Learning by Doing Works for Adults. It's Just Expensive.

According to Moebs, in 2016, banks recorded $33 billion in Overdraft fees.  $33 billion is such a large number that it may be hard to grasp.  It might be helpful to think of it as 33,000 million. Keep in mind, that the US population is about 325 million.  If the business of overdrafts in the US were combined to form one company, it would make the Fortune 500 list with a rank of about 350 in the world.  In 2012, Moebs estimated the average number of overdrafts per checking account to be 7.1 per year.  That is over seven common financial mistakes per year. Each of these mistakes can cost from $15-$45.  When financial skills are not taught in schools, adults learn through trial and error using real money.  While these costs are high, these figures only represent one type of fee at a bank.  The costs of learning by doing in the real world impacts many other areas.  Consider the impact to credit scores, student loan costs, credit card interest, and retirement savings rates. 

The cost of bank fees adds up

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Avoidable Overdrafts

Using data from the CFPB 2014 report "Data Point: Checking Account Overdraft"  Nerdwallet looked at the average cost of overdraft and other fees over time. They found that the average checking account fees (Overdraft, NSF, ATM, maintenance fees, and account use fees) exceeded $1,000 over a decade. That is over $100 a year for a typical adult.  The majority of these fees are from avoidable overdraft fees.

What if just one mistake per year was avoided?

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Students said THIS about the value

Survey of 51,647 students who completed Budget Challenge were asked: “Do you believe that this simulation experience has prevented future costly mistakes you would have made in the real world?”

84% Yes

16% No

These same students were also asked: “If a typical mistake in the real world costs between $30 and $40, how much in future fees would you estimate you saved by taking Budget Challenge?”

$0 (zero mistakes avoided) = 7.1%

$30-$40 (about 1 mistake avoided) = 20.0%

$60-$80 (about 2 mistakes avoided) = 30.9%

$90-$120 (about 3 mistakes avoided) = 18.2%

Over $120 (4 or more mistakes avoided) = 22.7%

Students expect to save over $80 because of Budget Challenge

Standard Pricing

$25 per student for volumes less than 300 students
This includes:

  • Individual account (sharing is not recommended)
  • 10 weeks in real-time simulation
  • Full curriculum
  • Self-grading assessments
  • Teacher accounts are included at no additional cost and with Teacher-Play, are able to play along with their class

Business Case for Budget Challenge

Budget Challenge is the only program in the world with hands-on training specifically on overdrafts.  Students can use different checking accounts types in the simulation.  Some of these accounts include overdraft protection.  When students overdraw their account they do get assessed fees that match the account they selected.  Students learn from these mistakes.  89.7% of students say that after Budget Challenge they are more likely to check account balances before writing a check.

  • Pays for itself if only one real-world fee is avoided 
  • Best Value in Education if one fee is avoided each year

The business case for Budget Challenge is compelling based solely on avoiding overdraft expenses. Budget Challenge does so much more! The choice is clear. It is time to get serious about financial literacy education.

Let's do this!

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