My Classroom Economy – a Financial Literacy Program from Vanguard

Have you ever wished that schools in the US would provide more in the way of personal finance education? Some school districts do require financial literacy classes, but they typically don’t occur until high school. What’s more, many of the teachers don’t feel qualified to teach personal finance. If only there was a better way!

Classroom economy.

Rafe Esquith, a fifth-grader teacher since 1984 may have found one. In his class, he created what is called a classroom economy to help teach his students, he says “to value and take care of property and to plan ahead and earn the things they want. With luck they’ll go on to use these economic skills for the rest of their lives.”

Vanguard volunteers.

Based on his book There Are No Shortcuts, and a partnership with him, Vanguard employee volunteers put together a classroom economy program available free to any US teacher. A Vanguard employee’s son happened to attend a class with a teacher that had adopted Esquith’s classroom economy idea. The employee raised the idea up at Vanguard and it became an employee volunteer effort.

The programs and materials were classroom tested using a pilot program during the 2011-2012 school year.

The classroom economy programs.

Each program comes complete with a program guide and the materials required to execute it. Program guides are currently available on the My Classroom Economy website for grades Kindergarten through 12, with some of the years combined (such as grades 9 – 10 and grades 11 -12).

Each guide includes sections on core learning objectives (many of which are based on the JumpStart Coalition for Personal Financial Literacy – National Standards).

The programs build on each other at each grade level, keeping the same overall ‘economy’ but adding complexity to it as the child progresses through the grades.

Each level includes assigning jobs to each student, rewarding them for completing the jobs and offering bonus rewards for other performance.

The kids dabble in real estate by renting (or ‘owning’) their desks and have a payday once a month. They keep their payday money in the classroom ‘bank’ account and are required to log additions and withdrawals to that account. If the students save their money, they can buy things at the classroom auction (conducted by the teacher) with the ‘funds’ in their accounts.

In higher grade levels, students are given the opportunity to purchase insurance, investments and start their own businesses. They also must fill out job applications and interview for classroom jobs at the higher grade levels, instead of just being assigned to them. An auditor reviews each student’s banking log for accuracy.

At each grade level, the student must pay bills (such as rent for their desk or a randomly generated electric bill amount and even taxes!). In addition, students may be ‘fined’ for breaking rules.

At lower grade levels, the jobs are simple and few. Jobs are designed so that students can do them independently without teacher intervention – after a few practice runs.

Sample lower grade level jobs include line leader, money collector and distributor, attendance taker and messenger.

At the junior/senior grade levels, jobs become closer to real world jobs. Examples include web master – to build and maintain the class website; economist – to monitor spending habits of the class and report to the teacher; insurance agent – to sell and handle accounts sold and etc.

Teachers can modify the program to suit classroom conditions.

Teachers have a great deal of freedom in the jobs that they can create and assign to students, in the bonus jobs that are available and in the choice of how much or little of the program to do. Teachers can let some of the jobs be businesses that the kids set up and run – and Vanguard volunteers have provided details even for that – down to a form to use for a business license application.

Take action!

It seems to me that the program would work best if all teachers in all grade levels in the same school would utilize it in similar fashions. However, it would be beneficial if kids were exposed to it just for one school year!

Check out the My Classroom Economy site and let me know what you think. But don’t just let me know, if you think it will work for your child’s (or grandchild’s) classroom, get the information to the teachers and administrator’s at their school and encourage them to make use of it!

I have not and will not receive any compensation in any form for this review.