Experiencing Economics Building Blocks to Creating a Token Economy in Your School

How Can We “Experience” Economics? We can create a simulation of real-world experiences to be used throughout the school year.

Step # 1 Have a discussion with your students about needs and wants and what we do to obtain them.

True needs are relatively few (food, clothing, shelter, water) Wants are unlimited

Needs and Wants do overlap

We obtain our needs and wants by exchanging our labor for them. Typically, this means we have a job, and we are paid a salary.

Set up a classroom or school-wide system in which being a student becomes their job Create a list of responsibilities Create a wage scale Establish accountability for failure to comply with the requirements. Step #2

Pay your Students/Employees “money” in exchange for a designated activity. The “money” is created in the classroom and has no value outside of the school. Students are given an opportunity to spend their “money” as a way to give it real value to them. Step #3

Goals of a Token Economy To simulate “real-world” economic experiences, creating a classroom safety valve wherein students can experiment and learn from their mistakes without suffering long-term consequences. To instill good habits To motivate students in all academic endeavors To help students gain the theoretical knowledge and practical skills of economics To prepare students to be responsible, contributing citizens as they mature.

Why use Incentives to Promote Positive Behavior? Students adapt their behavior over time to correspond to the student skills which are rewarded. It is important to think carefully about the traits and work ethic you are trying to instill.

The Costs and Benefits of Implementing a Token Economy The initial stage is teacher-intensive. It requires planning and reflection before you begin. It uses significant class time in the beginning.

There are significant benefits, too! Once established, it runs smoothly. A token economy integrates easily into the rest of the curriculum. It improves student learning. It helps students learn to manage money. It helps motivate students.

Using a Building Block Approach Divide a token economy into blocks that can be implemented incrementally. Don’t rush to add additional layers – wait until you are comfortable with it. Flexibility is key.

A Key to Success Front-load with non- economic concepts and terminology Back-load with economic terms and concepts

Keystone Economic Principles 1.We all make choices. 2.All choices have costs. 3.All choices have consequences. 4.Economic systems influence choices. 5.Incentives produce “predictable” responses. 6.Do what you do best and trade for the rest. 7.Economic thinking is marginal thinking. 8.Quantity and quality of resources impact living standards. 9.Prices are determined by the market forces of supply and demand and are constantly changing.

Building Blocks of a Token Economy I-A. Establishing your token economy I-B. Understanding the economic concepts II. Utilizing banking activities III. Additional activities for earning money IV. Additional activities for spending money V. Market Days

Some tips to make your token economy work more smoothly:

Transfer as much decision- making to your students as you are comfortable with. Encourage students to try new things. Foster a willingness to learn from mistakes. Don’t shield students from the consequences of their choices. Some Tips to Make Your Token Economy Run More Smoothly:

Establishing Guidelines that Give Students a Sense of Ownership Create a list of responsibilities. Create a wage scale. Define students’ payday. Post a salary chart. Select a designated time each week for payment of salaries. Determine penalties for failure to comply with agreed-upon requirements.

Design Your Own Money

Apply for a Job Write a resumé Conduct interviews Sign an Employment Agreement

Give Value to Your Money To attain value, your created money must have purchasing power. Price items available for purchase so that students do not have enough money to buy everything. They should choose among competing goods. Use non-financial rewards.

There should be at least one large, desirable purchase requiring students to budget and save weekly.

Resources for Teachers You do not have to re-invent the wheel to teach economics!