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Living Within One's Means

Herndon High School seniors are introduced to real-life financial planning.

Hunched over a long table, Max Rowan punches numbers into a small calculator so he can find out how much in taxes he's going to pay out of his yearly salary.

"I'm paying $12,600?" Rowan said as he pulled his eyes back from the paper. "Oh, bogus."

Rowan was one of about 65 students who came to Herndon High School's library last Wednesday to take part in an exercise called "Reality Store," where senior government class students learn about budgeting and fiscal responsibility.

This year marks the second year for the reality store, a product of Herndon High School and the Herndon-Dulles Chamber of Commerce. It was one of four sessions to accommodate all of the students interested, with two others preceding last Wednesday's session, while one more remained for June 1, according to Dr. Maureen Erickson, Herndon High School's employment and transition staff member.

The students "should exit from school with some type of basic understanding of spending realities," said Erickson. "When you think about it, this will help them in college, help them with their roommates, with their careers and with their lives in general. Students need to understand that when you're dealing with money there is a finite amount and they need to know how to spend it wisely."

THE EXERCISE PRESENTED the students with what their lives could look like 10 years down the road, with one of 12 different life scenarios that assigned them with different life variables that affected their financial standing such as marital status and number of children. The students then had to calculate taxes and form a budget for their imaginary life, factoring in expenses like mortgages, health insurance fees and retirement savings.

They were supervised entirely by volunteer members of the staff of the Herndon-based Northwest Federal Credit Union, a non-profit organization that works to help people with credit problems and institute financial literacy programs like the "Reality Store" for both children and adults.

The conversations coming from the tables of students figuring out their monthly budgets revealed how surprised they were to see how quickly money is spent when factoring in all of the expenses that come with adulthood.

"Yeah, I was hoping to you know, own a mansion, but apparently that's not going to happen," said Joe Quaranta after calculating his spending limits.

Neil Hansen, who participated in the event, said the biggest shock to him was "how much income tax really takes out of your money. It was only 28 percent, but it felt like half of my money."

"I definitely will be shopping at the dollar store just about every chance I get."

"I think the kids learned just how expensive being an adult can be; there are just so many expenses," said Jennifer Bitzinger, a teller for Northwest Federal Credit Union and a volunteer supervisor for a group of students. "When they see it all itemized in front of them it helps them realize how much they're spending."

THE IMPORTANCE OF becoming financially literate and understanding how to budget money is increasingly highlighted by the large number of Americans in debt, according to Erickson.

"This is important to us because we see people who are perpetually bouncing checks — and they're paying a lot of money in fees," said Barbara d'Anorade, outreach manager for Northwest Federal Credit Union. "Whenever we see that we try and redirect them and show them how they can have more financial freedom and live better lives."

D'Anorade said that Northwest Federal Credit Union sees financial literacy as so important, that they have started offering programs to elementary school students.

"The sooner you can get to them, the sooner you can teach them to avoid the pitfalls of poor financial planning," Erickson said. "People these days are living by piling up huge credit card bills and living in debt — they're forfeiting their future before they even have a future."

"Very seldom do parents sit down with their kids and show them their bills and teach them how to take care of these things," she added. "This [event] is a one-shot deal, but hopefully the students can go home and work with their parents and understand it even more."