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Hilton Head students get a dose of dollars-and-cents reality

Hilton Head High student Kaylee Krull, 17, center, reacts to her $1,080 monthly grocery cost required to feed herself and her five imaginary children Wednesday morning during Reality Store, an exercise designed to educate students about financial choices they may have to make as adults. Fran McKinney, right, and other volunteers from local businesses helped students understand the costs of living.
Hilton Head High student Kaylee Krull, 17, center, reacts to her $1,080 monthly grocery cost required to feed herself and her five imaginary children Wednesday morning during Reality Store, an exercise designed to educate students about financial choices they may have to make as adults. Fran McKinney, right, and other volunteers from local businesses helped students understand the costs of living. Sarah Welliver

Will I buy or rent a home?

Drive a Mercedes or a Hyundai?

Can I afford chicken or steak, or will I live on Spam and noodles?

Students at Hilton Head Island High School pondered these questions Wednesday when they visited the "Reality Store," a one-day program organized by the school and the Hilton Head Island-Bluffton Chamber of Commerce to teach students about the financial choices they will make as adults.

Versions of the program are used in schools across the nation.

The students were assigned imaginary incomes based on their grade-point averages. They then had to buy goods and services from vendors at 20 different booths -- all manned by representatives of local businesses -- while keeping track of their checkbook balances.

The balances dropped faster than many students expected after they paid for rent or a mortgage, a car, home repairs, insurance, groceries, utilities, cable, phone service, and personal grooming, such as haircuts. Students were randomly assigned a number of children to support, and most had to pay for child care.

Student Justin Shaw thought he was in good shape when he received a doctor's salary of about $115,000, even though he had five kids to support.

"I thought I'd be this rich guy living in the city," he said. "But it's quickly depleting."

After giving up nearly a third of his income to Uncle Sam, his take-home pay was about $6,700 per month.

His family's monthly bill for groceries? $1,144.

For child care? $2,000.

For medical insurance? $850.

He'd spent more than half his monthly income before factoring in mortgage and car payments.

"It's harder than you think," Shaw said. "I need to not have very many kids."

Most students had much lower incomes than Shaw. Some earned less than $30,000 a year.

Student Kolten Striano had five kids to support with about $3,000 per month in take-home pay.

"I'm already in debt," he said. "I'm going to have to get a side job."

Kris Linsday of NBSC bank talked to students about the importance of saving money, even when budgets are tight. She suggested they try to save 10 percent of their income.

"If you want to buy a car, you need a down payment," she explained. "If you want to buy a house, you need a down payment. If you're going to rent, you need to pay the first and last months in advance. You can't do anything without a source of cash."

Some students who couldn't meet their monthly budgets asked her for a loan. She reviewed their list of purchases and asked questions like, "Do you really need that Mustang convertible?"

"This is an opportunity for them to really understand money doesn't grow on trees," Linsday said. "You have to work for it. You have to budget."

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