A Lesson2 1 YYC

FIRST STEPS TO FINANCIAL MODULE 2 INDEPENDENCE

LESSON 2.1 Savings, Banking Services & Interest This lesson has students learning about Pay Yourself First®, savings, the different types of savings accounts, and the benefits of interest. In addition, students review vocabulary used during the lesson as part of FIT Work.

MATERIALS & PREPARATION LEARNING GOALS  Students compare different vehicles for saving money. Module 1 SDM sheet (previously completed by  Students conclude how and when a financial goal will be students) achieved, based on time and amount saved. Notebook paper  Students explore their financial goals and defend how they will achieve them. FIT Work 2.1 sheet (page 2.5)

FIT Tool: Savings Goal Calculator JUMP$TART PERSONAL FINANCIAL EDUCATION NATIONAL STANDARDS ALIGNMENT  Financial Responsibility and Decision-Making Slide Presentation 2.1  Planning and Money Management  Saving and Investing

DO THIS 1. Ask students if they save money. Ask how and why they save money. This discussion should not be about ‘how much’ they save but rather about the process of saving.

2. Review the concept of Pay Yourself First®, which is the idea that savings should be a regular part of a spending plan. Ideally, the money should be deposited in an interest-bearing account.

3. Define savings as the accumulation of money set aside for future use. Discuss the different savings methods and the benefits.  Piggy bank/”under the mattress”  Savings account  Certificate of Deposit

NOTES: 4. Introduce the concept of an emergency fund. Define emergency fund as money set aside for unexpected expenses or for living costs in case of job loss.

5. Discuss the benefits of bank accounts and where one can be established (bank or credit union). Have students brainstorm the benefits of having money in a savings account. Examples:  Earn interest  Compound interest  Safe  Federal Deposit Insurance Corporation (FDIC) - insured  Convenient  Affordable

6. Ask students if they know what interest is. Discuss how interest is the banking institution paying people for the use of their money.

7. Discuss how the Federal Deposit Insurance Corporation (FDIC) ensures money is safe. The FDIC is a U.S. government corporation that provides deposit insurance; currently guarantees checking and savings deposits in member banks up to $250,000 per depositor. Additional information can be found at www.fdic.gov.

8. Discuss how savings accounts usually have lower interest rates than investments, but they serve as a pre-requisite for investing. In order to invest in the future, a person must have thousands of dollars saved.

9. Demonstrate and discuss, using the FIT Tool: Savings Goal Calculator, how putting money in savings, over time, with a good interest rate can help one reach their financial goals. Compare the piggy bank rate (no interest) to typical savings account interest rates.

10. Present the following scenario: Grace wants to purchase her mom a pair of diamond earrings for her birthday. She has 10 months to save her allowance. The earrings cost $150. She has $75 in her savings account. The interest rate is 2%. How much must Grace save each month in order to purchase the earrings? How much money did Grace earn from interest? (Answers: $7.32 and $1.81)

11. Present the following scenario and demonstrate and discuss using FIT Tool: Savings Goal Calculator. Philip wants to purchase a car in four years. He can buy his uncle’s truck for $4,500. He currently has $1,000 in his savings

NOTES: account. The interest is 5.4%. How much does Philip need to save each month to purchase his uncle’s truck? How much money did Philip earn in interest? (Answers: $60.99 and $572.48)

12. Discuss Philip’s situation and the amount of interest earned.

13. Present the following scenario and demonstrate and discuss using FIT Tool: Savings Goal Calculator. Sterling wants to purchase an $850 treadmill. He currently has $225 in his savings account. The interest rate is 4.5%. If he saves $50 a month, how many months will it take him to save the money he needs for the treadmill? How much did Sterling earn in interest? (Answers: 13 months and $24.79)

14. Discuss Sterling’s situation and the amount of interest earned.

15. Have students review the SML goals they outlined on their SDM sheet from Module 1 Lesson 2. This should be in their PF Portfolio. Discuss if Pay Yourself First® was part of how they are going to achieve their goals.

16. Have pairs of students run their SML financial goals from the SDM sheet through the FIT Tool: Savings Goal Calculator and determine when and how they will be able to achieve their SML financial goals. Have students compare how putting money into an interest bearing savings account would help them achieve their SML financial goals quicker than having the money in a ‘piggy bank’. Discuss.

17. Using the FIT Tool: Savings Goal calculator, have students print off a realistic best-case scenario for achieving one of their financial goals and write two paragraphs explaining how they would achieve their financial goals. Include financial terms such as savings goal, interest rate, and savings account.

18. Optional: Have a banker visit the classroom to further discuss banking services.

Optional: FIT Work 2.1 sheet (page 2.5). Remind students they are FIT WORK responsible for keeping all FIT Work sheets in the PF Portfolio.

NOTES:  Review FIT Tool: Savings Goal Calculator and two paragraphs for ASSESSMENT completion and mastery of content.  Review FIT Work 2.1 sheet for completion and mastery of content.

 FIT Tool: Savings print off PFP  Two paragraphs about financial goals  FIT Work 2.1 sheet (page 2.5)

FIT Work 2.1 Date

Define the following:

Saving

Investing

Interest

FDIC

Certificate of Deposit

Savings Account

Emergency Fund

Why is it a good idea to save money in an interest bearing account, such as a savings account?

What is the purpose of an emergency fund?

FIT Work 2.1 Date

Define the following:

Saving The process of setting aside income (earnings) for future use.

Investing Purchasing a financial product or other item of value with an expectation of favorable future returns (the use of money in the hope of making more money).

Interest Money that financial institutions, governments, or corporations pay for the use of investors’ money.

FDIC Federal Deposit Insurance Corporation (FDIC) is a U.S. government corporation that provides deposit insurance; currently guarantees checking and savings deposits in member banks up to $250,000 per depositor.

Certificate of Deposit A short to medium-term, FDIC-insured investment available at banks and savings and loan institutions. A customer agrees to lend money to the institution for a certain amount of time. In exchange for doing so, the customer is paid a predetermined rate of interest.

Savings Account A deposit account at a bank which pays interest but cannot be withdrawn by check writing.

Emergency Fund Money set aside for unexpected expenses or for living costs in case of job loss.

Why is it a good idea to save money in an interest bearing account, such as a savings account? Because while it is in safekeeping at an FDIC-insured institution, you can also make money (the interest the bank gives you for having your money at their institution).

What is the purpose of an emergency fund? To be able to make it through a financial crisis which usually means having to deal with unexpected expenses.

LESSON 2.2 Compound Interest & Rule of 72 This lesson has students exploring compound interest and the Rule of 72. The FIT Work has students calculating compound interest.

MATERIALS & PREPARATION LEARNING GOALS  Students compare and contrast non-interest bearing and interest Compound Interest Resource (page 2.11) bearing saving alternatives.  Students defend the power of compound interest. Rule of 72 Resource (page 2.12)  Students discover how the Rule of 72 is impacted by compound Compound Interest sheet (page 2.13) one for interest. each student

Rule of 72 sheet (page 2.16) one for each student JUMP$TART PERSONAL FINANCIAL EDUCATION FIT Work 2.2 sheet (page 2.18) one for each NATIONAL STANDARDS ALIGNMENT student  Financial Responsibility and Decision-Making  Saving and Investing FIT Tool: Compound Interest

DO THIS Slide Presentation 2.2 1. Review the concept of saving (and eventually investing) and how interest is a benefit. Introduce the concept of compound interest. Ask students if they can define compound interest. Compound interest is defined as interest which is calculated not only on the initial deposit but also the accumulated interest of prior periods. When interest compounds, one makes money on the initial investment and all interest earned over time.

2. Share the following scenarios: How much money will Frank have if he saves the following in a piggy bank? Initial investment – $100 Monthly investment – $100 Time – 20 years Answer: $24,100 ($100 + ($100 x 240 months)).

NOTES: How much will Frank have if he saves the following in an account that earns compound interest? Initial investment – $100 Interest rate – 6% Monthly investment – $100 Number of times interest is compounded per year – 12 Time – 20 years Answer: $46,766

3. Have students estimate how much they think the investments will be worth after 20 years.

4. Input Frank’s two examples into the FIT Tool: Compound Interest. Compare the actual savings value to the students’ estimates.

5. Discuss the difference between the piggy bank savings and the compound interest savings. Frank’s saving in a piggy bank (a non- interest bearing account) would result in only $24,100 ($100 + ($100 x 240 months)), while an interest bearing account with compound interest results in $46,766.

6. Provide the following scenario. Estimate how much Sabrina will have if she saves the following in her piggy bank: Initial investment – $500 Monthly investment – $300 Time – 40 years Answer: $144,500 ($500 + ($300 x 480 months))

Estimate how much Sabrina will have if she saves the following in an account that earns compound interest: Initial investment – $500 Interest rate – 8.0% Monthly investment – $300 Number of times interest is compounded per year – 12 Time – 40 years Answer: $1,066,389

7. Input Sabrina’s variables in the FIT Tool: Compound Interest. Compare the piggy bank savings to the compounding interest.

8. Discuss how increasing the initial investment, the interest rate, the monthly investment, and the amount of time has a huge impact on Sabrina’s final investment worth of $1,824,761. Compare this amount to the principal amount without the compound interest of $144,500 ($500 + ($300 x 480 months)).

NOTES: 9. Walk students through 1-3 examples of how to calculate compound interest using a scientific calculator. Use the following formula (see more information on calculating compound interest on page 2.11): A=P(1+ r/n)nt Where, P=principal (initial investment) r=annual interest rate (as a decimal) n=number of times the interest is compounded per year t=number of years A=amount after time t

10. Provide each student with the Compound Interest sheet (page 2.13). Group students into teams of 2-3 (or individually) to complete the Compound Interest sheet. Some students may need additional assistance. Allow students to check their calculations using the FIT Tool: Compound Interest. Answer key is on pages 2.14-2.15. Review and discuss the sheet once teams have finished.

11. Explain compound interest is a way to make money work for you. It is a part of achieving financial independence.

12. Ask students to define the Rule of 72. Explain the Rule of 72 is a mathematical formula which calculates approximately how many years it will take for an investment to double with an annual compounding interest rate. The formula for the Rule of 72 is as follows (see page 2.12 for additional information):

72 ÷ interest rate = years until the investment doubles

13. Present the following scenario. If George invests $500 with a compounding interest rate of 8% per year, then it will take 9 years (72÷8) until the investment is worth $1,000.

14. Present the following scenario. If Gloria invests $1,500 with a compounding interest rate of 11% per year, then it will take 6.5 years (72÷11) until the investment if worth $3,000.

15. Hand out the Rule of 72 sheet (page 2.16) and have students complete it. Answer key is on page 2.17. Review and discuss once teams have finished.

16. Discuss how saving money improves one’s financial well-being and by saving regularly over time, it will grow exponentially.

NOTES: 17. Optional: Have a representative from a financial institution visit the classroom to discuss compound interest, saving, and investing.

Optional: FIT Work 2.2 (page 2.18). The answer key is on page FIT WORK 2.19.

 Observe and listen to discussions for logical thinking and ASSESSMENT mastery of content.  Review Compound Interest sheet for completion and mastery.  Review Rule of 72 sheet for completion and mastery.  Review FIT Work 2.2 sheet for completion and mastery.

 Compound Interest sheet (page 2.13) PFP  Rule of 72 sheet (page 2.16)  FIT Work 2.2 sheet (page 2.18)

Throughout the Yes, You Can curriculum, students are responsible for calculating compound interest. They will need to use a scientific calculator to complete the calculation. In addition, students can use the FIT Tool: Compounding Interest to check their work and integrate it into their presentations.

Compound interest refers to the interest that is paid on the original principal and on the accumulated past interest. Interest is compounded for most savings accounts and investments. Interest is also compounded on debt.

Below is the formula for calculating compound interest:

A = P (1 + (r÷n))nt

Where, P = principal amount (initial investment) r = annual interest rate (as a decimal) n = number of times the interest is compounded per year t = number of years A = amount after time t

Example: An amount of $1,500 is deposited in a bank paying an annual interest rate of 4.3%, compounded quarterly. Use the formula above to find the balance after six years with the following variables: P = 1,500, r = 4.3/100 = 0.043, n = 4, and t = 6.

A = 1,500 (1 + (0.043÷4))4x6 = 1,938.84

The balance after six years is approximately $1,938.84.

Students calculate the Rule of 72 in the Yes, You Can curriculum. It is a fairly straight-forward concept and equation.

The Rule of 72 is a simple way to estimate how long an investment will take to double given a fixed annual rate of interest. By dividing 72 by the annual rate of return, you can calculate a rough estimate of how many years it will take for the initial investment to double.

Example: By using the Rule of 72, it can be determined that $10,000 invested at 6% would take 12 years (72÷6 = 12) to turn into $20,000.

The Rule of 72 is fairly accurate with low rates of return, but it gets less precise as rates of return become higher. When dealing with higher rates, it’s best to calculate the precise number of years algebraically by means of the Future Value formula (see below).

Future Value Formula There are two ways to calculate future value:

Asset with simple annual interest: Original Investment x (1+(interest rate x number of years))

Example: Future value of $1,000 invested for 5 years with simple annual interest of 10% $1,000 x (1+(0.10 x 5)) = $1,500.00.

Asset with interest compounded annually: Original Investment x ((1+interest rate)^number of years)

Example: Future value of $1,000 invested for 5 years at 10%, compounded annually $1,000 x (1+0.10)5 = $1,610.51

25 Years

hly compounding interest. Date Date Name Name rate and investing over time. 15 Years

of $100 and factor in mont he impact of a higher interest 10 Years

ter an initial investment

12x5

nt 5 Years $110.51 100(1+.02/12) A=P(1+ r/n) Where, P=principal (initial investment) r=annual interest rate (as a decimal) n=number of times the interest is compounded per year t=number of years

2% 5% 7% 10% 12% Rate Interest Use a scientific calculator to complete the following table. Check your answers with the FIT Tool: Compound Interest. On another piece of paper, graph your results. Write about t A=amount after time t t time after A=amount Calculate the investment values below af COMPOUND INTEREST COMPOUND

$164.80 $348.13 $572.54 25 Years $1,205.69 $1,978.85

hly compounding interest. Date Date Name Name rate and investing over time. $134.95 $211.37 $284.89 $445.39 $559.58 15 Years

of $100 and factor in mont

he impact of a higher interest 164.70 $122.12 $200.97 $270.70 $330.04 10 Years ter an initial investment

12x5

nt 5 Years $128.34 $141.76 $164.53 $181.67 $110.51 100(1+.02/12) A=P(1+ r/n) Where, P=principal (initial investment) r=annual interest rate (as a decimal) n=number of times the interest is compounded per year t=number of years

2% 5% 7% 10% 12% Date Date Name Name terest. However, if you combine high interest rates with a

5 years5 years 10 years 15 years 25 $0 $800 $600 $400 $200 The higher the interest rate the more money you make from in long-term investment, your account will grow more quickly. $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 COMPOUND INTEREST COMPOUND

Date

Use the Rule of 72 to determine when the doubling of investments will occur. Please show your work. 72÷interest rate = years until the investment doubles

Ron invested $1,000. If the yearly compounding interest rate is 9%, when will the investment be worth $2,000?

Shiloh invested $15,000. The yearly compounding interest rate is 11%. How many years until the investment is $30,000?

Apple invested $8,000. In five years it doubled to $16,000. What was the yearly compounding interest rate?

Linus invested $2,500. The yearly compounding interest rate is 5%. How many years until the balance doubles? What will the balance be?

LuLu invested $600. In 7 years it doubled to $1,200. What was the yearly compounding interest rate?

Date

Use the Rule of 72 to determine when the doubling of investments will occur. Please show your work. 72÷interest rate = years until the investment doubles

Ron invested $1,000. If the yearly compounding interest rate is 9%, when will the investment be worth $2,000?

8 years

Shiloh invested $15,000. The yearly compounding interest rate is 11%. How many years until the investment is $30,000?

6.54 years

Apple invested $8,000. In five years it doubled to $16,000. What was the yearly compounding interest rate?

14.40%

Linus invested $2,500. The yearly compounding interest rate is 5%. How many years until the balance doubles? What will the balance be?

14.4 years, $5,000

LuLu invested $600. In 7 years it doubled to $1,200. What was the yearly compounding interest rate?

10.28%

FIT Work 2.2 Date

Define Compound Interest:

Compounding Interest Formula A=P(1+ r/n)nt Where, P=principal (initial investment) r=annual interest rate (as a decimal) n=number of times the interest is compounded per year t=number of years A=amount after time t

Using a scientific calculator, answer the following questions.

Jennifer deposited $1,000 into her savings account. The bank is paying a 4.7% interest rate, compounded monthly. Calculate the balance after 15 years.

Ramona deposited $500 into her savings account. The credit union is paying a 4.2% interest rate, compounded quarterly. Calculate the balance after 20 years.

Daphne started her investments with $100. Her investments are earning an 8.0% interest rate, compounded 12 times a year. Calculate the balance after 30 years.

Alice deposited $2,500 into her money market account. The money market is earning a 3.5% interest rate, compounded four times a year. Calculate the balance after 25 years.

FIT Work 2.2 Date

Define Compound Interest: Interest credited daily, monthly, quarterly, semi-annually, or annually on both principal and previously credited interest.

Using a scientific calculator, answer the following questions.

Jennifer deposited $1,000 into her savings account. The bank is paying a 4.7% interest rate, compounded monthly. Calculate the balance after 15 years.

$2,021.06 A = 1000 (1 + 0.047/12)12x15

Ramona deposited $500 into her savings account. The credit union is paying a 4.2% interest rate, compounded quarterly. Calculate the balance after 20 years.

$1,153.12 A = 500 (1+ 0.042/4)4x20

Daphne started her investments with $100. Her investments are earning an 8.0% interest rate, compounded 12 times a year. Calculate the balance after 30 years.

$1,093.55 A = 100 (1 + 0.08/12)12x30

Alice deposited $2,500 into her money market account. The money market is earning a 3.5% interest rate, compounded four times a year. Calculate the balance after 25 years.

$5,974.41 A = 2,500 (1 + 0.035/4)4x25

LESSON 2.3 Inflation & Yes, You Can BINGO This lesson has students exploring inflation. In addition, a review game of BINGO is included. The FIT Work has students answering a question regarding inflation.

MATERIALS & PREPARATION LEARNING GOALS  Students compare saving over time and its relationship to the Yes, You Can BINGO Instruction sheet (page rate of inflation. 2.23-2.24)  Students interpret how inflation affects the rate of return. Yes, You Can BINGO Definitions sheet  Students review vocabulary words learned in previous lessons. (page 2.25-2.26) Yes, You Can BINGO Call-Out sheet (page 2.27) JUMP$TART PERSONAL FINANCIAL EDUCATION NATIONAL STANDARDS ALIGNMENT Yes, You Can BINGO Possible Answers sheet (page 2.28)  Financial Responsibility and Decision-Making Yes, You Can BINGO Card sheet (page 2.29)  Saving and Investing one for each student

Coins, buttons, or scrap paper DO THIS Small, non-see-through container (i.e., coffee 1. Review with students the factors which impact an investment’s can or basket) opportunity to grow. Examples: interest, time, inflation, frequency of FIT Work 2.3 sheet (page 2.30) deposit, and initial investment amount.

2. Define inflation as the overall general upward price movement FIT Tool: Savings Goal Calculator of goods and services in an economy. Also, share that over time, as the cost of goods and services increase, the value of a dollar is Slide Presentation 2.3 going to fall because a person won't be able to purchase as much with that dollar as he/she previously could. So, a dollar in the future won’t buy as much as a dollar today.

3. Present the following scenario. Scott has $4,500 in a savings account that earns 5% (compounded 12 times a year). He is saving the money for college in five years. College tuition currently runs $5,000. If the rate of inflation is 4% will he have enough for tuition in 5 years?

NOTES: 4. Have students answer and discuss. Use the FIT Tool: Savings Goal Calculator to determine the savings amount and an inflation calculator to determine the value of the money due to inflation. Find an online calculator by doing an Internet search for “inflation calculator input rate.” Your search may lead you http:// www.calculatorweb.com/calculators/inflationcalc.shtml. The key is to ensure the inflation rate can be factored in.

Scott will need $5,475 in five years to account for the 4% rate of inflation. His savings will be worth $5775. Sam will have enough money to account for the rate of inflation.

5. Present the following scenario. Mary Beth has $2,500 in a savings account that earns 2.5% (compounded monthly). She is saving money to pay for Community College in five years. Tuition currently costs $2,600. If the rate of inflation is 3%, will she have enough for the tuition in five years?

6. Have students answer and discuss. Use the FIT Tool: Savings Goal Calculator to determine the savings amount and an inflation calculator to determine the value of the money due to inflation.

Mary Beth will need $3,014 in five years to account for the 3% rate of inflation. Her savings will be worth $2,832. Mary Beth will not have enough money to account for the rate of inflation.

7. Discuss with students that inflation can work against your money and that investment rates need to be higher than the rate of inflation. Inflation rates usually average between 3-4% per year.

8. Group student in teams of 2-3. Have teams answer the following question: “How does inflation affect the rate of investment return?” Answer: As the rate of inflation increases, the value of money goes down. The purchasing power of the money invested could be less when redeemed if the rate of inflation is greater than the rate of return. It is essential for investments to have a rate of return that is higher than the rate of inflation. If not, the money will have less purchasing power when it is redeemed. For example: If the rate of inflation is 3% and the rate of investment return is 2%, then when the investment is adjusted for inflation, there is a negative return of -1%.

9. Some teams may have a hard time answering the question. Monitor student progress, provide gentle prompts and check for understanding. Allow teams to report out their explanations. Discuss the implications of inflation.

NOTES: 10. Play Yes, You Can BINGO using resource materials on pages 2.23-2.29. The BINGO game content is a review of the vocabulary terms from the previous lessons.

11. Optional: Have a representative from a financial institution come in and discuss inflation.

Optional: FIT Work 2.3 (page 2.30). Students answer a question FIT WORK regarding inflation.

 Observe and listen to discussions for logical thinking and ASSESSMENT mastery of content.  Review FIT Work 2.3 sheet for completion and mastery.

 FIT Work 2.3 sheet (page 2.30) PFP

Materials  Yes, You Can BINGO Definitions sheet (page 2.25-2.26)  Yes, You Can BINGO Call-Out sheet (page 2.27)  Yes, You Can BINGO Possible Answers sheet (page 2.28)  Yes, You Can BINGO Card sheet (page 2.29) one for each student  Coins, buttons, or scrap paper  Small, non-see-through container (i.e., coffee can, basket)

Preparation 1. Write each student’s name in a box on the Yes, You Can BINGO Call-Out sheet (page 2.27). If you have 30 students, all 30 boxes will be filled in. If not, there will be some empty boxes.

2. Make a copy of the filled out sheet for each student. It is important to do this before the next step!

3. Cut out each square to create individual “call-out” pieces. Put the pieces in the small container.

4. Make copies of the Yes, You Can BINGO Card sheet (page 2.29) for each student.

5. Gather coins or buttons (enough for each student to have 25 pieces) or have students cut small squares out of scrap paper to be used as markers.

6. Print the Yes, You Can BINGO Definitions sheet (2.25-2.26) for each student.

How to Play 1. Tell students that they will be playing Yes, You Can BINGO. However, the catchphrase for the game isn’t BINGO; it’s YES, YOU CAN. So, when a student gets a row, column or diagonal filled in, he or she says “YES, YOU CAN!” instead of BINGO.

2. Give each student a Yes, You Can BINGO card and a copy of the Yes, You Can BINGO Call- Out sheet with student names on it.

3. Instruct students to write each of their classmate’s names (including their own) in the boxes on their BINGO Card. Tell students that they can use the Call-Out sheet to help them with this task. As they write down a name, have students cross that name from the Call-Out sheet. Students continue this process until all the names have been used. See options below to complete this task.  If there are 24 students in the class, tell students to write their own name in the center box, as well as another box. This will fill in all 25 boxes.  If there are 23 students or less in the class, have students write other student’s names in the remaining boxes or use them as “Free Spaces.” However, it is not recommended to have more than two Free Spaces in a game card.  If there are more than 25 students in the class, tell students to double-up their classmate’s names in boxes until all students are captured on the cards.

This process is critical because it gives students an active role in setting up the game and some perceived “control” over the game’s outcome even though chance is the overriding force in the game. The process above should take 3-5 minutes.

4. Once the BINGO cards are completed, tell students that the game is played just like regular BINGO except instead of calling out letters and numbers, their names are called out. When a name is called out, students put a marker piece on each box that has that person’s name on it. Boxes cannot have more than one marker on them (applies when names are doubled-up in one box).

5. Serve as the BINGO callers and facilitate the Players’ Challenge (see below) when “YES, YOU CAN!” is made.

6. When a “YES, YOU CAN!” BINGO is made by a student, the names in that column, row or diagonal go to the front of the class for the Players’ Challenge.

Players’ Challenge 1. Have the students identified in the Yes, You Can BINGO row work together as a team to correctly identify vocabulary word definitions.

2. Read the definitions on the BINGO Definitions sheet. Present each definition one at a time. The group has 30 seconds to confer and come up with the right answer.

3. If the group is unable to correctly identify the vocabulary word, open the floor to the rest of the class and ask students for an answer.

4. Repeat this process until all six of the vocabulary words for that game have been presented.

5. Conduct four BINGO games so that all 24 vocabulary words on the Yes, You Can BINGO Definitions sheet are presented.

GAME 1 Income – Earnings received as wages, rent, profit, or interest. Taxes – Government fees on business and individual income, activities, or products. Cash – Money in the form of bills or coins; currency. Financial goals – Desired results from one’s efforts to achieve personal economic satisfaction. Inflation – An overall rise in the price of goods and services; the opposite of the less common deflation. Opportunity cost – The value of possible alternatives that a person gives up when making one choice instead of another; also known as a trade-off.

GAME 2 Pay Yourself First® – Commitment to invest in your financial future before paying for expenses such as bills, vacations, a new car, or movies. Checking account – An account which allows the holder to write checks against money deposited in the account. Wants – Desires that can be satisfied by consuming a good or service. Credit card – Any card, plate, or coupon book that may be used repeatedly to borrow money or buy goods. Rule of 72 – A formula which calculates approximately how many years it will take for an investment to double with an annual compounding interest rate. Variable expenses – Periodic costs/expenses that do not have a constant value.

GAME 3 Needs – Necessities or requirements determined by factors in a person’s environment, such as food, security, and shelter. Systematic Decision-Making – A method of selecting a course of action after gathering and evaluating information and considering the costs and benefits of various alternatives and consequences. Comparison shopping – The process of seeking information about products and services to find the best quality or utility at the best price. Emergency Fund – Money set aside for unexpected expenses or for living costs in case of job loss. Fixed expenses – Costs that do not change from period to period or that change only very slightly. Savings account – A deposit account at a bank which pays interest, but cannot be withdrawn by check writing.

GAME 4 Spending plan – A financial tool, also called a budget, which outlines sources of income and expenses in detail in order to manage spending and analyze spending habits. Gross pay – Wages or salary before deductions for taxes and other purposes. Compound interest – Interest credited daily, monthly, quarterly, semi-annually, or annually on both principal and previously credited interest. Debit card – A card issued by a bank that directly accesses available funds from a bank account, typically a savings or checking account. Expense – The cost of goods and services, including those that are fixed and variable. Paycheck – A check issued to an employee in payment of salary or wages.

The following are potential answers in Yes, You Can BINGO. Be aware that not all of the terms are used in the game.

Cash Needs Checking Account Opportunity Cost Comparison Shopping Paycheck ® Compound Interest Pay Yourself First Credit Card Rule of 72 Debit Card Savings Account Emergency Fund Spending Plan Expense Systematic Decision-Making Financial Goal Taxes Fixed Expense Variable Expense Income Wants Inflation

FIT Work 2.3 Date

Inflation decreases the value of money over time. The higher the rate of inflation and the more time passes, the less your money is worth. Should this affect how you invest your money? Please explain.

FIT Work 2.3 Date

Yes. Long-term investments need to be in interest-bearing accounts that have a rate higher than the rate of inflation to ensure that the dollar invested will be able to buy as much (or more) in the future.

LESSON 2.4 Debt & Easy Access Credit This lesson teaches students about good and bad debt, how to reduce debt, and easy access credit. The FIT Work has students reflecting about easy access credit and making wise financial decisions.

MATERIALS & PREPARATION LEARNING GOALS  Students are introduced to the financial concepts (vocabulary) Good Debt vs. Bad Debt sheet (page 2.36) through a game. one for each student  Students understand the importance of setting goals. Easy Access Credit Resource sheets (page 2.38-2.40) one for each student JUMP$TART PERSONAL FINANCIAL EDUCATION FIT Work 2.4 sheet (page 2.41) one for each student NATIONAL STANDARDS ALIGNMENT  Financial Responsibility and Decision-Making  Planning and Money Management FIT Tool: Debt Reducer Calculator  Saving and Investing

Slide Presentation 2.4 DO THIS 1. Group students in teams of 2-3. Ask students if they know what debt is. Define debt as an obligation to pay someone else. Ask students to name examples of debt. Examples: home mortgage, home equity loan, car loan, credit card debt, student loans.

2. Ask students if there is such a thing as “good debt.” Discuss.

3. Define good debt as borrowing or financing to purchase something that can appreciate/gain in value. Define bad debt as borrowing or financing to purchase something that in the long run costs you more than its initial value.

4. Hand out the Good Debt vs. Bad Debt sheet (page 2.36). Explain to students they are to answer each of the questions and then create a skit that illustrates and answers the question. Give them an appropriate amount of time.

NOTES: 5. Have student teams complete the Good Debt vs. Bad Debt sheet. When teams have completed the sheet, have them present their skits for the class. Have students put the sheet in their PF Portfolio.

6. Ask students what happens when people “live beyond their means” or borrow to maintain their lifestyle. Discuss with students that more and more adults and young people are getting into serious debt, especially credit card debt.

7. Discuss with students what happens when debt such as credit card bills, home equity loans, home mortgages, car payments, and student loans are not paid on time or not paid at all. Some examples are late fees, foreclosure on your house, repossessed cars, and increased debt from interest charges. Discuss how compound interest charges can quickly cause debt to get out of control.

8. Use the FIT Tool: Debt Reducer Calculator to show how expensive debt can be. Since 2005-06, the minimum payment on a credit card must be 4% of the balance. Make sure students understand that the FIT Tool scenarios only reflect situations when there are no additional charges made to the card.

9. Provide the following scenario. Anne has a credit card with a balance of $1,200. The interest rate is 9.89%. Her fixed monthly payment is $48. When will she be debt free? How much will she pay in interest?

Amount of debt: $1,200 Interest rate: 9.89% Fixed monthly payment: $48 Total interest paid: $149.28 Debt free: 2 years and 5 months

10. After each example, discuss the length of time and the amount of interest paid.

11. Present the follow scenario: Arman has a credit card with a balance of $15,750. The interest rate is 19.89%. His fixed monthly payment is $630. When will he be debt free? How much will he pay in interest?

Amount of debt: $15,750 Interest rate: 19.89% Fixed monthly payment: $630 Total interest paid: $4,757 Debt free: 2 years and 9 months

NOTES: 12. Ask students how Arman could pay his debt off sooner. Guide students to increasing his monthly payment. Use the Accelerated Debt Reduction portion of the FIT Tool: Debt Reducer Calculator to add extra payments and discuss how increasing payment amounts saves you money.

13. Discuss other ways to reduce debt. For example:  Reduce spending and use the difference to pay down debt.  Cut up credit card.  Spend only cash.  Adjust spending plan.  Pay more than just the minimum payment.  Transfer to a credit card with a lower interest rate.  Negotiate a lower interest rate.  Prioritize payment options.

14. Explain to students that sometimes people get into situations where they need cash immediately and do not have an emergency fund to rely on. Pawnshops, payday loans, rent-to-own, and title loans are all examples of easy access credit and how people can get fast cash. Using these services can make a bad financial situation worse, and habitually using them can create a cycle of bad debt that can be difficult to escape.

15. Group students in teams of 3-4. Tell students that they will be teaching the other students about different types of easy access credit. Provide each student with a copy of the Easy Access Credit Resource sheets (pages 2.38-2.40). They can use this to learn about pawnshops, payday loans, rent-to-own, and title loans. Teams can also use textbooks, books, and/or the Internet to find additional information.

Have the students answer the following questions/prompts for each type of easy access credit:  Describe it.  Why do people use it?  Why can it be a bad financial move?  What other interesting information can you share about it?

16. Have each team teach the class about easy access credit. Have students take notes for their PF Portfolio. Check for understanding.

17. Discuss how debt impacts credit history and credit score. Explain that once a person has established credit that they are given a score. The score is listed on credit reports. Credit reports

NOTES: are meaningful to borrowers and lenders. A person may not get a loan based on a lower credit score.

18. Optional: Have a representative from a banking institution come in and present information on debt, credit cards, and easy access credit.

Optional: FIT Work 2.4 sheet (page 2.41). Students reflect on easy FIT WORK access credit and making wise financial decisions. The answer key is on page 2.42. Remind students they are responsible for keeping all FIT Work sheets in the PF Portfolio.

 Observe how teams work together – look for collaboration, ASSESSMENT leadership, communication, and teamwork qualities and skills.  Observe and listen to team presentations/lessons – look for mastery of content.  Review Easy Access Credit notes for accuracy.  Review FIT Work 2.4 sheet for mastery of content and completion.

 Good Debt vs. Bad Debt sheet (page 2.36) PFP  Easy Access Credit notes  FIT Work 2.4 sheet (page 2.41)

Date

Read the following scenarios and determine if the person has acquired “good debt” or “bad debt.” Include consequences for your decision and your rationale. Pick one of the scenarios and create a short skit to share with the class.

Rosie just bought a new house. Her 30-year home mortgage is $150,000. In addition, she is considering taking out a home equity loan of $20,000 to remodel her kitchen. She is discussing this option with her best friend over a cup of coffee. Why could this be considered good debt?

Norman is at the auto shop with his brother. He wants to purchase four chrome wheels at $1,500, two car seat covers at $250, and a stereo system at $500. Norman has $2,000 in savings and is considering charging the total bill to his credit card. His brother is discussing the purchases with him. Why could this be considered bad debt?

Pauline needs to pay $7,000 for one semester of college tuition and books. She does not have any savings to pay for it. She is considering charging it to her credit card. She will pay it back over a period of time. She is discussing the matter with her mother. Do you consider this to be good debt or bad debt? Why?

Jeffrey wants to start a business. He is at the bank applying for a $30,000 loan. He is there with his wife. Is this considered good debt or bad debt? Why?

Hilary has a once-in-a-lifetime trip to the Galapagos Islands. The entire trip is going to cost her $3,000. She only has $1,500 in savings. Hilary is considering charging the trip on her credit card. Her friend is trying to talk her into going on the trip. Why is this bad debt?

Date

This is good debt because the loan is being used for something that will increase the value of her home.

The money he would use to add those extras to his car does not increase the value of the car. He is also depleting his savings for an unnecessary purchase and going into more debt because of the interest he has to pay on the credit card.

This is bad debt because interest on credit cards is usually high and since she plans to pay it back over time, she will have to pay substantial interest to the credit card company. Since a college education can significantly impact Pauline’s ability to get a job with a decent salary once she graduates, she may want to get a student loan at a lower interest rate.

Jeffrey wants to start a business. He is at the bank applying for a $30,000 loan. He is there with his wife. Is this considered good debt or bad debt? Why?

This is good debt because he is using the loan to start a business which could increase his income and assets.

This bad debt because it is for an unnecessary expense, which also depletes her savings.

Payday Loan Payday loans are short-term cash loans based on the borrower’s personal check held for future deposit or on electronic access to the borrower’s bank account. Borrowers write a personal check for the amount borrowed plus the finance charge and receive cash. Lenders hold the checks until the next payday when the loans and the finance charge must be paid in one lump sum.

To pay a loan, borrowers can redeem the check by paying the loan with cash, allow the check to be deposited at the bank, or just pay the finance charge to roll the loan over for another pay period. In some cases, borrowers sign over electronic access to their bank accounts to receive and repay payday loans.

Payday loans can be made by payday loan stores, check cashers, and pawn shops. Some rent-to- own companies also make payday loans. Loans are also marketed via toll-free telephone numbers and over the Internet. To get a payday loan, a person needs an open bank account in relatively good standing, a steady source of income, and identification. Lenders do not conduct a full credit check or ask questions to determine if a borrower can afford to repay the loan.

Payday loans can trap consumers in repeat borrowing cycles due to the extreme high cost to borrow, the very short repayment term, and the consequences of failing to make good on the check used to secure the loan.

Is payday lending legal? Payday lending is authorized by state laws or regulations in 37 states. Some states allow licensed lenders to make payday loans. Twelve states and two territories have not enacted payday loan authorizing legislation.

What are the terms of payday loans? Payday loans range in size from $100 to $1,000, depending on state legal maximums. The average loan term is about two weeks. The finance charge ranges from $15 to $30 to borrow $100. For two-week loans, these finance charges result in interest rates from 390% to 780% APR. Shorter term loans have even higher APRs.

Payday loans are extremely expensive compared to other cash loans. A $300 cash advance on the average credit card, repaid in one month, would cost $13.99 finance charge and an annual interest rate of almost 57%. By comparison, the same amount for a payday loan costing $17.50 per $100 for two weeks would cost $105 if renewed one time or 426% annual interest.

Car Title Loan A car title loan refers to a loan in which someone’s car title and a copy of their car keys are held by the lender until the person repays in full. They are also called a “title loan” or “car pawn” or “title pledge loans” or “motor vehicle lines of credit.”

Pawnbrokers, used car lots, and stand-alone storefronts provide title loans and are found mostly in strip malls, near convenience or liquor stores, and in neighborhoods where there are few bank branches.

Like payday loans, car title loans are marketed as small emergency loans, but these loans put, at high risk, an asset essential to the well-being of working families – their car.

Typical car title loans have annual interest rates of 300% and the loan amount is no higher than 30 to 50 percent of what the lender says is the value of the car. Like payday loans, car title loans are usually made without regard to a person’s ability to repay.

Car title loans are set up to be repaid as a single large payment after a very short term, usually a month. The person taking the loan has to give the lender the title to his/her car or a set of keys. If the loan is not repaid in one month or another round of fees paid to extend the loan, the lender will take the car, sell it, and possibly keep the full sale price.

What is abusive about car title loans? Rollovers: Often, people cannot pay the full amount owed on the due date, so they must extend or “roll over” the loan repeatedly. This creates a situation where many consumers pay fees higher than the amount originally borrowed. Losing the car and “equity”: If a person cannot afford to pay fees every month to rollover the loan, the lender may take the car without advance notice. This can lead to further financial problems, if the person is dependent on the car to get to work. It can also lead to health and other problems as well, if there is no car to get to the doctor’s office or to get children to school. When the lender takes the car, he/she will sell the car and may keep the full value, not just the amount owed. Extremely high interest rates: The interest rates charged are often very high, sometimes 300% or more. Disguised loans: In states where car title loans are illegal, title lenders hide the true nature of their products to exploit loopholes in existing laws—for example, pretending that their abusive loans are “sales and leasebacks” or “pawns” when that is not the case. Internet loans: Using the Internet to borrow money leads to increased risk. It’s possible that car title lenders will not keep private information confidential. Also, they might not be physically located in the same state and often aren’t even present in the United States. They may lend over the Internet in order to avoid the protections of state laws and to make it virtually impossible for anyone or any government agency to find them.

Are car title loans legal? High-priced title loans are illegal in about half of the states. However, the car title lending industry has grown tremendously in states that have failed to take adequate steps to protect consumers or have passed industry-friendly laws.

Rent-to-Own For many consumers with poor or non-existent credit histories, owning big ticket items such as furniture, electronics, or cars can seem unattainable. Qualified buyers can often get low-interest loans from banks to finance these purchases, but some can only qualify to pay high-interest rental prices every month. Under traditional rental agreements, there is no sense of ownership. If the renter cannot make the rental payment, the item is repossessed by the owner.

A rent-to-own arrangement starts off as a traditional rental agreement, but the two parties agree to transfer ownership at the end of a specified period of time. The seller benefits from the high monthly interest rates, and the buyer benefits from the less restrictive credit qualifications (only a few references and proof of steady employment is needed).

A $600 television set, for example, might end up costing the buyer nearly $1,500 in total payments. Since these monthly rent-to-own payments are usually smaller than equivalent bank loans, the buyer doesn’t always feel the pinch. The seller can afford to take an occasional loss as long as those who remain in the rent-to-own program continue until the end. Repossessed items are sometimes sold again under new rent-to-own arrangements.

Despite the high interest rates and risk, these customers will eventually assume ownership rights to their purchases. The alternative might be to buy inferior used goods with available cash, or enter into other high interest loans with lending institutions.

Rent to own arrangements are legal, but consumers should be aware of all the hidden costs and conditions prior to entering into the agreement.

Pawn Shops A pawn shop is a lot like a dozen garage sales and a flea market all rolled into one. Pawn shops provide people with a fast, easy way to borrow small amounts of money. There are three transactions that happen in any pawn shop: People borrow money by putting up something they own as collateral. People sell used merchandise. People buy new and used merchandise.

The basic idea behind a pawn shop is to loan people money. This is how it works: Bring in something of value and give it to the pawnbroker as collateral for a loan (this act is called pawning). The pawnbroker loans money against that collateral. When the loan plus the interest is repaid, the collateral is given back. If the loan is not repaid, the pawnbroker keeps the collateral.

If an item is pawned for a loan, within a certain period of time, the pawner of an item may purchase it back for the amount of the loan plus some agreed upon amount for interest. The amount of time, and rate of interest, is governed by state law and the pawnbroker’s policies. If the loan is not paid (or extended) within the time period, the customer forfeits title of the item to the pawnbroker. The pawnbroker does not report the defaulted loan on the customer’s credit report, since the pawnbroker has title to and physical possession of the item. The pawnbroker may recoup the loan value through outright sale of the item at his pawn shop.

The pawnbroker should only accept items that are not stolen property. Laws to protect both the pawnbroker and the community-at-large exist in some areas. These laws often require the pawnbroker to establish positive identification of the seller through photo ID (i.e., drivers license or government-issued ID), as well as a holding period placed on an item purchased by a pawnbroker to allow for local law enforcement authorities to track down stolen items.

FIT Work 2.4 Date

Desmond is anxious to purchase some sneakers that are on sale this week. Unfortunately, he does not have the money to pay for them. Rather than wait until he saves enough, he decides to take out a title loan using his car as collateral. Was this a good decision? Why or why not?

What happens if he is unable to pay back the loan?

What advice would you give Desmond?

FIT Work 2.4 Date

No. Car title loans have extremely high interest rates (often over 300%). Desmond will be further in debt than before because he will have to pay back the loan plus the amount of interest. This means that his sneakers actually cost a lot more than the sale price because of the interest he had to pay for the loan.

What happens if he is unable to pay back the loan?

Two things could happen. Desmond can extend the loan at an even higher interest rate or the title loan company will take away his car.

What advice would you give Desmond?

If he really wants that certain pair of sneakers, he can wait until he has enough money saved to pay for them. They may not be on sale by then but at least he will not get himself further into debt with the car title loan. He can also buy another pair now that he can afford.

LESSON 2.5 Advertising Students learn how to analyze and evaluate advertising claims, identify target audiences, and the importance of comparison shopping. As part of FIT Work, students explore advertising and how it is used to influence consumer wants and spending.

MATERIALS & PREPARATION LEARNING GOALS  Students analyze and evaluate a variety of advertising claims. Two name brand cereal boxes; one targeted  Students critique how advertising targets different audiences. to adults and one to kids  Students compare and contrast two similar products and how One generic box/bag of cereal; similar advertising is used to attract consumers. product to the kid cereal box Comparing Products sheet (page 2.46) one for each student JUMP$TART PERSONAL FINANCIAL EDUCATION NATIONAL STANDARDS ALIGNMENT FIT Work 2.5 sheet (page 2.47) one for each student  Financial Responsibility and Decision-Making Adult Dialogue Activity 2 sheet (page 2.49)  Planning and Money Management one for each student

DO THIS Slide Presentation 2.5 1. Ask students to define advertising. Advertising is an announcement of the benefits of a product or service intended to encourage its purchase.

2. Have students share some of their favorite advertisements. Discuss why they like them, what makes them effective, and if the advertisement affects their purchasing decisions.

3. Share the adult- and kid-focused cereal boxes. Ask students to identify the target audiences for both. Define target audience as the market for which the product was created and to whom the product is advertised.

4. Have students list what tactics/strategies the advertisers used for both the adult and kid cereals to make them attractive to the target audiences.

NOTES:  Adult – focused on health, more subtle colors.  Kid – bright colors, sugary cereal, icon, cartoon-like images.

5. Explain to students that these are marketing tactics to get consumers to purchase the product.

6. Share the generic box/bag of cereal with students. Ask students to compare the name brand cereal to the generic cereal. Ask what is different between the two.  Packaging, no icon, not as bright, not as cartoon like, not as fancy.

7. If students do not bring it up, emphasize that the price is different, too. Typically, name brand products/services cost more and sometimes the quality is the same as the generic brand. When two products/services are very similar, it is important to comparison shop for the best buy. Comparison shopping means to seek out information about the product or service to find the best quality or utility at the best price. Comparison shopping saves money.

8. Hand out Comparing Products sheet (page 2.46). Explain to students that they need to identify two products that are similar and create a presentation that communicates how the products are different, how they are similar, how the company(ies) use advertising to attract the consumer, who the target audience is, and which product the student thinks is the best buy and why.

9. Give the students a few days time to complete the presentation. Suggest using computer presentation programs, actual products, or magazine ads on poster board. Emphasize the importance of creativity in the presentations to get their message across.

10. Optional: Have students compare the products and services offered by local banking institutions. Use brochures, mailings, and the Internet to compare and determine the ‘best buy’ for savings accounts, credit cards, CDs, etc.

11. Optional: Have a representative from an advertising agency come in and present information regarding advertising.

12. Optional: Adult Dialogue Activity 2 sheet (page 2.49).

Optional: FIT Work 2.5 sheet (page 2.47). For this FIT Work, FIT WORK students explore marketing/advertising and how it is used to influence the way they think/feel about a product or service.

NOTES: The answer key is on page 2.48. Remind students they are responsible for keeping all FIT Work sheets in the PF Portfolio.

 Observe and listen to student presentations – look for creativity ASSESSMENT and mastery of content.  Review FIT Work 2.5 sheet for completion and mastery of content.

 FIT Work 2.5 sheet (page 2.47) PFP  Adult Dialogue Activity 2 (page 2.49)

Identify two products/services that are similar.

Create a presentation (PowerPoint®, poster board, actual products – be creative) that communicates the following:  How the products/services are different  How the products/services are similar  How the company(ies) use advertising to attract the consumer  Identifies the target audience(s)  Which product you think is the best buy and why

Include graphics, drawings, images, etc. of the products/services to create a visual element to the presentation.

You will need to deliver your presentation to the class. All information in these guidelines need to be included in your presentation.

Comparing Products Presentation Guidelines Due Date:

Identify two products/services that are similar.

Include graphics, drawings, images, etc. of the products/services to create a visual element to the presentation.

You will need to deliver your presentation to the class. All information in these guidelines need to be included in your presentation.

FIT Work 2.5 Date

What are your favorite advertising campaigns, jingles, slogans, and icons? These can be through television, print media, radio, billboard, and Internet. Why are they your favorite?

How can marketing/advertising be used to influence how you spend your money?

Do advertisements always depict a realistic view of life? Give examples of advertisements that make unrealistic claims as to how their product/service can improve your life.

FIT Work 2.5 Date

What are your favorite advertising campaigns, jingles, slogans, and icons? These can be through television, print media, radio, billboard, and Internet. Why are they your favorite?

How can marketing/advertising be used to influence how you spend your money?

Marketing/advertising influence young people to spend their money by convincing them that material possessions are what matter and branding their products to be “cool” - if they buy their product, then they will be part of the cool club. Marketers also use the peer pressure tactic – if you don’t get the same brands your friends have, then you’re inferior.

As teens are creating/finding their identity, the identity-oriented branding also encourages disapproval of anything different, be it a different generation, different cultural group, or different school clique.

Do advertisements always depict a realistic view of life? Give examples of advertisements that make unrealistic claims as to how their product/service can improve your life.

A lot of advertisements are fantasy-based. However, when ads depict “realistic” views, sometimes they exploit our feelings and emotions to get us to buy their product. For example, ads will present how embarrassing it is to have acne and claim that their product can make blemishes disappear; making you happier and more popular.

Date

When you want to purchase an item, do you usually buy the first one you see or do you do some comparison shopping? Sometimes there are some really great bargains that you just happen to come across. Retail shops and other businesses rely on you to make the impulse buy. Marketers are very savvy about playing with your emotions. Try to remove emotions from your shopping. It can be difficult. However, if you just take a little time to do some research, you might just end up with a better product for less money. With the Internet, it’s easier than ever to comparison shop.

Caring adult and students: Share examples of some comparison shopping you’ve done and the benefits of your extra effort. Share examples of times when you didn’t comparison shop and rea- sons why. Document your discussion.

Adult initials:

PROJECT Be Money-Wise: You Are the Expert This project has students developing marketing collateral to educate and inform audience groups about how to achieve financial independence. This project allows students to demonstrate their knowledge and employ their creative abilities.

MATERIALS & PREPARATION LEARNING GOALS  Students create a marketing piece for a credit card company or Module 2 Project Guidelines sheet (page banking institution. 2.52) half-sheet per student  Students decide what essential financial information is included Module 2 Rubric sheet (page 2.53) one for in the marketing piece. each student  Students defend the design of their marketing piece.

Slide Presentation Project 2 JUMP$TART PERSONAL FINANCIAL EDUCATION NATIONAL STANDARDS ALIGNMENT  Financial Responsibility and Decision-Making  Credit and Debt  Saving and Investing

DO THIS 1. Explain to students that they are going to create a marketing piece and presentation designed to help people understand what they can do to save money, reduce spending, stay out of debt, avoid easy access credit, and set a course toward financial independence.

2. Group students into small, well-functioning teams of 3-4 students for the Module 2 Project Be Money-Wise: You are the Expert. Decide which teams will work on which scenario (credit card company or banking institution) and hand out the appropriate Module 2 Project Guidelines sheet (page 2.52) and the Module 2 Rubric (page 2.53) to students.

3. Review the guidelines and rubric with the class. Explain they will

NOTES: be graded on their project and presentation, based on the information in the guidelines and the rubric. Communicate the due date for the completed project and have students write the date on the Module 2 Project Guidelines sheet. The rubric should be placed in the PF Portfolio. A reasonable time to complete this project is approximately 1½ class periods. Adjust as needed.

4. Let the teams begin working on their projects. Some teams may need additional direction and help to get them started. Monitor and assist student groups.

5. Establish a schedule for presentations and have student teams sign up for their preferred presentation time.

6. Have students deliver their presentations for the “Be Money- Wise: You are the Expert” project. Remind them that their presentations are to be approximately 5-10 minutes in length.

7. Use the Module 2 Rubric (page 2.53) to assess each team presentation.

8. Once all presentations are completed, engage students in discussions concerning each presentation. Discuss the effectiveness of the marketing materials, strategies for reaching target audiences, and the content delivered.

9. After the classroom discussion of the presentations, have students complete their self-evaluation of the presentation using the Module 2 Rubric. The rubric should be in their PF Portfolio.

10. Meet with each team individually and review the completed rubric for their presentation. Have students compare their self- assessment to the score the team was given.

11. Thank students for their hard work.

 Module 2 Rubric (page 2.53) ASSESSMENT

 Module 2 Rubric (page 2.53) PFP

Credit Card Company You work for a marketing company and have been hired to create and design an educational marketing campaign piece (commercial, brochure, web-site, PowerPoint®, public service announcement, newspaper insert, etc.). The piece is for college students and is to teach them about the importance of using credit cards wisely to achieve financial independence.

When creating the marketing piece, ask yourself the following:  Who is the target audience and what are their unique financial needs?  What do you want your target audience to know, feel, or do?  What financial obstacles does the target audience have to overcome?  How will you convince your target audience to overcome their financial obstacles?  What information does the target audience need about using credit wisely? Why?

The marketing piece must describe ‘something’ that will help the target audience learn about achieving financial independence.

Create a 5-10 minute presentation that showcases the marketing piece and explains your rationale for the design; including how you addressed each of the questions above.

Use these guidelines and the Module 2 Rubric to create your marketing piece and presentation. All required information needs to be addressed.

Be Money-Wise: You are the Expert Module 2 Project Guideline Due Date:

Banking Institution You work for a marketing company and have been hired to create and design an educational marketing campaign piece (commercial, brochure, web-site, PowerPoint®, public service announcement, newspaper insert, etc.). The piece is for families and is to teach them about the role banking institutions can play in helping them achieve financial independence.

When creating the marketing piece ask yourself the following:  Who is the target audience and what are their unique financial needs?  What do you want your target audience to know, feel, or do?  What financial obstacles does the target audience have to overcome?  How will you convince your target audience to overcome their financial obstacles?  What information does the target audience need about banking? Why?

The marketing piece must describe ‘something’ that will help the target audience learn about achieving financial independence.

Create a 5-10 minute presentation that showcases the marketing piece and explains your rationale for the design; including how you addressed each of the questions above.

Use these guidelines and the Module 2 Rubric to create your marketing piece and presentation. All required information needs to be addressed.

Not included in presentation Not included in presentation Not included in presentation Not included in presentation Not included in presentation Not included in presentation Not included in presentation More practice and enhancements needed

ect guidelines for the design of

by your teacher to assess your TOTAL

One somewhat developed target audience financial need is included A somewhat developed plan is included Somewhat developed expectations are included One somewhat developed financial obstacle is included A somewhat developed plan is included and/or inaccurate Little financial information is included no creativeeffortLittle to Adequate communication skills and support materials

Use this rubric along with the proj your presentation. You will use this to self-evaluate your presentation and it will be used team’s final presentation. Put this sheet in your PF Portfolio.

Two target audience audience target Two financial needs are included Plan is included are Expectations included Two financial obstacles are included Plan is included Mostly accurate and/or applicable financial information is included Adequate creative design Good communication skills, multiple students presenting, eye contact, and nice support materials

Three+ fully developed financial audience target needs are included Fully developed, well- thought out plan is included Well-developed expectations are included Three + fully developed financial obstacles are included Fully developed, well- thought out plan is included Accurate and applicable financial information is included Creative, witty, and interesting design Exemplar communication skills, multiple students presenting, good eye contact, strong voice, confident, and excellent support materials

Target Audience’s Financial Needs How to Reach Them Audience Target What Needs to Know, Feel, or Do Financial Obstacles How to Convince Target Overcome to Audience Obstacles Relevant Financial Information Marketing Piece Design Presentation BE MONEY-WISE: ARE YOU THE EXPERT RUBRIC PROJECT 2 MODULE