IGNACIO – Jumping around turned into lessons about earning money, and how to eventually retire early, during a financial literacy activity this week at Ignacio Middle School.
TBK Bank brought The Money Game, a weeklong financial literacy program, to eighth grade students Tuesday at the middle school. Like other districts in La Plata County, the Ignacio School District is trying to give students practical lessons early. In some ways, students are graduating into a better economy than prior generations, but many need more financial know-how.
“It’s starting that process of being aware of the money you spend, where it’s going and trying to make informed choices about those things,” said Spencer Cone, eighth grade financial literacy teacher at Ignacio Middle School.
In Cone’s classroom, students earned income by doing “work,” i.e., jumping, then keeping track of expenses and using 90% of a $1,000 check to pay bills. Their main decision? To invest the remaining $100 or spend it on fun items, like candy.
“Who are you going to pay first?” said Ron Dunavant, vice president and community liaison officer with TBK Bank, to the class.
“Yourself,” the class said in chorus.
The way to win The Money Game is to use income to earn more money through investments, eventually making enough passive income to pay for bills and expenses. The program is an interactive final exam for the elective class, Cone said, and fulfills state educational standards.
In the early 2000s, Colorado passed legislation to standardize financial literacy in schools and address a lack of education on the subject.
For example, in 2014, 18% of young millennials exhibited high levels of financial literacy – meaning they could answer four or five questions on a five-question financial literacy quiz correctly – compared to 30 percent for older millennials, according to a Financial Industry Regulatory Authority, Inc. assessment.
Of all millennials, 34% engage in three or more costly credit card behaviors, the assessment said.
“What we’re attempting to do is help young people get some education so they don’t have to learn the hard way,” Dunavant said.
Wages for college graduates are above 2000 levels, but that wage growth does not make up for years of wage stagnation or the rising cost of college and resulting debt, according to the Economic Policy Institute.
States are investing less in higher education, which means the burden on students and families is increasing, the study said.
If high school students choose to go to college, they will likely graduate with more debt than in past decades. For example, 65% of 2004 graduates left college with $18,550 in debt. In 2014, 69% of college graduates left with $28,950 in debt – a 56% increase, according to a 2015 study by The Institute for College Access and Success.
“When I was a young person growing up ... this wasn’t spoken of at home,” Dunavant said, adding that the stigma around discussing finances still exists. “The only way to find out about it was to ... go out and understand the pitfalls.”
Dunavant said financial literacy education is an important step to avoid some of those pitfalls, like depending on high-interest-rate credit cards.
In Cone’s financial literacy class, students learned about the stock market, personal spending patterns and different kinds of debt, like credit cards and loans. They practiced financial literacy concepts like diversifying assets, budgeting and planning for unexpected events.
“The idea is to present them with all of the options out there that adults are faced with and to give them an informed sense of how to set themselves up for the goals they want to achieve in their lives,” Cone said.
During the game, some students gave into temptation and chose candy over real estate; others ended up with plenty to invest. Almost all, however, ended up enjoying the highly interactive activities.
“I think it was a great game that incorporated learning but was still fun,” said student Zoey Ashley.