Investing in financial literacy for Kentucky youth
It’s not every day a middle-schooler earns a paycheck and balances the budget. But through Reality Store, a 4-H program available in all 120 Kentucky counties, students get the unusual opportunity to manage their own bank accounts for a day.
“The Reality Store is a great eye-opening experience for young kids,” says Denise Myers, community relations manager at Blue Grass Energy, which regularly sponsors and participates in Reality Stores.
Reality Stores are among many ongoing efforts across the state to enhance youth financial literacy. Electric cooperatives, along with leaders in government, business, schools and nonprofits are working together to address gaps in students’ understanding of personal finances.
The need is real—more than half of U.S. teens say they “feel unprepared to finance their futures,” according to a national survey by Junior Achievement USA and Citizens Bank. Forty-one percent of teens surveyed say their school did not offer financial literacy classes, and 49% cited cost as their biggest concern about pursuing further education after high school.
Reality Stores help students better understand income and finances by simulating real-life financial responsibilities. Booths are set up in a school or other location, each booth representing a business found in that community. Students are assigned a job title that earns a specified monthly income, get a monthly budget and then are set loose to make purchases and pay for services at the booths.
“I think it’s really fun, but the groceries are really expensive,” says Charlotte Marshall, an eighth grader at East Jessamine Middle School who visited the Blue Grass Energy booth to pay her electric bill on Nov. 29. “It took me $400, and I only have one kid.”
Myers says most students struggle to keep their registers balanced and run out of money before their bills are paid. They have to review their spending and make different choices. They may choose to downsize their home or buy a less expensive car. It can get hectic, with some students rushing around to booths trying to rectify their budgets. And if a student is caught running between booths, a student police officer may pull them over and issue a speeding ticket, delivering that student an unexpected expense— which happens so often in real life.
More financial wake-up calls
Other school-based programs can help bridge the gap between imagination and reality. For example, last summer Abound Credit Union opened the Spartan Financial Learning Center at South Warren High School, which features a student-run bank. “We help our peers fill out paperwork and open savings accounts,” says Manyoo Brown, a 17-year-old student at South Warren, which is served by Warren RECC.
Vanessa Butts, business teacher at South Warren, teaches short lessons in personal finances four days a week in addition to elective business classes. “I think the most important thing is budgeting with checking accounts—how to keep up with money and keep the account reconciled,” she says.
Financial experts from the credit union visit the school periodically and supplement the curriculum with talks on different facets of money management. “They teach us about investments and different kinds of loans,” says Brown, “like auto loans, mortgages and things like that. They also talked about credit scores, which was something new to me.”
Brown says he now has a savings account: “I’m looking to save money for future endeavors, like college and further expenses.”
Abound Credit Union’s financial education programs reached 11,467 students during the 2021–22 school year. “What we’re trying to do with these initiatives at schools, and throughout communities we serve is to foster a better understanding of their financial situations and how it all works,” says Ray Springsteen, president of Abound Credit Union. “When our community makes better financial decisions, we all benefit.”
At Taylor County High School, business teacher Marcus Rodgers heads up a program, also funded by Abound Credit Union, that uses a curriculum developed by personal finance expert Dave Ramsey. Joshua Gaddis, a Taylor County graduate now in his freshman year at Campbellsville University, says what he learned about personal finance has been invaluable as he positions himself for the future. “The value of that class for me has been exponentially greater than the majority of my classes in high school,” Gaddis says.
“We are taking students that have had generational debt, that have lived in poverty, and we’re teaching them about generational wealth and what it can do,” says Rodgers. “Then, when we do have that money, we can also be helpful to other people. We don’t want to hoard it all up for ourselves.”
State laws, nonprofits, businesses help
Kentucky state leaders and policymakers have also shown an interest in bolstering financial literacy for youth. In 2018, then- Gov. Matt Bevin signed House Bill 132, which requires a financial literacy course for high school graduation and directs the Department of Education to develop materials and guidelines for schools to use in their courses. In 2019, the passage of House Bill 139 created the Kentucky Financial Empowerment Commission, which is chaired by the state treasurer. Funded by private donations rather than state dollars, the commission supports advanced training for teachers of personal finance, and work is underway to create an online financial education platform for students.
“Credit unions were big supporters of those bills and helped fund the commission run by Treasurer Allison Ball,” Springsteen says. “The educational curriculum will be the responsibility of the Department of Education, but we’re looking for ways to support it.”
Community banks and businesses have already been helping with school business programs. For example, at Taylor County High School, Taylor County Bank and Kroger have partnered with the school to create a student-run bank and a store inside the school.
Interest in youth financial literacy is nothing new to Junior Achievement of Kentuckiana, founded in 1949, which has taught financial education to generations of Kentucky youth, as has Kentucky 4-H Youth Development programming.
“Our mission is to inspire and prepare young people to succeed in a global economy,” says Jennifer Helgeson, president of Junior Achievement of Kentuckiana. That mission includes teaching financial literacy for all grade levels.
“Each classroom program is age specific,” says Barbara Byrd, Junior Achievement’s director of programs. “For example, a kindergarten class would talk about nickels and dimes and chores to do at home. At high school level, I might talk about real jobs, credit, credit agencies and such.”
Junior Achievement also has two city simulation programs, Biztown and Finance Park, which both have Disneyland-like store facades on streets inside large facilities. Based in Louisville and Lexington, the programs also serve nearby counties. Prior to their lively interactive visit to Biztown, students prepare by learning about personal budgets, jobs, how to fill out paycheck stubs, product pricing, marketing and more, says Jennifer Harris, vice president of education at Junior Achievement.
“They’ve learned the concepts,” Harris says. “Then they have this huge activity where they go and do it.”
Personal finances curriculum for home-schooling
Dave Ramsey, a multimillionaire financial advisor who lives in Tennessee, uses his radio show, The Ramsey Show, to teach personal finance solutions to a nationwide audience of over 18 million listeners. Ramsey Education has developed a curriculum for parents who are home schooling their children.
Help from 4-H
Students can take advantage of online versions of 4-H’s financial literacy programs, which were developed during the COVID-19 pandemic. The programs include:
Dollars and Sense Virtual Program
It’s Your Reality – Online Reality Store Activity
Besides those financial literacy programs, 4-H has also produced a five-part series explaining financial management concepts:
