The Common Denominator Online: Matt Wennersten

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Class Notes
	Lessons from the great pizza experiment (Published December 1, 2003) By MATT WENNERSTEN

Earlier this year, Bankrate.com, a major on-line mortgage lender, did a survey of American’s financial literacy. What they found should shock us. The average "grade" on this survey was a D – most people do barely two thirds of the things they say they should be doing to stay in control of their finances.

Last year, more than 1.5 million people filed for personal bankruptcy, a new record. This year, we’re on pace to break that record. Our young people in high school are emerging into a world of tempting credit offers; a world with the potential for devastating financial decisions.

If the average adult is ill prepared to handle money, how prepared are high school students? If the purpose of high school is to prepare young people for life after school, how well are we doing?

As Bankrate.com says, "More schools offer driver education courses than personal finance courses, which is good news for users of America’s roadways and bad news for folks who plan to spend, borrow and save money in their adulthood." These words are scarily true.

Almost every student at Bell Multicultural High School, where I teach, wants to take driver’s ed, yet the economics class is struggling with low enrollment. While mathematics courses like Algebra I and geometry do help students make mathematical decisions, there is nothing like getting experience with real financial situations.

Let’s look at one such situation. Last week, my pre-calculus class conducted the great pizza experiment. Over the course of five days, the pre-calc class sold pizza after school. We began by selling pizza for $1 a slice – and sold out in less than five minutes. Each day, we increased the price by $0.50. At $1.50, we sold out in about 10 minutes. At $2 a slice, the reactions from students were intense. "I can’t believe you expect to sell that little slice of pizza for $2!" We sold 28 slices. At $2.50, we still sold 28 slices. At $3 a slice, I expected to sell nothing. We sold eight slices of pizza at $3 a slice -- or in other words, we sold $24 worth of pizza, enough to cover the cost of all four pizzas we ordered.

Let’s put this in perspective. Roughly 70 percent of the students at Bell qualify for free lunch, based on parents’ income level, yet somehow kids had money to burn on snacks after school. When I asked them how they could pay $2 for a slice of pizza, a lot of them told me "at Union Station, it costs $2.50 a slice."

Unfortunately, they’re both right and wrong. The pizza only cost me about $0.75 a slice, and we bought ours from a local pizza delivery company. I expect each slice cost the vendors at Union Station even less. What costs $2.50 is the privilege of eating a slice of pizza whenever you want, and sadly, there are plenty of adults who are willing to bear that cost, or else Union Station wouldn’t be getting away with these rip-off prices!

Increasingly, Americans in general are willing to pay more, now. The average time we keep cars is dropping. The number of ready-to-eat meals we buy is going up. Every time we trade in our nearly new car and buy another, we miss out on a chance to save money. Every time we eat out instead buying cheaply at the supermarket, we miss out on a chance to save money. Every time the students at Bell skip lunch and buy pizza, they miss out on two chances -- a free meal and a $1-$3 savings.

If I ruled the world, high school students would be required to take a personal finance class. Fortunately at Bell, the students are educated not just in their core curriculum, but on financial skills as well. Students are required to take a life skills class as freshmen and a capstone class as seniors, which includes resume writing and job hunting skills. In addition, once a week during advisory period, many advisers discuss personal finances with the kids.

With all of this, you would think that Bell students would be better than the average high school student at making money decisions, yet I still made a profit of more than $100 in one week selling pizza. I wonder how much money I could have made at other high schools around the city?

Still, I can’t fault the kids. They’re bombarded by marketing. They’re shown a world of bling bling and fast money across all the media, with newspapers celebrating millionaires and rap stars. Once they graduate, they’re hypnotized by offers of easy credit and low payments. Why should they wait to enjoy the lifestyle they deserve? Their parents sure haven’t, which is why our national savings rate is negative (i.e. we spend more than we earn) and those bankruptcies are still on the rise.

I only hope that when our current low interest rate merry-go-round comes to a halt, all of my colleagues with credit card debt, leased cars and no savings consider their decisions to drive new cars and wear new fashions is worth eating beans and rice for the next five years. Unfortunately, their kids will be stuck eating beans and rice too.

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Wennersten is a third year mathematics teacher at Bell Multicultural High School in Columbia Heights and a graduate of the D.C. Teaching Fellows program (http://www.dcteachingfellows.org). Please send stories, comments or questions to mwenners@yahoo.com.