Saturday, December 09, 2006

Financial Literacy Project (or, screwing over the freshmen for fun and profit!)

I have the beginnings of an idea for a project to do later in Spring, for the exponential functions unit, in conjunction with our freshman College Readiness classes.

I was thinking about when I was a freshman in college, and how there were always tables set up by credit card companies who would attract crowds of freshmen with such irresistable items as Citibank t-shirts and Bank of America frisbees. They would give a credit card to just about anyone. There have been lots of reports about how so many college students get into incredible credit card debts because they don't know how to manage a credit card, and they are preyed on by these vultures.

I would like to run a simulation, where my Algebra 2 students run their own credit card companies. We will examine what interest means, and the types of predatory practices credit card companies engage in (i.e. a low introductory rate that suddenly changes for various reasons, allowing very low monthly payments, etc.). Then, the students will design their own cards and draw up a credit card offer. They will then set up booths in the school one day, and the freshman College Readiness students will be asked to sign up for at least one card (my students will need to come up with ways to attract their business with their own exciting promotional items... I'm predicting free bags of hot cheetos and the like).

Then, for the next few weeks, in the College Readiness classes (who will be in their Financial Literacy unit), the freshmen will have a given job and salary, mandatory expenses, and optional expenses. They can use their credit card at will, and pay as much of their balance as they choose. To make this more exciting for the students, I'd like to think about how to tie their decisions to real-life consequences (i.e. if you buy an iPod with your credit card, you earn the privilege to listen to one during tutorial time, or if you go on a shopping spree, you earn a free-dress day). Students will be responsible for tracking their budgets and payments.

Then, after a few weeks of the simulation, my students will collect the data and calculate how much the freshmen owe. Whichever credit card company made the most money will get some sort of prize (maybe I'll take them out to lunch or something). Though this may seem counter to the spirit of the project, I'd like to do this for two reasons. One, by thinking of ways to be as deceptive as possible, students will be more attuned to potential deception later when it really counts. Two, they'll enjoy "being bad" (which will increase engagement) and it's a safe environment in which to play the bad guy.

My students will use this simulation as a springboard for the exponential functions unit, compounded interest, and so on. To wrap it up, they will put together a presentation to make at our weekly school assembly where they report on the results of the simulation, explain why we did it, and include a note of caution to all students about the dangers of using credit cards.

The logistics are not thought out yet, but I think this has the potential to be both fun and very educational. Any thoughts?


Darren said...

This is an *exceptional* idea. Run with it--and let us know how it goes.

Dan Wekselgreene said...

Thanks. I'm going to have to do a lot of careful prep work to make sure this doesn't become a waste of time. I'll post updates as I develop it, and when it's done, I'll post the project materials on the ILoveMath website.

Dan said...

Definitely tie in those real-life bonuses (music, dress days) because otherwise purchasing power is less meaningful to the kids if they claim to "buy" something but never actually receive it. And besides, who doesn't like bribing children to learn math? :P

Anonymous said...

Excellent. When I teach my undergrads how to create amoritization tables, I always have students who are shocked to find that not all of their loan payment goes toward the principal, and that they are paying toward the interest.

Dan Wekselgreene said...

RWP - good point. I hope I'll have time to take students to the lab and teach the basic of spreadsheets. Then they can really play around with what happens when you change interest rates, monthly payments, and principal amounts. Managing their student loans is something they will all be dealing with relatively soon.

Anonymous said...

Mathmatics Teaching in the Middle School had an article on an activity a little like this (though from the other side--the credit card user's side):
November 2000, Volume 6, Issue 3, Page 150
I remember the article as being a really fun read with good ideas for how to put the activity together. I reccommend it to you and/or the teacher of the students who will be using the credit cards.

I'm looking forward to hearing how it works out!

Dan Wekselgreene said...


Thanks for taking the trouble to find that article. I downloaded it and I think it will be a nice starting point for our project.

Anonymous said...

I have been posting a few posts on my blog that touch on the importance of financial literacy and the lack of such teaching in most schools. It is heartening to know that there are now greater awareness in teaching financial knowledge to the students from young.
Great work and wish you all success!