February 25, 2014 at 1:56 p.m.

Mad Money simulation teaches students importance of living within a budget

Mad Money simulation teaches students importance of living within a budget
Mad Money simulation teaches students importance of living within a budget

By Marcus [email protected]

The junior class at Rhinelander High School received a financial reality check Tuesday during the Mad Money financial simulation facilitated by the school's business education teachers and the Rhinelander Partners in Education (PIE) group.

As part of the exercise, over 40 representatives from area businesses set up booths in the Jim Miazga Community Gymnasium offering goods and services. Students were given a monthly budget and had to manage their money so they could pay their bills and feed their mock families.

"All the juniors in the high school are going through the simulation," said Patrick Kubeny, business education teacher. "We provide them a checkbook, an itinerary of the day's events, a map of who's here, and then new this year we've added a sheet that will help them divide up their income as far as necessities - a phone, a car, a place to live, food, clothing, those kinds of things."

The new sheet was included this year because the goal of Mad Money has changed a bit since the concept was developed, Kubeny said.

"Our goal is to prepare instead of scare. The first few years we did this we operated it as more of a scare tactic - throw them in here and let the wolves eat them - but now we're going more to help them instead of scare and frustrate them," Kubeny said.

Kubeny said he talked with each student about their career plans and what income level they can expect as they enter the workforce. He also uses the event to introduce students to things like taxes and how that affects take-home pay.

"Each kid will get a sheet to tell them if they're married, what their spouse makes, if their spouse is working, what their occupation and income are - they got to choose their own careers - and I looked up every career and looked up what a starting salary would be for that career in Wisconsin," Kubeny said. "We take out a third of the money off the top for taxes, Social Security and whatnot, so we're dealing with just take-home pay."

Once they get the take-home pay, the students are introduced to things like saving for retirement, deciding on living arrangements, transportation and other everyday necessities.

"From their take-home pay, we ask them to save for retirement, some of them have credit card debt and some don't. I look at what their path was to their job. Similar to student loans, if you're a bricklayer, I didn't give you any student loans but if you're a surgeon, you're going to have student loans," Kubeny said. "Then they either buy or rent a home, they buy new or used vehicles for them or their spouse, they pay all of their utilities, TV, Internet, they have to have a phone of some sort, insurance, we just try to replicate reality as much as possible."

Additionally, the students had to purchase homeowner's insurance if they bought a house, car insurance, clothes, child care in cases where both spouses are working, personal care items, groceries and entertainment.

As a wild card, Rhinelander Police Chief Mike Steffes and his officers were walking around the gym handing out cards that are equivalent to chance cards in Monopoly. Some of the cards provided the students with extra money while others were tickets or fines. Steffes said he was glad to be able to support an event like Mad Money.

"It's great to get out and help the kids understand how important this stuff is," Steffes said.

Kubeny said the business education department and PIE are trying to stress that financial literacy and living within a budget are essential to a successful life.

To help achieve that goal, Kubeny said all of the participating businesses treated the students like they would treat an adult on any other day. Using purchasing a car as an example, Kubeny said the hope is that students realize they can't just go buy a fancy new car right away, even if that is what the salesman is pushing.

"If they go to the car dealerships, they're going to try to talk them into some new cars. We want them to do that, but we've told these kids they're going to try to talk them into a new car but that they need to think whether they really need the new car or can afford the new car," Kubeny said. "We want to teach them that when you go to a real (car) lot in town, that's going to happen. But, for most of the people here, the goal is to help the students, not scare them. We want to get them ready."

"Financial literacy is huge for our state and our nation. In Wisconsin, financial literacy is something that is looked at as something that the kids need to obtain before they leave high school," added Leah Van Zile, PIE board member and event organizer.

As for the students themselves, they said participating in Mad Money was an eye-opening experience.

"I learned just what it's like to have to manage your money, that not everything in life is free, that you have to learn to budget out what you get and stay within that," said Moglee Finch, noting that he was $1,048 ahead but still had some bills to pay.

Finch's buddy, Lloyd Smedbron, wasn't so sure about his financial future.

"I don't know how I'm doing just yet. I'm hoping to come out in the positive, but I don't know just yet," he said.

Both students agreed that there are many obstacles in the adult world that they hadn't expected.

"It's a reality check is really what it is. What surprised me the most is the babysitting costs at the YMCA. That's a pretty penny if you have a kid," Finch said. "The clothes were quite a bit for me. I went over budget on mine, but I had to get what I needed. I've got to make cuts now, I just don't know where I'm going to do that," Smedbron added.

Whether they end up in the black or the red, both students said the simulation provided them with a valuable learning experience.

"It gets you ready for the real world," Finch said.

"It teaches you how to buy stuff and manage your money and write out checks and stuff like that, stuff we need to know," Smedbron added.

Van Zile said PIE is grateful the local business community has been so supportive of the Mad Money endeavor.

"All of our businesses are returning businesses from over the three or four years we've done this," she said. "It's really great because each year they come up with new ways and ideas to make the experience better for the students."

Marcus Nesemann may be reached at [email protected].

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