LEARNING
EXPERIENCE:
“REALITY STORE”
Learning
Experience by Pat Loncto,
former
a member of the
and
of Prepare Tomorrow’s Parents’ Advisory Board.
Developed at
LEARNING CONTEXT
PURPOSE:
In
the words of a student, “The Reality Store is where you calculate what you will
earn with a certain education and see how you end up financially. This provides a fun and enjoyable way to
learn about the financial world. "
Students
will apply the decision-making, problem-solving, and management processes to
develop a spending plan to meet established goals with a degree of
accuracy. The goal is to develop the
knowledge and skills needed to use these processes in practical, real-life
situations involving the use of money.
The Reality Store is a place where students pay bills after planning
their budget for a level of income based on a predetermined level of
education.
Guiding
Questions:
·
How does an
adult make decisions when formulating a spending plan?
·
What is the
relationship between education and employment, and one’s quality of life?
·
Why is
mathematics important in everyday life?
CONNECTION:
Eighth
grade Home and Career Skills students are familiar with the Reality Store
concept from fifth grade when they selected a career and paid for household
expenses as they took a walk through life.
Unlike fifth graders, who keep a simple tally of household expenses, the
middle school students receive a salary and plan a budget based on an inventory
of projected education and lifestyle at age 28.
They use checkbooks donated by a partnership with Lockport Savings Bank
to pay their bills. The planning of a
budget and calculations for check writing are perhaps the most challenging
parts of this project.
The
Reality Store is used as a culminating assessment for units on consumerism and money
management in 8th grade Home and Career Skills classes about the
third week of a 13 week course. See
calendar for unit lesson descriptions.
KNOW AND DO TO SUCCEED:
(Skills and knowledge student must acquire during the
learning experience in order to be successful; these will be introduced in the
learning experience.)
·
Identify
individual lifestyle need and wants
·
Identify
possible educational and career choice with corresponding income.
·
Formulate a
personal spending plan for age 28.
·
Make decisions; solve
problems.
·
Spend and save
money wisely.
·
Add and subtract
with or without a calculator.
·
Write checks
properly.
·
Reason,
evaluate, and communicate about personal spending choices.
·
Identify their
own abilities and interests as possible guides to career choice. (optional)
PROCEDURE
·
Students
complete an Envision Your Life Form, predicting their life at age 28, by
recording key lifestyle choices concerning marital status, family composition,
housing, transportation, and education.
It is important to encourage realistic predictions or the students will
be disappointed later that they did not make this experience more personally
valuable. The teacher keeps the forms to
use at a later date so that students do not change the information.
·
Students examine
the Occupational Handbook for jobs/careers requiring the following educational
requirements before selecting their personal choice for the envision form.
- high school diploma
- 2 year associate degree
- 4 year bachelor’s degree
- +2 years master’s degree
- +3 years law degree/PHD
- +6 years MD, not specialist
·
Money management
lessons are taught on the topics of use of credit, savings, check writing,
money management principles, consumerism, social service system, taxation, and
the decision making process.
·
Students examine
utility bills, mortgage statements and real estate ads.
·
Introduce the
Learning Experience. Students may offer suggestions to edit the rubric but not
create the rubric.
·
Students convert
the information from the Envision Your Life form to the Student Profile
form. Some students may try to change
the predictions now that they know that the forms will be used to make
purchases. The teacher needs to
reinforce the rule not to change the
information.
·
Students create
a spending plan on the Checking Account Spreadsheet using the Student Profile
form and the reference packet with costs for items needed. The reference packet will need to be updated
as costs rise and fall. A computer may
be used for spreadsheet calculations or students may pencil in the costs and use a calculator to tally amounts.
·
Savings
accumulated for attending class prepared are given to each student by counting
the days in class and multiplying by $5.
One dollar is subtracted for every unprepared day. Some students will
have completed an interest inventory and career project in another subject area
and will use that information to make a more exact career choice leading to a
more exact income level for them personally.
·
Students sign
out checkbooks by number since students sometimes see an opportunity to play
and use the checks in the real world.
This is a good time to teach about fraud.
·
Students write a
check to pay for each expense but leave in checkbook until they visit the
reality store room. The check register
is to be completed accurately as well as the information on the spreadsheet
form. Teacher needs to instruct students
on how to void a check.
·
On the event
day, students will enter the Reality Store, a room with payment booths for each
item on the budget. They will deposit a
check for the amount of the item on the budget.
·
In addition,
they will select a “life surprise” ticket indicating an unexpected gift or
bill.
·
When all their
bills are paid, the students may visit the luxury table to purchase additional
items from dinner to a vacation, clothes to electronics.
·
In the event of
a lack of funds, students may visit the bank to ask for a loan or they may
change some of their flexible bills (ex: car choice) but they may not change the Student
Profile.
·
The check
register and all forms must be completed properly and balance. A “help” table is provided for math and
advice counseling by a volunteer parent.
·
The teacher
supervises the general operation of the room.
A support person is needed for the help table, fish pond, bank, and
auxiliary space for students who finish early and wish to work on the
evaluation and reflection. If a student finishes the event in one day he/she
may begin the evaluation and reflection. Most students take 1 1/4 periods, but
absent and slower students take two periods.
Also some average and advanced students make mathematical errors which
takes a second period to correct. Using
two days builds in a safety net for unforeseen situations.
·
Students turn in
the Student Profile, Spreadsheet, Evaluation, Reflection and Rubric. Students circle their score with a pen first
and then the teacher uses a marker on the same rubric. Discrepancies are discussed between the
student and teacher.
·
The guiding
questions and the NYS Standards are posted and referred to throughout lessons
to help keep the unit focused on the Standards.
When more computers become available and student
expertise increases, students will be required
to use computer spreadsheets for spending plans. Students are encouraged to word process the
reflection essay. Calculators are
provided.
During the event, situations will arise that were not
planned for and the teacher will have to become a financial advisor helping
students see choices. For example, a
student may need a loan to pay a medical bill from the fish pond. Sometimes students want loans to buy a
product at the luxury table. These are
teachable moments on credit and saving.
The goal is no loans.
This project reflects “best” classroom practice
because it is a real-world simulation rooted in each child’s personal
goals. The project may be simplified for
elementary classrooms and expanded for high school classrooms. It is interdisciplinary in nature, and may be
repeated at each educational level to track the progression of goals and skills
for students individually.
INSTRUCTIONAL/ENVIRONMENTAL
MODIFICATIONS
A large room with several tables and a few chairs is
needed to accommodate the payment stations and payment officers at some of the
tables. Signs and decorated payment
boxes (shoe boxes) make the room more inviting.
A table of catalogs, poster ads, and flyers add to the excitement of the
luxury table. Calculators should be
available for students throughout the planning and execution of the activity.
The “help” table is available for students needing
extra assistance. Budgets are planned
and checks are written BEFORE students enter the Reality Store during class
time and at home. Previous to the
reality event, students requiring tutoring when writing checks and using math
skills are provided with the needed support in school or by parents at home.
TIME REQUIRED
·
Planning and
preparation for teacher:
o
Arrange for
event room, support staff-one hr
o
Set up room-one
hr
o
Assess student
work-one hr per class
·
Planning and
preparation for students: eleven 45-min. class periods, two homework
assignments 1/2 hour-?
·
The event: two
45-min. periods
·
The assessment:
one 45-min. period
RESOURCES
·
Signs, posters,
catalogues, shoe boxes
·
Calculators
·
Parent
volunteers
·
Real checkbooks
and registers (with voided numbers)
· &nbsle='font-family:Symbol;
mso-fareast-font-family:Symbol;mso-bidi-font-family:Symbol'>·
Guest speaker
from social services
·
Student Work
Packets, Student Reference Packets, Teacher Reference Packet
·
And baby
makes three: If you're going to have a baby, make sure your financial life is
in order. http://money.cnn.com/2001/12/14/saving/q_baby/
ASSESSMENT PLAN
·
Students will be
asked to review the teacher-developed task and rubric, which will be edited
accordingly before being used. At the
end of the simulation students will again be asked for feedback for continuous
editing purposes.
·
Evidence of
meeting the learning standards’ performance indicators will be achieved through
a drill and practice activity, and observation and conferencing during the
budget planning periods, as well as the event day.
·
A rubric and
reflection essay will document student achievement. One random check will be selected for each
student. Each student will turn in a
student packet.
·
I do not accept
late or illegible assignments, therefore, a “0” is given on the rubric for each
dimension missing or illegible.
STUDENT WORK
Student completed samples in separate sections which
includes:
·
All completed
forms: Profile, Budget Plan, Check, Evaluation, Essay
·
Rubric
·
Reflection essay
OVERVIEW
STUDENT
PACKET &
TEACHER
RESOURCES
|
|
ENVISION YOUR LIFE
Name__________________________ Career_______________________________
Let's
pretend you are 28 years old. What would be your answers to these questions?
________________I.
Are you married or single?
________________
2. If you are married, does your spouse work?
________________
3. How many children do you have?
________________
4. What are their ages?
________________
5. How many children (under 5) are in day care?
________________
6. How many children (5-12) are in latchkey?
________________
7. Do you own a home or rent?
________________
8. Would you have a one or two bedroom apartment?
OR
Two/threelfour/deluxe Would you
have a two, three, four bedroom or deluxe home? (circle)
OR
Farm/single/double Would you have a farm? Single or double mobile
home? (circle)
New/used/no
car 9. Do you own a new or used car? ( circle)
OR
_______________ Do you use public transportation?
(bus/cab) (circle)
_______________
10. Does your spouse own a new or used car? (circle)
OR
_______________
Does your spouse use public transportation?
0, 2, 4,
grad school 11. How many years did you attend college?
(circle)
medical school
0, 2, 4, grad school 12. How many years did your spouse attend
college? (circle)
medical school
STUDENT PROFILE
Name ___________________________________ Date ______________________
Check the appropriate
lines.
Education, highest level achieved:
You Spouse
_____
no high school diploma _____
no high school diploma
_____ high school diploma _____
high school diploma
_____ two-year college degree _____ two-year college degree
_____ four-year college degree _____ four-year college degree
_____ Masters degree _____
Masters degree
_____ Doctorate degree _____
Doctorate degree
Family
_____ single
_____ married
_____ children, include # and ages _______________________
_______________________
_______________________
Housing
_____ rent
_____ own home
_____ farm/mobile home
Transportation
_____
used car
_____ new car
_____ bus
Salary and Income
Tax Chart
DEDUCT $25.00 TAX FOR EACH CHILD
FROM ONLY YOUR INCOME TAX, NOT YOUR SPOUSE’S.
|
LEVEL OF EDUCATION |
ANNUAL SALARY |
MONTHLY SALARY |
MONTHLY SINGLE TAX |
MONTHLY MARRIED TAX |
|
No high school diploma |
$12,000 |
$1000.00 |
$177.00 |
$127.00 |
|
High school diploma |
$15,000 |
$1250.00 |
$242.00 |
$192.00 |
|
Two-year college degree |
$20,000 |
$1667.00 |
$351.00 |
$300.00 |
|
Four-year college
degree |
$25,000 |
$2083.00 |
$475.00 |
$425.00 |
|
Masters degree |
$35,000 |
$2917.00 |
$763.00 |
$661.00 |
|
Doctorate degree (PhD) |
$38,000 |
$3167.00 |
$866.00 |
$739.00 |
|
Medical Doctorate
degree |
$100,000 |
$8,333.00 |
$3168.00 |
$2808.00 |
2000 Tax Table
Use
if your taxable income is less than $100,000: http://www.irs.ustreas.gov/prod/ind_info/tax_tables/
If
$100,000 or more, use the Tax Rate Schedules: http://www.irs.ustreas.gov/prod/ind_info/tax_tables/tax_sched.html
BUDGET
PLAN
Check for Attendance from teacher to be
deposited in your checking account.
|
503 Your Name
Your Address Hometown, State 12345
Date_____________ 01-1
133 Pay To The Order Of__________________________________________ $______________ ________________________________________________________________ DOLLARS
Blue Bank Hometown, State, 12346 FOR _______ Days in School
SIGNATURE_____________________________ I:0000-0000I0503 01-23-4567~ |
CHECKING ACCOUNT
|
TABLE |
AMOUNT |
AMOUNT |
TOTAL |
|
|
ME |
SPOUSE |
AMOUNT |
|
Deposit for Attendance |
$ . |
|
$ . |
|
1. Income Taxes,
Internal Revenue Service |
$ . |
$ . |
$ . |
|
2. Student Loan,
(tuition) Lockport Savings Bank |
$ . |
$ . |
$ . |
|
3. Housing Choice,
Lockport Savings Bank |
$ . |
|
$ . |
|
4. Food, Tops |
$ . |
|
$ . |
|
5. Clothing, Bon Ton |
$ . |
|
$ . |
|
6. Child Care, Wee Care
Day Care |
$ . |
|
$ . |
|
7. Utilities, Utilities
Unlimited |
$ . |
|
$ . |
|
8. Transportation, Car
loan Lockport Savings Bank |
$ . |
$ . |
$ . |
|
9. Gasoline or Bus pass
($50.00), Mobil Transit |
$ 50.00 |
$ 50.00 |
$ . |
|
10. Insurance (auto),
Greater Lewiston Insurance Co. |
$ . |
$ . |
$ . |
|
11. Insurance (Health),
Greater Lewiston Insurance Co. |
$ . |
|
$ . |
|
12. Insurance (Home),
Greater Lewiston Insurance Co. |
$ . |
|
$ . |
|
13. Insurance (Life),
Greater Lewiston Insurance Co. |
$ . |
$ . |
$ . |
|
14. Savings, Lockport Savings Bank |
$ . |
$ . |
$ . |
|
15. Donations to charity of your choice (optional) |
$ . |
$ . |
$ . |
|
16. Cable, Adelphia |
$ . |
|
$ . |
|
17. Fish Pond expenses |
$ . |
|
$ . |
|
18. Dining out |
$ . |
$ . |
$ . |
|
19. Medical emergency |
$ . |
|
$ . |
|
20. Luxuries |
$ . |
|
$ . |
|
21. Deposit from fish
pond into Checking |
$ . |
|
$ . |
|
SUB TOTAL |
$ . |
$ . |
$ . |
Monthly salary $____ + Spouse’s salary $ _____ =
$______ Total Monthly Salary
$_______ Monthly expense total (amt. spent)
$_______
Monthly checking account balance
(after paying bills with checks)
Loan amount $____ Monthly
payment for 1 year $_______
Withdrawal from savings $ ______
CHECKING
ACCOUNT SPREADSHEET FORMULAS
Savings
Account
|
Name |
Date |
Amount Withdrawn |
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Loans
|
Name |
Date |
Amount Borrowed |
Amount Due in 1 Year |
Monthly Payment |
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Mortgage Analyzer
http://www.freemortgageanalyzer.com/
This
amortization calculator displays amortization schedule, loan chart, graphs, a
mortgage payment table, and calculates both total as well as real interest
paid. Easily change payment amount, interest rate, loan amount and much more.
Provides an instant graphical display on loan amounts from one thousand to five
hundred million dollars. Amortization charts and graphs can be displayed for
both US and Canadian mortgages. Options for monthly or bi-weekly payments are
available with this innovative, java-enhanced calculator.
THE COST OF BORROWING MONEY
NAME______________________________________________
“Buy now, pay later” has become the shopper’s motto. But just what are the
costs of using credit or borrowing money?
Below are three examples which describe teenagers using credit to buy
something. Follow the instructions, using the simple formulas given at the end
of each example.
EXAMPLE #1:
After six months of saving
his money, Barry has finally put aside enough to buy a 35 mm camera. After
shopping around, Barry finds the camera he likes on sale at a major retail
store for $220. In addition to the sale,
the store is also offering a special buyer’s incentive plan to encourage
shoppers to purchase the camera. Cash customers can put $50 down and then pay
only $18 a month for a year to pay off the camera. Although Barry has enough
money to pay for the camera, he is tempted to make his purchase on the store
plan so that he has extra cash to buy film, accessories and developing supplies
to go with the camera. What will be the
total cost of the camera if Barry purchases it on the special plan, and what is
the finance charge Barry will be paying to purchase the camera on credit?
FORMULA:
STEP A:
AMOUNT
OF EACH PAYMENT X NUMBER OF MONTHS TO BE PAID DIVIDED BY DOWN
PAYMENT = COST OF CAMERA.
STEP B:
TOTAL
CREDIT PRICE - RETAIL PRICE = FINANCE CHARGE
EXAMPLE #2:
Art has been saving the
money he earns working part-time to buy his own car. He has $1,500 to put down and plans to
borrow $3,000 from a bank in order to buy a car for $4,500. The bank has agreed to loan Art the money he
needs at an interest rate of 15.25% (.1525).
Art is required to pay off the loan within three years. How much
interest will Art pay on the loan over the three-year period, and what will be
the total cost of the car?
FORMULA:
STEP A:
AMOUNT
OF LOAN X DECIMAL FRACTION OF INTEREST RATE X
NUMBER OF YEARS OF LOAN = FINANCE CHARGE DIVIDED BY AMOUNT OF LOAN =
TOTAL COST OF LOAN.
STEP B:
TOTAL
COST OF LOAN + AMOUNT OF DOWN PAYMENT = TOTAL COST OF CAR.
EXAMPLE #3:
Megan wants to buy a brand
new bike. Her father has agreed to lend
her the $240 she needs to buy it, but to assure that Megan takes the loan
seriously, he told her that he would charge her interest on the loan. Megan agrees that she will pay her father $12
a month for the next two years to pay off the loan, making the final cost of
the bicycle $288. What is the interest
rate Megan’s father has charged?
FORMULA:
STEP A:
FINAL
PRICE OF BICYCLE - RETAIL PRICE OF BICYCLE = TOTAL FINANCE CHARGE DIVIDED BY
NUMBER OF YEARS OF LOAN = ANNUAL FINANCE CHARGE.
STEP B:
RETAIL
PRICE OF BICYCLE DIVIDED BY ANNUAL FINANCE CHARGE = INTEREST RATE.
