MARSHFIELD – When 14-year-old Cassidy Kolstad wanted new soccer cleats, she thought her bedroom savings stash would cover buying the shoes.
“I looked online and found out these cleats cost $350,” she said. “There was no way I had that much saved.”
Crestfallen, the Marshfield Middle School student found a cheaper alternative for $50. Her mother, Kimberly Kolstad, helped her shop online and at local stores where the duo found mutually acceptable cleats.
A lot of teens are surprised by the facts of financial life when they first enter the adult world of budgeting and spending, according to local middle school business education teachers who teach introductory money management to seventh- and eighth-graders.
Study after study shows Americans do not plan and budget for financial difficulties, the teachers said.
Many families face money woes because they lack a nest egg for emergencies — a Federal Reserve study early in April showed that about half of the adult population would not be able to come up with $400 in savings for an emergency.
Those teachers say their role is to explain the basics of money management, and many supplement their lessons with a computer program that provides students with simulations to practice their new money skills. Central City Credit Union provides the program free to schools in communities with CCCU branches.
The online simulations work students through scenarios including dividing a paycheck into payments for planned and unexpected bills.
“There’s things like utility bills, car insurance payments, things I didn’t know about and it involves doing things like a budget and saving money,” Cassidy Kolstad said.
After taking the class and completing the online simulations, she said developed a plan to work harder to save money she earns doing chores at home.
The online simulations show students the consequences of their financial decisions, said her teacher, Dan Akin, who has taught business education at Marshfield Middle School for 22 years.
“The kids see how something like a car repair can be a big setback financially if you don’t have any savings,” Akin said.
Americans are terrible financial planners, which is why it’s important for him and his colleagues to teach money skills, he said.
All Wisconsin schools are required to teach financial literacy to students with age-appropriate instruction from pre-kindergarten through 12th grade. Most districts in central Wisconsin integrate financial curricula across the grades with the majority of education beginning in the middle school years, ages 12 through 14.
Financial education teachers at the districts in Marshfield, Stevens Point and Wausau all said they stress the importance of saving money for emergencies.
“Financial difficulties arise at one time or another for just about everyone,” said Art Greco, the business education teacher for seventh-graders at Benjamin Franklin Jr. High School, Stevens Point. A key to weathering the hard times is a savings account, he said.
While the finance classes taught by teachers like Greco help students to learn terminology and concepts, the online simulations give students opportunities to practice what they learn.
“That’s why this program is such an asset to us and our students,” said Brian Bauer, business/technology education teacher at John Muir Middle School.
Students are surprised to learn what everyday life as an adult can cost — and how everything from parking ticket fines or a trip to the emergency room for a sudden illness can throw a budget off course. They learn through practicing online how to avoid the monetary pitfalls.
“This teaches you a lot of life skills about money and budgeting,” said Kaylee Wilker, 14, of Wausau. She recently completed the Banzai section in Bauer’s class and said it makes her “think about saving money.” Wilker said her parents give her an allowance but she mainly spends it for the things she wants, like books and craft supplies, instead of saving it.
Parents who don’t pay their children an allowance or have a way for their children to earn money aren’t doing their children any favors because without an income, however small, they can’t learn to budget and save, Aikn said.
That’s why the credit union provides the program free to schools, said Suzanne Campbell, a Central City Credit Union manager in Stevens Point.
Cassidy Kolstad said she was inspired by her finance class to devise a new system so that she will save more money. She divided her wallet into one half for savings and another half for spending. She gives the savings half to her mother for deposit into her savings account where she is saving for future college bills, she said.
“I don’t want to be in debt so I’m going to work harder to save more money,” she said.
And that is music to her teacher’s ears; “I love it when one of my students begins to understand this, or says, ‘Mr. Akin, I opened a savings account,'” Akin said.