The goal of this assignment is to require introductory accounting students to do basic financial literacy research in order to develop real world awareness of the importance of setting goals,
spending habits and budgeting. This is a real-world personal budgeting assignment that students indicate they enjoy doing and find particularly insightful. Students are given an average salary for starting accountants as well as a listing of potential deductions and expenses (without amounts) that may or may not apply to them. They need to do their own research as to amounts
and which may or may not apply given their various potential living arrangements and cities chosen. Building wealth with a 401k has been emphasized also at the start of this assignment using examples, and some minimum contribution is expected in their realistic budgets.

An Excel worksheet is required with attached pages showing the source for each expense. Students are also required to evaluate what they have learned. Introductory students have expressed amazement at their result and several find it eye-opening when their bottom line is negative! It is also quite easy to grade. This assignment can be used in upper level courses but it is particularly insightful for the introductory course to build financial awareness in students.

This article is from the Accounting Instructors’ Report, an electronic journal that provides teaching tips and insights to those who teach accounting and other business courses.

Contributor:
Ann Galligan Kelly, Professor of Accountancy, Providence College

 

Read Making Financial Literacy Relevant to Today’s Student.