The Checkbook

Project
How to Start an Authentic Classroom
Economy with your Elementary or
Middle School Students
By Mack Lewis
Kids today cant balance a checkbook! Who knew? Of course we all did, so
when the Obama Administration implemented its financial literacy challenge, no one
was surprised when American kids did poorly. Given the tumultuous world economy,
financial literacy is certain to be a hot topic in education circles. In fact, talking heads
such as US Secretary of the Treasury, Timothy Geithner, are already calling for schools
to put the teaching of personal finance right alongside the three Rs. You can give your
elementary and middle school kids a head-start by creating a classroom economy using
checkbook registers donated by your local bank.

The Checkbook Project pumps life into a

classroom the way the stimulus package
pumped bucks into GM. It improves test
scores, inspires the entrepreneurial spirit,
and even turns thugs into pussycats. In
my case, it has motivated kids to clamor to
be in my class, to beg parents to start the
same system at home, to open real savings
accounts downtown. And nearly all my kids
count their checkbook as a defining
memory of 5th grade. Simply put, its a more
complex form of class money without the
bother of handing out Monopoly bucks
(which often get lost and stolen). But its
also much more. Its a real world
simulationan economic infrastructure
that promotes work ethic, practical math
skills, and you guessed it, financial literacy.

Materials: Ask local banks to donate

check registers and, if possible, checkbook

Covers. Ive also developed a series of re-

2010 Mack Lewis. All Rights Reserved

lated forms--tax reports, rental agreements,

and morewhich are currently available for
free on my website at mackowiecki.com.

Passing Work Earns Checkbook

Cash: Students get paid for their work.

What and how much depends on what you

wish to emphasize. I pay $1 per point on
standardized tests, $5 per night of verified
homework reading, $1 per percentage point
on chapter exams, and usually $1 per
question on lesser tasks. I value projects
and compositions based on the amount of
work required to achieve results, but I dont
pay anything for practice work or rough
drafts. Nor do I pay for failure, so if a
student does not meet on a state test, for
example, he or she does not get paid. I pay
immediatelysimply by writing the dollar
amount at the top of the assignment or
instructing a student to make an entry in
his or her checkbook.

www.MackLewis.com

Checkbook Project Page 2 of 5

Kids Get Paid for Attending:

Come to call and you get paid ($20 per
day). Kids also get paid for laps during our
Jog-a-thon, for special awards, and for
anything else I want to emphasize. How
much and what you pay is up to you. Since
you have an unlimited supply of this
imaginary money, there are no limits on
what you can reward. You merely have to
make sure you maintain a reasonable
balance between income and expenses so
that students dont stockpile too much cash.

Class Jobs: All those class jobs

teachers usually assignline
leader, classroom
custodianthey all
get posted as
employment
opportunities.
Im careful not
to post too many,
and once someone
lands a job, the rule
is authorized
personnel only. When
applying, students
submit a letter of
application and a simple
resume (I post samples of
each). Ive also created a fun
job application, giving students
experience with the sometimes silly
questions and too-small spacing on the real
ones theyll someday encounter when
seeking that weekend job at McDs. In the
classroom, I pay from $100 to $150 a week,
and I require employees to represent The
Company in a positive manner. Students
who get into trouble or perform poorly face
real world consequencesprobation or
dismissal.

Desk Rents and Fines: Once a week,

students pay rent for their desks and

cubbies ($100 per week for desks and $25
for cubbies with periodic rent increases of
from 10 to 25%). Theyre also charged fines
2010 Mack Lewis. All Rights Reserved

based on our behavior system (from $10 for

a first offense to $100 for referrals to the
principals office.) Theyre fined $5 for each
tardy, and I also sometimes assess minor
fines for incomplete work or messy desks.
Ive been known to fine the entire class for
violating our noise ordinance or for
community litter ($1 for each piece of trash
on the floor after clean-up, for example).
What
you require students to rent,
buy, and pay for is up to you.
The more complete your
classroom economy, the
more powerful it
becomes.

The Homeless
Shelter:

Students who
cannot pay rent
occupy the
homeless
shelter, a
single desk
near the front of
the room shared by
all those without funds.
These students also keep all
their belongings in a paper bag.
This might seem a bit harsh, but I tell
them (and their parents) that Id rather
have them learn about the connection
between work ethic and financial security
here in 5th grade than learn it on the street
as young adults. After all, in order to make
rent, a student needs only to show up to
class consistently and stay out of trouble. Of
course, my shelter kids are the ones who
most need to learn this lesson (and they
often do; some of my worst students have
become model citizens). Students move out
of the shelter as soon as they have enough
money, and I sometimes arrange emergency
loans to help. In one recent class, a student
started a non-profit organization to assist
getting the homeless back into desks. He
collected charitable gifts from students,
keeping a separate checkbook for the

www.MackLewis.com

Checkbook Project Page 3 of 5

charity, then dispersed the funds to

students suffering from unusual
circumstances. He did this of his own
volitionhows that for validation!

The classroom economy takes on a life of its

own as kids originate new twists. All the
teacher has to do is say yes to a students
inspiration (and then create that real world
bureaucracy to control it).

Desk Mortgages: Students also

purchase their desks. I start at $500,
charging 50% down and 2 or 3 equal
payments at 10% interest. The price of a
desk goes up periodically, jumping $100 at
a time every couple of weeks. Students can
also purchase their cubbies or lockers.

Spending Money: After

paying the mortgage, students
use their checkbook cash to
purchase treats, gifts, snacks,
and school supplies (kids
quickly learn the value of a
pencil or a glue stick). I
also auction items of
interest, often getting
hundreds of dollars for
mere trinkets (I then
turnaround and sell
the same trinket
outside of the
auction for just a
few dollars while
discussing how emotions
impact auctions and impulse shopping).
Many students also bring in items of their
own for me to auction. In those cases, I
charge a 10% commission.

Businesses: It never ceases to amaze

me how naturally kids start transacting
business. I have students who undercut my
prices on school supplies and checkbook
covers. Kids sell bookmarks, works of art,
homemade jewelry, and more. Before going
into business, I require students submit a
simple business plan and purchase a $10
business license, which I post on a specific
cabinet in the room. Kids also like to
advertise their business via signage. In
some years Ive charged for billboard
space, while in others Ive created a sign
tax when the room became too cluttered.
2010 Mack Lewis. All Rights Reserved

Real Estate Moguls: Students like to

become landlords, using their earnings to

buy unsold desks (usually those previously
rented by kids who have moved to the
shelter). They then rent the desk space to
their friends at a competitive rate, or
sometimes just maintain a vacation
getaway. This sometimes creates minor
behavioral issues, as kids end up
sitting in table groups that
dont always work for
them, but because the
teacher is ultimately
the real estate agent
making the deal, as well
as the government
regulator assessing fines
and fees, such problems are
easily controlled. One way is
to remind the new owner that
he or she is liable for the
behavior of his or her tenants. Perhaps
an eviction will soon follow.

Taxes: On Friday each week students are

required to file taxes. On the tax report they

list all sources of income and their total for
the week (they check off each item from
their checkbook as they enter it on the tax
form). They multiply their income by the
current tax rate. I begin the project at 10%
(.10) for Income Tax and 5% (.05) for Social
Security, but I raise it as I see fit. I also
audit studentsusually one per week
which means I examine their tax reports
and run through their registers with my
calculator. Errors (in their favor) result in
corrections and whopping fines. By
reminding students that theyre subject to
audits and fees, they work harder to make
sure their reports and registers are
accurate. The tax report, by the way, is the

www.MackLewis.com

Checkbook Project Page 4 of 5

only paperwork handled or recorded by the

teacher. Our classroom economy isnt a unit
study or a themeits an underlying
infrastructure. I set aside an hour each
week to pay for attendance and homework,
for students to pay rent, and to complete tax
reports. Otherwise, it all just happens as it
does in real liferoutinely.

Bankruptcy: Students who deplete

their bank accounts face overdraft fees of

from $10 to $25 (per day or incident, your
choice). Students who cant accurately
maintain their registers have to pay an
accountants fee of from $5 to $50 to have
the teacher correct it for them. Students can
accept non-taxable gifts or loans from
friends or the teacher, which dont count as
income (though any interest earned by the
lender does). Despite the myriad ways
students earn money, youll still have a few
who get so far in the hole they have but one
option: bankruptcy. In such cases, the
checkbook is recalibrated by the teacher,
their balance returns to zero, and perhaps
their social studies grade takes a hit. Once
again, bankruptcy may seem harsh, but
better to make their mistakes on a simulation than in the real world down the road.

Lost Checkbooks: Losing a checkbook

is like having someone swipe your debit
card, so I discourage students from take
their registers home and I remind them to
guard their checkbooks carefully. When I
find one left out after the students depart,
Ill sometimes right in a mysterious charge
or two, simulating where someone has
made bogus charges against the students
account. When some hot shot boy discovers
he spent $79.95 at Veldas Wig Shop, it
creates quite a stirand a lifelong lesson.
Also, if a student cant find his checkbook,
he cant receive payments or income.

Ending Balance: Ive found it best to

run this project for only a portion of the
school yearusually the last half or the final

2010 Mack Lewis. All Rights Reserved

trimester. At the end you can acknowledge

the students with the highest balance. These
will typically be your top performers
anyway, but every once in awhile youll be
surprised by some otherwise unruly kid
who was highly-motivated by cash. Most
kids are proud of their final balance,
whether theres something to spend it on or
not, but it doesnt hurt to have some things
on which students can blow their savings.
Ive allowed students to purchase afterschool ice cream or movie parties, offcampus lunch trips, and movie tickets. Ive
also found items at garage sales, thrift
stores, and around the house on which kids
were happy to spend $500. Again, finding a
balance between credits and debits is
significant. In the end, a kids checkbook
balance says a lot about who he or she is as
a student, and quite possibly what he or she
is headed for as an adult. I often tell folks,
If want to know how your child is doing in
class, just take a look at her checkbook.

Discussion: Nearly everything

associated with The Checkbook Project
results in a discussion about real world
experiences and consequences. These
discussions are perhaps the most significant
part of the learning process. What do our
taxes pay for? Why do banks charge
overdraft fees? What are the pros and cons
to buying rather than renting? What is
impulse spending? Why is it important to
budget? As you work with The Checkbook
Project in your room, youll no doubt find
lots of new ways to tweak it and expand it to
further simulate real life. Have fun with it!
For more info and reproducible forms to
use with the Checkbook Project, visit my
website at www.mackowiecki.com. For
more information about financial literacy,
visit www.challenge.treas.gov
Mack Lewis is a National Board Certified
teacher and a Scholastic author.

www.MackLewis.com

Checkbook Project Page 5 of 5

FORM 15-5 --

Tax Report

1. Name:
2. Date:
3. Income Since Last Report

(List all income sources and amounts):

Dollars

Cents

3a

________________________________ $

3b

________________________________ $

3c

_______________________________

3f

________________________________ $

3g

________________________________ $

3h

________________________________ $

3i

_________________________________ $

3j

_________________________________ $

3k

________________________________ $

3l

_________________________________ $

_______________________________ $

4.Total of additional items from back of this form: $

5. TOTAL INCOME FOR PERIOD: $

3d ________________________________

3m

Lump like items

together as
single amounts.

Taxpayers with
sloppy
handwriting or
crooked
columns must
attach Form
XP-20 and will
be subjected to
audits, fees,
and penalties.
Check here
if that applies
to you!

.
.
.

----------------------------- Section II -- FIGURE YOUR TAX ---------------------------------6. INCOME TAX (Multiply the amount on line 5 by _____ %):

7. SOC. SEC. TAX (Divide the amount on line 6 by 2):

8. YOUR NEW ACCT BALANCE

(After both taxes deducted):

9. Sign your return: ________________________________

2010 Mack Lewis. All Rights Reserved

www.mackowiecki.com

Check this box if claiming P23-7

exemptions and include Form 219b

Checkbook Project Page 6

Sample Checkbook Register

Create an overhead transparency of this sheet to show students
an example of a well-maintained checkbook register. Note the
transaction number for each entry, the running balance, and the
correct use of the payment and debit columns. Detailed
transaction descriptions are helpful, especially those involving
another student. Its also a good idea to use the column when
completing tax reports. Finally, note the dark line beneath
transaction #177. This identifies the end of a tax period.
---------------------------------------------

Mack Lewis. All Rights Reserved

www.mackowiecki.com

Checkbook Project, Page 7

Checkbook Register
Create an overhead transparency of this sheet to teach students
how to maintain their checkbook registers. Most banks will
donate registers to classroom teachers, but if registers are hard
to come by, or if students need more spacious columns in which
to write, you can make photocopies of this sheet and simply bind
them together.

---------------------------------------------

Mack Lewis. All Rights Reserved

www.mackowiecki.com

Checkbook Project, Page 8