Middle schoolers learn money management

Klamath Falls, Oregon – It’s costlier to insure a sports car than an SUV. A credit card can raise a credit score but can lead to debt and interest charges. College graduates earn more than high school graduates over a lifetime.

These were among dozens of finance tips for the 200 Ponderosa Middle School eighth-graders who attended the eighth annual Junior Achievement (JA) Finance Park at the Klamath County Fairgrounds March 2 for a 4.5-hour simulation experience on personal finance.

Ponderosa’s students started the program by receiving randomly assigned adult personas, including age, marital status, number of children, income, educational background, credit score, debt, savings and more. Using iPads with software designed by JA, each calculated a net monthly income and created a monthly savings plan for retirement.

Next, they conducted research at 16 kiosks representing 20 budget expenses, from food and philanthropy, to education and electricity. With the guidance of trained volunteers, groups of students discussed essentials like health insurance and housing, as well as extras like travel and investments.

At a kiosk about home mortgages, they considered how income level and credit score affect a home loan application. When discussing the length of mortgages, one student guessed “one, maybe two years?” and was surprised to learn that 15 to 30 years is typical.

At a communications kiosk, a group of eight unanimously agreed that cable, internet and phone connections are “wants,” not “needs.”

At a clothing kiosk, students brainstormed how to limit clothing expenses. Suggestions included buying with “room to grow” or buying “off-brands.”

Next, bound by the constraints of their personas, students allocated dollars to every expense. Those with children budgeted for childcare. Those with spouses budgeted for two vehicles or public transportation. Everyone created line items for housing, food and other necessities.

The final step was online shopping and bill paying. It wasn’t easy.

“All of my money is gone, just like that!” said a student as she struggled to stretch her income.

“Welcome to adulthood,” joked Cami Nielsen, outreach manager for the Klamath County Library who has volunteered at the Finance Park for the past seven years.

“They are getting really good life skills,” said Nielsen. “With this information, these kids will be a lot more prepared than our generation was.”

Natalia Garcia budgeted and shopped for her family of four. Even with $4850 per month from her job as a comptroller, she was careful in the choices she made: a three-bedroom home with a $1144 monthly mortgage payment ($106 under budget) and a pickup truck for $217 monthly (leaving $103 for a bus pass for her spouse).

While Natalia came with significant financial knowledge from her older brother, her classmate Mia Dentinger faced sticker shock. Denied a home loan and working with $2300 monthly, she chose rental housing, a modest car and generics-only groceries.

“I can’t believe how expensive everything is,” said the single mother of one.

Mia’s reaction was typical, according to social studies teacher Stacia Hanson, who has attended JA’s Finance Park since its inception.

“This experience shows them how expensive kids are and how boring and hard it is to pay bills,” Hanson said. “But it also inspires them to consider what job they’ll need in order to afford what they want.”

Hanson noted that Ponderosa was the first school in the Basin to participate in the Finance Park and that the school also offers JA’s “It’s My Future” program to its sixth-graders and JA’s “Economics for Success” program to its seventh-graders.

In four years, Ponderosa’s eighth-graders will repeat the Finance Park simulation as Klamath Union seniors, just in time to assume real adult personas.