Principle Five: Education, training, and information. Credit unions provide financial education to their members as well as the communities they serve.
Principle Seven: Concern for community. Since credit unions are locally owned financial institutions, they are committed to investing in the community.
| Jon Hamby tells students what their food options are at|
the "Gotta Eat” station. It is up to the students to decide
how much to spend on groceries and dining out.
Davie High School hosted four Financial Reality Fairs for a total of 174 High School Students. The program called Mad City Money, sponsored by the Winston-Salem based Members Credit Union, is a two hour interactive simulation that provides students with a glimpse of what it’s like to be an adult managing personal and family finances.
The program first took place on Monday, January 6 for 48 students and then was repeated three times on Thursday, January 9 for 40 to 46 students at a time. Each student was given a new identity with a family, occupation, salary, debt, and medical insurance co-payments and challenged to make financial decisions to meet their family’s needs. (Note: see event coverage in the Winston-Salem Journal by clicking here.)
"Financial literacy is important for high school students because in the very near future they will be responsible for their own finances, and many of them have very little knowledge of how to manage money or what their everyday expenses will consist of,” remarked Paula O’Rorke, Business Education Teacher at Davie High School. "The pressure from direct marketing solicitations to take on credit card debt, and the trend in student loan obligations make it even more important for students to understand the impact debt will make on their lives.”
To demonstrate how debt affects their lives in the simulation, students were instructed to visit nine stations regarding housing, transportation, clothing, food, day care, entertainment, discretionary items, savings contributions, and credit card payments to buy what their family needed while staying within a budget. They were also required to purchase items based on the size of their family and the age of their children. At each event there were 20 to 24 volunteers and many of them played the high-pressure sales person role at a station, encouraging students to buy higher priced items.
According to Jon Hamby, a volunteer who sold grocery and dining out options at the "Gotta Eat” station, students were surprised at the cost to feed a family. "Most of the students realized that feeding their family is more expensive than they thought and chose the least expensive option in order to stretch their monthly budget,” said Hamby.
The goal for participants was to stay within their budget but have no more than $100 in their checking account after they completed all of the reality fair requirements. During the simulation, students were encouraged to visit the Members Credit Union station to make contributions to a savings account, open a retirement account, pay down credit card debt, and seek advice if they experienced financial trouble or had more than $100 left in their checking account. Eric Stiff, VP at Members Credit Union volunteered at this station.
"One student started out at the entertainment station and bought over $3,000 worth of vacations. I explained to him why he needed to return some entertainment items and live within his budget,” recalled Stiff. "I think the light bulb went off and he realized that he must pay his obligations before spending money on entertainment. When he returned to the credit union station at the end of the session he had over $1,000 to put into savings and he paid off his credit card debt.”
Members Public Relations Director Carla Kimel shared that these events provide several takeaways for students. "The hands on experience provided by the
Financial Reality Fair made budgeting a tangible concept for students. Students
from the financial management and math classes that participated were able to
take what they have learned all year in school and apply that knowledge to a real
life situation. Many students were surprised about the cost to raise a family
and considered expenses that they have yet to deal with in real life."
Members Credit Union has also coordinated financial reality fairs with High School Students at Surry Central High School and seventh graders at North Davie Middle School. There is also an in-class financial literacy seminar program available for educators that can’t offer two hours for a reality fair during the school day. To find out how you can work with Members Credit Union to bring financial literacy to your school or youth program call 336-748-4594.