Forty-five Toll Gate High School upperclassmen put their budgeting skills to the test during the third annual Wave Federal Credit Union CU 4 Reality Financial Education Fair and got a dose of reality when it comes to personal finance.
Prior to the Tuesday morning event at the Radisson Hotel Providence Airport, the seniors and juniors picked a future occupation, determined the lowest annual salary, and calculated how much money they would have each month to cover expenses. For the fair, Wave Credit Union brought together a number of business partners to provide the students with the real-world costs for apartments, loans, groceries, utilities, clothing, gym memberships and more so the students could create monthly budgets.
Business partners included Liberty Mutual, Premier Homes Realty, Best Buy, Integrated Financial, Donahue Models and Talent, Empire Beauty School, LA Fitness, Stop & Shop, Donovan Travel and Elmwood Dodge. Students were also able to determine plans for savings, student loans, mortgages, part-time jobs and more with help from Wave Credit Union volunteers.
Once students had visited each booth and completed their budget worksheets, and spun the wheel of reality for an unexpected twist, a volunteer credit counselor would sign off on the final budget. The students brought their worksheets back to school to look over and discuss with their personal finance teachers.
There are close to 90 students in the program, however due to commitments only about half could not attend the program.
Paul Archambault, president and CEO of Wave Credit Union, said in three years, this program has improved and become a great experience for the students in the program. The fair served as a culmination of a yearlong program with Wave, during which guest speakers would visit the school to discuss various aspects of personal finance, such as credit, credit scores, money management, net worth, and checking and savings.
“I think it’s important to have people like that to talk to,” said Archambault about the business partners. “Hopefully, this helps.”
He added that many students are surprised by the true cost of things.
“I think they think they are just going to buy a house. Then they come back and say maybe I need a roommate, maybe I need to rent for a while, maybe I need to live at home for a while,” he said.
For the first time, two students were invited to speak about their experience in the program over the past year.
“They’ve actually taught me a lot about personal finance,” said senior Erika Pena. “I’ve learned I should start saving money now for college and retirement and stuff like that.”
Junior Courtney Sheraton spoke to how valuable the program has been and how much she has learned from guest speakers. “The class in general is good to have because it’s guaranteed to help you in the future,” said Sheraton.
She said that although she wanted a career in finance, a guest speaker who took the time to talk to her one-on-one explained a career in accounting would allow her to work from home when she starts a family, another life goal she has.
“That’s something I really took away from this,” she said.
The fair was very eye opening for students as they realized they might not be able to buy a house and renting an apartment with a roommate might be a better option. They also learned the true cost of groceries and eating out (up to $400 a month depending on how many times they ate out). Even when splitting food with a roommate, the cost was still over $200 with an additional $50 each to cover cosmetics or other household items.
“It’s a little scary. It gets you ready for the real world,” said senior Kayleigh Mullen.
Mullen’s chosen occupation was private detective and investigator, but with an annual salary of $27,000, she was learning it would be tough to get by.
“It makes me rethink my career choice,” she said.
To help cover the cost of things, Mullen planned to be roommates with junior Gianna Castellone, allowing them to share expenses.
“We spilt everything,” said Castellone.
Castellone’s occupation of occupational therapist gave her a little wiggle room with expenses.
“I have a couple of thousand left over after all these bills,” she said, admitting she still had to head over to the dreaded student loan table to calculate that cost and determine her savings amount.
Mullen added that she thought some of the costs might be blown out of proportion, such as a $232 used-car payment; that was too high for her so she decided to hold on to her current car and budget for maintenance only.
If students were running low on money, they did have the option for second, part-time jobs for extra income.
But even after they figured out their budget, each student had to spin the Wheel of Reality, which was filled with surprise expenses or bonuses such as $500 employee bonus, $750 income tax refund, $600 auto repair or a $400 stolen iPhone to cover. “Usually they do their budget and then oh, something happened today. Then they have to redo their budget because they have to come up with a couple of hundred dollars,” said Archambault.
Stephanie Soscia, owner of Premier Homes Realty, saw a quick change in many housing plans.
“They’d come up and say ‘Oh, we’re definitely buying a house,’” said Soscia. But after sending them to check their mortgage, they came back singing a different tune. “Then they’d come back and say we’re going to rent.”
They also got a wakeup call when it came to owning and insuring a car. Liberty Mutual’s George Tager said many students came up to his table looking for insurance costs on the new Dodge Charger they selected but were blown away when insurance was over $700 per month.
But Tager sees the valuable experience this can be for young people.
“We’re sharing financial experiences with kids that were never shared with me at their age. Sometimes the conversation changes to things like credit; everything revolves around that number,” said Tager.
“It gives them a taste of reality,” she said.
Toll Gate principal Stephen Chrabaszcz, Superintendent Richard D’Agostino, Secondary Education Director Dennis Mullen and School Committee member Gene Nadeau all stopped by the event to see firsthand what the students were experiencing.
“Knowing how to live week to week is important. This is something you’ll use for the rest of your life,” said Chrabaszcz.
Toll Gate Business Department Chair Ken Castellone explained that this program teaches the students in Toll Gate’s five personal finance classes to think about finance as an adult.
“[It helps them] make good decisions, and I think it helps them grow up a bit,” he said. “That’s why they’re taking it so seriously.”
He also referred to it as a “real world fair,” echoing the shock his students often express. “I didn’t know it cost that much for cable, I didn’t know it cost that much for cosmetics. That is why this is really good.”
Warwick Representative Frank Ferri was also impressed with the event.
“This is wonderful. This is exactly what we need,” said Ferri. He went on to recall when he graduated from college and was able to afford a lot on his starting salary. But today, he sees more and more Rhode Islanders stuck in “a financial rut.”
He says with the rising cost of living and technology, even he is overwhelmed with figuring out finances at home.
“Imagine young people just starting out,” said Ferri, pointing out those salaries have not kept up. “It’s out of whack.”