By Kari Weber
Benjamins, dough, green, scratch, cheddar, bucks, skrilla: Whatever name it is goes by, money is used by all. But today many Americans are expected to understand how to make money, save it, invest it and, by some miracle, create a financially secure future – all without much guidance. Schools focus primarily on core testing areas; teaching the dollars and sense of money can get left behind. Many states have been slow to add “real world” skills around money and personal finance to the curriculum.
A 2013 study by the Center of Financial Literacy gave California a letter grade of “F” for failing to provide lessons and standards around managing personal finance. California was not the only state behind on this measure. Often, the teaching of these practical skills falls to parents, but many parents and families don’t have the skills and knowledge to pass on to their children.
The REACH youth development program understands the value of teaching these skills early and often. As part of the program, students attend a series of lessons in Financial Literacy. Students are encouraged to create healthy habits around money, build a spending and savings plan, and to start thinking about long term goals such as saving, investing, and planning for their education expenses.
During one recent financial literacy class, students worked with Santa Barbara local Elisabeth Donati, entrepreneur and founder of Creative Wealth International, an extensive collection of educational money management games and camps. REACH students participated in The Money Game. The Money Game is an interactive game that exposes students to essential components in the world of money, from earning a paycheck to investing in the three pillars of wealth (stocks, real estate, and business). Elisabeth has created a game that allows students to experience the ‘realness’ of money through an experiential, engaging, and safe process.
Specifically, students practice “paying themselves first,” covering their expenses, and reconciling their personal “register” or bank statement. “Paying yourself first” refers to prioritizing savings, and encourages students to think beyond instant gratification. If they have spent wisely through the game, students then have the option of investing. The game has many rounds that build on the lessons of previous rounds. REACH student Joceline Ortiz commented on the interactive nature of the game: “We weren’t just sitting there and having all this stuff taught to us, but we became part of the process of doing it, so we understood it.”
Other habits for cultivating a successful relationship with money include avoiding pitfalls like credit card debt, predatory lenders and the always present struggle between wants and needs. In later rounds of The Money Game, students experience “life events” that have financial repercussions. For example, when students experience a car accident, some have savings or insurance to cover it, while others do not. This process allows students to witness the consequences of a tight budget in a hypothetical – yet very common – circumstance.
Participants in The Money Game were engaged throughout a long day, intently covering a topic considered dry or less-than-interesting for most teenagers and even many adults. Student Tito Michel said, “This class really helped a lot with my understanding of finance. I like the game we played. I am excited to learn more about the three pillars of wealth.” Marisol Duarte proclaimed, “I’ve become so much more aware of how to invest money. I pay myself first!” This is music to the ears of financially savvy adults.
Students in the REACH program will continue to build on their Financial Literacy learning over the course of the next two years, delving deeper into the topics introduced in The Money Game.
Useful links and a reference to the 2013 study:
Kari Weber is a Program Manager for the Orfalea Foundation’s REACH youth development program.