will follow up with students to help them set up a savings account at the bank of their choice. Ms. Simpson also discussed the exorbitant interest rates of Payday Loan and Cash for Car Title operations, many of which are illegal in other states. These businesses invite citizens to become hostage to high interest loans.
This reality check experience was important for all of us. Responsible adult living, we learned, is challenging, but it can be done. Check out the slide show below to view pictures from the activity.