PayGrade is a great program that at its core teaches students money management lessons, but can be used for much more than that. In fact, even though I’m teaching computer science this year I plan to try using PayGrade in one of my classes.

To get started on PayGrade you set up a classroom in which you’ll manage your students’ accounts. You can manually add students to your classroom by entering their names and assigning them passwords. Alternatively, you can give your students a join code to register themselves to participate in your PayGrade classroom. In either case, students don’t need to have an email address to use PayGrade. They simply need to remember their usernames and passwords which you can reset if they forget.

Once you have your students in your PayGrade account you can assign jobs for them to do in your classroom. Students are paid in virtual currency for completing their assigned jobs. PayGrade offers a list of default jobs that you can assign to students or you can create your own jobs for students to complete. Some of the default jobs you’ll find listed in PayGrade are secretary, conservationist, and technology assistant. A secretary does things like post the date and special events on the classroom board every day. The conservationist is responsible for things like making sure only recyclables are in the classroom’s recycling bin. A technology assistant makes sure that things like iPads in a cart are all plugged in. You can assign those jobs to students as written or make up your own descriptions and rates of pay.

Students in your PayGrade classroom earn virtual currency for doing their assigned jobs. The rate of pay is something that you can determine. That’s not the only way that students can earn their virtual currency. You can also give them bonus pay for things like a good report from a substitute teacher, helping a classmate with a difficult task, or any other action that you deem worthy of a bonus payment. You can also deduct currency from their accounts for things like not following directions or failing to complete an assigned task.

Budgeting & Entrepreneurship
You choose the frequency at which students get paid in your PayGrade classroom. That frequency can be daily, weekly, bi-weekly, or even monthly. I’m planning to pay my students weekly because I think it’s a sweet spot between having to do daily paychecks and not letting students feel like I’ve forgotten about their work.

The weekly payout intervals encourages students to budget their paychecks. Where does budgeting come into this? PayGrade lets you set-up a billing system in which students have to use their paychecks to pay for things like pencils, desk space, or their shares of the electric bill. Again, you can decide what the bills will be. You might even decide that you want to simulate payroll taxes and have a percentage of paychecks withheld when you run payroll in PayGrade. Whatever students have leftover after taking care of their expenses is money they can save to spend on things they want like prizes that you’ve established.

Just like a real banking environment, students can write checks and transfer funds in their PayGrade accounts. They can also earn interest on money that they save in their PayGrade accounts.

The budding entrepreneurs in your classroom may want to figure out how to earn more money. They might ask to do more jobs. But I heard of one case where a student started hiring other students to work for him. Another case involved a student who built up a little savings and then started making loans at an interest rate exceeded that of what his teacher had established in the PayGrade classroom.

Run the Simulation as Long as You Like
The thing about PayGrade that impresses me the most is its flexibility. You can use it for a week or two to teach personal finance concepts, use it all year long as a classroom behavior management tool, or do something variation in between those extremes. I’m planning to try it with my ninth grade students. I’ll use it for a month and then report back here on FreeTech4Teachers.com

Disclosure: PayGrade is an advertiser on this blog.