To teach students about financial budgeting, have them create a bookmark business! Students learn what an entrepreneur is, how to figure out the total cost of their resources, how to calculate the total revenue they make and how to make a profit.
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Original We Are Teachers post:
In my classroom second and third grade students were divided up into groups of four. Each group chose one person to be the entrepreneur of their bookmark company. The entrepreneur had the final say on decisions if there were any arguments within the group. Their challenge was to create one bookmark, try to sell it to their peers and make a profit.
First, groups paid rent for the space they used (the table they sat at) and figured out the cost for labor (each group member got paid except for the entrepreneur). Then, they looked at the resources available to them so they could decide on a theme for their business. Students examined stickers and came up with a theme for their bookmark company. Each table had one basket of stickers. One person from the group could go around to the other groups and ask if they had any stickers they wanted to trade. For example, if they decided on an animal theme, they traded stickers to obtain all animal themed stickers.
Once they decided on a theme, they came up with a name for their business and a slogan. Then they figured out how many of each of the resources (listed on the resource list) they would need to create their bookmark.
After they figured out the production cost (the total cost of all of their resources), they sketched out the design of their bookmark. Their bookmark dimensions had to be the standard size: 6" long by 2" wide. Once they had their design figured out, students were ready for the production process. They were given their resources and created their bookmark.
After their bookmarks were created, all of the students were given three dollars (play money). Each group went up to the front of the room and presented their company name, slogan and bookmark. They tried to persuade their peers to purchase their bookmark. Students could only buy one bookmark because the cost of a bookmark was three dollars. They had to really think about which bookmark they preferred. They could not purchase their own group's bookmark!
When company presentations were over and bookmarks were bought, teams figured out the total revenue (quantity of the product sold x the price of the bookmark - $3.00) and total cost (total cost of resources x the number of bookmarks sold) for their business. Then they figured out whether or not their business made a profit. They subtracted the total cost from the total revenue. (Note: All of this is written out on the recording sheet so it is easy for students to calculate). Students compared their total revenue to their total cost. If their revenue was greater they made a profit! If not, their company lost money by making an expensive product that only sold for three bucks!