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Find out how high schoolers did facing financial reality

By Anthony Panissidi, Asbury Park Press, N.J.
McClatchy-Tribune Information Services

May 31--TINTON FALLS -- At the age of 18, Karim Elbery makes an annual salary of $83,110 as an architect.

After taxes and other deductions, including contributions to an employer-sponsored retirement plan and health insurance premiums, Elbery brings home $4,567 per month.

Even though Elbery earns a healthy salary, however, he lives well beyond his means. He spends $5,771 per month after he pays his monthly bills for rent, student loans and the usual temptations in life, including his car -- an Audi A6.

Luckily for Elbery, he will probably avoid those budgeting mistakes when he actually lands his first job. Right now, he is still a senior at Monmouth Regional High School, where on Friday morning he participated in a financial education fair sponsored by Tinton Falls-based United Teletech Financial, a nonprofit federal credit union whose roughly 80 employees serve central New Jersey.

"There's so much you have to pay for," said Elbery, who now plans to opt for a Mazda2 instead of an Audi A6 to save $70,000. "All this you have to do all on your own. You have no more parent, no more anyone helping you. You're really on your own. You have to really strive for it, earn and get a good degree in order to do all this stuff you want to do."

Income vs. expenses

Prior to the fair, roughly 215 of 250 seniors chose their expected careers. Then, United Teletech Financial provided budget sheets to the students with their average salaries for their professions, a breakdown of their monthly gross and net pay, a credit-card limit, monthly loan payments based on how many years they would attend college to achieve degrees in their fields, random credit scores and so on.

Next, the students visited different tables in their high school's gymnasium, where United Teletech Financial employees acted as salespeople trying to push the most expensive products imaginable, from apartments to cellphones to pets. Once the students chose their expenses, they met with financial advisers from the federal credit union to see how they could better spend their money in the future.

"We recognize, as a financial institution, that financial education in our communities is really lacking," said Ronald Amar, a spokesman for United Teletech Financial, who added students often overspend on cars. "A lot of research that we have from some different places (shows) that millennials are just not learning to make smart choices financially. We're a different kind of organization. It's our mission to give back, so that gap that exists with financial education, this is one way that we help fill that gap."

As of July 1st, 2014: a new strategy to avoid RMDs

As a solution, United Teletech Financial advocates the use of gaming to financially enlighten millennials -- those born between the early 1980s and early 2000s. In 2011, all Americans 15 years old and older spent an average of 12 { hours per month playing games or using computers for leisure; for those 15 to 19 years old, that amount of time jumped to 28 hours, according to the U.S. Bureau of Labor Statistics.

"Learning by play or gamification, it kind of hits home with Gen-Y, millennials, high-school-aged kids that are going into life because they're used to learning that way with video games and other things," Amar said. "The reality fair kind of mimics that with financial education."

Hands-on learning

Kymberly Mate, the job coach at Monmouth Regional High School, says the fair provides students with a hands-on experience that they cannot glean from their books, which could prevent them from amassing debt later in their lives.

"It's a reality check," she said. "They really retain the information, I think, because on those portfolios, it says their name, so it's very personalized to them. They chose their career."

Alison Todd, 18, of Red Bank, who is also a senior at Monmouth Regional High School, chose business administration as her career for an annual salary of $55,000. With a monthly income of $4,599, Todd's monthly net pay amounted to $3,236. After a monthly loan payment of $481 and other expenses, she spent $2,680 and so saved $556.

"It was interesting to learn about how you're going to have a lot of expenses that you don't really think about right now because we're in high school and we don't have to account for it," she said. "Once we're out in the real world, (then) we do have to worry about all this money. You think $3,000 is a lot of money; it's really not. It's eye-opening."

MILLENIALS BY THE NUMBERS

--23 percent spend more than their income

--24 percent can correctly answer four of five questions on a financial literacy quiz

--25 percent save for retirement

--31 percent have unpaid medical bills

--33 percent have rainy-day funds

Source: 2012 National Financial Capability Study (State-by-State Survey)

___

(c)2014 Asbury Park Press (Neptune, N.J.)

As of July 1st, 2014: a new strategy to avoid RMDs

Visit the Asbury Park Press (Neptune, N.J.) at www.app.com

Distributed by MCT Information Services

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As of July 1st, 2014: a new strategy to avoid RMDs