Teaching Students About Money

Recently, I was cleaning the garage, going through some old classroom supplies, when I came across a pile of money.

Well, not really—it was “play” money I had created years ago, when I taught a self-contained fifth-grade, gifted classroom. The money was part of an economic system I used with the students, one that produced lots of fun but also instilled valuable lessons.

One of the largest gaps in our current education system is financial literacy. We do little if anything to teach about how to manage money. Thus, children are left on their own to figure out how money works, learning from their parents, from experience (often negative ones) or maybe reading on their own. But the teaching of money doesn’t have to be a time-consuming diversion from everyday curriculum in the classroom. In fact, if approached the proper way, it actually enhances the school experience.

The classroom money system I employed came from Teach Like Your Hair’s on Fire and There are No Shortcuts by famed educator, Rafe Esquith. You can check out those books, but I will also lay out the basic principles of the system here:

Pay Up!

The system is based on the idea that students must all pay “rent” each month for sitting at their desks. Explain to them that it requires money to live somewhere, an apartment, a house, and they must earn their keep. The teacher sets the rent ($600, $700, $800 a month). Everyone can pay the same rent or students sitting in certain parts of the room (the front) might pay more for nicer real estate. When students earn three times the rent, they can then “buy” their house and no longer have to pay rent.

Pay Day!

Students are assigned different jobs in the classroom (custodian, errand person, technology assistant, police officer, classroom manager, bankers, etc.). These are real jobs with tasks associated with them. If students are completing those job tasks each day, every two weeks, they get paid. Different jobs pay different amounts (just like the real world); more responsibility, more pay. At this point, provide students with an accounting ledger and teach them how to balance their account (debits/credits). Students receive a check during payday, which they deposit in their account. They then pay the rent (to the bankers) and whatever is left over, they can keep in savings.

Extra Cash!

Students can also earn extra cash (that’s where I printed the pretend money) for various actions: handing in homework, keeping a clean desk, extra credit work, etc. But they can also be fined for not having homework, rudeness, messy desk, etc. The police officers collect this money and give it to the bankers.

Sold!

Now, here’s the really fun part. At the end of each month, we would hold an auction, where students could bid on various items using the money in their savings. I asked parents to donate items found in their garage, around the house (books, sporting equipment, toys), or goodies from the dollar store. Students would have a blast bidding up items and spending their money how they wanted. Caught up in the excitement, students would sometimes regret that they spent a thousand dollars on candy—within a few minutes, the money that took them a month to save was gone from their savings!

My students absolutely loved this money system. It motivated them and made class an interesting place to be. But more importantly, perhaps, they learned some extremely insightful lessons: the value of earning money, balancing it, spending it wisely (or not so wisely), and renting versus buying. Like a good science experiment or civics lesson, all this learning occurred through doing, not lecture. The students learned about money from using it, day in and day out. While the money I found in my garage was worthless to others, it was “gold” to me. It reminded me of the joy and experience my students gained from using this system and the true learning that occurred.

Steve Haberlin is a graduate assistant and Ph.D. student at the University of South Florida and an educator with 10 years of experience.