From Cornell University’s “Chasing the Dream” project comes a calculator that predicts whether an individual will fall into poverty over a given period of time.  Before going to the calculator, you might ask students to guess what variables might be most important in predicting this (the calculator asks for age, race, level of education and marital status). The youngest age for the calculator is 25-29 (older than most of your students) but it will help demonstrate the value of a college education in poverty alleviation.

Here was a chart that I created with the probability of being poor at some point over a 15-year period. Here were the variables that correspond to the various bars on the chart: 

• First bar: White, Beyond High School Education, Married, Age 25-29
• Second bar: White, High School or Less Education, Married, Age 25-29
• Third bar: White, High School or Less Education, Not Married 25-29

The main purpose of the chart is to help students see the importance of an education beyond high school and how important it is to their financial well-being. You might ask the students the following:

• What other variables do they think are important in predicting poverty?
• Why do you think marriage improves one’s financial outlook?
• How important is getting an education beyond high school? Run a scenario where all variables except education remain constant to measure its impact.

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More NGPF curated Simulations available here!

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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