Students in grades K-12 will have the opportunity to learn basic information about earning money, saving and budgeting with a new, free financial education program developed by Vanguard.
My Classroom Economy will allow children to “rent” or “buy” their desks with money they earn by doing a classroom job or earning bonuses through exceptional performance. The programs uses fun, experiential learning and a simulated microeconomy to teach kindergarteners through twelfth graders how to make wise money decisions.
The program was designed by award-winning educator Rafe Esquith and meets many of the common core state curriculum standards developed by the National Governors Association Center for Best Practices and the Council of Chief State School Officers, according to Vanguard. It also meets several of the personal finance education standards developed by the Jump$tart Coalition for Personal Financial Literacy.
“The basic tenets of financial responsibility—saving adequately, living within your means, and delaying gratification of purchases—are important at any age. But if learned early on, these principles can help more young people create financial security as they become older and need to make more difficult financial decisions,” said Vanguard CEO Bill McNabb. “My Classroom Economy is designed to help teachers supplement what many parents are doing at home to teach their children smart money skills. Outreach of this type is a natural extension of Vanguard’s long history of providing ‘plain talk’ financial and investor education.”
The program is free to schools across the United States and includes an instructional website, www.myclassroomeconomy.org, featuring teacher guides and downloadable student materials. If students save some of the money they earn in class, they can spend it at a class store or auction where grade-appropriate items like markets, small toys and lunch with the principal are sold.
Students assess their budget, bills, and income to determine how much they can spend. Alternatively, they can choose to save money by not buying at all or delaying purchases. With their savings, they can eventually buy their desks outright and thus stop paying rent. Supersavers can also purchase the desks of other students and earn rent themselves.
The program adapts to the increasing sophistication of students as they grow older. For instance, middle school students begin paying for electricity and taxes in addition to their rent, requiring them to budget for multiple expenses.
Vanguard, headquartered in Valley Forge, Penn., is one of the world’s largest investment management companies. Vanguard manages more than $1.84 trillion in U.S. mutual fund assets, including more than $200 billion in ETF assets.