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9 Ways Student Organizations Build Practical Money Habits

9 ways to build money habits

by Susan Sharkey, HSFPP Senior Director

NEFE Nudge: Leverage student organization experiences to equip teens with real-world money management habits that will pay off for years to come. Your students will thank you for it.

Recently I had the pleasure of reconnecting with a former student who was active in the Future Business Leaders of America (FBLA) chapter that I advised during my teaching career. She shared that, more than two decades later, she still is compelled to straighten, sort and arrange wads of cash bills to face in one direction – a habit she formed when carrying out FBLA concession duties.

While it seems insignificant, I was impressed that she continued the habit, and it occurred to me that student organizations present built-in opportunities for teens to practice real-world financial skills and critical thinking in a safe setting.

In a time when young adults are underprepared to manage complex financial decisions, but overconfident in their ability to do so [Lusardi, 2015], how and where do youth develop financial literacy? It might be assumed that everyone learns about personal finance in school and in the home, but the reality is that financial education experiences vary for a multitude of reasons.

Schools differ in financial education requirements and implementation. Limited class offerings might present scheduling conflicts that prohibit some students from participating. One-time workshops might be offered as alternatives, but research finds that one-time interventions have short retention spans. Money habits are formed from what is modeled and learned within families, and those habits are influenced by varied experiences, values and socioeconomic conditions.

I propose leveraging youth organization activities to fill gaps in financial education, taking into consideration the varied experiences and circumstances of club members. With little effort and some creativity, common organizational activities provide opportunities for teens to adopt money management habits through routines and repetition. Under the guidance and watchful eye of an adviser, the students practice financial and critical-thinking skills with real consequences.

Built-In Real-World Practice with Safety Nets

The following suggestions are just a starting point. Use these tips as a springboard for introducing and reinforcing financial skills and money management habits. Many of the HSFPP lessons include extended learning activities appropriate for youth organization group tasks. We would love to hear what you think! Share your experiences in the comments below or on our Facebook page.

1. Collaborate on spending and planning decisions.

When the group is faced with decisions about what to sell for fundraisers or which catering vendor to engage for a banquet, make it a habit to follow the HSFPP criterion-based D-E-C-I-D-E decision process as a group. Before comparing options, reach consensus on required criteria and identify any deal-breakers. Students can transfer this learning to their own decisions, such as finding a part-time job, deciding on a college option or choosing a mode of transportation.

Once when I helped two dozen teens plan a trip to a national church youth conference, I guided them to compare travel options using the HSFPP D-E-C-I-D-E steps. They first agreed on the criteria for an acceptable arrangement, taking into consideration deadlines, personal values and preferences, known and anticipated costs, the not-so-obvious costs such as lost wages for time off from summer jobs, and even an additional criterion for their anticipated “tiredness” factor. Imagine how thrilled I was when they collectively discerned (on their own) that rather than a four-day bus ride, flying was the most economical choice.

2. Reach consensus.

It’s one thing to practice consensus-building and negotiation skills using case studies and simulations. However, the level of engagement and end results differ when the stakes are real, such as when collaborating on decisions that impact a youth organization.

What better place to foster best practices than in a club setting, under the gentle guidance of an adviser? The organization simulates real-world experiences to agree on rules of engagement when making decisions for the greater good of a group, while also considering personal values. In the real world, students make joint decisions like these in their families, their circle of friends, romantic relationships and their workplaces.

3. Monitor the budget. 

Especially for students with no personal finance experience, operating within a club budget introduces budget lingo and presents opportunities to set goals and practice estimating expenses to meet financial obligations. I recommend that every club member actively monitor the budget throughout the year.

After my church youth group estimated the total costs to attend the national conference, they created a budget that everyone monitored, ensuring that each member was mindful of expenses and aware of the progress toward their savings goal. The teens were so engaged that they figured out ways to stretch meal funds while on the road by using coupons. Some chose to start each conference day early so they could walk extra blocks for a less expensive and tastier breakfast buffet.  

4. Implement checks and balances for banking transactions.

Sloppy money handling habits increase the risk for accidental or intentional mishandling of funds. Most schools and student organizations have requirements to produce backup documentation and follow customary protocols for handling money that is received, deposited and spent. This helps to ensure that received funds are secure, financial obligations are met in a timely manner and financial records are up to date for reporting.

Help students understand liability issues and ways to reduce the risk of fraud accusations. These concepts build habits to deter and detect fraud in their personal lives when dealing with work or personal business matters.

5. Be intentional with fundraising goals.

It is appropriate to establish S-M-A-R-T goals as your group weighs fundraising options and analyzes returns on fundraising efforts.

For example, after estimating the anticipated financial return on many bake sales compared with selling candles or hosting a half-day chicken BBQ dinner for the community, a small high school youth organization opted for the loftier one-time BBQ event. The dine-in and drive-through dinner was a fun way to build camaraderie among members and the community responded with enthusiasm.

6. Establish lucrative prices for products and services.

In the real world, everyone will be faced with discerning how well their working wages or freelance fees match their income needs. But unless they are enrolled in a marketing or business course, students might not have the opportunity to learn about basic pricing concepts.

Include members in the calculations when establishing prices for club-related sales so everyone considers key factors that influence pricing, such as costs, tax obligations, what people are willing to pay and competitor prices. Just as the organization needs to determine whether or not fees sufficiently cover costs while achieving revenue needs, individuals can apply the same concepts when assessing what is a fair wage or fee to achieve personal goals and cover financial obligations.

7. Stick to a record-keeping system.

Not everyone has a knack for order or feels compelled to be organized. The reality is that everyone will have times when personal data or financial information needs to be retrieved – such as when filing taxes or requesting reimbursement for work travel expenses. Having a practical record-keeping system in place can save time, money and stress. Youth organization routines offer opportunities to establish and practice efficient record-keeping habits while demonstrating the value of having a system to manage data for handy retrieval.

Typically, formal youth organizations operate under a charter or school rules with some degree of prescribed record management and retention protocols. Take the time to explain why the protocols are in place, such as to quickly retrieve information when questions arise or to archive data for historical reference. By establishing routines and standard procedures, students gain an appreciation for record-keeping discipline that also applies to their personal and work lives.

8. Read the fine print on contracts.

Whether arranging for your group to travel to a state conference or ordering custom print t-shirts to sell for a fundraiser, someone will be responsible for contracting services on behalf of the organization. Teens are not able to legally enter into contractual agreements, but they can review agreement details for accuracy, completeness and the likelihood that terms can and will be met.

Any club contract is an opportunity to make members aware of who has authority to represent parties in a contract and why, the rights and responsibilities of parties, the role club members play in meeting the terms and conditions of an agreement and the value of reading the fine print before signing any deal. My experience has been that knowing the rules outlined in a contract empowers club members to self-monitor behaviors and promote adherence to the agreed-upon terms. They also gain experience that they can draw on when presented with their own employment contracts, apartment leases and credit card agreements.

9. Vet charitable giving options.

In instances where student organizations support charitable causes, do the students know why that particular cause was selected? This is an occasion to engage students in a due diligence exercise to vet the charitable organization for shared values, impact and integrity. They might evaluate the charity against established criteria or craft acceptable criteria for expending charitable giving of funds and time. Vetting practice within the group can arm students with predetermined criteria standards and confidence to vet charitable giving requests in the future.

Leaving a Legacy

A 2012 HSFPP impact study suggests that children in farm-owning families report more dynamic money management behaviors than other students: They earn more, save more, spend more and owe more. Students who live on farms report greater baseline knowledge related to paying off debt, credit ratings, and checking accounts; and they also have higher self-reported saving behavior and financial confidence. [NEFE, 2012] Not all students live in situations like these, where they are immersed in family business decisions, but active engagement in youth organizations can help extend these opportunities to a broader group.

The money management habits developed through youth organization activities complement what is learned in the classroom and modeled at home. And I suspect that your students will appreciate the long-term payoff of their youth organizations experiences.

Lusardi, Annamaria, Overconfident and Underprepared: The Disconnect Between the Millennials and Their Money, Research Brief, 2015.

National Endowment for Financial Education (NEFE), High School Financial Planning Program 2007 Curriculum Evaluation, 2012.