With the month of April fast approaching, a certain level of financial competency is needed for an American adult to file their April tax forms. For seniors of SUA, this broad concept of fiscal awareness is taught in their economics classes, specifically through the Budget Challenge. This activity is an online simulation “purposefully designed to put students in uncomfortable financial situations so they actually have to deal with them,” explains Mr. Tonnis, an economics teacher at SUA.
Each student creates an account, and receives a virtual bi-monthly check from her employer. In turn, she must learn how to responsibly budget her income and allocate the money towards rent, insurance, student loans, cell phone payments, etc. The entire challenge lasts for nearly 2 months, an intentionally significant amount of time for the student to explore her own virtual finances, make mistakes, and learn to correct them accordingly. According to Mr. Tonnis, finances as a whole are still a foreign concept to most seniors, and thus a “real life experience” such as Budget Challenge is needed to prevent roadblocks in future adult life.
Co-creator of the Budget Challenge, Ms. Buten agrees and speaks from personal experience on the matter. “We realized after purchasing a new home that we never really learned how to do finances! You would hope to learn it through trial and error or through your parents, but there was no systematic way to learn financial concepts, which left a big void in the education system.”
Budget Challenge was created in 2009 by local Cincinnati couple, Mr. and Mrs. David and Palmira Buten. Prior to the activity being purchased by H&R Block, the two had both majored in business and worked as entrepreneurs, approaching local high schools who would be willing to try their idea. St. Ursula Academy was one of these pilot schools, and even received visits from the Butens to various economics classes. Ms. Buten is eager to praise SUA’s history department and their help in this challenge. “We are so appreciative of all the support we received at SUA, especially with such great teachers like Ms. Smith, Mr. Tonnis, and [now retired] Mr. Dauner and Ms. Butz.”
The Budget Challenge dovetailed perfectly with the mandate of “Ohio’s department of education [for] a high school course in financial literacy,” relates chair of the social studies department, Ms. Mollaun. Other schools quickly caught onto this fact, and Budget Challenge was soon adopted by many high schools across Ohio, and then across America. To date, it’s used in over 3,000 schools, and has been utilized by over 500,000 students, according to Ms. Buten. “Budget Challenge isn’t hard, but it is complex. Mental accounting, timing bill cycles, tracking your payments, and reconciling your accounts is complicated! The key is to check your budget often, because it’s a lot easier to correct mistakes that way rather than waiting till the last minute.”
Mr. Tonnis explains its typical reception among seniors. “Initially students think of it as a chore, but normally by the end of it, they are pretty appreciative of getting such a valuable learning opportunity before entering the real world.” Indeed, not only is this activity valuable to students, but it also is perfected by student and teacher input. “In our initial meetings [with the Butens], we requested all of the following additions [be made to the Budget Challenge], and they were included: 401k savings, tax filing info, student loan payments and a breakout of gross salary and net pay to show the effect of taxes on income,” describes former history teacher, Ms. Butz.
Points like these were helpful to seniors, holds Ms. Mollaun, because “although basics like taxes, checking accounts, and loans were covered in economics class, the girls needed a real life experience” to go above and beyond these basic concepts and avoid financial pitfalls later in life. Though it may be a drudge for SUA economics students, Budget Challenge is an indispensable, hands-on experience in personal finance. Mr. Tonnis confirms this. “A lot of financial roadblocks that I ran into as a young adult would’ve been easier to deal with had I done the Budget Challenge in high school.”