With a salary of about $40,000 a year as a wastewater treatment plant worker, 14-year-old Derrick Alfaro worried whether he had enough money to pay his bills.

With a calculator in hand Tuesday, Alfaro computed his taxes into the mix, and estimated he only had about $27,000 to live on and support his child. And then there's those pesky home and car loans, which required a second job to pay off.

Though Alfaro's situation at the third annual Baraboo High School Reality Fair for freshmen was only fictional, it is just one of two examples of how high-schoolers in the Baraboo School District can learn about fiscal responsibility in a time of economic hardship.

A new personal finance course at BHS next year will be the latest example of teaching financial literacy to students, after the Baraboo School Board approved the course Monday night.

The Reality Fair is a one-day event that gives students a fictional job, bank account and life situation and then asks students to manage various life scenarios while balancing their budgets. The personal finance course will last a semester and will build upon basic financial literacy messages being taught in high school economics courses and other classes.

Financial literacy

Machell Schwarz, BHS principal, sat on the committee that developed standards for teaching financial literacy in Wisconsin schools. She presented the new class to the board after about two years of work developing it.

Schwarz said in order for instructors Mike Carpenter and Gabriel Sederberg to teach the finance course, record keeping and accounting classes were dropped because of low enrollment.

"Personal financial literacy is probably more critical than ever now — especially in these economic times," she told the board.

Roughly 75 percent of 1,000 high school parents surveyed by Visa agree with Schwarz and said that schools should be required to teach money management skills, according to a study in 2005.

Aspects of a personal finance course have for years been implanted in the curriculum of other school districts in the state, including in Baraboo, even though state law does not require it.

In some districts like Wisconsin Dells, an entire class on the subject recently became mandatory due to high demand.

John Hoenecke, a business education teacher at Wisconsin Dells High School, launched the personal finance course 12 years ago and said about 70 percent of students were already voluntarily taking the course before the School Board made it mandatory last month.

Carpenter suggested Baraboo may follow a similar path if there is similar demand.

Balancing the books

As the Reality Fair neared its end, Alfaro reflected on the hard task of keeping everything in balance. He thought he could use some of what he learned as he works at McDonald's this year to help out with family expenses. He was interested in learning more later in high school.

If he continued into the new personal finance course in his junior year, Carpenter said, he would learn about the fine print in mortgages, investments and credit cards. Carpenter said credit scores are particularly important to understand, because college students often leave school with $3,000 of credit card debt.

In addition to encouraging students to take the personal finance course, Carpenter suggested some of the parents of students in the Reality Fair take time to talk with their kids about how much is required to keep a household running.

The same Visa study that said parents want financial education at schools, available at http://www.practical moneyskills.com, also notes a need for learning at home and suggests 76 percent of parents do not think their high school students keep a budget. Fifty-three percent of parents thought their student thinks "money grows on trees."

Among other things considered in the new personal finance course, Carpenter said students would be able to pick a career they are serious in pursuing by their junior year, and draft a budget for living with the career.

Vital volunteers

Many of the 40 community volunteers and parents helping at the Reality Fair agreed with district officials and the results from widely available studies about the need for financial education.

Michael Althen, president of the Baraboo Optimist Club, manned the insurance table at the Reality Fair, and said when he was growing up the most financial knowledge he was taught was that buying a house created equity. Now, he said, the world is more complex financially.

With that considered, he was surprised by the number of students who didn't know some of the basics, and opted at the fair for buying a sport-utility vehicle over saving their money.

"A few of the kids had a substantial amount of money and they didn't know what to do with investments or what they were," he said.

Terry Kramer, utilities superintendent for the city of Baraboo, said students were working toward understanding what their parents go through monthly when they had to pay utilities.

"The most common comment I heard was, 'This is stressful,' and my usual reply was 'Parents do this every month,'" Kramer said.

As college or the prospect of working full-time approaches, students without a foundation of financial knowledge in high school may confront an overload of stress. A 2006 poll conducted by Harris Interactive found that 32 percent of college students, when thinking about their freshman year, admit that they were "not at all" or "not very well prepared" for managing their money on campus.

That lack of preparedness could continue beyond college. A 2007 survey by the Hartford Financial Services Group found that about 24 percent of students say they are very well prepared to deal with the financial challenges awaiting them after graduation from college.