High school students get reality check in budgeting

BANGOR, Maine — Gareth Cleveland, a Brewer High School senior, likes math and chose to be a research statistician, which provided him with an annual salary of $44,188.

His job on Tuesday — at the fifth annual Financial Fitness Money Management Experience — was to create a household budget with that salary, which gave him $2,762 a month to work with.

He started with housing.

“I purchased a moderate house,” Cleveland said. “I could have rented, but I wanted to buy.”

From there, he purchased a 2004 Mazda.

“I bought a $9,000 car,” he said. “It was used.”

Next he spent money on insurance, food, savings, clothing, education costs, home furnishings and, of course, fun.

“I went middle of the road the rest of the way,” Cleveland said — except for the fun, which he scrimped on. “I went cheap. I took just the cell phone and movie theater. I knew I was getting kind of close, so I made cuts there.”

Even so, at the end he was $3.11 over budget.

“I could cut down on groceries,” for which he budgeted $160 a month, “or savings,” Cleveland said. “I could ditch the Mazda and go for a Honda.”

Credit unions from all over the area host the annual event in an effort to teach today’s youth the importance of a budget, credit scores and savings, said Mary Jo Freeman, vice president of the Eastern Maine Medical Center Federal Credit Union.

“We are teaching young adults about the real world,” she said as teenagers milled around her with budget worksheets and calculators.

A total of 45 volunteers from 10 different credit unions and the Maine Credit Union League converged on EMCC for the event and worked with 200 area students from high schools in Bangor, Brewer, Bucksport, Hampden and Hermon, as well as the Hancock County Technical Center.

Each student chose a job, was given a corresponding Maine salary and a good and a bad credit report, and was sent out to create a budget, Freeman said.

“They all get to choose” items to spend money on that are grouped into cheap, moderate and expensive, she said. “They all want the best and have to go back and readjust.”

In addition to the big budget items, the worksheet also included utilities, maintenance and repairs, life and health insurance, eating out, vacations, and even laundry costs.

Brewer computer technology teacher Andrew Maxsimic, who is teaching a class on personal finance, said students have learned how to balance a checkbook and create a budget, but many still don’t understand how fast money can be spent.

“It’s a reality check,” he said of the workshop. Students learn “what actually they’re going to have to do when they leave” high school.

Cleveland said the experience taught him the importance of looking at the big picture and keeping track of where his hard-earned money goes.

“It’s easy to forget about some of these [expenses], and it adds up,” he said.