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Math Things | Extended Projects | Checkbook Project

This began as an exercise in decimal computation and went on to become a year-long project that we spent two weeks with early in the year, and then revisited for one or two days a month thereafter. There is a condensed version also presented here which does not require that massive investment of time early in the year.

(CCSS: 5.NBT.3; 5.NBT.5; 5.NBT.7)

Overview and Purpose

I used the checkbook project for about 20 years with students in Grades 5-8. Teachers will need to gauge how much their students are able to do. It’s as realistic a simulation of personal finance as I was able to come up with.

In this most recent rendition, the students receive an annual salary of $26,000. The scenario is that they have completed some form of training that has prepared them to obtain a useful full-time job. The annual $26,000 figure breaks down to $12.50 per hour for a full year of 40-hour weeks. If this figure is unrealistic for your student population you can adjust it in either direction.

The project has a dual purpose: (1) to provide an interesting and realistic context in which students use math and develop some decision-making and interpersonal abilities, and (2) to practice a number of specific math skills and concepts. These include working with decimal amounts, calculating percentages, and any number of problem-solving skills. It certainly fulfills those purposes. All of my own children were in my Math classes, and my youngest (now 22) recently remarked that the checkbook project was “the only thing I remember from school math.”

Actually, there was a third purpose. The “hidden curriculum” in this project was always for students to accept the need to allocate scarce resources. It usually fulfilled that purpose too.

There are a few value-based provisions in here. One is that students are charged $25 for an overdraft -- no

overdraft protection, in other words. Another is that students are required to donate $50 per month to a charity

of their choice. A third is that students are required to deposit $100 per month in a savings account.

Scope of the project

The full project involves a 16-page packet for each student. This

includes an explanation of each of approximately 20 expenses and a

discussion of income and deductions (taxes and insurance). There

is a lot of detailed information in here and teachers should not

underestimate the commitment involved in using the full project.

It takes several days to introduce because students need to research a number of expenses: house/apartment rental, car leases/loans, utilities, cell phone plans, etc., etc. Prior to starting, you will want to collect a couple weeks’ worth of classified ads from the local newspaper, so that students are looking at ads for actual houses, apartments, and cars, with actual prices, all from local sources. The Internet is obviously a good source of information too, but the newspaper allows students to search local resources without a lot of computer time.

Once students have determined their expenses, you can begin the

paydays. Students fill out a deposit slip for the amount of their take-

home monthly salary, enter the amount in their checkbook registers,

and begin to write checks to pay their bills. You will need to give a

certain amount of direct instruction in filling out checks and deposit

slips, but after a while they'll get the hang of it.

You then plan to use 1 or 2 class periods near the start of each month for the rest of the school year to continue the project. Students take that time to deposit their paychecks, pay their bills, and decide what to do with the surplus, if they have one.

Student Packet for Checkbook Project (PDF)

This is the full student packet -- 16 pages. It includes a fairly detailed explanation of calculating living expenses (rent, car loan/lease, utilities, etc.).

There are tables in which to record everything.

This is a link to a loan calculator at the State Farm Insurance site. This will help students calculate loan payments and, just as important, the

amount of interest they pay on a loan. Often students try to stretch out payments over as many years as possible, or buy an expensive car

that they can only afford by taking 6 years to pay off. This lets them see how much more interest they pay over that longer period.

Living arrangements

You might suggest that students choose between one and three other people to share a house with and work with throughout the preparation phase. Student collaboration in this phase will be very valuable, although I always allowed students to work independently if they wanted to.

By the way, one issue that would surface (not every year, though) was, who lives with whom? I simply mandated that there be no romantic living arrangements and left it at that. In practical terms, this meant that there were no boy-girl combinations.

If you don’t have all that time…

The project can be condensed by simply giving students a specified income and expenses, and requiring them to accurately maintain their bank balances. This is good decimal computation practice. Checks, deposit slips, and register pages are included in these files. This is, in fact, how the project began.

You can take the list of Basic Monthly Bills (pages 15-16 in the full packet, and also at right) and estimate plausible expenses based on any annual salary and monthly paycheck. A list of expenses corresponding to the $26,000 salary in the packet is included in the file shown at right. This gives your students the chance to practice decimal computation with some realistic numbers.

The living expenses are based on a student’s sharing a house or apartment with two others. Rent, utilities and city services would be higher if a student were living alone.

Checks and Deposit Slips (PDF)

Arranged 3 to a page and aligned so they can be copied and easily cut with a paper cutter.

Check and Deposit Slip (Smartboard)

One of each, for demonstrations.

This has the amounts filled in and would be used if you only want some practice with keeping a checkbook register.

List of Monthly Bills (Smartboard)

The checkbook register

When I first began this project, debit cards hadn’t been invented and direct deposit may have been in its infancy

(I can’t remember). Now, the checkbook is becoming a thing of the past. However, I still have students write checks for all expenses and fill out deposit slips for all income. That way they (and you) have a written record of every transaction.

Students can work in groups to check each others’ registers, and make sure the math is accurate. One student can sign off on another student’s register as the second student’s “accountant,” certifying that the balance is accurate. This means you, as the teacher, don’t need to check all those computations (though you will have a pretty good idea of how much money they should have left after paying their bills).

A variation on this peer monitoring method is for each student to assume the role of the bank and be assigned to check another student’s math. If the “bank” finds any computation error, the student making the mistake would write a check payable to the student serving as “bank.” The real money in this arrangement is if the “bank” finds an overdraft, and can then charge $25 for each bounced check.

Blank Register Page (Smartboard)

Register Page for Estimation Practice (PDF)

I like to make sure students estimate their balances. This has the amounts filled in, and students are required

to estimate the running balance.

Register Page for Estimation Practice (Smartboard)

A list of transactions for practice in filling out the register correctly.

Transaction Practice (Smartboard)

Unexpected expenses and windfalls

To keep things interesting, I introduced “Wild Expenses” and “Surprise Income” cards after a

month or two. I would shuffle a bunch of these cards together and pass them out randomly

after bills were paid. There were usually about twice as many expense cards passed out as

income cards. You can always solicit student ideas for additional windfalls and expenses.

These cards are 6 to a page and aligned for easy cutting.

Easy money (?)

Students who bought more house or car than they could easily afford were always asking for lottery winnings to be included in the Surprise Income cards. I eventually decided to operate a lottery once a month.

Students could write a check for tickets at $2 each. They would get a receipt with their ticket numbers on it (If students each wrote a check for $10, the first would get a receipt for ticket numbers 1-5, the second a receipt for ticket numbers 6-10, and so on.)

Here is a simple Excel spreadsheet that calculates the amount of money in the lottery and generates a random winning number. You input the price of one ticket and the number of tickets sold. The holder of the winning ticket number fills out a deposit slip and enters the winnings in the checkbook register.

The total winnings was always 60% of the total in the lottery. The program would produce a report giving the total amount wagered and the total returned, to keep visible the fact that gambling is, for the gamblers, a losing game. And interest in the lottery eventually subsided each and every year we did that.

Related activities

You can use the numbers your students are working with for practice with other skills. Here are some possible uses:

1. Graph the expenses

Students group all their monthly expenses into categories (living expenses, transportation, insurance, house, etc.). They then create graphs showing the absolute amounts (bar graph) or relative amounts (pie chart). Steps for creating a pie chart are below.

2. Graph the class’s average expenses

Add up and average the amounts each student spends within each category, and graph those numbers in the same way.

3. Graph monthly heating expenses

This is a device for giving students practice making line graphs, since it’s probably the only figure that changes over time. This can also be done on an individual basis, or with the class average.

4. Car price or monthly payment

This would be interesting. Create a line plot or bar graph showing the sale price of each student’s car. You could do the same with the students’ monthly car payments.

Steps for creating a pie chart (Word)

Simple steps for creating a pie chart using a calculator.

Students need to know how to use a protractor.

Table to record expense categories (PDF)

Pictured at right. Includes reminders about what the totals need to be.

Table to record expense categories (Smartboard)