Day 12 (PF)

WATCH THIS VIDEO TO SEE HOW TO PAY A BILL & RECONCILE YOUR CFS: https://screencast-o-matic.com/watch/cqnlI53Mxz WATCH THIS VIDEO ABOUT TODAY’S LESSON: https://screencast-o-matic.com/watch/cqnQbm3dmL READ THROUGH ALL OF THIS; HOWEVER, THE ITEMS IN BOLD MUST BE DONE FOR A GRADE Pit Stop Summary: Thoroughly reviewing bills each month is recommended during the Budget Challenge® . Students should verify bills are accurate per the contract terms. Some bills have a fixed payment amount and/or a fixed frequency. Other bills are variable like credit card and utility bills. Understanding the timing between statement dates, due dates and payday is vital in creating a budget and paying bills on time. PRACTICING NAVIGATION TIP #1: In the game and in life, students should strive to pay bills on time. It is important to review invoices each month to ensure payments made are reflected in the account activity and unwarranted charges/fees have not been applied. PRACTICING NAVIGATION TIP #2: In the Budget Challenge, three out of four bank account options offer Over Draft Protection(ODP). Students should research their situation to determine if they plan to use ODP or if they could lower the cost and/or restrictions of their bank account by not choosing ODP. Students can change their bank account type throughout the challenge to meet their banking needs at Student Home→Bank. PRACTICING NAVIGATION TIP #3: Customer Service agents are available to answer student questions or assist students disputing a charge/fee. Students can submit questions at Student Home>Help Desk. Please note that teachers will be carbon copied on the email response and will have visibility into the initial question asked. A turnaround time of one business day can be expected, although it may be longer in times of high volume or if complex research is involved. Courteous, professional emails are appreciated. Each student may request a single, one-time courtesy late fee waiver during the simulation. Terminology Tune-Up:
  1. Invoice – A bill or statement of charges.
  2. Due Date – Date a payment must be received by the vendor to be considered on time.
  3. Statement date or Cycle Day – Date an invoice is issued.
  4. Current Bill Amount – Total of all new charges.
  5. Total Amount Due – Amount to be paid by the due date.
  6. New Charges – List of items and amounts billed for this billing period.
  7. Credits and Adjustments – Money credited to an account this period due to bill overpayment or refunds.
RIGHT NOW:
  1. Open this handout. Follow the step-by-step instructions and answer the questions at the end in your Word Online file for this class: https://www.budgetchallenge.com/Portals/0/Documents/RoadMap/Week1/W1_B_Test%20Drive_Reading%20Invoices.pdf
  2. Open this handout and follow the step-by-step instructions–https://www.budgetchallenge.com/Portals/0/Documents/RoadMap/Week1/W1_A_Test%20Drive_Using%20Student%20Accounts.pdf
  3. Here is the Quick Tips Handout–https://www.budgetchallenge.com/Portals/0/Documents/RoadMap/Week1/BC_Student_quick_tips_2015.pdf
The goal of the simulation is for students to learn personal finance is about priorities and trade-offs. The simulation scoring and metrics encourage positive behaviors and discourage counterproductive behaviors. Student priorities:
  1. Pay bills on-time.
  2. Minimize fees.
  3. Prepare for unexpected events.
  4. Manage a credit card balance
  5. Maximize retirement savings into 401(k).
  6. Maintain a Budget and Cash Flow Spreadsheet, or comparable tool to track income and expenses. Reconcile the tracking tool regularly.
  7. Research quiz topics independently.
  8. Ask questions when they do not understand or need help.
The best way to learn personal finance is through experiencing it first-hand. This simulation immerses students into financial life as an adult, so they can go through the actions of paying bills, saving for, retirement and dealing with unexpected events while having a teacher to support them through the process. It is important that students make their own decisions, and even make mistakes, in the simulation to learn personal finance lessons. Encourage discussion, but insist on individual play. Each student must maintain their own Budget and Cash Flow Spreadsheet, pay their own bills, determine their own 401(k) contribution percent, take their own quizzes/surveys, and submit their own Help Desk tickets.

How to Play

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Once the simulation begins, students will be immersed into the financial life of a college graduate. They will begin to receive and pay bills, maintain their CFS, and monitor and manage their credit card balance. To avoid paying bills late, students will need to stay engaged, plan and execute a budget. Students can take advantage of the Mobile Bill Pay App provided for both iOS and Android devices. Some tasks are better performed on the website so the app is primarily for paying bills. Students can access the App at Bank>Bill Payer App from budgetchallenge.com or by going to the App Store or Google Play and searching “Budget Challenge.” Students will learn through the process of researching and answering quiz questions, using provided resources, and through interacting with customer service through the Help Desk. Each help desk ticket receives an individual response on which the teacher is carbon copied. In the simulation, trophies are awarded for the accomplishment of financial goals. To pass the Road Test you must earn 5 of the 6 trophies to demonstrate your ability to achieve adult-level financial goals in real-time. Full details for how to earn each trophy are posted in the Road Test section of the Dashboard. Below is a summary:
  1. Each goal, by itself, is fairly simple to achieve. The Road Test becomes more challenging when multiple goals are added to the responsibilities of a typical household budget.  Just keeping track of monthly bills and pay dates can be difficult to manage. So, when this is combined with multiple financial goals in the Road Test, it is essential to get organized and make a plan before the simulation begins.
  2. Once the simulation begins, you will be immersed in the financial life of a working adult. To avoid paying bills late and achieve the 6 key goals, you will need to stay engaged and execute your budget. In the game and in life, you should strive to pay bills on time. It is important to review invoices each month to ensure payments made are reflected in the vendor account activity and unwarranted charges/fees have not been applied to your account.
  3. You will receive invoice notifications via email and Dashboard Alert. For quick action steps or what to do next review the “Take Action” section of the Dashboard to view and click on the “Vendor with Outstanding Balances” link to view the vendor page, vendor activity, and invoice.
  4. If the funds are available issue a payment by processing an online check on the Bank page.
  5. There is a 2-day processing window built into the system for creating checks. This represents the time it would take the bank to create and mail the check (or send it electronically) as well as the time for the recipient of the check to get the check and process it. This 2-day processing window is enforced within Budget Challenge by blocking out today’s date and tomorrow’s date at the time when you create the check. So for example, a check created today can have a delivery date that 2 days out in the future. Today’s date and tomorrow’s date are not able to be selected. Sundays and federal holidays are also blocked out. As long as you can select a date using the calendar icon, the delivery of your check is guaranteed by that date.
  6. The date you select on the calendar is the date the funds will be debited from your checking account and applied to the vendor invoice balance.  Then record the pending check-in your CFS on the date the check is scheduled to clear. Recording a check in your CFS does not issue the check to the vendor.  Checks are issued on the Bank page.  Ensure you have the funds to pay your bills on time by maintaining your CFS and regularly reconciling it with your checking account.
  7. Mistakes happen. If you pay the wrong vendor or overpay a vendor, you can request a refund in the action column of the vendor activity table on the vendor’s page by clicking the orange “Get Refund” button. The money will be refunded to your checking account overnight.
  8. Like in real life, in the game paying a bill late has consequences. The Perfect Pay goal is broken out into two trophies, perfect pay for the first 20 days and the rest of the game, each worth 500 points.  If you pay a bill late you will lose the Perfect Pay trophy and the 500 points. In addition to losing the trophy, when you pay a bill late, you incur fees (charged by your vendor and added to your vendor account balance) and penalties (affecting your point total) the first day a bill is late. If the bill is more than one day outstanding you will incur daily late fee penalties.
  9. If you pay a bill late in the game, you may be eligible for the one-time late fee waiver. To be eligible, the account with the late fee must be in good standing (current and not over the credit limit), you have paid the bill in full including any returned check fee (the check has cleared and is not pending), and you have not already received your one-time waiver.  Once you have requested a waiver from a vendor, you are unable to request an additional waiver from any other vendor during the simulation.
  10. If the waiver is available a blue “Get Waiver” button will appear in the action column of the vendor activity table on the vendor’s page. Requesting a waiver results in:
    1. a credit to the vendor account for the amount of the vendor late fee.
    2. a return of the vendor late fee penalty points.
    3. a return of 75 of the initial 150 point late fee penalty points.
    4. reopen the perfect pay trophy (if that was your only late fee and the waiver was applied before the trophy closed)
  11. Early in the game establish an emergency fund by transferring money from your checking to your savings account. Keep your savings account balance at $500 by the 11th day in the simulation and maintain a minimum of $500 for the rest of the game and earn the Emergency Fund trophy and the 500 points.
  12. If you incur 1,000 daily late fee penalties or more you will lose your Credit Health trophy and the 1,000 points.
  13. The Surge Credit card invoice is one of the first invoices you will receive in the game. You start the simulation with a small credit card balances and the daily credit card charges will start immediately.  The daily credit card charges in the game average between $500 and $750 per month.  These charges represent the “life” expenses that your character incurs during the game, so you are not blindsided by spending we show 10 days of pending credit card charges on Vendors>Credit Card. Pending charges will post the next day. The charges may not be charges you would choose in real life but they are representative of monthly average spending and are the same for all participants in the game.
  14. Use this credit card data and your Budget and Cash Flow spreadsheet (CFS) to determine how much and when you can pay on your credit card to earn the Credit Management trophy and the 1,000 points. Remember to pay at least the minimum balance of $15 between the day after the bill is issued the date it is due plus any grace period and you can make more than one payment to your credit card per month.  Carrying a balance could lead to finance fees and utilization penalties. Carrying a balance could lead to finance fees, exceeding your credit limit, or incurring credit utilization penalties. To understand more about Credit Utilization, View the “Understanding Credit Utilization”  video on Vendors>Credit Card. The daily charges are the same for all participants in the game and will continue even if you are over your credit limit. Your management of your credit card affects three goals in the game:  Perfect Pay (you have to pay your credit card bill on time, every time), Credit Card Management (you have to pay off your second credit card invoice), and Credit Health (you have to stay under 100 credit utilization penalty points for the entire game).
  15. In the simulation, you are actively making payments on an auto loan and a student loan. Like most lenders, installment loan payments must be received between the day after the invoice is issued and on or before the due date (with grace period) to be applied to the billing period.  View the “Understanding Installment Loans”  video on Vendors>Auto Loan and Vendors>Student Loan for an explanation of the nuances of installment loan payment timing and billing cycles to ensure your payments are correctly applied in the game. In real life, you need to know the interest rates on your loans and pay off the loan with the highest finance cost first.  In the simulation, the student loan has a higher interest rate than the auto loan. Remember to pay an extra $500 toward your student loan during the game to earn the Debt Reduction trophy and 1,000 points.  Making an extra payment to your student loan will be one of the last goals you earn in the game.  If you pay too much on your student loan early in the game, take advantage of the “Apply to Next Invoice” button, next to your extra payment(s) on the Riptide activity table.  In order to earn the Debt Reduction Trophy, you must have paid a total of $500 extra on your student loan during the game. Suburban Bank offers a Bill Payer app.  For information on downloading the app go to Bank>Get Mobile App.

Dashboard

  1. The collapsed view of the Dashboard shows your current Road Test Score and your written test percentage in the form of your quiz average. With a countdown of days remaining and “Take Action” tasks the Dashboard makes navigating the game easy.
  2. The Road Test “Take Action” section includes the link “Vendors with Outstanding Balance”. Click the link to see a listing of those vendors and to navigate to the vendor page. There you will see a detailed activity table and buttons for invoices.  Before issuing a check review the “Take Action” link for “Pending Checks” to verify you have checks issued for the correct amount to the correct vendor to pay the outstanding invoice.  You can also view an invoice on the vendor’s page by hovering over Vendor on the main menu and selecting the appropriate vendor service.
  3. Click “View Details” under the Road Test section for details on each of the six key financial goals and under the written test section for weekly unit material with a button to open the weekly quiz(zes) along with resources to navigate the game.
  4. All participants start the game with good credit health (zero penalty points and zero credit utilization points) and the credit health trophy. It is yours to keep unless you incur 1,000 daily late fee penalty points OR 100 credit utilization points. If you go above the point limits, you lose the trophy and cannot get it back.
  5. The goals on the Dashboard are in order by days remaining. The first goal to close is the Establish Emergency Fund goal. The Emergency Fund trophy is earned if by the 11th day of the game your savings account has a balance of at least $500 and maintain a minimum of $500 for the entire game. The row color for the Credit Health trophy is yellow because it has been earned, but can be lost during the game.

How to know the status of a goal/trophy

The participant’s dashboard below displays road test results as of day 13. The Emergency Fund goal has closed (closes on day 11) and they did not earn the trophy; therefore, the row is shaded grey.  Like all participants, they started the game with the Credit Health trophy and have not incurred either 100 credit utilization points or 1,000 daily penalty points,  so the goal remains open and earned but eligible to be lost and therefore shaded yellow.
The Dashboard below shows a participant at the end of the simulation with 5 green shaded rows for trophies earned (4.5/6 trophies). The green shading indicates that at least .5 of the goal or perfect pay trophy I (500 points) was earned for that goal. The Perfect Pay goal is shaded green because they only met the requirements for the first half (first 20 days) of the goal and not the second half (21 days to the end of the simulation).  As a result, only .5 of the trophy was earned.
The details section for each goal includes helpful links, resources, and videos to help you understand the goal and how to earn and keep each trophy and earn the trophy points.

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