Bell tower

Financial Literacy

About the Game:

The Beta Alpha Psi – Beta Eta chapter Financial Literacy Program is an interactive program designed to teach students important budgeting skills to use throughout their lives. All you need to know about the game is included here and it is easy to set up. Enjoy the game!

Directions:

This budgeting game is an interactive exercise that simulates the financial choices a first-year college student will typically make. To begin, randomly assign (hand out cards) participants their basic expenses for rent, cable & internet, and cell phone. These are seen as unavoidable expenses that must be paid. However, as you can change your situation in life, give the students a five minute period to try and trade their cards if they are unhappy with what they were "dealt."

Next, hand out the mock checking/savings account forms. Have participants note a beginning balance of $1,500 in their checking account and $250 in their savings account.

Next, they will add their rent, cable & internet, and cell phone expenses to their checking account to determine how much money they will have to spend during the purchasing period. Advise participants to deposit money into their savings accounts if they want to set some aside.

After setting up the store stations (project display boards), allow participants to visit the stations where they must make choices regarding the quality and cost of goods and services they must purchase (clothing, transportation, food), and may purchase (electronics and entertainment). Participants mustpurchase one item from the essential clothing, transportation, and food stations. Purchasing from the electronics and entertainment stores are optional and can be as little or as much as desired. For each purchase made, give participants a receipt, which is later used to track their expenses in their checking accounts.

During the purchasing period, randomly deliver "life events" (red and green cards). Handing out more red cards than green cards emphasizes the importance of budgeting. After the purchasing period, participants add their purchases (from "receipts") to their checking account and determine their final balance. Discuss different strategies used by participants and how "life events" can impact budgeting.

As a note, assistance will be needed to present the game. There will need to be "clerks" at each station to hand out receipts, as well as the life event cards. If no assistants are available, students may be persuaded to man the stations for a portion of the purchasing period to earn additional "income." Presenting the game works best as an interactive way to cement budgeting ideas after initially covering the material conceptually in class.

Materials needed in the game (click on links to download materials):

  1. Project Display Boards (5) with pictures of different products for sale
  2. Receipt Cards

    Products for sale on the Project Display Boards will vary in quality (price). Give participants receipt cards corresponding to their purchase

  3. Housing, TV & Internet, and Cell Phone bill cards
  4. Life Event Cards
  5. Printouts for bank accounts (checking/savings)

Video Explanation of the Game

Tips For students:

  1. Get creative! If you aren't happy with your situation during the game try to make changes. Push the limits
  2. Remember that you must make a purchase from the clothing, transportation, and food stations. You may want to visit these first
  3. Take advantage of the 5 minute trading period for your Housing, TV & Internet, and Cell Phone cards. If you're not happy, make a change. Once the time is up though, you will not be allowed to trade anymore!
  4. Don't lose your receipts! You will need them to record your purchases in your bank account.

DOs and DON'Ts:

  1. Think carefully before you make a purchase. Do you really need it or is it just a nice to have?
  2. Always keep your current account balances in mind
  3. Try to set goals beforehand on how much you want to save

FAQs:

  • Q: How old do you have to be to open a checking account?
    A: To open a checking account on your own you typically have to be 18 years old, but you can jointly open an account with a parent at any time.
  • Q: Do you always have to pay a monthly fee to have a checking account?
    A: No! You can find checking accounts that don't charge a monthly maintenance fee. For example, Bank of America offers an "eBanking" account with no monthly fee and no minimum balance. You may have to do some research to find such accounts, but they are out there.
  • Q: Why can credit cards get you in trouble?
    A: Credit cards let you spend money that you don't have. They can be useful if you want to buy a skateboard on Monday, but won't have the money to pay for it until Friday. However, they can be devastating if you don't get the money you were expecting. When this happens, you will owe the amount you paidplus interest on that amount, which will continue to grow until it is paid for.
  • Q: What is interest?
    A: Interest is a piece of some larger amount, representing the cost of borrowing or lending money. It is usually represented as a percentage. For example, 1% interest on $100 is $1. So if your savings account earns 1% interest each month, the $100 in the account will increase to $101 (the $100 you had plus the $1 you earned from interest) at the end of the month.
  • Q: I have a savings account. Now what?
    A: Savings accounts are a great way to start laying aside money for the future. Financial experts recommend setting aside at least 10% of your income every month. A savings account can be used to lay up for emergencies, purchase a car, pay for college, buy a laptop, or something else that may be important to you.