Chris E. Parrill, Sierra Grande, Blanca, CO

MICRO ECONOMICS - PERSONAL BUDGETING

Appropriate for grades 9-12.

OVERVIEW:  How many people can do their own income tax?  Know
about life, health, or property insurance?  Will?  How many shop
wisely for an automobile?  What about raising children?  Adoption? 
Infertility?  How many people compare interest rates?  Is it
better, financially, to withdraw money from your savings account
to pay for a large purchase of should you charge it?  How do you
figure compound interest?  All these questions and more are
discussed in a class entitled "Modern Problems".

PURPOSE:  The purpose of the class is to show students that life
in the "real world" away from the secure confines of home is
drastically different.  Decisions must be made with your spouse
or, if you're single, by yourself.  The outlook changes when the
money comes out of your pocket and not someone else's.

OBJECTIVES:  Students will be able to make their own "real world"
decisions based on expert lecturers from the insurance, banking,
law, real estate, and tax professions.

ACTIVITIES:  

 1.  Invite experts to the classroom and discuss the importance of
     their fields and how young adults can use them.  Topics
     included will consist of catastrophic insurance, bankruptcy,
     and income tax forms.

 2.  The students are "married" with children, jobs, bills, and a
     weekly budget.  The budget is due every week.  The couple
     must pay their bills and present a signed grocery receipt.

     Single people are single parents.  They have the same
     responsibilities and assignments as the "married" couples.

     Once a week each couple and each single parent draws a paper
     from a large container. This paper could be a bill, money
     received, or even pregnancy.  The money that comes in or has
     to be spent must be shown in the weekly budget.

     The budget must show a savings account that draws compound
     interest (that the student must compute weekly).

     Income tax statements are due April 15, and a check must
     accompany the form if money is owed.  If there is a refund,
     it cannot be added to the budget for six weeks.

     All single parents and married couples must take out a loan
     ($1000.00) at 12% simple interest.

     To make it more authentic, the students must carry dolls to
     represent their children while at school.  If they don't have
     the child they must pay for babysitting.  This teaches them
     responsibility.  If they neglect or forget their "child",
     "Social Services" will take them away.

 3.  Write a reaction paper about the above activity.  This gives
     the student insight into what has happened to them over the
     past several months.

RESOURCES/MATERIALS NEEDED:  Teacher creativity.

TYING IT ALL TOGETHER:  The ongoing activity must be kept
organized and students are encouraged to suggest topics for
discussion, which continues through the activity segment.

It is hoped that this activity will make the students' step into
the "real world" somewhat easier by providing them answers to
their questions, having experts explain various facets of life,
and giving them "hands-on" experience with life's little
surprises.