PORTLAND, Ore. — There is a joke among millennials: they learned everything in school except money management. And it might be true.
Only 24 percent can demonstrate basic financial literacy, according to a study from the National Endowment for Financial Education. But now a group of credit unions are trying to teach the next generation how to budget by showing them what it's like in the real world.
The Financial Reality Fair has given nearly 1,300 Oregon high school students a taste of the financial hurdles they will face in adulthood.
Esbeidy Castillo Rodriguez just graduated from high school, but she is already getting a feel for the real world with her summer job at Sunset Science Park Credit Union in Portland, which put on several of the fairs this past year.
“I get to do different transactions every day, which is exciting. Learning new things every day,” she said.
Castillo Rodriguez admits she did not give much thought to her financial future in the past. However, she landed this summer job after working at her high school’s credit union. She said attending the Financial Reality Fair opened her eyes.
“It was almost like a gateway for me to understand all these concepts and to understand why credit is so important,” Castillo Rodriguez said.
Grants from the Northwest Credit Union Foundation made the fairs possible in several schools this past academic year.
“It's kind of a missing element, finical education in schools,” said Rhonda Baggarley, President of Sunset Science Park Federal Credit Union. “And so, if we can just provide that, a little taste of it, that might help them one step down the road.”
The fair guides students though a day in the life of an adult's financial responsibilities. Using an app-based platform called “Bite of Reality,” the teens download a persona, a career and a starting salary. They may be single or married, might have children, student loan debt, or entry-level, lower wage jobs. They make purchases and decide on expenses in real time.
As in the real world, volunteers may try to upsell the students on tempting housing, transportation, clothing, entertainment, and travel options. That leads to decisions they may face later in life, such as whether to buy a public transportation pass instead of a new car, or get roommates to help pay the rent. Every student must finish with a balanced budget.
“They thought they could have the luxury car and then they have to go to reality. Maybe someone has to take a bus instead,” Baggarley said.
Many students are shocked by what their parents deal with every day to make ends meet.
“Just all the bill that you have to pay. That really plays in,” Castillo Rodriguez said.
The goal is to prepare kids for the real world of bills, loans and budgeting, and help them avoid financial pitfalls in the future.
Castillo Rodriguez will head to Portland Community College in the fall. A choice she made because she is not sure what she wants to major in yet and factored in tuition costs. No matter what path she chooses next, she is headed in the right financial direction.
"Something just clicked in me and I was like, 'I think I need to be more responsible,'” she said.
“It is as rewarding for our team to volunteer as it is for the students to experience a Bite of Reality Fair,” said Brooke Van Vleet, CEO of InRoads Credit Union in St. Helens. “It’s not unusual for them to tell us the experience gave them more respect for how their parents manage the family budget, and that they’re going to be smarter about how they can spend and save.”
While Oregon students who attended a Financial Reality Fair this year will head into summer smarter about how they spend and save, the Northwest Credit Union Foundation is working with its member credit unions to prepare for similar events in more Oregon schools in the coming academic year.