He checks his company’s income versus its expenses, and tallies expected utility costs. He figures in advertising money and revenue from sales. And at the end of the day success is finally measured in his company’s ability to pay back its loan.
Not the scenario one would expect of a group of 65 elementary and middle school students, but this is just a sample of a typical day at Experiencia’s Exchange City.
Exchange City is a hands-on learning program that combines eight weeks of classroom curriculum with an interactive government and free enterprise component. Students learn and apply math, civics, social studies, language arts and technology in real-life roles as citizens of a miniature city.
At the heart of every Exchange City is a bank — except in Michigan. Thanks to credit union sponsorships, students here do all their Exchange City financial transactions at a credit union. “Everyone involved in credit unions in Michigan should be thrilled that Michigan credit unions sponsor Exchange City CU,” said Taylor Community CU (DR) President/CEO Phillip Matos.
“For the price of that annual sponsorship, public and private school teachers throughout Southeast Michigan teach thousands of children annually that credit unions are the place to save and borrow, both for their personal and future business needs. Ten to 15 years from now, the thousands of young adults who are now receiving the credit union message through Exchange City will be knocking on credit union doors for financial services.”
In addition to the credit union, Exchange City contains a broadcast studio, a sign shop, city hall, post office, various retail outlets, a distribution center and a snack bar.
Students fill a range of roles within the shops of Exchange City and operate their enterprises according to the business model that each group of students design.
“The students, or ‘citizens,’ decide pretty much everything when it comes to running their shops,” said Southeast Michigan Executive Director Marilyn Opdyke. “They set prices for their goods or service, decide how to sell them and how much to spend on advertising. They must anticipate variables such as utilities, taxes — the whole works. One of the primary measures of success for a shop is paying back its loan to the credit union.
“Each shop has an accountant who tracks expenses and earnings, and little by little they write checks to the credit union to pay off that loan.”
Herlong Academy student Danielle Smart, who served as Exchange City CU president, learned a lot about how credit unions function during her visit to Exchange City. “I wanted to be credit union president because it’s a job with some authority,” she said. “It was hard work, but I knew I could do it because I’m good at math and good with computers. So far, I’ve recorded all of the loans and have taken payments. It’s hard to finish my work while people are coming in to make their loan payments.”
Fifth grader Rachel Smart was the accountant for the broadcast shop, which was the first business to completely pay back its loan. “It was important to us to pay back our loan,” she said. “All of our money came in from our advertising and I feel we did a good job.”
The Exchange City experience, combined with more than 40 hours of classroom course work, is beginning to show remarkable results in Michigan. According to a 2005 University of Missouri study of 352 fifth graders from six Taylor elementary schools, financial literacy and civic concept mean scores of students who completed the Exchange City course improved 51 percent.
Students were tested on their understanding of several financial concepts, including taxes, opportunity costs, supply and demand, personal finance, check writing and business economics.
In addition to Exchange City, Experiencia facilitates EarthWorks, a simulated environment that portrays North American habitats for third and fourth graders and several summer camp programs.
There are plenty of opportunities for credit unions to participate in Exchange City. “The credit unions have been wonderful providing volunteers to assist in the Exchange City CU and with their sponsorship,” said Opdyke. For information about sponsorships or staff volunteer opportunities, contact Joanne Krohner at (734) 287-8696, Ext. 24, MCUL Consulting Services Director Brian Paul at (800) 262-6285, Ext. 462, or Matous at (313) 291-3300, Ext. 234.