DELIVERING THE LIFE SIMULATOR
The game provides a fun and interactive way for students to think about financial planning and to put into practice the knowledge and understanding they have developed.
In the game, students pick the attributes that are most similar to their personality and hopes for the future, e.g. whether they are a 'spender' or a 'saver' and what they would like their future job to be. Once students have chosen their attributes, the game is played over a number of stages.
They begin by answering questions about how they see their lives today, and their plans for the future:
- Do they earn pocket money or have a Saturday job?
- What level of education do they want to achieve?
- How much money do they spend and how much do they save?
They then move through a timewarp to see what these decisions will mean for their lives in a few years' time.
Students will then answer more questions relating to their lives in future years (based on what sort of job they want, whether they are planning to have children, whether they wish to take out a pension, etc.). After each round of questions, students will go through a timewarp to a future year, to see the impact of their decisions.
The overall goals for students in using the simulator are:
- to secure the level of income determined by their job choice at the initial stage of the game by 2070
- to maximise their financial satisfaction (e.g. if they like to spend money, they will want to have enough disposable income left over after bills, pensions, etc.)
- to have achieved decent levels of savings and pension contributions so that they can retire by the year 2070.
Students will see that by changing the values of key variables, they can increase or reduce the progress they make towards achieving these goals.
The simulation focuses on lifestyle and financial planning, including decisions relating to education, income, consumption, saving and overall financial satisfaction. Like all financial planning models, the simulation is a caricature of reality. Teachers may wish to explain to students that this game is useful for seeing the consequences of decisions (even decisions made at a young age), but that things are more complicated in real life and less 'set in stone' (one bad decision doesn't have to have a negative financial impact for the rest of one's life).
Delivering the game
Students can work on their own or in pairs. They will need to consider the likely impact of each decision and could be encouraged to play the game several times to fully appreciate the financial planning relationships. For example, education and training is a chief driver of future income; and the compound interest of early pension contributions means that students will have a much larger pension in 2070. Teachers may want to check whether students had noticed this subtlety.
Similarly, teachers might want to hold 'mini plenaries' as the game progresses, so that students can share the decisions they took and the knock-on effect this had. This can help inform 'group strategies' on what can be done to propel them towards their aspirations more quickly. The parallels with learning about financial planning are clear.
The strongest teams will be able to identify that the success of their strategies lies in achieving a balance between the competing variables e.g. spending versus saving. They will also be able to see that long-term decisions can have future benefits but may mean a short-term negative impact e.g. a high pension contribution has a positive effect in the long term but tends to reduce the potential for spending today.
The financial planning relationships are broadly as follows:
- More education/training tends to push up future income but less so over time. It would be a good idea to remind students that they should pick the
- education/training that they would need for the career they have chosen.
- Financial satisfaction is linked to a student's lifestyle choice (whether they like to spend their money) and how much disposable income they have (as well as how much money they are able to save and keep in a pension).
- Savings reduce financial satisfaction levels in the short term (if the student prefers to spend than save).
- Smaller increases in income tend to mean smaller increases in financial satisfaction; this effect is magnified if the student has a high lifestyle rating (prefers to spend than save), because the student will not have a high disposable income.
- Good insurance cover boosts financial satisfaction over the longer term, but over-the-top insurance cover (getting everything needlessly insured) will reduce financial satisfaction over the longer term.
- Like savings, pension contributions play a role as the game progresses into the future: in the short term, pension payments tend to reduce spending potential and short-term financial satisfaction.
Although the game can be repeated, teachers may want to think about offering only two or three opportunities to play, so that students have to think about what they need to do in terms of financial planning decisions rather than keep playing and learning what the underlying calculations are.
Running the simulation on an interactive
whiteboard
The simulation can easily be run on an Interactive whiteboard (IWB) or as a simple projection for the whole class. One way to deliver this is for the class to be divided into team teams of threes/ fours. Each team can make predictions on what the likely outcomes might be, given the proposed decisions. Teachers can think about introducing a competitive element to encourage active engagement (e.g. points awarded for teamwork, the quality of their rationale, the accuracy of their prediction). In this way, students can still be rewarded even if their team's decisions are not the ones which their class chooses to select for the simulation.
This approach could also mean that some valuable discussion and dialogue is created, with students actively thinking and sharing ideas related to lifestyle decisions and financial planning consequences.