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.
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