How to Teach Managing a Budget, Risk, and Credit through Project Based Learning

Posted by:
Erin M. & Hannah B.
4 minute read

Understanding financial literacy concepts such as managing a budget, risk, and credit can be challenging for students without engaging and relevant learning opportunities. By incorporating real-world applications and hands-on experiences into the classroom, educators can transform abstract financial principles into meaningful lessons. See how two ClassBank (formerly ClassEquity) ambassadors incorporate applicable life lessons into their classroom!

Learning How to Budget with Real-World Prices

National Standards for Financial Literacy I. Earning Income, II. Spending., III. Saving

In addition to great classroom store ideas in this video, ClassBank (formerly ClassEquity) ambassador Erin M. takes an innovative approach to teaching her middle school students about budgeting. In her classroom, students earn $552/week, which is minimum wage for a standard 40-hour work week in the state of Maine. To illustrate the reality of needing multiple sources of income to cover the cost of living, she also offers her students the opportunity to take on a second job in the classroom, such as taking out the trash to help the custodians.

This practical setup allows students to manage a monthly budget with realistic expenses: $1,200 for rent and $500 for utilities. This hands-on experience is not just about numbers; it’s about understanding budgeting and financial management in a context they can relate to and apply in their own futures.

Managing Risk with Classroom Simulations and Disaster Insurance 

National Standards for Financial Literacy VI. Managing Risk

In addition to rewards such as stickers or flex seating, students have the opportunity to purchase "disaster insurance" in Erin's classroom store. While it's not mandatory for students to make this purchase, Erin emphasizes the inherent risk involved in not doing so, as disasters can strike unexpectedly like the classroom "hurricane" pictured here!

Students experienced an “earthquake” while learning about earthquakes in their science class. The damage was covered if students had purchased insurance through the ClassBank store, all other students went bankrupt!

Understanding Credit and Loans with Hannah B.

National Standards for Financial Literacy IV. Managing Credit

Hannah B., another ClassBank (formerly ClassEquity) Ambassador, teaches credit management through a hands-on classroom loan system. Students take roles as borrowers and loan officers, directly engaging with concepts of debt, interest rates, and loan responsibilities. Using loan slips and ClassBank as the classroom bank, students engage in negotiating repayment terms and learn about the financial implications of interest on borrowed money. This student-led system not only educates about credit but also highlights responsible borrowing and the real-world mechanics of banking and loans. Learn more about her methods and view the loan slip template below!

Loan Slip Template Here
Just as in real life, students don’t always have enough money to cover their needs and wants. This is where our loan system comes into play. Students can fill out a loan slip and work with a loan officer to work out a payment plan. This is an excellent opportunity to teach students about interest rates and how to calculate percentages.

I choose students who have a strong interest in math to be our loan officers and give them the responsibility of ensuring the loans are repaid in a timely manner. Students work together to pick a reasonable repayment date, and it is put onto the loan officers’ calendar that is kept with their other materials. These other materials include a bank withdrawal log and an envelope of Burdorf Bucks to pay out the loans.

I recommend that students only take out loans if necessary. We talk about how you always have to pay more money back than you borrow because that is how banks make a profit. We don’t exceed more than a 10% interest rate on personal loans. Students can take out as many loans as they desire but are cautioned not to get too caught up in borrowing money. Our loan system is almost entirely student-run, and I only step in to help with any issues or assist with repayment reminders.

We're excited to hear how you bring financial literacy to life in your classroom! Share your tips and tricks with us at