While economics is considered part of the elementary social studies curriculum, textbooks and other social studies programs often neglect to incorporate economic instruction. The classroom economy can fill this void while serving as a fun way for students to act as both consumers and economists in a real world setting. A well-run classroom economy has the ability to teach students economic principles while also serving as a behavior management system in which students are essentially responsible for themselves.
READ ON to learn about how I set up my classroom economy, watch a VIDEO of what it looks like in my classroom, and download tons of PRINTABLES that you can use to implement a classroom economy of your own!
Watch Our Classroom Economy in Action
How I Implement an Economy in My Classroom
My detailed classroom economy unit plan is available on the Scholastic Web site. It outlines specifically how I run a successful economy in my own classroom. However, you will find additional information and photos in this post as well as highlights from the unit.
Lesson 1: Introducing the Classroom Economy (Highlights From My Online Lesson)
From the beginning of the school year, my students are immersed in our classroom economy. While it certainly runs itself after a while, students must first learn "What is an economy?" I use trade books, online resources, and class discussions to teach my students a bit about the history of money and the purpose of an economic system. Before implementing an economy, students must first become familiar with the economic system we have in place in our country. See my classroom economy book list for trade books that work well for introducing students to the concept of an economy, and read the full "Introducing the Classroom Economy" lesson plan.
Determining Classroom Jobs & Salaries
Once students understand that they will be participating in a classroom economy, it is important to discuss how they will earn money. Just as adults earn money by doing jobs in the real world, students will also be expected to complete jobs in the classroom as a way to earn money. We spend time brainstorming the jobs that students feel are necessary in order to make our classroom run smoothly.
Check out my list of common classroom jobs.
Once the jobs are determined, students vote on how much money each job should earn. Students rate each job based on its importance, time commitment, level of difficulty, etc. The total points are tallied to determine the jobs that should earn the highest daily salaries and those jobs that should earn the lowest daily salaries. Once students determine the top salary amount, we assign salaries based on the payroll voting results.
The specific classroom jobs and their assigned salaries are posted in the classroom. The jobs are changed each day so that students move through jobs quickly. Students are paid for their jobs at the end of each school day if they have been completed successfully.
Credits and Debits
I do not give students actual money each time they earn pay. I use a system called "Credit and Debits." Each student has a credit and debit log sheet where they are given tallies for the money they earn. Whenever a student earns a dollar, it is marked as a single credit in their log book by the teacher using a red pen. This makes for a quick and easy way to pay students at the end of the day without having to count out bills. Learn how I use the credit and debit log books, and download credit and debit log sheets.
There are many ways to earn money (credits) in our classroom economy. Hard work, responsibility, good behavior, and academic achievements are rewarded in our classroom economy. Of course, poor behavior, lack of responsibility, and lack of effort are ways students can earn debits. Debits are subtracted from the total amount of money a student may accumulate during a given month. As a class, we create a list of ways students can earn credits and debits on a daily basis. Of course, as the teacher, I can choose to give credits or debits for anything I deem appropriate throughout the day. Below is a sign that hangs in our classroom as a reminder to students about how many credits they can earn for specific accomplishments and how many debits they earn for irresponsible behavior.
Lesson 2: Grand Opening (Highlights From My Online Lesson)
Part of implementing a classroom economy is having a purpose for the money students earn throughout the school year. In my classroom the purpose is the privilege of shopping at the class store. Once a month, students are able to spend their money on a variety of goodies that I collect from dollar stores, request as donations, and purchase in bulk amounts online. Read the full "Grand Opening" lesson plan.
Before students can shop at the class store, it is important to determine what students will use for money. You can use play money, but it is exciting for students to have a special type of money used solely for the purpose of your classroom economy. Each year our classroom money is named in relation to our class theme. For instance, this year our money is called "Captain Cash" to go along with our "Pier 13" theme. Students can help determine the name of the money and even create designs for the $1, $5, $10, and $20 bills. Students can then vote to decide which design they want for each denomination.
Download the blank Money Template (for students to use to design their own money).
Before the store opens for the first time, we read about the U.S. Mint to learn how money is made. After copying each bill on a different color of paper, we turn our classroom into a mint for an hour as students help cut the money that will be used throughout the school year.
The Class Bank
At the end of a pay period, students find their total amount earned by adding up their credits and subtracting their debits. Students then receive a check for their total amount of money earned. They take the check to the class bank where one or two students cash the checks and give their classmates the appropriate amount of cash. Read more about setting up a class bank.
In addition to earning money, I also create gift certificates for special occasions. Students receive gift certificates on their birthdays, as holiday gifts in the classroom, and for meeting their monthly reading goals. The gift cards can be used like cash at the class store.
Download Christmas Gift Card (You must have Print Shop installed to open this file)
Download Valentines Day Gift Card (You must have Print Shop installed to open this file)
Students keep their money in plastic index card holders that are used as wallets. They also keep their gift certificates in the wallet with their cash.
The class store consists of colored baskets filled with goodies for students to buy. Each basket is labeled with a price. Students use small shopping baskets to store the things they buy as they are shopping. I only allow four students to shop at one time. The rest of the class is working quietly at their desks on a purposeful activity often related to a previous economics lesson. Read more about setting up a class store.
Students use a shopping log to keep track of the items they are planning to buy. They must find the total for the items they are purchasing and show it to the cashiers when they check out.
Download a shopping log template.
Two students work as cashiers to check out student shoppers at the class store. The cashiers use oversized calculators to double-check each student's shopping log. This job gives students good practice making change, a math concept that can be tough for third graders. Cashiers also keep track of what each student spends so that they can give that information to the Student Economist (see lesson 4).
Download money spent log.
Lesson 3: Using the Class Store to Teach Economic Principles (Highlights From My Online Lesson)
While the classroom economy is used as a form of behavior management, its real purpose is to help students learn necessary principles of economics. You can check out my suggestions for using the class store to teach students about spending vs. saving, opportunity cost, inflation, scarcity, the laws of supply and demand, and how advertising affects the law of demand. Read the full "Teaching Economic Principles" lesson plan.
Additional Economics Lesson on Inflation
Inflation is another economic concept necessary to teach students, but it is not included in the lesson plan referenced above. I teach an inflation lesson once students have earned quite a bit of money. Oftentimes students choose to save up their money over time. For that reason, many students become "rich," and they have lots of money to spend at the store. When this happens, I raise the prices at the class store without forewarning the students. While they are understandably disappointed with the increase in prices, it is a great way to explain the concept of inflation. This lesson shows students that the value of our class money decreases as the volume of money earned increases. I can't continue to sell my inventory at low prices when the students have earned so much money.
Check out my economics book list that includes a variety of trade books that can be used to teach economic principles including scarcity, supply and demand, spending vs. saving, opportunity cost, and consumer decision making.
End of the Year Class Auction
Auctions are another great way for students to take part in a real-world economic activity. At the end of the year my students are able to participate in a silent auction by bidding on larger ticket items and class mementos. I ask parents to donate "desirable" items that are new or gently used for our end-of-the-year auction. I also include items like autographed class pictures, class books, hallway signs, and other theme-related classroom decor that might appeal to my students. Each item has its own bid sheet, and students are able to bid and outbid each other to get the items they most desire.
Lesson 4: The Student Economist (Highlights From My Online Lesson)
Each time the store is open, a selected student economist will study consumer behavior and economic trends based on his or her knowledge of previously taught economic principles. The student wears a special visor labeled "Economist." Read the full "The Student Economist" lesson plan.
While students are shopping, the economist observes consumer behavior and keeps track of what she notices on the "Economist Report" sheet.
The student economist enters the amount of money each student spends each month into an Excel spreadsheet. Once the information is entered in the spreadsheet, we can easily create graphs to show the class spending trends.
The student economist uses the information he or she collected while observing consumers at the store to give an oral report to the class on the "state of the economy." This monthly economics report ensures that students are continuing to use economic terms and that the store continues to be a means of ongoing economic education throughout the year.
Other Economics Resources on the Scholastic Web Site
How Can I Help You?
Feel free to post any questions you might have about my classroom economy. I am here to help!