One of my favorite things I did in all of my time in the classroom was a classroom economy. It started because of a research project I was required to do in my graduate program and I continued it all my years of teaching. A classroom economy tied with a behavior system allowed me to teach my students financial literacy and reward students for their behavior. It was a win-win!
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If you are a reader, keep on reading to see why and how I implemented a Classroom Economy System in my classroom. But maybe you are more of a listener, then you can head to Episode #36 of the Simply Teach Podcast all on my Behavior Management Economic System!
Why a Classroom Economy
This idea came about from the book Teach Like Your Hair’s on Fire by Rafe Esquith. I can’t even remember why I had to read his book in undergrad, but I did. And he had this whole chapter on his classroom economy and I thought it was ahhh-mazing.
I grew up in a home where money management was super important. When I turned thirteen I started getting an allowance. With said allowance, I had to fill out this ridiculous check register of how I spent my money and turn it into my Dad every few weeks. I thought it was stupid.
Fast forward a few years to when I realized just HOW valuable those check registers were. My parents taught me SO much about how to make decisions about money, what was wise and what wasn’t. I am very aware of the privilege I had growing up in a home that taught those skills.
I want all students to have access to learning those same skills I did. Thus, I conducted research on the effects of a Classroom Economy for both behavior management purposes and to see how students responded to personal financial literacy.
Classroom Economy Research
TEKS and standards are important. But life skills are SO much more important. The economic system allows me to manage behavior, but more importantly, teach these kids lessons about money. In my classroom, they have the opportunity to fail without any real consequences. I want them to make poor choices where I can coach them and support them instead of in real life with real money.
I am proud to say that this behavior system DID increase students’ behavior but also their awareness of money and spending habits.
According to the research…
So, as you can see in the graph above. I conducted research for ten weeks and over the ten weeks, the number of students who paid rent on time increased while the amount who purchased items from the store decreased because they were saving their money!
How to Implement a Classroom Economy
Students can earn money two ways.
Behavior- When a student is working hard, doing their work, walking in line quietly, etc. I reward them with $1. Sometimes up to $5 if they are doing something really awesome like picking up trash in the classroom voluntarily.
Classroom jobs- All my students have classroom jobs. That is a really big part of this economic system. I talk about my classroom jobs in this post.
Students get paid every Monday for their classroom job. I pay them $10 for their job each week. In Esquith’s book he talks about paying kids according to their job. I think this is great, but let’s be real. Ain’t nobody got time for that.
If a student does not have a job that week, I pay them $5 for just being there. They need money to function in my classroom so I think of this as their “paid vacation.”
On Wednesday I allow students the opportunity to go to the store. They can choose from an assortment of items that we brainstorm at the beginning of the year.
Here is a picture of my classroom store from my first year. You can see I have simplifiedÂ as the years have gone on.
3.Students Pay Rent
Here is where the real learning happens.
On Friday, my students are expected to pay rent for their desks. I charge them $5 for their desks each week. If they are not able to pay me their rent money, then I automatically deduct it from their check on Monday + $1 in interest.
Students even have the opportunity to buy their desk. This is a HUGE concept for kids to grasp. Once they purchase their desk they no longer have to pay rent. This helps reinforce the concept of saving money for big things instead of spending money on every little thing that peaks their interest. After a kid buys their desk and they aren’t paying rent, they are earning an extra $5 each week because they are not spending it on rent. I have even had students purchase other desks and EARN $5 each week from rent money. Talk about a life lesson!
Now I know that in real life even if you own something, you still have bills and a mortgage to pay, but that’s too much for second grade. If I taught fifth or sixth, I would incorporate this into the system.
And then sometimes this rent thing gives great opportunities for persuasive writing topics.
(His letter worked. I lowered rent from $7 to $5 each week.)
When I was in third grade I gave the kids a check register to keep track of their money. I didn’t do it in second because I think it is too much. I stapled it into their Math Journal. When they would get paid on Monday, it was their responsibility to record that in their check register. They would also record the money they spent at the store and on rent.
Along with the check register, I listed a couple of short questions asking their opinions on spending money. This was mainly for the research aspect but it was also really enlightening and helped me know what I needed to reinforce with my students.
I introduced this by reading economic books to the students and discussing key vocabulary like spending, deposit, withdrawal, interest, etc.
These conversations brought up the topic of banks and how they work. I actually had my third grade class request a bank so that they could invest their money! I was floored. This was something I never even anticipated! Again, it was third grade so I kept it easy. Students could earn $1 in interest each week for their money in the bank.
I still use the bank in second grade but have not yet introduced earning interest. However, when students bring me money to put in the bank I require them to say things like “I would like to deposit money into the bank.” Or if they are taking out, “I need to withdraw money from the bank.” I am reinforcing those Personal Financial Literacy TEKS all throughout the year.
Classroom Economy + Behavior Management System Packet
I am super proud of my economic system. I think it is so valuable and my kids LOVE it. They are usually most excited about going to the store and they NEVER let me forget about it.
If you believe in the importance of teaching your students about money and personal finances, I would encourage you to implement a classroom economy in your classroom. Start out small, pay kids for their behavior and let them buy items from the store. This alone is huge! Especially for those kinders and firsties!
As you progress through the year, add different components. First the concept of rent. Then you can introduce the bank. If you teach an upper grade, I would recommend using the bank and allow students to earn interest based on a percentage of the money invested in the bank. You will be teaching SO many concepts here; financial literacy, financial terms, percentages, spending habits, interest and on and on and on.
I have created a step by step Classroom Economic and Behavior Management System to help you implement a classroom economic system. Included in this packet is classroom money, check registers, classroom reward ideas, surveys for the students, and even classroom checks to teach your students how to properly fill out a check.
I also have some more specific information about how to get started with this including an implementation plan to introduce your classroom economic system week by week.
Looking for more resources on Classroom Management?
5 Important Behavior Management Plans to Develop
Simply Teach #11: 4 Must Have Behavior Management Plans
Simply Teach #36: Behavior Management Economic System
All About the Classroom Economic System
Until next time,
If you found this helpful, make sure to pin it to your Pinterest board so you can refer back to it or so other teachers can find it!
What do you you if the students are Absent when rent is due?
Kelly Michelle says
If their money is in the online bank, I just withdrawal it because they know it is due on Monday. If they are paying cash for rent, I’ll get it from the next time I collect rent (so they pay double).
Thank you! I am nervous but I really want to implement this system. I am currently using class dojo this year and I feel like something is missing. I’ve always been curious about how to implement classroom economy. I would LOVE a post or podcast on your thoughts on class dojo. I remember a podcast how you implement it classroom economy with dojo, does your classroom economy bundle talks about it using class dojo with classroom economy?
Kelly Michelle says
Thanks for the recommendation! I think class dojo is great! At this time, it is not in the Classroom Economy, but it is something I can consider adding 🙂