Austin Hickman spent a month writing down every penny he spent.
“I realized that I spend a lot more than I thought I do,” the high school junior said.
Like many high school students, Austin has few expenses other than paying for his phone and buying gas. Still, he spent over $400 the month he kept track.
“Now I stop and think before I just pick up a little candy or something,” he said. “I really don’t need it.”
The every-penny-spent exercise was part of a two-semester personal finance class Kent City High School requires of all its students.
“Society marketing is very extreme, and what I hope my students learn is that wants and needs can easily be blended,” said instructor Trafford Adams. “It is important that they learn to become fiscally responsible” by distinguishing between the two.
Classroom lessons include understanding how vendors mark up products. Knowing that the markup on a vehicle is only about 10 percent, but on furniture it is often between 400 and 700 percent, will help students make better choices as consumers, Adams says.
When Adams asked, “Why do consumers need to know what the average markup percentage is?,” at least one student answered, “So you know how you can bargain with them.”
While this lesson tackles how and when to bargain for a better price, other lessons deal with day-to-day expenses and how to plan a budget. It also includes a nine-month simulation of handling and balancing a bank account.
“Every kid should know how to balance a checkbook and use a debit card,” said junior Clay Davis.
It Gets Personal
Clay knows firsthand how important having some emergency money on hand is.
“During the mortgage crash in 2008, my dad lost his job,” he said. During the family’s transition, his father thought about going to college for a business degree but decided instead to do what he knew best. “He was a car washer and he ended up opening a car wash and running a business,” said Clay.
Clay likes the finance class for another reason: The practical knowledge he is gaining has allowed him to step in and help his dad with the business books.
Much of the course content is based on avoiding debt and other strategies expounded by popular finance guru Dave Ramsey.
Adams, who says he started following the Ramsey financial model 10 years ago, is debt-free except for his home. Students are on board with the idea, but some worry about figuring out just how to do that, especially after they leave high school.
“I really like the Dave Ramsey stuff, he gives us practical stuff to think about,” said Hannah Van Wert. “I know he’s right when I buy something just because it is cheap, I regret it later — buyer’s remorse.”
“He says to pay cash for everything, your car, house and even college,” said Katlynn Van Oeffelen. “I feel this could be a very positive lifestyle, but with today’s society it could be difficult. College is very expensive.”
Katlynn and Hannah are on board with the main concept, but aren’t sure most people really live debt-free. “I think maybe my uncle is,” Hannah said. “He didn’t go to college and worked a lot and now has a good job.”
While the class offers other reading materials, including “Rich Dad Poor Dad” by Robert Kiyosaki, the Ramsey no-debt rule has made an impact on at least one of the students.
Jarod Coates proudly says of his 1992 baby-blue Cadillac, “I paid cash for it.”