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Beaver Lake MS Students Learn the Finances of Need vs. Want

Beaver Lake MS Students Learn the Finances of Need vs. Want during Their Visit to the Junior Achievement Finance Park

Posted by User Not Found on 10 February, 2016

“I’m not trying to scare you,” explained Tim the Junior Achievement (JA) Finance Park facilitator. “Personal savings in America is at a four year low and personal debt is at an all-time high. Fifty-five percent of Americans didn't save last year and 34% of Americans don't have adequate retirement funds. Almost half of Americans live paycheck to paycheck and the average college student graduates more than $23,000 in debt.”

After Tim’s opening presentation, Beaver Lake Middle School students sat shocked to learn that many Americans have financial difficulties and haven’t planned for their futures.

While in the JA Financial Park simulation, eighth graders took on new life scenarios and practiced saving, budgeting, and balancing need vs. want. As students broke out into groups, they were provided with new lives that explained their age, marital status, kids, education, job, credit score, savings, and debt.

At the Chase Bank storefront, a group of girls noted various aspects of their randomly selected new lives. One claimed, “This is horrible, I make no money and have two kids!” Another shared, “Guys, I make 70,000 dollars! Yes, this is awesome.” And a third noted, “Oh my gosh, I'm a single mom!”

After reviewing their new life scenarios, students shared what they could do to save based on their life profiles. John, a parent volunteer, reviewed various aspects of finances with his group, and asked the group questions such as: Is 680 a good credit score? What are the key things to growing savings? Why do you need emergency savings? Why should you save for your retirement when you’re young?

While one student joked that emergency funds are for when a sharknado touches down at your house, others shared that emergency savings are for huge medical bills, if you lose your job, or if something happens where you can't earn an income. John explained, “Life throws weird things at you and it’s better to be prepared than not.”

With their life scenarios in hand, students decided what sort of savings they would like to put away. In JA Finance Park, students are required to save at least 2% of their income, however they are encouraged to save more. While filling out their savings worksheets, students were able to see what 5, 10, and 15 percent savings would look like out of their monthly income and choose a savings amount based on their life scenario.

While waiting for the groups to finish their savings worksheets, students who had finished met to discuss their new lives. Some were intrigued that two people could have the same job, but make different salaries. One boy claimed, "My life scenario sucks! Apparently I'm married at 27 and have a kid. This is the worst." Others were more pleased with their life scenarios and one girl shared, "I'm a teacher and make $51,000. It seems pretty good, but I'll need to work on my savings and the amount of debt I have."

Monthly salaries in JA Finance Park ranged from $1,690 to $8,952. Facilitator Tim, shared, "you're all budgeting for the exact same items it just might look a little different today."

As the small groups came together as a whole, Tim noted some of the differences students would see throughout the day and covered the educational paths that many life scenarios were provided, from a high school diploma to a trade school certification and an Associate’s degree to a Bachelor’s degree.

After this review, students started on the second part of the day, which was to make a budget and research the services they wanted to use at the storefronts throughout JA Finance Park.

Tim warned, "You must budget for all items. It's ok if you spend less than your budget, but you cannot spend more than your budgeted amount."

Many students groaned when they learned that they had to pay for childcare if they had children and after being approved for an auto loan one boy joked, “I’m going to get an awesome car! My spouse can take the bus.”

The final part of JA Finance Park was the shopping exercise, where students put their budgets into practice. Many found it was easy to stay within their budgets, while some wished they had budgeted differently.

The Junior Achievement Finance Park field trip was provided by the Issaquah Schools Foundation as part of their financial literacy curriculum. The simulation provided a foundation for making intelligent, lifelong personal-finance decisions.