Fairfax students get hands-on lesson in personal finance

By Ylan Q. Mui
Washington Post Staff Writer
Saturday, October 23, 2010; 5:34 PM

Lake Braddock Secondary School student Zenat Raza has a problem that an eighth-grader wouldn't expect to encounter for a while: how to budget the $81,085 salary of a 35-year-old single mom with two kids.

Taxes eat up $676 a month. Social Security and Medicare payments take away another $338. Then there's the house payment, car note, insurance premiums, cellphone bills and even college to think about. Zenat scans her budget worksheet and realizes the harsh truth.

"Going into a big world seems really challenging," the 14-year-old said. There are "a lot of difficulties - a lot of, like, math."

The exercise is at the heart of a program developed by nonprofit Junior Achievement and the Fairfax County school system that teaches eighth-graders the basics of personal finance, from the difference between debit and credit cards to calculating compound interest. The curriculum culminates in a visit to a 20,000-square-foot interactive museum called Finance Park that opened this month, where students such as Zenat put their skills to the test.

"You are no longer eighth-graders here today at Finance Park," building manager Rachel Wunder told about 100 students on a recent morning.

Instead, they transform into adults, with all the financial obligations thereof. Each student receives a life situation that spans the economic spectrum. Some become married couples earning six figures; others are single parents making ends meet. There are students who are single with plenty of disposable income, and those who only thought they had money to spare until they began tackling their budgets.

During their day at the park, students visit about a dozen faux stores to purchase a dizzying array of life's necessities, from clothing to college education. They track the rise and fall of their stock portfolios through a prominently displayed scrolling ticker. A few fortunate students get "lucky chances" granting them extra dollars for, say, helping the elderly. Others receive the not-so-happy news that their car broke down or their sunglasses cracked, resulting in an unplanned expense.

"Financial literacy is not a fad," Federal Reserve Chairman Ben S. Bernanke said during the grand opening of Finance Park last week. "It is a critical thing for everybody."

In a 2008 study by the Jump$tart Coalition, which promotes financial literacy among youths, high school students correctly answered less than half of the questions on a personal finance assessment, down from 52 percent in 2006. Meanwhile, a survey this year by the National Foundation for Credit Counseling found that more than half of adults do not budget their expenses. About a third of adults would give themselves a grade of C or worse for their knowledge of personal finance.

The creators of Finance Park said that the Great Recession has spotlighted the need for financial education starting at an early age but that the idea for the program was born well before that.

Junior Achievement, a nonprofit group that helps teach students about business, opened its first Finance Park in Tampa in 2003 and has since opened 14 more locations. In Fairfax, the group began by working with schools to incorporate its curriculum into the classroom, followed by a trip to a smaller version of the park that was housed in a trailer.

The initiative coincided with the passage of legislation in Virginia that made financial education a requirement for students. The program has since evolved into 20 hours of instruction taught in all eighth-grade math and social studies classes and, of course, the visit to Finance Park. Junior Achievement said it is in early conversations with other school systems, including those in Prince George's and Montgomery counties, about creating similar programs.

The park is staffed primarily with volunteers, including parents and employees from sponsoring businesses. Capital One was the largest backer of the program, but other big names are displayed on the storefronts and even street signs at the park: ICI Investments, Burger King, Volkswagen. Companies pay $15,000 to $250,000 for naming rights. Capitol One donated $2.5 million.

Edward J. Grenier III, head of the National Capital Area chapter of Junior Achievement, said the group often partners with businesses and has established standards to ensure that corporate marketing does not detract from students' learning. In addition, he said, the group wanted the park to mimic real life as closely as possible, warts and all, to engage students.

"It has got to feel real so they get lost in the moment," Grenier said.

Students begin the visit by calculating their monthly take-home salary and creating an estimated budget. The catch is that if students purchase items only at the high end of their budget, they are guaranteed to go over their total spending limit. That forces them to make tough choices.

"Getting it wrong is actually the right answer here," Grenier said. "Making your mistakes here gives us a chance to correct them."

Some students have caught on to the game. Meagan Bragg, 13, stood in Finance Park's car dealership and sifted through paperwork detailing her options: compact, premium, sporty, wagon. Meagan picked the least expensive, most practical vehicle on her list, a VW Jetta SportWagen.

"It's easier just to drive kids around in a wagon," she said, thinking about her 8- and 11-year-old fictional children. Plus, she added, "I didn't really want to use all my money because I don't want to go bankrupt."

But sometimes even the best intentions can be led astray. Melissa Mathews, 13, perused the description of a house with a $1,163 monthly mortgage: a spacious two-bedroom, two-bath with a deck and a grill and a -

"Ohhh, it has a backyard pool!" Melissa said, as she checked the box next to her selection. "I like that!"

One small problem. In her imagined adult life, Melissa has two kids. A real adult visiting the park pointed out that they would have to share a room. Melissa shrugged.

"Think about how many children you have and what kind of home you'll need, not necessarily what you want," Finance Park staffer Lori Lichstrahl told the students. " 'Cause sometimes you can't always have what you want."

Quietly, Michelle erased her check mark and opted instead for a three-bedroom house close to good schools. There was no pool.

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