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Colorado students get bites of reality in financial planning

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Eric Galatas

(Colorado News Connection) Credit unions in Colorado and across the Mountain West are helping high school students tackle money challenges through "Bites of Reality" fairs.

The app-based program forces students to make budgeting and spending decisions in real time.

Sarae Bay, vice president and managing director of the GoWest Credit Union Association Foundation, said the fairs -- which assign each participant a persona including a job, income, a family, monthly expenses and debt -- allow students to experience the effects of their financial choices in a safe environment.

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"Where they are not going to have a catastrophic mistake that is detrimental to their credit which would impact their ability to find an apartment to live in, or get a small business loan, or a graduate school loan down the line," Bay outlined.

Each student completes a 90-minute budgeting exercise, and visits nine different merchant booths, where they have to make decisions about housing, transportation, groceries and child care. Budgets are updated in real time to help students see the effect of everyday purchases and recurring expenses.

Bay pointed out students can modify any of their financial decisions, and can see how those modifications instantly affect their budgets. Students also have to deal with roadblocks, such as a notice for failing to pay back taxes, or a traffic accident making it harder to get to work.

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"There's also a 'fickle finger of fate' that randomly visits each participant on the app during the simulation," Bay explained. "That assigns unexpected life events, like an unplanned expense that might pop up in one of our everyday lives."

Bay noted the fairs are central to credit unions' ongoing mission to provide resources and solutions to challenges affecting financial well-being in the communities they serve. She added after the exercise, many students said "planning is important to prevent overspending." And most were surprised by the sacrifices you have to make to stay above water financially. 

"Like, 'Wait, I can't buy a boat and a sports car on my budget?'" Bay observed. "Or 'being an adult is hard.' And the very realistic, 'How will I be able to afford child care with my income?'"