Young people are given a persona — a fictional occupation with salary, credit score, debt, family — and then go to various stations where they have to pay for things such as housing, transportation, food, clothing and other necessities.
Bite of Reality has been taught to juniors and seniors in high school, nonprofit partners of RCU’s that serve teens, as well to students at Sonoma State University, Dominican University of California, Napa Valley College and Santa Rosa Junior College.
Information that is disseminated changes as necessary.
“The increased incidents of fraud and scams has really led us to change how we teach these programs,” Martin said. “We find we need to provide people with the information they need to know how to identify and prevent scams and fraud. It’s one of biggest changes through the years in our financial education.”
Proven record
At San Rafael’s Dominican University of California components of financial literacy are integrated in various classes at the undergraduate and graduate levels. Bite of Reality is part of the freshmen curriculum.
“It helps them increase their social mobility, to move from one socio-economic quartile to the next,” Giulia Welch, director of Career Development and an adjunct professor in the business school, said of the offerings.
Embedded in coursework are lessons in retirement planning, evaluating benefits packages, salary negotiation, building wealth, personal budgeting, evaluating benefits packages, and other life skills.
It can be as simple as getting students to understand if they get a credit card and put it in a drawer, they are not building credit.
“Ultimately, if students walk away more empowered, they make better choices, which is better for society,” said Giulia Welch, director of career development and an adjunct professor in the business school. “They will have more purchasing power. Overall, financial well-being is good for everyone.”
Velasquez has each of her students pick a career other than an entertainer or professional athlete to research. They find out starting salaries, all the taxes they will have to pay, as well as insurance bills they are likely to encounter, along with all the other cost of adulting.
“I want these kids to leave high school to be prepared for the real world at least a lit bit,” Velasquez said.
Maggie Steiner is in her third year of teaching personal finance at Casa Grande High School in Petaluma.
Some of the more pertinent lessons Steiner likes students to learn include understanding the importance of an emergency fund, how their credit score impacts the interest rates they’ll be given on loans, how investing now will compound to be much greater when they are older, and figuring how to pay for college and the ramification of student loans.
Steiner and Velasquez credit Burlingame-based Next Gen Personal Finance for providing relevant curriculum for their classes.
“The level of professional development is so impressive,” Steiner said. “You can tell a teacher who has been in the classroom designed the curriculum.”
Tim Ranzetta, co-founded the nonprofit in 2014, with the goal of having all high school students in the United States be taught financial literacy by 2030. When he started, five states were on board. With the addition of California, that makes 64% of high schoolers who will receive this education.
“California prior to this legislation was the worst in nation (for) access to personal finance. Only a quarter of schools had an elective in personal finance,” Ranzetta said.
Next Gen’s curriculum is online and free. It’s also always being updated.
“Textbooks don’t work well in personal finance because the world of personal finance keeps changing,” Ranzetta said.
A new unit focuses on gambling and sports betting because states that allow online betting are finding young people drawn to this activity without understanding potential consequences.
Units for middle school are also available.
Ranzetta believes the three key takeaways are learning to manage credit scores, the power of compounding, and the importance of understanding the psychology of money.
“Four-hundred and fifty thousand kids graduate every year from high school in California. Think about the economic value they could create with understanding money,” Ranzetta said.
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