Credit counseling, the busiest table at today's finance fair

I spent this morning at the UMass Lowell Tsongas Center participating in the “Money Strong” Fair sponsored by Jeanne d’Arc Credit Union for the benefit of seniors at Lowell High School. It was an amazing event, one that all students (and many adults) should be required to attend. The JDCU folks put an incredible amount of work (and money) into making this a huge success. Here’s how it worked:

Each student was assigned to a particular occupation and was given a portfolio containing financial information such as annual salary, savings balance, and credit availability. The student also was given a worksheet with spaces for clothing, education, health, luxuries, furniture, housing, insurance, savings and transportation. Around the perimeter of the arena floor, separate booths were set up for the above categories. Every student had to go to every booth where the student would make financial decisions. Would the student rent a studio apartment, a one bedroom, or find a roommate and take a two bedroom. Was it cheaper to get a furnished apartment or an unfurnished one and acquire furniture separately. Each student had to make the dozens of financial decisions and calculations, large and small, that each of us continuously has to make.

I was assigned to the Housing Booth. Early customers opted for more opulent apartments. Many of them returned a few hours later after meeting with credit counselors after discovering that their expenses exceeded the income (see above photo). They asked to switch to a cheaper, less desirable housing option to be able to live within their budgets.

The exercise was remarkably lifelike and the students were wonderful. All seemed to seriously contemplate their decisions and none treated it frivolously. And the folks from Jeanne d’Arc were fantastic. They provided a true community service. I left the event thinking that if many folks who purchased homes during the housing bubble had first experienced an exercise such as this, we wouldn’t be plagued by the foreclosure crisis that continues to engulf us.