LOWER TOWNSHIP — They can balance a checkbook. Students in Lee Pierce’s consumer economics class also know how to pay bills on line, contribute to a 401(k), deal with bank overdrafts, and stay within a budget.
And when something unforeseen happens, such as having their laptop computer stolen or dropping their smart phone in the toilet, they know how to adjust that budget so they can still pay the bills.
That’s why Pierce’s class here at Lower Cape May Regional High School received a $2,500 check on Friday from the company H&R Block. At the mid-way point in H&R Block’s annual Budget Challenge, a financial literacy program for the nation’s schools that draws entrants from all 50 states, Pierce’s class is No 5 in the nation.
Pierce said the skills the students are learning will be invaluable when they graduate and have to live within their means.
“When they get out in the real world we don’t want them to make some of the mistakes they are making now,” said Pierce. “Everybody I talk to says I wish we had this when I was in high school.”
The 18 students in his class aren’t making too many mistakes even when the computer program throws them a curve ball. One of these was when they were told their smart phone fell in the toilet and was ruined.
The students that took out insurance on the phone got extra points. Those who had to pay the full cost of a new phone fell behind.
“I actually made a bad decision on insurance. I had to pay $200 for a replacement phone. Insurance was only $50,” said senior Matt Donohue.
In spite of that, Donohue currently has the 94th best score in the country out of 1,181 students. The national winner gets a $100,000 scholarship while other top finishers also get scholarship funds. H&R Block invests $3 million a year into grants and scholarships for the program.
Donohue said he has done well in the 401K category where students decide how much to invest to draw employer contributions while still leaving enough to pay the bills.
“They all keep a spreadsheet so they know how much money they need in the next few weeks,” said Pierce.
Donohue has been overdrawn but won some points by contacting H&R Block and explaining why. Pierce said H&R Block encourages consumers to do this.
“I had one late fee over only 31 cents but I sent an e-mail to H&R Block. I said I made a mistake and I’ll pay the 31 cents back,” said Donohue.
Another roadblock was when computer laptops were stolen, not really, but only in the simulation. Besides getting a new computer, students had to learn how to submit an insurance claim and understand how deductibles work.
“It shows them how they have to adjust their budgets,” said Pierce.
Donohue, who worked three jobs last summer to save money to buy a car, said the course has been invaluable.
“It’s not just common sense. You have to learn how to do everything first before you go out in the real world,” said Donohue.
The students in the course all make the same money, a fictional job in engineering, and have the same gross take-home pay. How they manage it determines who wins.
Bill Cooper of H&R Block delivered the oversized $2,500 check on Friday and commended the class and the state for teaching students about finances.
“New Jersey is one of only five states requiring financial literacy before you exit high school,” Cooper noted.
The class will use the money for some new technology and a promised pizza party.
Meanwhile, some quizzes and surveys are coming up that could decide the final standings and the class is in a heated competition with another LCMR class taught by Mike Wilson that has pulled ahead since the halfway point.
“We’re rooting for each other but competing at the same time. We’ll see what happens when the final tally comes,” said Pierce.
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