“What is overdraft protection?”  “A $75 charge! What did I buy at the movies?!!”  Strange questions were asked in the junior college prep course last year… questions about health insurance, 401k contributions, insurance deductibles, loans, and bank fees, to name just a few.  Sure, the focus of the college prep class is the college application process, which encompasses writing college essays and developing interviewing skills, but fiscal awareness is also an important part of the curriculum.

What is fiscal awareness in the context of the college preparation process?  I believe it is helping our students understand the financial impact the cost of their college education will have on their future, not only in lifetime earnings, but financial freedom.  So how do you help teenagers understand personal finances that most adults don’t understand? Through participating in a national budgeting simulation called the H&R Block Budget Challenge.

The 2015-16 academic year was the second year the Academy participated in this simulation, whose aim is to help students learn how to successfully manage their money after graduating from college.  Budget Challenge places the students in a real-life scenario of having to make decisions about how they will spend or save their money.  The decisions they make at the beginning of the simulation will dictate outcomes throughout the game.  Choosing a bank that requires a minimum balance and pays interest is a great way to earn points, but could hurt you at some point when expenses cause you to go below the minimum bank balance.  Paying bills on time earns you points while lateness results in point penalties.  Correctly answering weekly quizzes on financial terms and situations also helps students gain points.  Someone will crash their virtual car and have their virtual laptop stolen in the simulation in order to teach them how to plan for the unexpected events in life.

If a student can successfully manage his or her personal finances, the reward goes from being virtual to real, by way of a scholarship in the amount of $22,000 — a great incentive to keep asking questions such as, “How much should I contribute to my 401k if my employer matches 10 percent?”

College readiness starts early and so should fiscal awareness.  I look forward to continuing this valuable simulation with my students in the 2016-17 academic year!