GOAL: Before you leave class today you will know about the Budget Challenge and you will begin to choose your vendors for the game.

  1. What is Budget Challenge®? Budget Challenge® is an online personal finance simulation in a competition format. During the 9-16 week simulation, you will receive paychecks and bills in real time and you will be challenged to build a budget that allows you to pay your bills on time, manage your credit card balance, and save money for retirement in a 401(k). The simulation does not use real money, but is extremely realistic including features such as online banking, electronic bill-pay, direct deposit, e-mail bill alerts, 401(k) paycheck deductions, late fees, utilization penalties and more. During the simulation, you are immersed into a financial life of a recent college graduate who has been working and living on their own for about 6 months. All participants compete to best manage the same scenario for their round. This means you will receive the same gross bi-weekly paycheck from your employer, but the net pay will vary depending on your choice to save money directly into a 401(k) plan. Financial commitments include: health insurance (through payroll deduction), rent, renter’s insurance, car loan, car insurance, cell phone, gas & electric utilities, cable, credit card, and student loan. These bills will expose you to a wide array of terms and conditions like billing frequency, fees, penalties, and interest rates. Bill amounts are based on national averages. By playing the game, you will learn:
    1. the importance of budgeting and tracking of payments
    2. the importance of timing of cash flow and scheduling checks
    3. some rules for using a checking account and online bill-pay
    4. about 401(k) and the advantages of saving for retirement early on
    5. how to read bills, account statements, and paychecks
    6. how to negotiate with customer service
    7. how to budget for unexpected events.
  2. You will play the game individually as you would in real-life. The more you invest in playing the game, the more you will learn. This game is automated to enforce the contractual rules for each of the vendors. However, it does not electronically “hound” you. Beyond the courtesy bill notifications and optional push notifications, it merely shows you the consequences of your actions. Mrs. Weber will play a role in Budget Challenge®. Using the game’s analogy of the Road Test for Personal Finance, think of Mrs. Weber being like Driver’s Ed instructor. An extra brake pedal or steering wheel can be used in case of emergencies, but the focus is on you to do the driving. We will have conversations about the simulation, especially when you make a “costly” mistake or when you become disengaged. But I want you to know that you are allowed to make your own decisions and even make mistakes (gasp!!!). Yes! You will learn by doing. Rookie mistakes are better had in this safe environment, than out in the real world.
  3. What is the Budget Challenge
  4. Sign up for Budget Challenge.–Actually DO what they are showing you to get signed up.
    1. Unique Class Code: AINBPYS
    2. Check your SPAM folder for the email from Budget Challenge to verify. If you find any, move them to the Inbox.
  5. Review the Information Packet–located under My Simulations. Read it. We will discuss each one in class together in the future. For now, please just read each one.
  6. Find the Knowledge Base (FAQs) which is located on Student Home>Help Desk (scroll below the form). This Knowledge Base is a great resource where you can find answers to frequently asked questions. Read it.
  7. Read and begin to pick your vendors. We will do activities in class that will hopefully help you have a better understanding of each vendor. For now, remember/do the following:
    1. Help each other!
    2. You must complete vendor selections by 9 p.m. on February 15th to compete in the H&R Block Budget Challenge.
    3. When all tabs on the Student Home> Vendor selections page are green, you are ready to launch.
    4. If you do not complete all of the vendor selections you will not launch with the class. You may be added late to get the simulation experience, but you will not be eligible for student scholarships. Please read the Official Contest Rules for more details.
  8. Once the simulation starts at 9 pm on February 15, everything except the bank account type and the 401(k) deduction percentage are locked down.
  9. FYI:
      1. Leaderboard Score = Savings – (Fees and Penalties) + (Quizzes and Surveys)
      2. Engagement Score = Logging in regularly x Paying bills on time x Taking weekly quizzes
      3. Real-World Ready Score = (Quiz Points/Target x 100%) + (Cumulative Engagement Score x 100%)
        + ((Leaderboard Score/Target) x 200%)
    2. The Real-World Ready score will be used to determine the H&R Block Budget Challenge scholarship winners for the 2017-2018 school year.
  10. Navigation Tip #1: Using the Leaderboard and Leaderboard Score
    1. Our class has its own leaderboard, which includes a listing of each student in class along with their class rank, Leaderboard Score and other key statistics.
    2. The Leaderboard Score is a measure of performance which evaluates knowledge and skill in the practical application of personal finance concepts.
    3. The score illustrates the importance of balancing current and future cash needs, timely bill payments and resourcefulness in the application of financial concepts.
    4. The score is used individually for ranking students within the class and amongst all students playing in the same simulation round nationally.
    5. Leaderboard Scores are updated each night and visible the next day.
    6. Check the Leaderboard EVERY CLASS
    7. You can increase your score by exhibiting your skill in budgeting, avoiding fees, saving for retirement, and
      demonstrating financial knowledge.

      1. Use the Budget and Cash Flow spreadsheet.
      2. Research the quiz questions.
      3. Most of the quiz questions require you to apply a concept you have learned in the simulation or
        demonstrate your resourcefulness in finding the answer.
      4. There is no downside to attempting a quiz. You can view the questions multiple times, but answers may only be submitted once.
      5. Once a quiz/survey closes, it cannot be re-opened.
      6. You can see available quizzes/surveys right above the leaderboard on Student Home. Once the quiz/survey has been submitted (or when it closes), it will drop-off from this view.
      7. Surveys work similarly to quizzes, but have no right or wrong answers. Surveys must be completed in full in order to receive credit.
      8. You can earn points by finding the right balance of the cash needed for short-term bills and then saving the rest into your 401(k).
      9. Paying bills on time is expected per the terms and conditions in the contracts with each vendor.
      10. Failure to pay bills on time results in fees which increase transaction costs and penalties.
      11. You do not get points for keeping money in your checking account.
      12. The 401(k) contributions can only be made via paycheck deduction and once deposited cannot be withdrawn.
      13. You can earn reward points by displaying fiscally responsible behaviors such as maintaining a low
        credit utilization (5 points per day for maintaining your credit card balance below 50% of the credit limit).
  11. Navigation Tip #2: Engagement Score and Learn-by-Doing
    1. It is important that you continue to fully participate in the Challenge. The Engagement Score rewards planning,organization and staying on top of financial matters.
    2. Student Engagement Score = Logging in regularly x Paying bills on time x Taking weekly quizzes/surveys
    3. The score is derived by verifying you are logging in regularly (at least every five days), paying bills on time for the last three days and attempting all available quizzes (regardless of their score).
    4. Engagement scores are updated each night and tracked daily and cumulatively for individuals and teams.
    5. Based on your activity, you will be deemed either “1”- fully engaged or “0” not fully engaged for each of the
      three dimensions.
    6. To have an “Engaged” score for a particular day, you must be fully engaged with a score of “1” in all 3 dimensions.
    7. Engagement Score is used in the Behavior Component of the Real-World Ready Score
    8. There is a high correlation between improvement in Engagement Scores and improvement in Leaderboard Scores. By managing a budget first-hand, you can learn from your actions, even when you make mistakes.
  12. Navigation Tip #3: Putting it all together with the Real-World Ready Score
    1. In Budget Challenge, being Real-World Ready means:
      1. Having an understanding of a variety of financial products/services
      2. Making educated decisions in selecting suitable products/services for a given scenario
      3. Understanding the terms of agreements with simulated vendors
      4. Demonstrating the ability to meet financial commitments from vendor contracts in a timely manner
      5. Controlling credit card utilization
      6. Building and maintaining a budget
      7. Managing the financial impact of unexpected events
    2. All students participating in the same simulation round are presented with the same scenario. However, each round of the Budget Challenge is unique.
    3. Real-World Ready score combines three dimensions of performance into one overall metric:
      1. Skill (based on Leaderboard score)
      2. Behavior (based on Engagement score)
      3. Knowledge (based on Quiz score)
    4. The Real-World Ready Score is used to determine the H&R Block Budget Challenge scholarship winners. Student winners with the top Real-World Ready scores (5 winners in Fall 2017 and 5 winners in Spring 2018) are submitted to a third party agency for verification of eligibility and administration of funds. For full eligibility details, see the “Official Contest Rules” (at the bottom of the Home page).
    5. The participant’s Real-World Ready component scores and overall Real-World Ready rank are updated nightly and are available at Student Home > Real-World Ready. Each component is assigned an apple color based on percentage as detailed in the Legend.
  13. Navigation Tip #4: Fees and penalties are deducted from the Leaderboard Score on the date incurred.
    1. Bank Fees – Bank fees are detailed by option in the Suburban Bank section of the Information Packet. Bank fees are automatically deducted from your bank account, are non-refundable, and cannot be waived.
    2. Vendor Fees – There are several vendor fees charged in the game. The amounts and grace period are detailed in the Information Packet.
    3. Penalty Points – Budget Challenge aims to teach participants to pay their bills on time and manage their credit. Penalties have been designed to discourage financially damaging behaviors and encourage financially-sound behaviors. Not all penalties are disclosed to you or Mrs. Weber, as some can be associated with unexpected events or specifics of a particular round.
    4. Late Fee – An initial 150 point late fee penalty is incurred the day a bill is late (including the grace period) and only affects the participant’s Leaderboard Score and not the vendor account balance. This initial late penalty is eligible for a one-time waiver to each participant during the simulation. The account must meet eligibility requirements for the onetime waiver, including that the account is current. Eligible waivers will be evident to the student in the vendor activity table on the vendor page. The waiver will return the full amount of the waived late fee to the vendor account and 75 of the 150 point late fee penalty to the Leaderboard Score. By using the one-time waiver, there will be a modification to the Leaderboard Score, but the impact of the late fee on Engagement Score will remain.
    5. Outstanding Balance Fee – If a bill remains outstanding for more than 1 day (including the grace period) the
      participant’s leaderboard could be charged an Outstanding or Excessive Balance Fee. The late fee penalty type depends on the amount of the unpaid balance and number of billing cycles the bill is overdue. These penalty amounts will vary by round and by vendor and are ineligible for the one-time waiver.
    6. Credit Card Utilization Rewards/Penalties – To demonstrate the impact credit card utilization rates have on a credit scores, a daily penalty is assessed when the Surge Credit Card utilization percentage (credit card balance/credit limit) changes. A breakdown of reward/penalty points by utilization percentage is included below:
      Credit Utilization Percentage Range Utilization Penalty Points Per Day
      0%-49.99% +5 Points Per Day
      50%-74.99% 0 Points Per Day
      75%-89.99% -15 Points Per Day
      90%-99.99% -25 Points Per Day
      100% or higher -100 Points Per Day
    7. There are many ways to earn and lose points on the Leaderboard Score.
      1. You can earn 1 point for every dollar saved in their 401(k), including any employer match.
      2. You can earn 1 point per dollar earned in interest on the checking account and 401(k) account.
      3. Points may be earned through submitting correct answers on quizzes or answering surveys in full (including open ended questions).
      4. The Leaderboard Score will be decreased by 1 point per dollar in fees when a student incurs a fee.
    8. Budget Challenge strives to teach participants that some choices have more serious consequences than others.
    9. Penalties up to 1000 points may be assessed for irresponsible financial behavior that could result in harmful or illegal consequences in real life.
  14. In your Google Doc for this class, please tell me what you accomplished today.
  15. Check JMC and get your make up work done, if necessary.
  16. Play the Personal Finance game, if time permits.

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