Standard 1: Reading SIXTH GRADE

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Table of Contents

Standard 1: Income...... 3

Standard 2: Money Management...... 4

Standard 3: Spending & Credit...... 7

Standard 4: Saving & Investing...... 10

Tennessee Personal Financial Literacy Social Studies Curriculum Standards ©2014 Personal Finance Course Description Personal Finance is a course designed to inform students how individual choices directly influence occupational goals and future earnings potential. Real world topics covered will include income, money management, spending and credit, as well as saving and investing. Learning Expectations: Students will design personal and household budgets; simulate use of checking and saving accounts; demonstrate knowledge of finance, debt, and credit management; and evaluate and understand insurance and taxes. This course will provide a foundational understanding for making informed personal financial decisions. Standard 1: Income Performance Indicators: The student will: 1.1. Interpret factors affecting income a. Career choices and potential income SE/TE: Determining a Career Path, 72–73; Education and Skill Requirements, 74; Compensation, 75–76; Sources of Career Information, 77; Job Experience, 78; Training Programs, 79; Education, 80; Expanding Your Education, 81 b. Educational requirements/training costs SE/TE: Education and Skill Requirements, 74; Internships, 78; Training Programs, 79; Education, 80; Expanding Your Education, 81 c. Educational level SE/TE: Education and Skill Requirements, 74; Education, 80; Expanding Your Education, 81

1.2 Analyze employer benefits packages a. Savings plan SE/TE: Defined–contribution plans, employer–sponsored, 255–256, 258 b. Retirement SE/TE: Employee–Sponsored Retirement Plans (ESOPs), 255–256 c. Insurance SE/TE: Employer–provided insurance plans, 119, 126–127 d. Leave (vacation, sick, etc.) SE/TE: For related material see: Sources of Career Information, 77–78; Research careers, 90 e. Stock purchase SE/TE: For related material see: Investing in Stocks, 269–273

Tennessee Personal Financial Literacy Social Studies Curriculum Standards ©2014 Personal Finance f. Educational reimbursement SE/TE: For related material see: Education and Skill Requirements, 74; Internships, 78; Training Programs, 79; Education, 80; Expanding Your Education, 81 g. Incentive plans SE/TE: For related material see: Sources of Career Information, 77–78; Research careers, 90 h. Cafeteria plan SE/TE: For related material see: Sources of Career Information, 77–78; Research careers, 90 1.3 Demonstrate an understanding of inflation and its effect on purchasing power a. Cost and availability of goods SE/TE: Inflation, 144–145, 148 b. Effect of cost on availability of and SE/TE: Inflation, 144–145, 148 demand for goods c. Inflation’s effect on the value of money SE/TE: Inflation, 144; Monetary Policy, 234–236, 237 1.4 Examine the components of paying taxes a. Types of taxes (Federal, State, County, SE/TE: Payroll Taxes, 97; The Internal City) Revenue Service, 98–102; Personal Income Taxes, 103–104 b. Personal and employer tax SE/TE: Tax Basics, 96–101; Filing Taxes, responsibilities 104–108 c. Various documents for reporting taxes SE/TE: Pay Stub, 98; Form 1040EZ, 100– (W-2, W-4, 1040, 1040-EZ, 1099, etc.) 101; W-2 Form, 106 1.5 Analyze the costs and benefits of paying taxes 1. Cost of government services (Police SE/TE: For related material see: The Four and fire protection, schools, roads, Social Rs of Taxes, 97; also see: Tax Basics, 96- Security, AFDC, parks and recreation, 97; Social Security and Medicare, 102–103; etc.) Social Security, 140–141 Standard 2: Money Management Performance Indicators: The student will: 2.1 Apply a decision making process to SE/TE: Benefits of Good Financial Decision personal financial choices Making, 8; End of Chapter Activities: Financial Responsibility & Decision Making, 19; Financial Decision Making, 36; overview of, 37–38; Step–by–Step Decision Making Process: Step 1: Establish Your Financial Goals, 40–41; Step 2: Evaluate Your Current Financial Position, 42; Step 3: Identify and Evaluate Options for; Accomplishing Your Goals, 43; Step 4: Pick the Best Plan, 44; Step 5: Periodically Evaluate Your Plan, 45; Step 6: Revise Your Financial Plan as Necessary, 46

Tennessee Personal Financial Literacy Social Studies Curriculum Standards ©2014 Personal Finance 2.2 Design a current personal financial plan SE/TE: Step–by–Step Decision Making Process: Step 1: Establish Your Financial Goals, 40–41; Step 2: Evaluate Your Current Financial Position, 42; Step 3: Identify and Evaluate Options for; Accomplishing Your Goals, 43; Step 4: Pick the Best Plan, 44; Step 5: Periodically Evaluate Your Plan, 45; Step 6: Revise Your Financial Plan as Necessary, 46

2.3 Create a realistic household budget that includes the following items: 1. Short-term components—saving and SE/TE: Short–term goals, 9–11, 41; spending (housing, utilities, food, Creating a Budget: Step 1: Create a entertainment, clothing, transportation, Personal Cash Flow Statement, 54; Step 2: personal items, insurance, etc.) Turn Your Cash Flow Statement into a Budget, 55; Working with and Improving Your Budget, 56; Assessing the Accuracy of the Budget, 57; Creating a Personal Balance Sheet, 58; Investments, 59; Liabilities, 60; Analysis of Your Personal Balance Sheet, 61; Budgeting and Your Financial Plan, 62

2. Long-term components—saving and SE/TE: Planning for long-term goals: spending (estate planning, wills, Education, 9; Buying a Car, Buying a Home, insurance, long-term care) Having a Family, Retirement, 10 A Plan for Your Retirement, 29 Retirement Savings Options, 252 Individual Retirement Accounts (IRAs) 253 Employer–Sponsored Retirement Plans, 255 Annuities, 256

2.4 Understand banking procedures and services 1. Checking and savings accounts SE/TE: Banking Basics: Checking Accounts, (maintaining and reconciling) 227; How Checking Accounts Work, 227; Using Your Checking Account, 228; Balancing Your Account, 229–230; Interest and Your Savings, 248; Interest Rates on Deposits, 248; Types of Bank Accounts, 249; Checking and NOW Accounts, 249; Interest Bearing Savings Accounts, 250; Certificates of Deposit (CDs) 250; Money Market Deposit Account (MMDA) 251; About Credit Unions, 252; APY and Comparing Savings Options, 252; Retirement Savings Options, 252

3. Payment methods SE/TE: Banking procedures and services: Arrangements for credit payments, 231– 232; Other online services, 232

4. Debit, bank, and automatic teller SE/TE: Automatic teller machines (ATMs), machine (ATM) cards 227–228; Debit cards, 227-228, 238

5. Loans SE/TE: Personal Loans, 176; The Personal Loan Process, 177; Loan Contract, 178; Financing a Home, 179; Mortgage Loans, 180; Home Equity Loans, 181; Financing Your Education, 185; The Reality of Student Loans, 186; Leasing Versus Buying a Car, 187; The Importance of Car Insurance, 189

2.5 Analyze personal risk management (insurance) 1. Health SE/TE: Insuring Your Health and Your Life, 116; Opening Case, 117; The Importance of Health Insurance, Sources of Health Insurance, 118; Health Care Costs, 119; Health Insurance Features and Terms, Indemnity Plans Versus Managed Care, Family Coverage, 121-122; Group Plans, Location Restrictions, Preexisting Conditions, Cancellation Options, Deductibles, 122-123; Coverage Limits, Co–insurance, Provider Networks, 123

2. Life SE/TE: Insuring Your Health and Your Life, 116; Life Insurance, 124; Types of Life Insurance, 125; Getting Insurance, 126; Chapter Review, 128

3. Homeowners SE/TE: The Importance of Homeowner's and Renter's Insurance, 183–184

4. Auto SE/TE: Auto Policies, 124

5. Renters SE/TE: The Importance of Homeowner's and Renter's Insurance, 183–184

6. Disability SE/TE: Disability insurance: Medicare, 118, overview, 127

Standard 3: Spending & Credit Performance Indicators: The student will: 3.1 Demonstrate knowledge of basic principles of consumer finance 1. Credit worthiness SE/TE: Obtaining and Protecting Your Credit, 154; The Basics of Credit for Consumers, 156; Building Good Credit, 159; Your Credit History, 160; Credit Reports, 161; Monitor Your Credit Report, 166

2. Comparison shopping SE/TE: Math for Personal Finance: comparing two vehicles, 10

3. Purchases SE/TE: Buying a Car, Buying a Home, Having a Family, Retirement, 10; Personal Loans and Purchasing Decisions, 174; Financing Your Car, 186; Leasing Versus Buying a Car, 187

4. Goods/ Services SE/TE: Buying a Car, Buying a Home, Having a Family, Retirement, 10; Personal Loans and Purchasing Decisions, 174; Financing Your Car, 186; Leasing Versus Buying a Car, 187; also see: Careers and education: in financial services and banking, 227

5. Consumer loans/credit life insurance SE/TE: The Basics of Credit for Consumers, 156; Advantages, Disadvantages of Using Credit, 157; Credit Cards and Other Forms of Credit, 198; Use a Credit Card Only If You Can Cover the Bill, 208; If You Experience Credit Card Debt Problems, 209; Other Risky Credit Arrangements, 210

6. Opportunity cost SE/TE: Opportunity cost: viewing purchases in terms of, 8, calculating, 9, Expanding Your Education, 81

Tennessee Personal Financial Literacy Social Studies Curriculum Standards ©2014 Personal Finance 7. Consequences of purchasing choices SE/TE: Financing or Interest Charges, 206; Use a Credit Card Only If You Can Cover the Bill, 208; Pay Credit Card Bills First, 208; If You Experience Credit Card Debt Problems, 209

3.2 Demonstrate awareness of consumer protection and information 1. Personal responsibility SE/TE: Use a Credit Card Only If You Can Cover the Bill, 208; Use Savings If Necessary, 209; If You Experience Credit Card Debt Problems, 209

2. Laws and regulations SE/TE: Credit Rights and Consumer Credit Laws, 158-159 3. Legal documents, including contracts SE/TE: The Person Loan Process, 177; Loan Contract, 178; Secured and Unsecured Loans, 178-179 4. Consumer protections SE/TE: Credit Rights and Consumer Credit Laws, 158-159

5. Crimes against consumers SE/TE: Threats to Your Credit: Identity Theft, 164; Protecting Against and Reacting to Identity Theft, 165

6. Fraud/Scams SE/TE: Health Care Fraud and Abuse Control Program, 119; Threats to Your Credit: Identity Theft, 164; Protecting Against and Reacting to Identity Theft, 165; Other Risky Credit Arrangements, 210

7. Loan Sharking SE/TE: For related material see: Other Risky Credit Arrangements, 210; Payday Lending, 211; Pawn Shops, 212

8. Identity theft/protection SE/TE: Threats to Your Credit: Identity Theft, 164; Identify Theft Tactics, 164; Protecting Against and Reacting to Identity Theft, 165-166 9. Credit reporting services (Equifax, SE/TE: Credit Bureaus and Credit Scoring, Trans Union, Experian, etc.) 160; Credit Reports, 161 10. Rental/ Lease SE/TE: Rental insurance, 184; Mileage limits, vehicle leases, 188; Cell Phone Leases, 213

Tennessee Personal Financial Literacy Social Studies Curriculum Standards ©2014 Personal Finance 3.3 Analyze consumer debt management 1. Credit card use and abuse SE/TE: Credit Cards and Other Forms of Credit, 198; Opening Case, 199; How Credit Cards Work, 200; Applying for a Credit Card, 201; Credit Card Features, 204; Credit Limit, 205; Financing or Interest Charges, 206; Prepaid Cash Cards, 207; Use a Credit Card Only If You Can Cover the Bill, 208; Use Savings If Necessary, 209; If You Experience Credit Card Debt Problems, 209

2. Credit costs (interest [including APR], SE/TE: Ease of Availability and Use, 200; penalties, fees, credit score, etc.) Interest and Fee Information for a Sample Credit Card, 202; Annual Fee, 205; Grace Periods, 206; Cash Advances, 206; Financing or Interest Charges, 206; Use a Credit Card Only If You Can Cover the Bill, 208; Pay Credit Card Bills First, 208; Use Savings If Necessary, 209; If You Experience Credit Card Debt Problems, 209

3. Loan consolidation (benefits and SE/TE: Debt consolidation, 210, 214 disadvantages) 4. Credit Counseling SE/TE: If You Experience Credit Card Debt Problems, 209–210

5. Credit problems including bankruptcy, SE/TE: Bankruptcy, 7, 210, 214; foreclosure, repossession, surrender of Disadvantages of Using Credit, 157; Credit collateral (turn back), delinquency, Bureaus and Credit Scoring, 160; Threats to garnishment, effect on employment and Your Credit: Identity Theft, 164; Monitor purchase of insurance, etc. Your Credit Report, 166; If You Experience Credit Card Debt Problems, 209; Other Risky Credit Arrangements, 210

3.4. Examine various forms of credit payment 1. Installment SE/TE: Installment loans, 156

2. Bank draft SE/TE: Bank drafts, 231–232, 237

3. Lay Away SE/TE: For related material see: Arrangements for Credit Payment, 231–232 4. Electronic (Internet, debit card, SE/TE: EFTs (Electronic funds transfers), electronic transfer, credit card) 232, 237

Tennessee Personal Financial Literacy Social Studies Curriculum Standards ©2014 Personal Finance 3.5 Compare/contrast various types of loans 1. Mortgage SE/TE: Financing a Home, 179–181, homeowner's insurance to cover, 183

2. Balloon SE/TE: For related material see: Financing a Home, 179–181; Adjustable rate mortgages (ARMs), 191

3. Installment SE/TE: Installment loans, 156

4. Education/Training loans SE/TE: Education: resources for funding, 11, 185–186

5. Check cashing businesses SE/TE: For related material see: Payday lending risk, 211, 215

6. Personal SE/TE: Personal loans: overview of, 175– 176, Why Take a Personal Loan? 176, The Personal Loan Process, 177-178, Secured and Unsecured Loans, 178-179, Financing a Home, 179–184, financing education, 185, Financing Your Car, 186–189, review summary, 190–192, review, test prep questions, 193–197 7. Secured and unsecured SE/TE: Personal loans: secured and unsecured, 178-179

8. Line of credit SE/TE: Line of credit, home equity, 181

9. Equity SE/TE: Home equity, 181–182

10. Title loans SE/TE: Financing Your Car, 186–189

11. Pawn shops SE/TE: Pawn Shops, 212

Standard 4: Saving & Investing Performance Indicators: The student will: 4.1 Identify reasons for saving & investing 1. Education SE/TE: Education: earnings potential and, 7, as personal financial goal, 9, Expanding your Education, 81, Resources for funding, 11, 185–186

2. Emergencies/rainy day SE/TE: Emergencies/Rainy Day Fund, 9

4. Long term goals SE/TE: Planning for long-term goals: education, buying a car, buying a home, having a family, retirement, 10 A Plan for Your Retirement, 29 Retirement Savings Options, 252 Individual Retirement Accounts (IRAs) 253 Employer–Sponsored Retirement Plans, 255 Annuities, 256

5. Retirement SE/TE: Retirement, 10; Retirement Savings Options, 252; Individual Retirement Accounts (IRAs) 253; Employer–Sponsored Retirement Plans, 255 Annuities, 256

6. Down payment SE/TE: Down payments defined, 176; Leasing cars and, 187–188

4.2 Evaluate methods of saving 1. Certificates of Deposit SE/TE: Certificates of deposit (CDs): FDIC insuring, 233, Saving money with, 250, Annual percentage rate and, 257, Saving cash reserve in, 268

1. Interest bearing savings account SE/TE: Interest–bearing savings accounts, (Passbook savings) 250

2. Individual Retirement Account (IRA)— SE/TE: Individual retirement accounts Roth and traditional (IRAs): overview of, 253–255, defined, 258, Growing investments in, 277

1. Pension plans (401K, 403B, annuities, SE/TE: Pension plans: as defined–benefit etc.) plans, 255, Employer–sponsored retirement plan vs., 257, Institutional investors of stocks for, 270

5. Education savings plans SE/TE: Education, resources for funding, 11, 185–186

4.3. Evaluate methods of investing 1. Stocks and bonds SE/TE: Investing in Stocks, 269–273; Investing in Bonds, 274–275; Other Ways of Investing, 277–278

3. Real estate SE/TE: Real estate, investing in, 278, 280

4. Annuities SE/TE: Annuities, 254, 290–291

5. Business SE/TE: Methods of Investing: Owning a Business, 278

4.4 Appraise other aspects of saving and investing 1. Diversification SE/TE: Diversification, 294-295

2. Time value of money SE/TE: Time value of money: future value vs. present value, 291–292, Retirement planning and, 290–291, 296

3. Compound growth/ Accrued interest SE/TE: Compound Interest: overview of, 252, defined, 257, Future value of money and, 291, versus simple interest, 292, Summary and review, 299

4. Rule of 72 (divide interest rate into 72 SE/TE: Rule of 72, 293–294, 299 to determine number of years in which money will double) 5. Risk and return SE/TE: Return and risk trade–off, investments, 268, 295

4.5 Identify regulatory agencies and their functions 1. Federal Deposit Insurance Corporation SE/TE: Federal Deposit Insurance (FDIC) Corporation (FDIC), 232–333, 238, 248

2. Securities Exchange Commission (SEC) SE/TE: Securities and Exchange Commission (SEC), 272–273

3. Federal Reserve SE/TE: Federal Reserve System (the Fed), 208, 234–236, 248

4. Internal Revenue Service (IRS) SE/TE: The Internal Revenue Service (IRS), and Taxes, 98–102

13 SE = Student Edition TE = Teacher’s Edition