The classroom economy program is an effective and enjoyable way to teach your students fundamental financial literacy components without altering your curriculum.
Implementing the program is an easy three-step process:
As they perform their tasks, the students will help you manage the classroom and, in the process, learn valuable skills—such as responsibility, the value of saving, and delayed gratification—that they will carry with them throughout life.
The beauty of the program is that you don't need to teach these lessons; rather, your students will experience them and learn for themselves. As one teacher told us, there's a thrill in seeing "the lightbulb go on" when a student realizes he or she should have saved money for the next month's rent instead of overpaying for an item at the auction.
Through My Classroom Economy, students learn valuable life skills in an experiential way.
Specifically, they are able to:
At these grade levels, students continue to earn and spend dollar amounts of three and four digits to match their math skills, but also begin to learn more advanced financial concepts. Students pay an electricity bill, in addition to their rent, and also pay taxes for the first time.
The classroom economy is designed in an experiential way to ensure that it supplements rather than interferes with a classroom's core curriculum. It allows students to learn valuable life skills and make progress on topics that are integral to the curriculum. This page is designed to help you make connections between common lessons and the experience of the classroom economy.
Our connections are based on the Common Core State Standards.
My Classroom Economy
Attend to precision.
Each student is required to maintain a bank log of his or her finances. The individual student's log and the Banker's log of client accounts must be kept in balance to ensure accuracy.
|Use place-value understanding and properties of operations to perform multi-digit arithmetic.||Students' bank accounts can grow from as little as $50 to as much as several thousand dollars. To keep an accurate log, they will need to perform multi-digit arithmetic.|
|Fluently add and subtract multi-digit whole numbers using the standard algorithm.||Students are required to complete bank transactions using the standard algorithm.|
Interpret information presented visually, orally, or quantitatively (e.g., in charts, graphs, diagrams, time lines, animations, or interactive elements on web pages) and explain how the information contributes to the understanding of the text in which it appears.
Students must read and interpret bank logs and bank slips and explain how these collateral items are used in the classroom economy.
Write opinion pieces on topics or texts, supporting a point of view with reasons and information.
Students are required to complete a job application naming three jobs they want and the reasons they think they should have those jobs. Essentially, the students must state their case of why they should be awarded a particular job.
The classroom economy is a perfect complement to a supply-and-demand unit. Specifically, you can discuss how items at the auction are in high demand (everyone wants them), but the supply is low (only one set of markers, for example), which drives the price up. (Note: Social studies standards are not a part of the Core Standards.)
The classroom economy is designed to help students learn about financial literacy from an early age. This page is intended to support you in connecting common financial literacy standards with the experience of the classroom economy.
Our program addresses many of the standards included in the Jump$tart Coalition for Personal Financial Literacy's National Standards in K-12 Personal Finance Education.
My Classroom Economy
|Financial responsibility and decision-making
Take responsibility for personal financial decisions.
|Students earn a salary to pay rent and electricity bills, and they can save their extra money or use it for purchases; alternatively, they may have to pay fines. In this way they learn about the benefits of financial responsibility and the costs of irresponsibility.|
|Make financial decisions by systematically considering alternatives and consequences.||Students learn to prioritize personal financial goals by determining how to spend or save their earnings surplus.
Students can set measurable short- and medium-term financial goals based on the way they spend their salaries. They can choose to earn bonuses and can incur fines for misbehavior, both of which involve assessing alternatives and experiencing consequences.
|Develop communication strategies for discussing financial issues.||Students and their families are encouraged through a parent letter to discuss the classroom economy and gain a better understanding of finances.|
|Income and careers
Explore career options.
|Students have the opportunity to select various classroom jobs that correlate to real-life jobs. They must have specific skill sets or get recommendations for some of these jobs. Those who want to can start their own businesses.|
|Identify sources of personal income.||Students earn salaries as their basic source of income. They can receive bonuses by performing well academically and participating in extracurricular activities. Those who want to can start businesses to earn income, and those who don't will see how it works as a source of income.|
|Describe factors affecting take-home pay.||Although students do not have money withheld from their paychecks, they do pay rent, electricity bills, and income tax.|
|Planning and money management
Develop a plan for spending and saving.
|Students need to calculate what they will owe for rent, electricity, and income tax, and set aside money to cover these bills. If they want to spend during the classroom auction, they must save for that too. Opportunities also exist for setting long-term goals.|
|Develop a system for keeping and using financial records.||The classroom economy requires students to keep their own financial records and verify them with a classroom banker. Students must record income as well as money spent in their bank logs.|
|Apply consumer skills to purchase decisions.||Students can determine the relationship between spending practices and achieving financial goals by choosing whether and how much to bid in the classroom auction, which offers a range of alternatives.|
|Consider charitable giving.||Students are encouraged to give charitable gifts and are rewarded with tax deductions when they do so.|
|Saving and investing
Discuss how saving contributes to financial well-being.
|The classroom economy offers strong incentives to savers. To start, they can buy better things in the classroom auction. If they save enough, they even purchase their desks—escaping rent payments forever and having still more money to spend. The system provides many opportunities for students to see how saving improves their financial well-being.|
Begin planning your classroom economy before the school year starts.
Allow 2 to 3 hours to choose jobs, bonuses, and fines, and an additional 2 to 3 hours to prepare all of the materials.Introductory activities
On or near the first day of school, introduce your students to the classroom economy. Approximately a week after the introduction, assign jobs to students and provide short training sessions.
Allot a portion of 2 to 3 class periods to complete these activities. Keep in mind, this time does not need to be taken from your curriculum schedule, because it can replace time that you would otherwise spend explaining your class rules and establishing procedures.Ongoing activities
Every month students earn paychecks and bonus money. They also pay fines, electricity bills, and rent for their desks, and they purchase prizes at auctions—all with classroom economy currency. Although students may need more time and guidance at the beginning of the school year, they typically will become more efficient at banking as the year progresses. To avoid interfering with the curriculum, we encourage you to have students do their banking during transition periods, such as at the beginning and end of the class period. You might also allow students to work on classroom economy activities if they finish curriculum materials early.Tax Day
Once a year, around April 15—the tax filing deadline for their parents—the students pay a flat income tax of $500. They can reduce that amount throughout the year by earning points for charitable giving.Year-end wrap-up
Bring the classroom economy program to an end by encouraging a group discussion and giving students a chance to reflect. Distribute certificates to highlight student successes.
Allow approximately 1 class period for the year-end wrap-up.
To start the classroom economy program, you'll need to select:
Your selections for bonuses and fines can be drawn from the lists we've provided or based on your own classroom rules. As an option, you may choose to involve your students in creating the bonus and fine lists.
Once the lists are ready, post them in your classroom and refer to them throughout the year. If you wish, you can use materials from this site for the posters and handouts.
Every student in the class needs a job. You can select jobs from the list below, and you can create additional jobs to meet the specific needs of your classroom. We do recommend that you include four core jobs: Central Banker, Bank Teller, Fine Officer, and Auctioneer.
Each job needs an appropriate salary. The highest pay should go to the most responsible positions.
This list shows suggested duties and monthly pay for some of the more common jobs.
|Jobs||Job Description||Monthly Salary|
1 per class
|Keep a record of all money flowing into and out of the Central Classroom Bank. Provide Bankers with money as needed. Manage deposits made to the Central Classroom Bank. Review bank logs to double-check transactions conducted by Bankers.
Requires a recommendation.
1 for every
|Keep banking records for about five students. Accept money for deposits. Pay out money for withdrawals. Keep some cash ready to meet requests. Deposit remaining cash in the Central Classroom Bank.
Requires a recommendation.
1 for every
|Check the teacher's offense log for violations of class rules. Hand out fine tickets to students who break the rules. Keep a record of fines and payments. Deposit money from fines in the Fine Folder.
Requires a recommendation.
1–2 per class
|Allow students to acquire loans for a set amount. Hand out loan slips and calculate interest. Keep a record of all loans. Work with the Banker to deposit money from the students' accounts.||$650|
3–5 per class
|Poll the class to determine appropriate auction items. Identify ways to obtain the items. Plan and facilitate fund-raising events to sponsor the auction. Manage the auction.||$750|
1–2 per class
|Monitor electricity usage in the classroom. Determine the daily charge and report the monthly total. Creatively present ideas on how to conserve energy and reduce the monthly bill.||$750|
2–3 per class
|Monitor the recycling bins and trash cans for appropriate deposits. Increase the school's awareness of the importance of recycling by creating signs and flyers.||$750|
1 per class
|Take daily attendance and record absences. Report absences to the teacher. Provide students with make-up materials when they return to class. Students must have a strong attendance record to be considered as a candidate.||$700|
2–3 per class
|Hand out papers to students. Hand out materials such as worksheets and textbooks. Collect papers or homework from students when asked. Organize the class supply shelves and keep them neat.||$700|
|Provide one-on-one or small-group tutoring in subjects identified by teacher. Students must be high performers in the subject for which they are chosen.||$700|
1 per class
|Maintain and update class's/teacher's webpage. Respond to relevant inquiries. Post new information to page as directed by teacher.||$700|
1 per class
|Monitor spending habits and trends during the class auction. Report back to teacher and other students about the buying trends for the auction and how they compared to previous auctions.||$650|
1–2 per class
|Deliver written or spoken messages to people throughout the building. Answer the class phone.||$650|
|Visual Display Artist
2–3 per class
|Determine what type of information is presented on the class bulletin boards. Ensure class bulletin boards are updated with relevant class information. Decorate boards for class events, holidays, and other special occasions.||$650|
Other job-related items:|
The obligation to pay bills is central to the classroom economy. Here are the key concepts:
|One-time desk purchase price||$3,000|
You can choose whether to charge a flat $150 per month for electricity or a rate of $5 per day, which can be reduced through classroom conservation efforts.
For the daily usage process, we encourage you to hire an Electrician as one of your classroom jobs so that he or she can motivate the students to conserve energy and reduce the bill. Allow the Electrician to present ideas about how to reduce usage and thus reduce the cost by $1 for each initiative (for example, turning out unneeded lights, reducing the number of bulbs in some fixtures, turning off computers when not in use). The Electrician keeps a log of the daily electricity use—from $0 to $5.
The daily usage process provides a framework for fruitful discussions about conservation and the environment.Failure to pay bills
We recommend that students who miss a rent payment or an electricity bill be excluded from that month's auction. You may choose to have them forfeit other privileges, but please, remember that the program is designed to help students learn financial responsibility—it is not to punish them.
When students miss payments, it's important to get them back on track as soon as possible. You can take the missed payment as an opportunity for a discussion about making responsible choices, and then encourage the student to earn bonuses so that he or she can catch up on rent and get in on the Auction Day fun.Successful saving
Students who make their rent payments and manage to save additional money can reap rewards:
In addition to the salaries that students earn from their jobs, they can earn bonus money by performing well academically and participating in extracurricular activities. Students need to earn bonuses to make rent and save up for the auction. In addition, bonuses can be useful incentives for your own class goals.
The following bonuses should be included if at all possible. The dollar amounts are simply suggestions.
|Earn 100% on a small test or quiz.||$50|
|Earn 100% on a major test.||$200|
|Earn 90% to 99% on any assignment.||$100|
|Complete an outside reading assignment.||$100|
|Get a compliment from another teacher.||$200|
|Join in an extracurricular activity.||$100|
In the classroom economy, the role of fines is to help students understand costs and consequences—it is not to punish them. The list of fines should be short and direct, matching your classroom priorities. Our list is an example.
|Messy desk or locker||$100|
Although the Fine Officers write tickets for fines, you control the process through an offense log. As you correct a student, you can mention that you're adding the violation to the log. Then, when Ticket Day comes, the Fine Officers write tickets based on the entries in your log. In this way you retain explicit authority over dealing with misbehavior.
Loans are available to students through the Loan Officer. Interest for these loans will be front-end loaded. Therefore, there will be no accruing interest. If a student receives a loan for $100 with 20% interest, he or she will have to pay back $120 over a term. Here are the key concepts:
Throughout the year, you will need classroom economy materials, such as money, banking paperwork, and handouts, for your students. You can download the materials or order printed copies for free. Gathering and preparing materials will take approximately 2 to 3 hours.Supplies
In addition to the materials we provide, you may wish to purchase or gather the following items.
|No. 10 business envelopes so students can conveniently hold their cash.||2 per student (1 is kept by the student and the other is kept by the student's Banker)|
|Portfolio folders with clasps where students can store their bank logs and other materials.||1 per student|
|Cash drawer or box to serve as the Central Classroom Bank. Create one from a shoe box or use an item from an old board game, such as Monopoly.||1 per class|
|Popsicle sticks or paint stirrers for auction paddles.||1 per student|
|Sticky notes for convenience during auctions.||1 slip per student per auction|
|A clipboard where you can hold the offense log to keep track of fines.||1 per class|
|Items for students to purchase at auctions, such as toys, baked goods, or gift certificates.||3–7 per auction|
Put the following items in each student folder:
|Bank slips||4||Loan slips||2|
We suggest keeping an offense log to keep track of students who disobey the rules. The Fine Officers can issue tickets based on what you write on the offense log. Using this system, the Fine Officers are involved, but you maintain the ultimate authority.Central Classroom Box
Create a cash box with three slots, one for each denomination. This is where the Class Banker will monitor the classroom cash throughout the year. We recommend that each Banker only hold about $2,000 in cash, and store the rest in the cash box.Visual displays
When presenting and explaining the classroom economy to your students, we recommend using visual displays to aid their understanding. In particular, it is a good idea to display the jobs list, bonus money opportunities, and fines you will use in your classroom.
You may print and display our versions or create your own displays and presentations. Some suggestions include:
|Posters (bonuses, fines)|
Print individual copies of display items and place them into each student's folder.Print classroom economy cash
To start, print about $7,000 in classroom economy cash:
|$50 bills||42 (seven sheets)|
|$100 bills||18 (three sheets)|
|$500 bills||6 (one sheet)|
Print the bills on colored paper.Other materials
For the activities throughout the year, you will need the following materials:
|Job offer letters||Job assignment|
|Business licenses||Throughout the year|
|Fine tickets||Ticket day|
|Unpaid bill notice||Bill day|
|Deed to desk||Bill day|
|Electricity bill||Bill day|
|Tax form||Tax day|
|Auction record form||Auction|
Think ahead about items your students might like to purchase at the classroom auctions. Gather both tangible and intangible rewards.
In the year-end wrap-up, you could allow your students to pool their money and purchase a class reward, such as:
Teachers who are comfortable with the classroom economy may want to include some of these additional modules to enhance the learning experience for their students. These are not recommended for teachers implementing the program for the first time. Be certain your students understand the underlying curriculum components before adding any of these modules.Real estate investments
Taking property ownership a step further, allow students to purchase the deeds to other students' desks. In this situation, a student whose desk is purchased now pays the rent to a landlord instead of the bank. We recommend you insist the rent remain at the bank's original price so that students can't force students out of their desks by driving up the rent too high!Inflation
After returning from a break in the school year (e.g., winter or spring break), raise the prices of students' desks based on inflation. You can also raise their salaries, but we suggest you raise the price of the desks more than any salary increase to stress the importance of saving and outpacing inflation. Depending on your students' math skills, you can make inflation a flat amount (e.g., $50) or a percentage of the current economy (e.g., 3%).Student auctions
Allow students to bring their own items to be sold at the auctions. Require those who do so to turn over a percentage of their total sales to the bank as a fee for the right to sell. For example, if the selling fee is 10%, a student who sells an item for $1,000 at the auction will keep $900 and pay $100 to the bank. This helps students to understand vendor fees, which are common for internet commerce sites such as PayPal, eBay, and StubHub.Disaster relief
Require students to pay a fixed amount (e.g., $100) for disaster relief. This can be especially effective if you are studying disasters in science or social studies. For example, if you are studying hurricanes in science class, you can pretend there is a hurricane in your classroom and everyone must pay to fix the damage.Emergency funds
Help students prepare for their future by establishing an emergency fund. Assist the students in determining their monthly expenses, and then encourage them to build a nest egg that is greater than or equal to that amount. The overall purpose of this module is to teach students the importance of saving in a liquid investment such as a bank savings account, so they are prepared for unexpected situations that can occur in life. By building an emergency fund, students will be prepared to pay their bills, even if they do not receive bonus money or if they lose their job. Keep in mind, anytime students use their emergency fund, they will have to devise a plan to replenish it.Insurance
Require your students (or simply give them the option) to pay renters insurance on their desks. With the insurance, the students are given special benefits, such as being able to participate in the auction if they cannot pay the entire rent amount.Interest
Allow students to accrue interest on money they keep at the bank. Have Bankers pay the interest monthly using a percentage.
On the first day of the program, you explain the rules and expectations of the classroom economy as you would with any classroom management system.
Welcome the students and inform them that they'll be earning and spending money throughout the year. Pass out the student folders you created.
Use your visual displays as you explain these key concepts:
If you like to include your students in creating class rules and policies, feel free to let them suggest additional bonus opportunities, fines, and auction items.
Once you collect all the students' applications and any needed recommendations, take a few days to plan the job assignments. It's best to make the assignments in class about a week after the students apply.
For the Bankers and Fine Officers, you need to decide which students will be their "clients." They should be assigned four to six students each. (It's a good idea to use the same groups for each purpose, so that the same set of students would share a Fine Officer and a Banker.)
For each Fine Officer, prepare a folder listing the names of his or her clients. Put some blank fine tickets in the folder.
For each Banker, prepare a folder listing the clients' names and containing the following items:
Prepare a simple job offer letter for each student. (Our template has blanks for the job title and the student's name.)
Finally, plan an assignment that students can work on quietly at their seats. While the class works, you'll be able to train small groups of students on their job responsibilities.
Inform the students that they'll receive their job assignments today and will start earning their salaries.
Deliver the job offer letters. Each student should sign the letter and place it in his or her folder.
Next, train students for their jobs:
Note: After you review the business license requests, we recommend meeting with the students individually to briefly discuss your expectations about how the business will be conducted in your classroom. You can do this at any convenient time over the next few weeks.
Here are tips for teaching three of the more complicated jobs.
If time allows, you may want to have all the students practice a bank transaction. For example, you could have each student deposit $200, and then withdraw that $200. (Afterward, you might let them keep the money as a bonus for good behavior.)
On the first Payday, you'll need to explain how the process works. The steps are below.
Each Banker should keep about $2,000 in the bank folder at all times. The Banker should deposit any additional cash in the Central Classroom Bank through the Class Banker.
On Ticket Day, students must pay the fines that have been assessed since the last Ticket Day.
On the first Ticket Day, explain that students who were fined for violating class rules over the past month need to pay up now. They'll have to withdraw the money from their bank accounts.Fine procedures
On the first Bill Day, explain to the students that paying bills is one of their most important financial responsibilities. It's so important that, unless they pay their bills, they won't be allowed to participate in Auction Day.
Emphasize the importance of planning and watching their spending so they'll always have the rent money ready when it's due.
Remind the students that they can escape rent payments altogether if they can save $3,000 to buy the deed to their desk. Strongly encourage them to do this.
Allow the Electrician to report on electricity usage and provide suggestions about how to lower next month's bill.
Also, remind the students that they will need to pay taxes in April and should consider setting money aside to prepare for this. You can encourage them to earn tax deductions by making charitable gifts. Suggest that they review the tax document you placed in their folders at the beginning of the year and keep track of their charitable contributions throughout the year.Bill procedures
On each subsequent Bill Day, ask if anyone can purchase his or her desk that month. If a student can do so, celebrate him or her and make a show of handing over the deed.
A student who buys a desk takes the $3,000 to his or her Banker along with the deed (not the rent log). The Banker marks the student's rental account "Paid in full."Follow-up Discussion
Paying bills is a strong indicator that students are succeeding in the classroom economy program. If a student can't pay bills, it is important to get him or her back on track as soon as possible. The unpaid bill notice is a mechanism to keep you informed about students who fall behind so you can reach out to them. You can encourage these children to participate in more activities so they'll earn enough bonus money to catch up on bills and get in on the Auction Day fun.
Students are required to pay income taxes on or around April 15. We suggest taxing them at a flat rate. You should also give students tax deductions for charitable contributions. For example, students who donate items for the auction or who perform community service could receive a deduction of $100 for each contribution.
Under the flat-rate system, students pay $500 in yearly income tax unless they receive deductions. The tax form in each student's folder should hold a log of any reductions he or she has earned throughout the year.
Explain to students that federal income taxes are collected by the U.S. government to help pay for national programs such as the court system, the military, interstate highways, and all the hundreds of other services that Americans use. Similarly, in the classroom economy, taxes are collected to pay for students' salaries.
The auction is an important component of the classroom economy. It lets the students reward themselves for working diligently to earn money. From a learning perspective, it links directly to the concept of supply and demand, and students quickly discover how impulse buying can shrink a bank account. In addition, children look forward to the auction because it is fun.
Make sure each student will have an auction paddle or another way to bid. If you wish, you can use our auction paddle template to create your own paddles or to have the students make their own.
Explain that students can only spend the amount of money they have in their bank accounts, and that they're not required to purchase anything. This is a good time to reinforce the importance of saving, and to remind the students that they have the ability to buy the deed to their desks and thus escape rent payments forever.
It's also important to emphasize that an auction bid is a binding contract, and there's no going back on it, even if they later wish that they hadn't spent the money.
If necessary, explain the auction procedures before beginning the auction.
Before the auction starts, allow students to quickly confirm their bank logs with the Bankers so everyone knows what he or she can spend.
After the auction, each winning bidder needs to withdraw cash from the bank to pay for items bought. Do not give an item to the student until you receive the cash.
At this point some students may decide they bid too much and no longer want the item they won. It is very important that you require them to purchase it anyway. The auction is a vital tool in teaching the lesson of buyer's remorse.
After an auction, some students will feel overwhelmed because they got caught up in the action and spent most or all of their money. This can be a tremendous learning opportunity.
You could use some of the following questions to guide a discussion:
Plan a time near the end of the year for students to reflect on what they have learned in the program and for you to tie everything together.
It is also a time to celebrate the students' successes and reward them for their hard work.Certificates
Students who managed to save a significant amount during the year should be rewarded. We recommend passing out certificates to those who met these thresholds:
Hold a discussion with your students to reinforce what they have learned.
Here are some questions you can ask to guide the discussion:
Allow students to pool their classroom money and purchase a class reward, such as: