Kids get dose of reality on making ends meet

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Martinsville Bulletin (Virginia)
By: Debbie Hall
October 22, 2010

At Dollars & Sense fair

The expenses of daily life hit home Thursday for local high school seniors as they attempted to deal with budgets, bills and debt at an annual financial literacy fair.

"I think I've got to get a part-time job," said Thomas Clark, a senior at Martinsville High School.

Clark, 17, was among the area seniors who participated in the two-day Dollars & Sense fair, sponsored by the United Way at the National Guard Armory.

Each participant was assigned a "job" and specific pay. Students then visited various booths, manned by volunteers, and made choices about the types of housing and cars they would buy. Related expenses such as insurance, tags and fuel were included.

Students also incurred expenses associated with utilities, decided whether to buy health insurance, groceries, clothing and furniture, put money aside in savings and dealt with community service, Clark said.

With a calculator in hand, Clark tallied his monthly expenses and decided against visiting an area titled "Temptation Island," which featured vacations and other pricey options.

"This is not adding up good at all," Clark said of his living expenses.

His annual $20,000 income amounted to about $1,333 in take-home pay each month, he said. By the time he paid a mortgage, car payment, utilities, food, donations, entertainment and fuel, Clark said he owed more than he could pay.

"This has really made me think about the future and what I'm going to do," he said.

He plans to attend a community college after graduating and later hopes to transfer into an auto mechanics program.

But that may not be as easy as he thought, he said.

"I've learned that life after high school is going to be tough," Clark said.

He was not the only student to reach that conclusion.

Chris Lovern, 17 and a senior at Bassett High School, thought his $68,000 annual pay would cover his living expenses.

"I think I am good," he said while adding his monthly bills. "I don't know if I'll be over (his income) or not, but if I am, I don't think it will be by much."

He estimated his expenses might be $200 per month more than his monthly income of nearly $4,000.

Lovern was surprised when he finished the tally.

"Oh. I went over about $600 per month," he said. "Now I have to figure out somewhere to cut" expenses.

Staring at his list of expenses, Lovern said, "I think where I messed up was getting a house right off the bat. I should have paid off my student loans first" and lived in an apartment. "Apartments are cheaper."

Uncertain that was the best path, Lovern continued going over his expenses.

"I'm looking for somewhere to cut, but where do I do it?" he asked.

"With us being adolescents," many students lack experience preparing a budget or dealing with real-life financial issues, he said.

"This has been an eye-opening experience," Lovern said. "It makes you realize the actual value of a dollar."

Bailey Dalton, a Magna Vista senior, switched cars after her expenses came in over budget.

"I had to change my car. I went in the hole," said Dalton, 17. She traded her new Toyota 4runner for a 2005 Toyota Camry.

In addition to her car payment, Dalton said she also had to pay "insurance, taxes, tags, everything" out of her $68,000 annual pay.

"This has been a real eye-opener," she said. "It made me realize I can't do everything and have everything I want."

The literacy fair is funded through a grant from the Lacy Foundation.

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This page contains a single entry by CFED published on October 22, 2010 3:43 PM.

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