Post AP test, I try to give the older ones some access to the kind of adult information they all hear whispers about but never learn until it's too late.

For the last few days we've spent some time on financial literacy. Specifically, building a spreadsheet that would make it easy to compare the real costs of owning a home, with some generous assumptions built in.

Using the (apparently secret) mortgage formula I dug up a few years ago, we built a tool. Each kid made a version of this. The input variables are the sale price and the appraisal value (sourced from databases local to the area). We plugged in some assumptions about property tax calculation and insurance. The point is to have them think about a house as more than the base line mortgage payment. And to see how ungodly high interest can pile up on a 15 or 30 year loan. Also, property tax? Say what?

This spreadsheet has other modules in it, but this first one served our purposes. It can also be extended to part two which involves buying a car and then ballparking what kind of monthly income it would take to afford the car and the house.


They were given a link to the following instructions. The price range is mid-tier for this part of the city. Another assumption in the scenario is that we're about 15 years in the future and have acquired the cash to make a 20% down payment on something.

Note the mandatory fidget spinner.

Over in the corner I set up the bank. I had them make a few blind choices to acquire a random set of loan terms. Then they chose between a 15 year and 30 year option.

I had fun with it. They were required to begin the dialog with "Excuse me Mr. Generous Banker, may I have a loan please?" The bank was only open for 40 minutes (we had about 80). I'd get up and go on break at random, even in the middle of a transaction. Kids would play along and complain when there was a line. "There's always a line!" One regret is not having a bowl of lollipops.

I had a couple kids walk out and then yell that they didn't like the terms of their loan. I directed them to the complaint department.

Super fun task. A more complicated version might subdivide the loans based on the amount they're trying to borrow. I think that's how part 2 with car loans will go. Terms dependent on what kind of cash they're trying to drop. Kids are doing some dynamite stuff with their collection of materials. The hilarious part was listening to others watch someone get their loan terms at the bank and react with "ooh, nice one! or, oooh you got the bad one!" without any real idea what they were talking about. Listening to them chit chat about their interest rate was hilarious. "You know this is what adults do, right? This is what we talk about?" "Ew, gross."

Gross, indeed.

AuthorJonathan Claydon