Experiencing Economics Building Blocks to Creating a Token

Experiencing Economics Building Blocks to Creating a Token Economy in Your School www. powellcenter. org

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

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

• True needs are relatively few (food, clothing, shelter, water) Wants are unlimited www. powellcenter. org

Needs and Wants do overlap www. powellcenter. org

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. www. powellcenter. org

Step #2 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. www. powellcenter. org

Step #3 • 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. www. powellcenter. org

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 theoretical knowledge and practical skills of economics • To prepare students to be responsible, contributing citizens as they mature. www. powellcenter. org

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. www. powellcenter. org

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. www. powellcenter. org

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. www. powellcenter. org

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

A Key to Success • Front-load with noneconomic concepts and terminology • Back-load with economic terms and concepts www. powellcenter. org

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

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 www. powellcenter. org

• Some tips to make your token economy work more smoothly: www. powellcenter. org

Some Tips to Make Your Token Economy Run More Smoothly: Transfer as much decisionmaking 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. www. powellcenter. org

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. www. powellcenter. org

Design Your Own Money www. powellcenter. org

Apply for a Job • Write a resumé • Conduct interviews • Sign an Employment Agreement www. powellcenter. org

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. www. powellcenter. org

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

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

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