Add the Budget Challenge to your classroom

Learning Goals/Objectives:

Budget Challenge is an innovative way to bring real-life personal finance to the classroom. Modeled after a young adult’s first attempt to live on their own, the Budget Challenge simulation recreates many of the choices and situations that prove difficult for young people learning to manage their personal finances. Late fees, below minimum balance fees, non-sufficient funds fees, finance charges and over credit limit fees are all part of this simulation that is also a competition that classmates play. It is a new, hands-on way of teaching that allows students to learn from mistakes in a safe environment without costly fees or impacting their credit score.

The objective of Budget Challenge is to develop real personal finance skills, knowledge, and habits to thrive in today’s world.

Since Budget Challenge simulates a realistic personal finance environment, many subjects and topics are contained within the simulation:

Budgets

Creating budget based on income and known expense obligations
Understanding cash flow and timing of payments and pay check deposits

Banking, Savings & Financial Services

Online Banking
Types of Checking Accounts
Direct Deposit
Online Check Writing
Overdraft Protection
Bank Fees
401k plans (Matching and Tax Deductibility)

Credit & Debt

Interest Calculations
Credit Limit
Fees
Billing Cycle and Grace Period

Common Terms of Vendor Bills (Billing Cycle, Payment Terms, Late Fees, etc)

Overview:

Budget Challenge is a fun and engaging way to teach budgeting. It is a realistic simulation done online and via email that provides students with a "real world" experience. It adds the fun of competition to make it even more engaging. To really teaching budgeting, it needs to be done over a period of repeated activities and budget challenge accomplishes that.

Visit www.BudgetChallenge.com to register and learn more. For questions, contact support at 513-335-0619 or Support@BudgetChallenge.com

Cost is $20/student, which is small in comparison to the cost of making one personal finance mistake with a bank or credit card.

Grouping of Students:

Students compete as individuals within a class or group of peers. Classes have the option to compete with other classes throughout the country.

Methods:

Simulation competition (real time, using modern tools such as electronic bill-pay, online banking, direct deposit, and email correspondence)

Activities:

In Budget Challenge, students are given an information packet and:

a 'job' with a defined salary and pay schedule
a choice of different service providers (rent, cell phone, car loan, etc)
a choice of different types of checking accounts and bank account options
a choice of employer 401k savings accounts and a 401k payroll deduction percent

Students are encouraged to make a budget prior to the start of the simulation.

During the Simulation

Bill notifications will arrive (via email) as described in the information packet and students will be required to respond to them (write on-line checks) in the most efficient way (or the way that results in the least amount of total fees). At the same time, students are also given points for savings in their 401k account, which a student can control by changing the 401k deduction percentage in their pay check.
Students will be given a score that will be used to determine class rank. The score is primarily based on the ability to pay bills, maximize savings and avoiding fees. Other points can be earned through surveys/quizzes.
Students' scores will be listed on a 'Leaderboard' and class rank will be updated daily.

At the End the Simulation

A winner is determined by the score on the Leaderboard.
Teachers may translate a student's performance in the simulation to a grade or partial grade for a class (this is at the discretion of the school).

Materials:

A student information packet is provided to each student. Budget Challenge is age-appropriate for high school students. Since it largely takes place outside of class, it requires little classroom time. Simulations are offered at several lengths from 9-16 weeks to accommodate quarters, semesters, and trimesters.

Assessment:

Students will be provided with a class score and class rank. The score is calculated via the following equation “score” = “savings” – “fees” + “quiz/survey points.” Budget Challenge also provides additional measures to capture participation/activity withing the simulation, such as number of checks written and pending, as well as login frequency. Some teachers prefer to factor in a student’s effort/participation along with the score to determine a grade.

Schools have the option to compete against other classes across the country that share common simulation start/end dates. In class-to-class competitions, class average score will be used to rank classes/schools.

Download:

BudgetChallenge_LessonPlan.doc