Financial Literacy Curricula

C.S.A. – Consulta Sviluppo Aziende e Professioni, Italy

Istituto Istruzione Scolastica Superiore "Carlo Alberto Dalla Chiesa", Italy

FINANCIAL LITERACY CURRICULA

“THE NEW LITERACY SET” PROJECT

Viterbo, January 2017 “The New Literacy Set” Project 2015-2017 TABLE OF CONTENTS:

1. THE “NEW LITERACY SET” PROJECT 3 1.1. ABOUT THE PROJECT 3 1.2. NEED FOR NEW CONTENT 3 1.3. GOAL AND PURPOSE OF THE CURRICULA 4 1.4. POSSIBILITIES OF INTEGRATING CURRICULAS INTO CLASSROOMS 4 1.5. TEACHER COMPETENCES 5 2. FINANCIAL LITERACY 5 3. RESEARCH 6 3.1. INTRODUCTION 6 3.2. RESEARCH METHODOLOGY 7 3.3. RESULTS – STUDENTS 9 3.4. RESULTS – TEACHERS/STAFF 12 3.5. CONCLUSION 13 4. TOPICS AND LEARNING OUTCOMES OF THE FINANCIAL LITERACY CURRICULA 15 5. CURRICULA SUBTOPICS 18 5.1. SUBTOPIC 1 – MANAGEMENT OF BANK ACCOUNT 19 5.2. SUBTOPIC 2 – METHODS OF PAYMENT 22 5.3. SUBTOPIC 3 – LOANS AND MORTGAGES 25 5.4. SUBTOPIC 4 – ROLE OF BANKS IN TODAY’S WORLD 28 5.5. SUBTOPIC 5 – BASICS OF STOCK EXCHANGE 31 5.6. SUBTOPIC 6 – STOCK MARKET SIMULATION 34 5.7. SUBTOPIC 7 – PERSONAL FINANCE MANAGEMENT 39 5.8. SUBTOPIC 8 – HEALTH AND PENSION INSURANCE 44 5.9. SUBTOPIC 9 – STARTING A BUSINESS 47 5.10. SUBTOPIC 10 – TAX BURDEN 51 5.11. SUBTOPIC 11 – BEHAVIORAL APPROACH TO MONEY 54 5.12. SUBTOPIC 12 – ONLINE SHOPPING: SECURITY AND RESPONSIBILITY 58 5.13. SUBTOPIC 13 – THE IMPACT OF MARKETING ON CHILDREN AND YOUTH 62 5.14. SUBTOPIC 14 - BASKET OF GOODS IN DIFFERENT COUNTRIES 67 5.15. SUBTOPIC 15 – CARRIERS IN FINANCIAL SYSTEM 68 6. LITERATURE 72

“The New Literacy Set” Project 2015-2017 1. THE “NEW LITERACY SET” PROJECT

1.1. ABOUT THE PROJECT

The communication skills are essential for success and happiness. People who are good communicators are more successful in their jobs and handle their personal relations much easier. Knowing how to search and evaluate information makes the difference between an active, responsible and aware citizen, and an easy-to-manipulate person. Each day one is faced with the consequence of financial literacy, as many people are on the edge of bankruptcy because they do not understand what they sign, or they chose the wrong financial strategy. So, communication, information and financial literacy are the new literacy set and are skills students need in later life and work.

The primary objectives of New Literacy Set project are enhancing digital integration and innovative teaching methods in learning and developing ICT, mathematics and language skills and students’ creativity, social and civic responsibility, initiative and entrepreneurship. Also, strengthening students’ position in labour market and encouraging their personal growth by developing their communication, information and financial skills.

Enhancing digital integration in learning and teaching is chosen as the most relevant priority because the development and testing of high-quality digital learning materials is the biggest part of the project. Three intellectual outputs are linked directly with this priority – open educational materials for communication, information and financial literacy.

The project is designed as a cornerstone of the new skills needed in everyday life, and that are best taught through everyday situations. Today this includes the use of technology, so all developed materials are placed on project web site (www.newliteracyset.eu). Access to these materials is free to all interested users of any age and any prior knowledge such as individuals, associations, other educational institutions, and especially schools.

1.2. NEED FOR NEW CONTENT

New technology is an indispensable part of the lives of today's students. Also, bustle lifestyle, hyperarousal with various visual, auditory and generally sensory effects makes today's young people highly susceptible to novelties and consumerist lifestyles. Such a mode of life spread to the education system, therefore, any form of inactive, frontal or inflexible lessons focused on the substance rather than the skills or attitudes is inadequate and maladjusted for today's student. Although there are numerous studies on the impact of such a lifestyle on the future

“The New Literacy Set” Project 2015-2017 of the individual and his/her happiness, neglect of these apparently deep changes in society is counterproductive. Therefore, in addition to adapting the technology of work, as well as the introduction of modern methods in the teaching process, it was necessary to add also some specific outcomes and, so far unused techniques.

Furthermore, the project helped students with learning difficulties and lower results to be better motivated and connect the educational materials with situations from everyday life, binding specific needs with prepared curricula materials. Also, professional staff that worked on the project and used the curricula developed new knowledge in terms of learning outcomes, as well as innovative methods for teaching and learning, which they will be able to use in other aspects of their work. The use of ICT modernized teaching and encouraged the modernization of education in general.

Finally, the European character of this project and curricula enabled connectivity and developing of social relationships, and thus the communication skills among the participants, as well as teachers, and students, whether through student exchange, participation in professional meetings, communication via the Internet and others. Also, it increased awareness of the existence of such projects and Erasmus+ among students and professors who haven’t participated in such activities so far.

1.3. GOAL AND PURPOSE OF THE CURRICULA

The curriculas for communication, information and financial literacy are the fundamental documents of the project. They contain main ideas of the project, conducted research results and workshop specifications: expected learning outcomes, general content and used teaching methods.

However, the main goal of the curriculas stems from the desire and the need to give young students the opportunity to further develop their own personality, individuality and increase the chances for a successful and happy life, and that is possible only through the possession of certain knowledge, skills and attitudes.

1.4. POSSIBILITIES OF INTEGRATING CURRICULAS INTO CLASSROOMS

Should the curriculas be implemented in educational institution, there are several possibilities to integrate into existing subject curricula.

To begin with, the first option would be to integrate it into the teaching process as a separate, optional subject. Given the complexity of each curricula and time it takes to get through the 4

“The New Literacy Set” Project 2015-2017 workshop activities and develop new, it should extend through two semesters.

In addition to viewing it as a separate subject, the workshops can be held as a compact unit, for a selected time during the year, when there is time for it.

The next option is to integrate it into tutorial classes. This option excludes optionality, increases the number of participating students, but also takes time off existing class content. The solution lies in the ability to choose certain parts of workshops and special activities.

1.5. TEACHER COMPETENCES

Competences that teachers doing the workshops should have are the following:

• general professional knowledge and skills (teaching, psychological development, sociological, legislative-legal) • knowledge and use of the learning and teaching processes (cross-curricular and subject-planning, programming, learning and teaching focused on learning and student achievement) • knowledge and application of new methods of learning and teaching (ICT), knowledge and application of methods of evaluation and self-evaluation

2. FINANCIAL LITERACY

Financial literacy is the confluence of financial, credit and debt management and the knowledge that is necessary to make financially responsible decisions—decisions that are integral to our everyday lives. Consumers are nowadays often asked to choose among various investment and savings products. These products are more sophisticated than in the past, asking consumers to choose among different products options offering varying interest rates and maturities, decisions they are not adequately educated to make. Deciding on complex financial instruments with a large range of options can impact the consumer’s ability to buy a home, finance an education or save for retirement, further complicating financial decision making: all these daily life actions are affected by the financial knowledge of an individual. Any improvement in financial literacy will have a profound impact on consumers and their ability to provide for their future while avoiding the pitfalls of debt. Recent trends are making it all the more imperative that consumers understand basic finances because they are being asked to shoulder more of the burden of investment decisions in their retirement accounts while having to decipher more complex financial products and options. The tasks are not easy but a better understanding and more knowledge can ease the burden tremendously.

The international educational community agrees with the importance of introducing financial 5

“The New Literacy Set” Project 2015-2017 literacy at school. The survey PISA 2012 (Programme for International Student Assessment) on the level of financial literacy in the context of high school, expressed the need to introduce in the training programs of extra information in schools which can contribute to improving the knowledge, tools and techniques that govern behaviour within increasingly sophisticated financial markets.

Financial Literacy is defined by the PISA 2012 as: “knowledge and understanding of financial concepts and risks, and the skills, motivation and confidence to apply such knowledge and understanding in order to make effective decisions across a range of financial contexts, to improve the financial wellbeing of individuals and society, and to enable participation in economic life". The results of PISA tests provides some guidance to set an action of financial education at school (see “Students and money. Financial literacy skills for the 21st century”.) The issue is not new. The OECD in 2005 published two very interesting documents that highlight the importance of a good supply of financial expertise. In particular, for young people, it is noted that "financial education should start at school. People should begin to receive a financial education as early as possible". (see “Improving Financial Literacy and Recommendation on Principles and Good Practices for Financial Education and Awareness”). The reading of these documents can provide valuable support to set the teaching of teachers. The training plan should combine basic lessons for learning economic and financial issues defined in the topics, with analysis of practical cases, documents in use in banks, specialized newspaper articles etc. The use of spreadsheets is important: to set the necessary analysis of the various possible solutions, to evaluate concretely and orient the choice towards those suited to meet the needs of consumers.

3. RESEARCH

3.1. INTRODUCTION

Literacy is not just ability to read and write, today it includes skills like financial literacy.

Financial literacy is about understanding of financial products and concepts and develop the skills necessary to improve one’s financial literacy; i.e. to be aware of financial risks and opportunities and to make informed decisions in their choice. The skills that are required to be financially literate call for an understanding and ability to take decisions about:

- Personal financial data (e.g., budgeting income and expenses, net worth analysis).

- Cash flow (e.g., calculations needed to understand inflation and cash flow, reduce indebtedness).

“The New Literacy Set” Project 2015-2017 - Taxes (e.g., taxable income, withholding levels and deductions).

- Retirement (e.g., types of retirement accounts and their tax implications, income needed at retirement).

- Buying a home (e.g., calculating amount needed for down payment, mortgage payment, credit report).

Students who are financially competent understand financial concepts such as the time value of money, the effects of inflation on savings, compound interest and the rate of growth, and the benefits of deferred income and reinvested capital gains and interest.

Financially well-informed individuals are able to take greater responsibility for their financial decisions, are more proactive in their financial decision-making, are more confident in their financial decisions, experience less stress at home and at work, have a greater sense of control over their lives, enjoy higher standards of living and are more productive future professionals and citizens.

First step in this research was assessment of skills students have in field of financial literacy.

Before main exploration, preliminary research was made among teachers in schools participating in project, in form of brainstorm meetings. Findings of those sessions were used for selection of topics for main research.

Topics selected for main research for financial literacy can be grouped as follows:

● The financial system ● Financial education ● The current use in daily life of financial concepts and tools

Next step in the process was construction and execution of survey on teachers and students in schools participating in the project. Students were asked which financial literacy skills they need and teachers/staff were asked what is the level of students’ skills in financial literacy and what skills could be improved (based on their experience in classroom).

After collection and validation of data, data were processed and used for creation of topics for the financial literacy curricula as well as topics for 15 workshops.

3.2. RESEARCH METHODOLOGY

Method selected for this exploration was survey in the form of closed questions. Students and teachers had to fill out survey using Google Forms.

“The New Literacy Set” Project 2015-2017 Survey for students consisted of 21 closed questions about financial literacy, some of them related to practical situation students can experience during their life. Survey for teachers and staff consisted of 15 closed questions.

Students and teachers taking part in this study were selected in three partner schools in the project. These schools are:

● Privatna gimnazija i ekonomsko-informatička škola Futura s p. j. from Zagreb in Croatia, ● Institut Carles Vallbona from Granollers in Spain, ● Instituto Istruzione Scolastica Superiore “Carlo Alberto Dalla Chiesa” from Montefiascone in Italy.

Students, who responded to questionnaire, were 309:

● 39% of students come from Catalonia, of which the 62% are males and the 38% are female; ● 28% of students come from Croatia, of which the 73% are males and the 27% are female; ● 34% of students come from Italy, of which the 49% are males and the 51% are female;

“The New Literacy Set” Project 2015-2017 Students are between 12 and 23 years old.

12-15: Catalonia 45%, Croatia 35%, Italy 14%

16-18: Catalonia 50%, Croatia 54%, Italy 88%

Over 18: Catalonia 6%, Croatia 1%, Italy 2% and 59 of teachers / staff (HR = 20; IT = 17 and ES = 22) took part in questionnaire, mainly females.

3.3. RESULTS – STUDENTS

Results showed that the majority of the students sometimes talk about finances with their parents (57%). Only a small percentage of students say that they do not talk about this topic in the family (approximately 28%). Most of students say they do not know how the parents plan a monthly budget (37%) or that they are aware that parents plan a monthly budget but they do not take part in it (23%). However, many students say to take part in budget planning that it is done each month (16%) or periodically (13%) Only few students (11%) say that is never planned a budget in their family. In particular, the Catalan and Croatian students do not know if budget planning is given a monthly, while the Italian students are included in this if not every month at least periodically.

When asked about their savings, most of students (51%) affirm that they save money for something special while others students (34%) always put something aside. It is interesting to highlight that about 18% of Croatian students say they do not set aside money as they spend all they get.

Results of responses to questions focused on loans show that a relevant portion of students think that the loans must not be used (27%) or that should only be used to buy house and provide funding for college (53%). Only the 20% of students thinks the people can use loans for the daily expenses. When inquiring if they would take a loan to finance further education, it appears that most of students are not sure if they would take a loan to finance their further education (56%), and only some students (28%) think of doing it. Some students would go to a state college so they would not need to take a loan (17%). In one of the following questions, we asked students how they would have bought their first car: about half of students answered that will buy the first car with the saving (42%), while some students will ask help to parents (23%), or they will use a leasing (18%) or a loan (17%).

We also tested the general knowledge of students about the use of credit cards and bank

“The New Literacy Set” Project 2015-2017 accounts, as well as the meaning of taxes. As first consideration, we found out that most of students have not their credit and/or debit card (65%). However, differences among countries exist: 26% of Catalan students own a credit/debit card, 36% of the Croatian and almost half of the Italian students (44%).

Moreover, many of students of all nationalities are aware that payment by credit card is not safe on the Internet. So, they say that they would never pay in this way (17%) or they would pay only on trusted sites (74%). The 9% of students think that to pay by credit card on the Internet is completely safe.

More than half of students affirm that they do not know what is the difference between a current and a giro account (50%) or have not ever heard about them (8%) or they gave the wrong answer. Only some students know the difference between current account and giro account.

Students are also confused about the meanings of the term taxes. They answered to the question “What are taxes” dividing themselves between the four definitions with similar percentages (about 25%). The correct answer (Payments to the government to finance state administration) was given by 28% of students.

This confusion or scarce knowledge of the basic financial terms is due to a low presence of financial literacy in school. Generally, students say that the finance is not in their curriculum (29%) or that some teachers sometimes talk about tem (39%). Some students (22%) affirm to study economics at school like subject. Few of them (11%) study the finance as part of extracurricular and cross-curricular topics.

In contrast with the above mentioned findings, most of the students consider useful to insure the goods, people, ... (36%) or they consider it useful only in some cases (42%). Generally speaking, there is a widespread trust towards insurances. Few students think that the insurance is useless (7%) or that it is not good because insurance companies never fully pay real damages (14%).

During the research, we focused also on daily life situation that students can experience, giving an holistic approach to our study.

Firstly, we asked students on what they spend the most. From the answers given by the students it can be deduced that they spend their money as follows:

1. Going out with friends (26%) 2. Buying clothing, shoes, cosmetics, etc. (24%) 3. Buying electronic devise, such as cell phone and laptops (20%) 4. Buying materials for different hobbies such as sports, collectibles, etc. (14%) 5. Buying books and educational materials, for example foreign language courses (7%) 10

“The New Literacy Set” Project 2015-2017 6. Other (5%) 7. Buying snacks and sweets (4%) Therefore, we can conclude that the boys and the girls spend their money, especially, for going out with friends, to buy clothing and electronic devices.

On the other hand, when students are asked to declare in what would they invest their financial resources to increase them, a portion of answers show that they would invest in investment funds (28%) or in properties (26%). The others prefer to invest in cars (15%), gold (12%), shares (10%), bonds (5%) and pictures (4%).

If they had to buy a new phone, most of students say that they would ask their parents buying the phone for them (46%). Some will save money (29%) or will earn money through mini – jobs (summer jobs, helping neighbours, babysitting...) (24%).

In case of family financial problems, almost half of the students would help the parents through mini-jobs so they can earn some of money (50%). Few students would save by avoiding to buy mobile phones and similar devices (13%), by buying cheaper clothing and shoes (13%), by reducing electricity and water consumptions (11%) and by giving up the pocket money (14%). Very few students think that saving in that situation is not necessary (4%).

We also tested the feelings of the students related to money spending and saving: when asked how would they feel if their credit card turned red after having bought a new pair of sneakers, most of students said to be worried and that they would plan to spend less the next month (38%) or to feel guilty and to try to get out of the red as quickly as possible (30%). However, some students would not worry too much (19%) or they think they have done a good investment (13%). In case they received a salary, most of students would invest it in personal things and saving the rest (43%). Some students would give a part of salary to family and to spend the rest of money on themselves (28%). Few students would spend all money (10%), or would give the whole salary to their parents so they can administrate it (8%), or they do not know what they would do with the money (11%).

Finally, an overlook to the general economic situation of the countries in the project was questioned. Generally, the students are very worried (23%) or they are a bit concerned (46%) about the economic situation in their countries. Only few students say not to be worried too much (21%) or not to be worried because these are the concerns of adults (10%). More than half of the students thinks that the economic situation of their country does not stimulate new investments.

“The New Literacy Set” Project 2015-2017 3.4. RESULTS – TEACHERS/STAFF

In the second part of the study, teachers were asked similar questions about financial literacy of students.

First question for teachers was how would they approximately rate the level of financial literacy of their students. Results showed that most of teachers believe that their students own a fair knowledge about financial literacy (53%). Some teachers think that the students are knowledgeable (19%, with a sensitive distribution among countries, since the 9% of the Catalans, the 20% of the Croatian and the 29% of the Italians answered “knowledgeable”) while one quarter of the interviewed think that the students are not very knowledgeable (24%). Very few teachers believes that the knowledge of those topics is satisfactory (5%). These percentage seem not to change when it comes to practice: most of the teachers, in fact, think that only some students are able to manage their finances (64%). Some teachers believes that most of students are able in this (24%) while the others think that almost no students are able to do it (12%)

Most of the teachers talk to the students about finances sometimes (42%) or rarely (36%) and only the 14% do it very often.

When it comes to ordinary life questions, it was discovered that more than half of teachers think that only some students get pocket money on monthly basis (56%) while the other teachers believe that most of them have pocket money monthly (39%). Only few teachers think that almost none receive pocket money each month. This money is, according to the teachers, spent for going out with friends (41%), buying electronic devices (22%), buying clothing (17%) and some snack and sweets (10%), hobbies (5%) or for entertainment (5%).

About the students saving habits, teachers are divided in two groups: the first one thinks that some students save money (41%) and the second one thinks that almost none does it. Most of teachers think that students usually save money for buying new electronic device (71%) and only some of them think that students save money for their hobbies (29%).

According to the respondents, just some students are informed about security issues while using online shopping sites (58%) or that most of them know it (14%). Few teachers think that almost one are informed about the topic (29%).

In the last part of this section of the questionnaire, teachers/staff were asked if students are, in their opinion, worried about general financial/economic situation in their country. In this respect, teachers think that almost none of students (41%) or only some of them (46%) are worried about general economic situation in their countries whilst only few teachers believe that most of them are worried for this problem (14%).

“The New Literacy Set” Project 2015-2017 It is interesting to underline the answers to the question about students’ long-term finances and retirement plans. Almost all teachers think that almost none of students plan their long- term finances and retirement (86%). Few teachers think that some of them do it (14%, with an evident difference among countries - Catalonia 5%, Croatia 20%, Italy 18%).

Finally, questions were asked about education practices in partner schools on financial literacy. In most of the cases, financial education is taught in Business studies (68%) or in Maths (42%), while others say that the topic is taught in Citizenship (29%), Social Science (32%), Geography (20%), ICT (14%) or History (14%). Few teacher answered that financial education is not part of specific subject (15%) or is not included at all (3%). Efforts were made to understand what financial topics would students be most interested in learning about and most teachers think that their students are most interested to learn about credit card (35%) and education funds (29%), while a minority is persuaded that it is interesting for students to know the savings (12%), the interest rates (12%) and the investments (12%).

About the need for a school to offer financial literacy education, most of teachers affirm that it is important the teaching financial literacy because the students will be able to handle their money (59%) or because somehow it will have an impact on students’ financial situation later in life (61%). A remarkable percentage of answers show that parents cannot or fail to teach their children how to manage finances and for this reason the school education should support them in this task (34%) and also it will enable students to deal with today’s complex financial system (37%). Anyway, there are still some barriers to teaching financial literacy in schools. In most of the cases, teachers don’t have time or space in the curricula (47%), or the financial literacy isn’t seen as a part of curricula (39%). Some respondents denounce a lack of consensus about what to teach (25%). Moreover, another of the main reasons is that there aren't well trained teachers (22%) because the teachers have limited access to training on this topic (17%).

In the opinion of many teachers the financial education is more effective at school if it is integrated into curriculum with modules in other subjects (66%), while other people think that the best way is to train the teachers who deal with financial education (37%) or to make financial education mandatory as a stand-alone subject (31%) or to do a choice of topics relevant to the concerns of students at specific year levels (25%).

3.5. CONCLUSION

After completion of study and data analysis of results from student’s answers, conclusion is that students are not even aware of skills they don’t have and how much room for improvement they have in field of financial literacy. Results from students’ study were confirmed with a study for teachers, who based on their experience had to valuate students 13

“The New Literacy Set” Project 2015-2017 skills in financial literacy.

Results of this study will be used for new financial literacy curricula and setting wanted learning outcomes. In total, 15 workshops were defined for accomplishing those goals. Workshops are divided in 4 groups:

1. The financial system

2. The stock exchange transactions

3. Financial planning

4. Financial education

“The New Literacy Set” Project 2015-2017 4. TOPICS AND LEARNING OUTCOMES OF THE FINANCIAL LITERACY CURRICULA

Based upon research results, main goal and purpose of this project and curricula there are four fields where additional improvement in student financial literacy is needed:

1. The basic knowledge of financial system

Financial literacy is the ability to understand how money works in the world: how someone manages to earn or make it, how that person manages it, how he/she invests it (turn it into more) and how that person donates it to help others. More specifically, it refers to the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources. This said, it is easy to understand that financial literacy is a core life skill for participating in modern society. Children are growing up in an increasingly complex world where they will eventually need to take charge of their own financial future.

Our surveys show that our students have a general low level of financial literacy. This is reflected by their general inability to choose the right financial products and often a lack of interest in undertaking sound financial planning. Even from an early age, children need to develop the skills to help choose between different career and education options and manage any discretionary funds they may have, whether from allowances or part time jobs. These funds may entail the use of savings accounts or bank cards. Additional education is needed in order to make students getting acquainted with the major financial tools and terms.

2. The basic knowledge of stock exchange transactions

The stock exchange is the aggregation of buyers and sellers (a loose network of economic transactions, not a physical facility or discrete entity) of stocks (also called shares), which represent ownership claims on businesses; these may include securities listed on a public stock exchange as well as those only traded privately. Types of stock market transactions include IPO, secondary market offerings, secondary markets, private placement, and stock repurchase:

- An initial public offering (IPO), or stock market launch, is a type of public offering where shares of stock in a company are sold to the general public, on a securities exchange, for the first time. - A secondary market offering is a registered offering of a large block of a security that has been previously issued to the public. - In the secondary market, securities are sold by and transferred from one investor or speculator to another. It is therefore important that the secondary market remain highly liquid.

“The New Literacy Set” Project 2015-2017 - Private placement (or non-public offering) is a funding round of securities which are sold not through a public offering, but rather through a private offering, mostly to a small number of chosen investors. - Stock repurchase (or share buyback) is the reacquisition by a company of its own stock. 3. How to use financial knowledge in daily life

This part will be the most practically linked with the curricula document. Since this project is widely based on the application of knowledge acquired to ordinary life actions, workshops and learning methods will be tied the topics tackled in the real world.

4. A financial education based on a conscious use of financial tools Ethics is so important when talking about finances: speculators are always around the corner and the volatility of the financial money helps in this. For this reason, we will deal also with the conscious use of financial tools.

Based on everything written above, 15 topics from field of financial skills are suggested:

1. Management of bank accounts (types of accounts and their possibilities)

2. Methods of payment: bank checks and drafts, wire transfers, credit/debit cards, paying online

3. Loans and mortgages: from different views (customer and bank), responsibility

4. Role of banks in today’s world: role in the financial crisis and bubbles

5. Basics of stock exchange: trading operations and the features of the stock exchanges, stock, bonds and other financial products, top 5 world stock exchanges

6. Stock market simulation

7. Personal finance management: savings and investment (housing savings accounts, investment funds, life insurance…), budget planning

8. Health and pension insurance

9. Starting a business: business plan, budget, marketing, registration, trade mark, how to get first money (crowd funding, mini jobs, lottery, playing online, …)

10. Tax burden: personal and on companies

11. The psychological and behavioural approach to money: value of money, awareness of future, from consumerism to reusability

12. Online shopping security and responsibility

“The New Literacy Set” Project 2015-2017 13. The impact of marketing on children and youth: financial marketing

14. Basket of goods in different countries (income and average costs), money and travelling

15. Careers in financial system

“The New Literacy Set” Project 2015-2017 5. CURRICULA SUBTOPICS

Following topics could be done in a longer time period but due to project proposition, fifteen subtopics were chosen, their choice based upon results of research which deemed them a necessary inclusion into ‘Financial literacy’’ curricula:

1. Management of bank account (types of accounts and possibilities) 2. Method of payment: bank checks and drafts, wire transfers, credit/debit cards, paying online 3. Loans and mortgages: from different views (customer and bank), responsibility 4. Role of banks in today’s world: role in the financial crisis and bubbles 5. Basics of stock exchange: trading operations and the features of the stock exchanges, stock, bonds and other financial products, top 5 world stock exchanges 6. Stock market simulation 7. Personal finance management: savings and investment (Housing savings accounts, Investment found, Life insurance…), budget planning 8. Health and pension insurance 9. Starting a business in different countries: how to earn easy money, money havens (fiscal paradises), business plan, budget, marketing, registration, trade mark, how to get first money (crowd funding, mini jobs, lottery, playing online, …) 10. Tax burden: personal and on companies 11. The psychological and behavioural approach to money: value of money, awareness of future, from consumerism to reusability 12. Online shopping security and responsibility 13. The impact of marketing on children and youth: financial marketing 14. Basket of goods in different countries (income and average costs), money and travelling 15. Careers in financial system Workshop on these subtopics are planned in such way that students acquire new knowledge, learn new tools, develop all needed skills but also think of and create their own attitudes regarding their own financial literacy. Best way of implementing them is by using teaching methods that require extremely proactive student participation, developed on a higher scale of outcome using Bloom’s taxonomy, while having in mind the use of unavoidable information technology. Researches show that using active information technology during class is a great way of active learning and increases the level of collaborative learning and teamwork. Taking those two aspects in consideration it is important to recognize active and passive information technologies because, if we’re observing student participation, watching video clips isn’t the same as doing quizzes, tests and online research. In the end, since the best way of studying is teaching others, it is needed to implement that aspect into workshops which will also train

“The New Literacy Set” Project 2015-2017 and improve other soft skills, like those related to non-verbal communication between students, presentation skills, self-empowerment, empathy and other communication skills.

5.1. SUBTOPIC 1 – MANAGEMENT OF BANK ACCOUNT

Subtopic goals:

The goal of this workshop is to develop in students: 1. awareness of the importance of the banking system in the current socio-economic reality of the Western world; 2. knowledge of the operation of contracts and bank instruments to improve understanding and acquire a critical approach to the rational use of money and financial planning.

Expected outcomes:

At the end of the workshop, students will:

 Know the structure of the banking system and the rules governing the financial relations  Assess the technical differences of the various bank accounts  Read and check your bank records  Understand the system of calculation of bank interest

Content:

The most important and most commonly used bank accounts are current account and giro account. Both types are transaction accounts.

Bank accounts are open and run by a credit institution on demand and on behalf of one or more payment service users (clients) for execution of payment transactions. All details on the conditions of opening, keeping and closing the transaction account are contained in the framework agreement between the credit institution and the payment service user and on the basis of which the credit institution opens a specific transaction account. As credit institutions offer different terms and conditions related to transaction accounts, before making ultimate choice of credit institution, where a specific transaction account will be opened, a comparison of different bids needs to be done. After this decision making follows according to customers own needs.

Transaction account can normally open an adult person regardless of whether there is a regular inflow in the account or not. With the custody of a parent (custodian or legal 19

“The New Literacy Set” Project 2015-2017 representative), the current account may also be for minors. The giro account can be opened for minors also for the purposes of scholarships, pupil awards at the competitions and work of students and student services/associations, seasonal or other similar jobs.

A credit institution opens a current account or a giro account based on a framework contract concluded with a payment service user. The framework agreement details the conditions for opening and running this account. When opening an account, a credit institution is obliged to:

 confirm your identity,  conduct other procedures in accordance with the regulations in charge of the prevention of money laundering and terrorist financing,  obtain all information that is required to be submitted for this account in accordance with the law on a unique account register that regulates the contents of the unique account register in the country (if applicable).

At the opening of the transaction account, the credit institution issues a personalized credit card that allows you to easily access the funds in your account (e.g. ATM).

Current account

A current account is a transaction account that a bank opens at the request of consumers for the purpose of receiving regular or casual payments and making payments within the limits of available funds in the account. In this case, the available funds also include the amount of the overhead loan (permissible overdrafts - minus per account) if approved by a credit institution.

The current account is opened by the conclusion of the relevant contract. The contract by which the current account opens is concluded for an indefinite period of time. Your current account funds are considered as sight deposits and are included in the deposit insurance system up to the statutory amount. Upon conclusion of your current account contract, you get a current account card that is a mandatory payment instrument and allows you to easily allocate funds to your current account, so it is important to take care of its security. Credit institutions provide different features related to the current account card. Thus, with the unavoidable withdraws and payment of cash on ATMs and purchases via POS devices, recently some credit institutions also offer the functionality of contactless payments.

Giro account

The giro account is a type of transaction account that is primarily intended for occasional income of individuals.

Traditionally, the giro account is used for payments of income such as rent, royalties and the like, and for minors to open for scholarship inflows, student awards for competitions and 20

“The New Literacy Set” Project 2015-2017 students and student services/associations, seasonal or other similar jobs.

The allocation of funds in the giro account is permitted using the account card, up to the amount of own funds without the possibility of negotiating a permitted overdraft.

Proposed teaching method:

References for preparing a lesson:

“The New Literacy Set” Project 2015-2017 5.2. SUBTOPIC 2 – METHODS OF PAYMENT

Subtopic goals:

The goal of this workshop is to increase in students: 1. historical knowledge of the nature and purpose of money as a medium of exchange 2. understanding of the diversity and nature of the different payment instruments 3. use of the different payment instruments 4. knowledge and use of electronic money

Expected outcomes:

At the end of the workshop, students will:  Know the functions of monetary systems  Be able to assess the technical differences of various bank payment methods  Locate the best mean of payment according to the economic operation  Appreciate the use of electronic money and other alternative ways of payment

Content:

Alongside the traditional bank drafts and bank checks the banking system always introduces new means of payment: - Bank cheques - Bank drafts - Bank and wire transfers - Direct debit - Credit cards. Let’s start analysing the most important ones more in deep.

Bank cheques The cheque, as the promissory note, is a credit instrument as it has the following characteristics: - Certifies the existence of a right - Ensures the possibility of relying the right that it incorporates - Allows to transfer the right from one person to another

What is the process for issuing a check? The debtor issues the cheque and delivers it to the creditor. This action implies an order, deliver to the debtor bank, to pay the correspondent amount to the creditor. The bank pays the cheque on sight to the creditor when it goes to the bank office or deposit it on his/her own current account. In order to deposit the cheque on 22

“The New Literacy Set” Project 2015-2017 your account, you will need to “endorse” the cheque, that means signing the back of the cheque.

But mind that a cheque can be endorsed only if there are funds in the debtor’s current account. Sources of income for funds to endorse a cheque can be: - from money deposited prior to the issuance of it - from a credit line or overdraft granted by the bank to the debtor.

If the bank cheque is issued without the presence of funds on the current account, then it is defined as a "blank cheque" or “overdrawn.". This is an illegal practice in some countries.

Bank drafts A bank draft or draft cheque is a payment on behalf of a payer that is guaranteed by the issuing bank: so, only a bank may issue a bank draft. A draft ensures the payee a secure form of payment: a bank draft is safer than a personal check when accepting large payments. To get a bank draft, a bank customer must have funds (or cash) available, and the bank will freeze or keep those funds in the bank’s own account until the payment is completed. Banks are able to guarantee bank drafts because the customer has already “paid.” Obtaining a bank draft requires depositing funds equal to the check amount and applicable fees with the issuing bank: so, funds must be available when issuing a draft cheque.

Bank and wire transfers Wire transfer, bank transfer or credit transfer is a method of electronic funds transfer from one person or entity to another. A wire transfer can be made from one bank account to another bank account electronically or through a transfer of cash at a cash office.

Direct debit A direct debit is when you allow a merchant (the business providing the goods or services to you) to debit (take money from) your (savings/cheque) account on a regular basis to pay for goods and services. Payments by credit card can also be made by direct debit. When you want to authorize a direct debit, steps are: 1. You agree to pay by direct debit for goods or services, for example, your electricity bills or gym membership 2. You sign an agreement called a Direct Debit Request (DDR). This form tells your bank to deduct money from your account to pay the merchant for the goods or services you are getting. The merchant cannot deduct money from your account without a signed Direct Debit Request. 3. Money will be taken from your account until you cancel the Direct Debit.

“The New Literacy Set” Project 2015-2017 Credit and debit cards (differences and uses) The credit card is a tool that configures the opportunity granted by the issuer to the cardholder to make purchases of goods and services at member stores. Credit cards represent both electronic payment instruments and personal credit granted to the holder. The issuer: • defines with the holder a credit line within which it can operate; • agrees to pay the merchant member according to the credit line granted to the holder; • credits the retailer according to the memorandum signed by the owners of shopping, stating a commission (2-6%); • issues a monthly statement adjusted in 20-25 days without charging interest on the referenced bank account. A credit card is a card that allows you to borrow money in small amounts at local merchants. You use the card to make your basic transactions. The credit card company then charges you interest on your purchases, though there is generally a grace period of approximately thirty days before interest is charged if you do not carry your balance over from month to month.

Debit cards also offer the convenience of a credit but work in a different way. Debit cards draw money directly from your checking account when you make the purchase. They do this by placing a hold on the amount of the purchase. Then the merchant sends in the transaction to their bank and it is transferred to the merchants account. It can take a few days for this to happen, and the hold may drop off before the transaction goes through. For this reason, it is important to keep a running balance of your checking account to make sure you do not accidentally overdraw your account. It is possible to do that with a debit card. You will have a PIN to use with your debit card at stores or ATMs. However, you can also use your debit card without a PIN at most merchants, you will just sign the receipt like you would with a credit card.

Proposed teaching method:

The activity will have to be done in an IT classroom, starting with a group activity to break the ice and help establish a community of learning based on mutual trust and knowledge. The participants’ previous knowledge and experience should be taken into account and the assimilation of new knowledge facilitated by expository teaching and 24

“The New Literacy Set” Project 2015-2017 demonstration/execution, by means of solving structured exercises.

The teacher will have presentations (Prezi, for example) as a learning tool, use of the internet and can hand out support material to the participants. Structured exercises could be used, as doing these will help to achieve the goals set.

References for preparing a lesson:

● The currency and payment instruments alternative to cash - Educational Notebooks by the Italian National Bank ● Compendium Of Banking Technique - Author Concetta Salicone - Edition Simone

5.3. SUBTOPIC 3 – LOANS AND MORTGAGES

Subtopic goals:

The goal is to develop in students: 1. awareness of the importance of the banking system in the current socio-economic reality of the Western world; 2. knowledge of the operation of contracts and bank instruments to improve understanding and acquire a critical approach to the rational use of money and financial planning.

Expected outcomes:

At the end of the workshop, students will:

 know the main contracts used by the banking system and the rules governing the financial relations  be able to evaluate the financial differences of bank contracts  be able to understand the structure and the typical loan transactions  be able to compare consciously financial opportunities

Content:

Loans

A loan is the act of giving money, property or other material goods to another party in exchange for future repayment of the principal amount along with interest or other finance charges. A loan may be for a specific, one-time amount or can be available as an open-ended line of credit up to a specified limit or ceiling amount.

The terms of a loan are agreed to by each party in the transaction before any money or

“The New Literacy Set” Project 2015-2017 property changes hands. If the lender requires collateral, that is outlined in the loan documents. Most loans also have provisions regarding the maximum amount of interest, as well as other covenants such as the length of time before repayment is required.

Loans can come from individuals, corporations, financial institutions, and governments. They offer a way to grow the overall money supply in an economy as well as open up competition and expand business operations. The interest and fees from loans are a primary source of revenue for many financial institutions such as banks, as well as some retailers through the use of credit facilities.

Loans can be secured or unsecured. Mortgages and car loans are secured loans, as they are both backed or secured by collateral. Loans such as credit cards and signature loans are unsecured or not backed by collateral. Unsecured loans typically have higher interest rates than secured loans, as they are riskier for the lender. With a secured loan, the lender can repossess the collateral in the case of default. However, interest rates vary wildly depending on multiple factors.

But how can a loan be repaid? To answer this question, let’s try to build up a scheme: An operator A lends to an operator B a sum C (amount of the loan) that B agrees to return in n years (duration)

The operator B agrees to pay with an agreed mode the interests on the amount C at the rate of interest i (rate of return)

Loan returns can happen in many ways: 1. C may be returned throughout n years 2. C may be returned in equal parts at the end of each year 3. More generally with the payment of n different instalment C1, C2, ... Cn- 1, Cn at the end of the first, the second ... the nth year

Mortgage contract

The mortgage contract is the one by which a real right in immovable property or movable warranty registered, which is constituted by entry in public registers.

A mortgage is a debt instrument, secured by the collateral of specified real estate property, that the borrower is obliged to pay back with a predetermined set of payments. Mortgages are used by individuals and businesses to make large real estate purchases without paying the entire value of the purchase up front. Over a period of many years, the borrower repays the

“The New Literacy Set” Project 2015-2017 loan, plus interest, until he/she eventually owns the property free and clear. Mortgages are also known as "liens against property" or "claims on property." If the borrower stops paying the mortgage, the bank can foreclose.

In a residential mortgage, a home buyer pledges his or her house to the bank. The bank has a claim on the house should the home buyer default on paying the mortgage. In the case of a foreclosure, the bank may evict the home's tenants and sell the house, using the income from the sale to clear the mortgage debt.

Mortgages come in many forms. With a fixed-rate mortgage, the borrower pays the same interest rate for the life of the loan. Her monthly principal and interest payment never change from the first mortgage payment to the last. Most fixed-rate mortgages have a 15- or 30-year term. If market interest rates rise, the borrower’s payment does not change. If market interest rates drop significantly, the borrower may be able to secure that lower rate by refinancing the mortgage. A fixed-rate mortgage is also called a “traditional" mortgage.

With an adjustable-rate mortgage (ARM), the interest rate is fixed for an initial term, but then it fluctuates with market interest rates. The initial interest rate is often a below-market rate, which can make a mortgage seem more affordable than it really is. If interest rates increase later, the borrower may not be able to afford the higher monthly payments. Interest rates could also decrease, making an ARM less expensive. In either case, the monthly payments are unpredictable after the initial term.

Proposed teaching method:

References for preparing a lesson:

● Compendium of Banking Technique - Authors Concetta Salicone - Edition Simone

“The New Literacy Set” Project 2015-2017 5.4. SUBTOPIC 4 – ROLE OF BANKS IN TODAY’S WORLD

Subtopic goals:

- To acquire knowledge to develop awareness of the importance of the financial system in the current socio-economic reality of the Western world through the achievement of the necessary skills to carry out proper choices. - To promote awareness on financial issues through a critical approach and operational orientation directed to improve understanding of financial instruments and evaluation of different opportunities. - To educate to a rational use of money and financial planning to foster conscious and responsible choices.

Expected outcomes:

At the end of the workshop, the students will:  Be able to understand the working principle of credit system;  Be able to compare different bank products and choose the one that fits the best according to the costumer’s needs;  Be able to identify the main types of bank services for a family;  Be able to identify the main types of insurances and their features;  Be able to understand the difference between commercial and ethic banks;  Be able to calculate interest and assess the most advantageous economic situation.

Content:

What is a bank? A bank is a financial institution that receives deposits and makes loans. Banks may also provide financial services, such as wealth management, currency exchange and safe deposit boxes. Banks may be defined as institutions which borrow money from client, whether individuals or companies, and than lend out this money to other individuals or companies in order to earn a profit. They act, therefore, as intermediaries between the people who have been able to save money and those who need it for a certain period of time. The funny thing about how a bank works is that it functions because of our trust. We give a bank our money to keep it safe for us, and then the bank turns around and gives it to someone else in order to make money for itself. Banks can legally extend considerably more credit than they have cash. Still, most of us have total trust in the bank's ability to protect our money and give it to us when we ask for it.

Types of banks There are three types of banks: 28

“The New Literacy Set” Project 2015-2017 1. Retail banks 2. Commercial banks 3. Investment banks

Retail Banks These deal with individual costumers and concentrate on mass market product such as current and savings accounts, mortgages, loans and credit and debit cards. All of the major retail banks also serve the needs of small businesses.

Commercial banks These deal with business clients, both large and small, and as well as current and deposit accounts, they offer foreign currency accounts and exchange, lines of credit and guarantees for international trade, payment processing, loan for businesses development and expansion. A commercial bank is a financial institution that is authorized by law to receive money from businesses and individuals and lend money to them. Commercial banks are open to the public and serve individuals, institutions, and businesses. A commercial bank is almost certainly the type of bank you think of when you think about a bank because it is the type of bank that most people regularly use. Banks are regulated by European and state laws depending on how they are organized and the services they provide. Commercial banks are also monitored through the European Bank. A commercial bank is authorized to serve the following functions: - Receive deposits: take money from individuals and businesses (called depositors) - Disburse payments: make payments upon the direction of its depositors, such as honoring a check - Collections: a bank will act as your agent to collect funds from another bank payable to you, such as when someone pays you by check drawn on an account from a different bank - Invest funds: in securities for a return - Safeguard money: banks are considered a safe place to store your wealth - Maintain and service savings and checking accounts of its depositors - Maintain custodial accounts: accounts controlled by one person but for the benefit of another person, such as a trust account - Lend money

Investment banks This kind of bank does not take deposits but works with companies and investment markets, for example by underwriting the issue of stocks or bonds and advising on merger and acquisition processes. Investment bank is a specific division of banking related to the creation of capital for other companies, governments and other entities. Investment banks underwrite new debt and equity securities for all types of corporations, aid in the sale of securities, and help to facilitate mergers and acquisitions, reorganizations and broker trades for both institutions and private investors. Investment banks also provide guidance to issuers regarding the issue and placement of stock. Investment banks focus on providing corporate clients with services such as underwriting and assisting with merger and acquisition activity. 29

“The New Literacy Set” Project 2015-2017 Therefore, an investment bank is a financial intermediary that performs a variety of services. Investment banks are specialized in large and complex financial transactions such as underwriting, acting as an intermediary between a securities issuer and the investing public, facilitating mergers and other corporate reorganizations, and acting as a broker and/or financial adviser for institutional clients. The advisory divisions of investment banks are paid through a fee for their services, while the trading divisions experience profit or loss based on their market performance. Professionals who work for investment banks may have careers as financial advisers, traders or salespeople. An investment banker career can be very lucrative, but it typically comes with long hours and significant stress. Because investment banks have external clients but also trade their own accounts, a conflict of interest can occur if the advisory and trading divisions don’t maintain their independence (called the “Chinese Wall”). Investment banks’ clients include corporations, pension funds, other financial institutions, governments and hedge funds. Size is an asset for investment banks. The more connections the bank has within the market, the more likely it is to profit by matching buyers and sellers, especially for unique transactions. The largest investment banks have clients around the globe. Investment banks help corporations issue new shares of stock in an initial public offering or follow-on offering. They also help corporations obtain debt financing by finding investors for corporate bonds. The investment bank's role begins with pre- underwriting counseling and continues after the distribution of securities in the form of advice. The investment bank will also examine the company’s financial statements for accuracy and publish a prospectus that explains the offering to investors before the securities are made available for purchase. Many investment banks also have retail operations that serve small, individual customers.

Proposed teaching methods:

References for preparing the lesson:

● The currency and payment instruments to cash - Educational Notebooks of the Italian National Bank ● Compendio Of Banking Technique - Authors Concetta Salicone - Edition Simone ● http://europa.eu/youreurope/citizens/consumers/financial-products-and- services/bank-accounts ● http://eur-lex.europa.eu/legal-content/

“The New Literacy Set” Project 2015-2017 5.5. SUBTOPIC 5 – BASICS OF STOCK EXCHANGE

Subtopic goals:

The workshop is aimed at understanding why companies float on a stock exchange, how stocks are traded, how the finance markets work and who operates them.

Expected outcomes:

At the end of the lesson the student will be able to:

 Define stock market and stocks  Understand how stocks are sold and bought  Distinguish ways of making money from stocks  Analyse types of stocks and label classifications  Analyse various types of companies and stocks they offer  Investigate largest companies by market capitalization  Understand importance of indexes

Content:

STOCK MARKET

The stock market is an everyday term we use to talk about a place where stocks and bonds are "traded" – meaning bought and sold. For many people, that is the first thing that comes to mind for investing. The goal is to buy the stock, hold it for a time, and then sell the stock for more than you paid for it.

How long do you hang on to stock? Investors who hold stock for 15 years or more usually succeed in the market. Stocks are long-term investments. But, there are no guarantees.

WHAT ARE STOCKS?

Stocks are units of ownership in a company. A stock represent a share in the ownership of a company. If you own a company's stock, then you are a owner, or shareholder, of the company. A stock represents a claim on the company's assets and profits. A stock is also known as equity.

Ownership of stock is represented by a stock certificate. A stock certificate represents your ownership of the company. These days, when you buy stock of a company, you usually do not get the actual stock certificates any more. Instead, your ownership is tracked electronically, making it easier to buy and sell shares. So, now that you have stock and ownership of a company, what can you do? Not really very much. You will benefit when the price of the stock goes up, or lose if the price goes down. As 31

“The New Literacy Set” Project 2015-2017 an part-owner of the company, you are given the right to vote for company's board of directors.

Another way you may benefit is if the company pays dividends. Dividends represent a percent of the company's profit, paid to the shareholders.

MARKET CAPITALIZATION AND LABELING

In looking at companies, investors and analysts like to classify/sort various companies together to gage the market. One way is by the total value of a company’s outstanding shares, which is called Market Capitalization. Companies go from large cap (over $5 billion) to micro-cap (those under $250 million). Another way to classify/sort companies is to put a label on them, such as Blue Chip, Growth Stock or Penny Stocks. These labels are unofficial, often without precise definitions, and stock can carry more than one of these labels. Never-the-less these labels are used frequently by analysts, the press and investors.

INDEXES

It is also important to judge/measure "how the market" is doing. Is it going up, declining, and by how much? Indexes are the most widely used measures of the market, although different investors use different indexes. Indexes, are a group of stock selected according to a certain criterion to represent a specific market, industry or asset class. The Dow Jones Industrial Average, is the most commonly referred to as a measure. Even though The Dow only measures the top 30 largest companies, those 30 companies actually make up 20-25% of the total U.S. market value.

Other investors rely on a broader picture, such as the Russell 3000, which measures the performance of 3,000 companies, which represents over 98% of the U.S. market value.

TYPES OF STOCKS

Even though most of us hear the word stock, and think there is just one kind of stock, there are actually two different stock classifications: Common, the most widely held, and Preferred.

Common Stocks

When you hear most people talk about investing in stocks they are talking about common stocks. When you buy a share of common stock, you own a share of the company that issues it. When you own a stock it is known as equity ownership. The price of the stock goes up and down depending not only on the performance of the company, but how investors and analysts think the company will perform in the future. Other broader market issues can also affect stock prices. As an owner of a common share, even just one, you are entitled to vote on major 32

“The New Literacy Set” Project 2015-2017 issues affecting the company and attend the annual shareholders meeting.

A stock may or may not pay dividends. Dividends are a share of the company’s net profits that are distributed by the company. The Board of Directors determines the amount, if any, of the dividend. Dividends are usually paid quarterly, based on how much money the company earned, how much money they need to hold on to, to reinvest in the company and how much they can return to the shareholders. If profits fall, dividend payments may be cut or eliminated. Dividends are usually taxable in the year the shareholder receives them.

Preferred Stocks

Like common stock, with preferred stock you also have a share of ownership in the company. Preferred stockholders have the first rights to dividends. Most preferred stocks pay a fixed dividend, set at the time of issuance, stated in a dollar amount or as a percentage of the par value bonds. Preferred stocks are similar to corporate bonds, without a maturity date. Because it is a fixed dividend, a preferred stock shareholder does not share in the potential growth of the company’s profits that a common shareholder would realize. However, if a company goes bankrupt or liquidates, preferred stockholders have a better claim to the company’s assets than common stock shareholders (bond holders trump all stockholders). Preferred shares do not change as often as common shares.

Proposed teaching method:

After a first theoretical part, the workshop will make a vast use of simulation games. Stock market games and simulations allow students a valuable and fun opportunity to learn all about the process of making good investments and begin a good foundation for sound money management. In order to learn the ins and outs of the stock market, students research can be done through the internet, magazines and newspapers. An online simulated securities trading can be used, too, as it allows students to use their research done online.

References for preparing a lesson:

● I Markets and financial instruments. Discipline and organization of the stock exchange. A. Banfi ● www.borsaitaliana.it ● www.milanofinanza.it ● http: //www.soldionline.it/guide/mercati-finanziari/la-storia-delle-borse-valori-nel- mondo ● http: //www.treccani.it/enciclopedia/borsa-valori/

“The New Literacy Set” Project 2015-2017 5.6. SUBTOPIC 6 – STOCK MARKET SIMULATION

Subtopic goals:

Typical stock market simulations try to make the simulation a "contest" with the winner the one who has the largest portfolio and the end of the exercise. This is unfortunate since it encourages poor investment decisions such as rapid trading and taking large risks. Unlike typical stock market simulations, the goal here is to learn and understand basic investing principles, current events, the basics of how the economy works, money management skills, basic math and reading comprehension, writing skills, etc.

Expected outcomes:

At the end of the workshop students will be able to:  Differentiate various financial reports and understand their importance in decisions regarding stocks  Understand when is the best time to sell stocks  Describe 2 strategies for selling shares  Distinguish various types of stock orders  Understand how to sell stocks  Analyse their own consumer habits

Content:

Stocks: Buying, Selling & Researching

When you purchase a stock or sell it, it is called trading stocks. Before you buy a stock you need to research the company. Most of this information is available for free. However, for a fee, there are services and brokerage houses that can provide you with the tools you need to make your decision.

There is no one single proven method for investing success. One method many investors have found success in is identifying and investing in companies that offer both strong growth and high value and then holding on to the stock for the long term, which can vary from three to ten years, assuming the companies’ fundamentals and performance remains the same. Most financial advisors also recommend that you have a diversified portfolio which produces better- than-average total return on your investment.

Buying Stocks - Information Is The Key

Research is the key to finding a good company to buy in to. You need accurate information and then know how to interpret it. You not only have to find out information about the company, but also its competitors, and the industry it is a part of. You have to investigate the 34

“The New Literacy Set” Project 2015-2017 companies, their historical performance and current performance and try to look for clues for its future performance. Companies operate in the world around them, so you have to look at the larger picture too.

You really should understand the companies you invest in. For example you should know what the company does or makes. You should be able to explain how the products or services are used, and who the buyers are. You should be able to explain what their competitive advantages are. Make sure to keep a watchful eye for not only news about the company but also its industry and competitors. Finally, keep tabs on what other market analysts are saying about the company. A buy recommendation from them can cause the stock price to increase, while a sell recommendation generally forces prices down.

Corporate Reports, Financial Statements & Balance Sheets One source of information about a company is from their own financial reports and press releases. The best places to obtain these are either directly from the company itself or company's website or governing bodies for stocks in your country.  Annual Report to Shareholders o Provides a financial statement and balance sheet for the previous year. Management will highlight their successes and some things that may not have worked out as planned. They will also discuss changes that they might make to improve their performance. Footnotes often hold interesting pieces of information.  Quarterly Report to Shareholders o Shorter than the annual report, but contains much of the same information. It is also called the earnings report. This keeps you abreast of the latest changes and the company’s financial performance.  Current Reports o These are released if a company has a major announcement they think shareholders need to know about. This could be a bankruptcy, merger, acquisition, change in top management, etc.

Selling Stocks

You do not want to buy or sell every time a stock goes up or down because then the only one who profits are the brokers on commission. However, you need to realize when it is time to get out. Here are just a few things to look for:

 Fundamental Change: Are the profits and earnings not as high? Are they still a leader? Is their balance sheet as strong? (see some of the above items). Is the company going in the same direction, or is management changing course?  Dividend Cuts: Dividend cuts are generally a sign that a company is in financial difficulty.  What are other people saying? Are the news and analysts reports as favorable or are they getting negative publicity?

“The New Literacy Set” Project 2015-2017

 Slow Growth: If the stock is not moving, growing slower than it has historically, you might be wise to sell and reinvest in a stronger security.  Overvalued Stock: When stocks soar quickly past their real value, they are often being set up for a fall. If you have made a profit, cash it in, you can always repurchase the stock.  Keep an eye on the industry and its leaders: If you have purchased one of the top leaders in a growth industry and the other leaders are starting to slow, it might be time to get out before it happens to your company. The same holds true if the industry is slowing.

Trading Stocks & Types Of Orders Once you have decided to buy or sell a stock you need to contact your brokerage firm. The type of account you have will affect the cost/commission you will have to pay for the trade. Also, based on the kind of account you have, this can be done either on the phone or electronically on the internet. Remember that you have be eighteen to trade.

When you place an "order", you provide your broker not only the name of the stock and the number of shares you want to purchase (or sell), but also the type of trade you want to execute (or filled). Trade executions, in most cases are quick, but not instantaneous. With a fast moving stock or market the price you see before you execute your trade can vary significantly from the price at which you buy or sell. Based on the type of order you place, you can put limits or conditions on the order. Following are the most frequent types of orders. However there are other more complicated trades that only experienced traders use.

Market Order

This is the most common type of order. You give your stockbroker an order to buy or sell a specific number of shares for a specific stock. The broker will try to fill it at the best price currently available which is called Market Price. This means the lowest price if you are buying, and the highest price if you are selling. This is the simplest type of order. You are almost guaranteed your order will be executed. The disadvantage could be the price you buy or sell at.

For Example: In a fast moving market you can place an order currently selling at $30. By the time the order is executed it could be $40, which might be more than you wanted to spend.

Limit Order This allows you to set a limit for the amount you are willing to buy or sell a stock. A buy limit order will only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price or higher. Limit orders may never be executed if the market moves quickly, or does not meet your limit instructions. Most limit orders will have an expiration date. Because this is a more complicated process than a market order, some firms might charge a higher fee. Examples: 36

“The New Literacy Set” Project 2015-2017

 Buy Limit Order: If you put a buy limit order at $35, you would not receive it if the price jumped to $40, from the original $30. Your brokerage would only purchase the stock for you if they could find a person who is willing to sell you shares under $35. The potential negative is that if the stock continued to rise to $50, because you put a limit at $35, you did not get the stock, and you missed the potential profit of a rising stock.  Sell Limit Order: If you put a sell limit order at $40, it can be sold as soon as it reaches $40, but it could also be sold higher. As soon as the stock reaches $40 your broker would try to sell it. You might get $41 for example. If the stock sells at $41, and then the stock price rises to $50, you would have missed an extra $9 profit. However you still would have made money assuming you purchased it at $35, which would be a $6 profit.

Time Order You can also place a limit, or not, on the time your order must be filled.

 Day Orders: Unless you specify otherwise, all orders are day orders, meaning they are good for only the day you place the order. If the order is not executed by the end of the trading day, it is cancelled. It will not be carried over into after-hours trading or the next day. If you want the order to be executed the next day, you must place your order again.  Good-till-Cancelled (GTC): In this case all day orders primarily limit orders, remain in place until they are executed or cancelled. GTC orders can remain in effect for a day, a week, or a month. However, some brokerage accounts might limit the number of days an order can remain in effect.

Conditional Order These are orders, other than limit orders, that requires a broker to perform a specific act (buy or sell) when certain conditions are met.

 Stop Order: A stop order is only used after a stock has been purchased. These are orders to buy or sell a stock once a certain price has been reached, known as a “stop price”. It was designed to attempt to protect a profit or prevent further loss if the stock starts to go down. When the stop price has been met, your order becomes a market order. With these types of orders customers don’t have to continuously monitor the price. Once the stop price is reached, it becomes active, your order kicks in and becomes a market order. Two negatives: First, once the stop price has been met and it becomes a market order, the final price your order is executed might be very different from your stop price. Second, if for some reason the stock’s price fluctuates for a brief time, it will trigger your stop order, even for example if the stock quickly rebounds on the upside.  Buy Stop Order: Buy Stop Orders are placed by investors who think a stock is going to go higher. The stop price (in this case the buy stop order price) must be higher than the current market price. If for example a particular stock is currently selling at $35,

“The New Literacy Set” Project 2015-2017 you might put a buy stop price at $40. If the stock reaches the stop price (buy stop price), it becomes a market order.  Sell Stop Order: A sell stop order is used only after a stock has been purchased. It helps investors avoid greater losses or protect profits if the stock price continues to drop. The stop price must be lower than the current market price. If for example particular stock is currently selling at $35 (you might have purchased it at $25), you may be worried the stock price will drop and you want to make sure you receive a profit. You could put a sell stop order for $30. If it reaches that price the broker would then sell at the next available price. Stop sell orders are generally used to protect a profit or limit a stock already purchased at a higher price. Remember, a stop order won’t guarantee a price you will get. It becomes market price and sold as soon as possible, whatever the price.

Stop Limit Order These combine the features of a stop order and a limit order. Once the “stop price” has been reached the stop limit order becomes a limit order to buy or sell at a specific price. This is another way investors can control the price at which the order is filled. But, as with all limit orders; your order may never be filled if the stock price never reaches the limit order. For example if particular stock is trading at $50, you might put in a stop limit order with a stop price at $45 and a limit price at $42. If the price falls to $45, the stop price is activated, if the stock can be sold above $42, the trade will be executed. If the stock falls below $42, let’s say to $40, the order will not be filled. It can help protect your investment, but your transaction is not guaranteed if the conditions are not met.

How to Cancel an Order

There might come a time when you put in an order that you decide you don't want to go through with. If the order has not yet been executed, cancelling it is usually as simple as selecting the "cancel" option online or calling your broker. Remember that once the order does go through, if you're not happy with your investment, you can't take it back to the store it came from. So make sure that you seriously consider all of the implications involved in placing a stock order.

Proposed teaching method:

The following strategies are very good for acquiring informational competence, in terms of processing financial knowledge and exercises: ● Cooperative learning ● Work projects ● Problem-based learning (PBL) ● Simulation ● Game based learning We intend this workshop to be as more interactive as possible. For this reason, we will use

“The New Literacy Set” Project 2015-2017 simulations and game based learning as preferred methods for carrying it on. References for preparing a lesson:

● http://www.econedlink.org ● http://www.borsaitaliana.it/varie/loginservices/borsavirtuale/intro/borsavirtuale.ht m ● https://www.diventaretrader.com/giocare-in-borsa-simulazione

5.7. SUBTOPIC 7 – PERSONAL FINANCE MANAGEMENT

Subtopic goals:

This workshop is aimed at explaining the basics of money management. It will help students identify and set proper and achievable financial goals, provide strategies that will help them save and make money short- and long-term.

Expected outcomes:

At the end of the workshop students will be able to: ● Understand importance of saving ● Distinguish various types of investments ● Analyse ways to invest and types of investments ● Judge investments based on risks and rewards they offer ● Define types of expenses ● Understand meaning of cash flow, gross income and net pay ● Evaluate presented budgets and suggest improvements

Content:

INVESTING

Saving money is a good move for ensuring financial security in the future, but it is also smart to put some in investments. They can earn more money than a regular savings account. Money you set aside to invest has to be money that you will not need for emergencies or everyday expenses. Investments are for the long-term – years into the future.

As you learn more about each kind of investment, you'll decide which ones might fit you best. Some are riskier than others. You could lose some or all of your money. Some investments let you take your money out more quickly than others – that's called liquidity. Investments offer different rates of return. You must weigh all of these factors before put your money in any investment. 39

“The New Literacy Set” Project 2015-2017 It's smart to divide your money among different kinds of investments. This is called diversification. When you put your money in different places, you lessen your risk. While one investment may lose value, others may not.

1. CERTIFICATES OF DEPOSIT

You can buy Certificates of Deposit (CDs) at banks. They're called CDs because when you deposit your money, the bank gives you a certificate telling you –

 the amount you have deposited  the interest rate being paid  how long the money must remain in the account

Certificates of Deposit pay slightly higher interest rates than savings accounts. There are many kinds of CDs. They pay different rates, and they require different lengths of time you must keep your money in them.

Safety: Bank CDs are insured by the government. Just like a savings account, your money is protected.

Liquidity: Money you invest in a CD is less liquid than the money you put in a savings account. With a CD, you are not free to take your money out whenever you want. You must invest your money for a specific time: 3 months, 6 months, 1 year, 5 years. The time all depends on the CD you choose. You can withdraw your money earlier, but then you must pay a penalty.

Return: The longer the CD's deposit time, the higher the interest rate or return. Interest rates on bank CDs are fixed – the rate cannot change for as long as you own the CD. Typically, a CD rewards you with compound interest. That means the interest you've already earned also earns interest.

Required amounts: To invest in a CD, you have to invest a certain amount – the higher this amount, the more interest the CD will pay.

2. MONEY MARKET ACCOUNTS

This is a kind of savings account offered by a bank or brokerage company. Because you must deposit a required amount in the account, money market accounts usually pay more interest than a regular savings account.

Safety: The government insures bank money market accounts, so if you have under $100,000 in your account, your money is safe. This amount varies from country to country.

Liquidity: Unlike a CD, you may withdraw money at any time. In fact, most bank money market accounts come with checkbooks. You may write a few checks each month to make purchases or pay bills. However, money market accounts are not meant to be a checking account.

“The New Literacy Set” Project 2015-2017 Return: There is no fixed interest rate. Interest floats up and down from day to day, but it usually earns more than a regular savings account.

Requirements: Unlike a savings account, you usually have to deposit a certain amount of money to get one of these accounts. Sometimes you also have to keep a certain amount in the account.

3. BONDS

When you buy bonds, you're lending money to the government or a corporation. They then use this money for finance a variety of projects and activities. For example, bonds were used during World War I and II as a way for the government to raise money for fighting the wars.

Safety: The money you invest in bonds is backed by the full faith and credit of the government or company.

Liquidity: How free are you to take your money out? This is long-range investing. Your money is tied up for years.

Return: Interest rates are lower than some other investments because there's lower risk with bonds.

4. MUTUAL FUNDS

These funds combine the money of many investors to buy many kinds of investments, like stocks, bonds, real estate, etc. Index mutual funds invest in companies that are part of a published index like the Standard & Poor's 500. In a mutual find, a fund manager trades the fund’s underlying securities to realize a gain or a loss and collects dividends or interest income.

Safety: There is risk because no one insures your investment. If the price of the fund drops, you lose money. But mutual funds can be safer than individual stocks. Why? You are spreading your money around in a mutual fund – diversifying. Buying lots of different stocks and bonds lowers your risk. The theory is that if one investment drops, the other stocks and bonds will hold their value or do well enough to make up for the loss.

Liquidity: With mutual funds, you have freedom. You can withdraw any or all of your money at any time. However, at the time you sell your shares (the number of units you own in the fund), you are paid what the shares are worth that day – calculated at the end of the trading day. Their worth may be higher or lower than what you paid for them.

Return: Mutual funds are professionally managed by fund managers with lots of experience investing money. They bring wisdom to what and when the fund buys and sells. As experts, they are taking care of your money, and their past performance can be measured. But you have to remember that their past performance does not guarantee success in the future. 41

“The New Literacy Set” Project 2015-2017 Fees: Mutual funds need money to operate – to pay the fund managers and to do business. The fund gets this money by charging fees to anyone who invests in the fund. Think of it as paying "dues" to belong to the fund.

5. STOCKS A stock represent a share in the ownership of a company. If you own a company's stock, then you are a owner, or shareholder, of the company. A stock represents a claim on the company's assets and profits. A stock is also known as equity.

The ownership percent, of a company that you own is calculated by dividing the number of shares a person owns buy the number of shares of stock outstanding.

For example: 1000 shares owned and 10,000 shares outstanding = 10% ownership.

Safety: With stocks, there's no government body to protect you against losses. No compound interest. You're on your own. Your stock can rise like a rocket or drop like a stone – or grow steadily.

Liquidity: You can sell your stocks at any time. BUT when you sell, you sell them for what they are worth at that moment. If that's more than you paid for them, you've earned money. If the price of your stock has fallen since you bought it, you'll be losing money if you sell it.

Return dividends: This is a payment made by a company to a stockholder to share in the company's profits. Dividends are paid according to how many shares you own – for example, a dollar a share. Dividends can be paid in cash, but they can also be "paid" in the form of additional stock that is automatically re-invested in the company. Dividends are usually paid quarterly.

Appreciation: If your stock appreciates, that means the price of your shares (units) rises in value. So each share of your stock is worth more than it was before. You "realize" (obtain) this gain only after you sell the stock. Companies and shareholders want stocks to appreciate, but only up to a point.

Splitting: If shares cost too much, they are less attractive to people shopping for good stock. As a shareholder, you want to encourage more people to buy shares of your stock. The company feels the same way. So when a stock has reached a high dollar value, the company may split the shares, lowering the per-stock price. Splitting encourages more investors to buy. Splitting actually means reducing a stock's price but increasing the number of shares each shareholder owns. Here's how it works.

You may have 100 shares. You paid $30 each for them several years ago. Now they're worth 42

“The New Literacy Set” Project 2015-2017 $60 each. The company splits the shares two-for-one, which means you now own twice as many shares (200) but each is now worth $30. The amount of your investment hasn't changed. True, your shares are only worth half their former price, but you now own twice as many shares. By splitting, the company has made shares affordable again.

6. COLLECTIBLES

These are items you buy, hold onto, and hope they'll be worth more someday because they're rare.

Examples are baseball cards, action figure dolls, coins, stamps, comics, antique toys, furniture, and art. These are only some of the things that people collect, hoping that, in the future, a buyer will pay a high price for them.

Safety: Collecting may sound like more fun than other kinds of investing, but there are absolutely no guarantees that the item will grow in value and that anyone will want to buy it.

Collecting can be very risky – especially if you pay a high price for things you decide to collect, for example, rare coins. While collectibles can increase in value, they can also decrease. You'll find them at the very top of the Risk/Reward Pyramid.

Liquidity: Once you've invested in collectibles, the only way to get your money back is to find a buyer willing to pay the price. Therefore, you may not be able to get your money back when you want it. What happens if you can't find a buyer who is interested? Or what happens if a buyer won't pay you at least the price you paid for the collectible? You're out of luck.

Return: Like stocks, you're betting your collections will appreciate. But there's no interest or dividends to rely on. Collecting is a long-term investment, so you must be patient.

Proposed teaching method:

The training program must follow a method that starts from theoretical knowledge to arrive at practical knowledge using a learning system that privileges the involvement of students with laboratory methods that include the analysis of their financial experiences of daily life. Use of active teaching methods, practical exercises, reading trade journals, comparison calculations with spreadsheets, use of web platforms. So, after having dealt with the theoretical part, we suggest to use an online budget planning simulator (i.e. https://www.moneyadviceservice.org.uk/en/tools/budget-planner/budget/how_to_use) to make students feel involve and understand how they can really plan their finances and budgets.

References for preparing a lesson:

● http: //crescitaindividuale.com/2016/03/finanza-personale/ 43

“The New Literacy Set” Project 2015-2017 ● “How to manage the relationship with the investor in times of crisis” by Vincenzo Pacelli - Bancaria Editrice ● “The Private real estate saving” of Ugo Mattei - Bancaria Editrice ● https://www.moneyadviceservice.org.uk ● http://www.investopedia.com

5.8. SUBTOPIC 8 – HEALTH AND PENSION INSURANCE

Subtopic goals:

In this workshop, students will explore the idea of risk, how to assess the risk in a given situation and how to protect themselves and their families through insurance and estate planning. By the end of the workshop, students will understand that while life always involves personal and financial risks, these risks can be minimized and their assets protected with the right level of preparation.

Expected outcomes:

At the end of the workshop students will be able to:

 Recognize risks in everyday life  Define insurance and insurance policy  Understand concepts of premium, co-pay and deductible  Evaluate insurances and recognize best one for a specific need  Define estate plan  Understand importance of making a will Content:

Students who acquire the value of financial planning are able to understand the importance of designing their own future.

In a market characterized by obvious occupational difficulties away the entry of young people into the labor market it is important to highlight the need to prepare for the future with savings rates in the social security perspective.

The information and training shall turn to the knowledge of the main features and characteristics of the products, particularly life insurance policies, health policies and accidents policies, to highlight any different construction techniques that sell offers from companies.

“The New Literacy Set” Project 2015-2017 Health insurers come in various forms and offer diverse products that distinguish themselves from other insurance companies as well as other businesses. It is often said that this is the only business where the consumer (the person receiving the healthcare) has no active role in the decision-making process, and the provider (the doctors or hospitals providing the care) has no say in how much pay they receive for a service. Thus the health insurer has gained control over the "healthcare equation".

These companies set the pay structure they will grant to providers for specific services, and set the rules for the consumers on how they can use the services provided. It seems to be a great role to be in from an investor standpoint - controlling your destiny is advantageous to controlling your success.

There are many categories of health insurance companies and the products offered to consumers, but health insurers can be categorized based on payor structure. Payors include private companies, individuals and government entities. Many health insurers cater to all types of payors, but some specialize in individual categories. The largest U.S. health insurers generally have a diverse payor mix, although some may be more heavily weighted towards one.

Payor mix is important to understand because it often points toward the risk and timing of cash flows and profitability. In general, government entities (Medicare, Medicaid and others) are considered the largest payors, but they are slow and can increase risk of profitability as these entities often change the payment structure for specific services, impacting health insurance companies' bottom lines. Individuals are generally considered undependable sources of cash flow as well. Private companies tend to be the most stable.

Within private companies, there are two types of products insurers offer. The first is ASO, or self-insure, administration-only products. These products require that the private companies take responsibility for the underwriting risk; the insurer only acts as an administrator for the plan by providing statements, paying the doctors, etc. Under this product, the insurance companies get paid on a contract basis and those fees are very stable and virtually risk-free.

The second product is a full service or at-risk product where the insurance company does all the underwriting and takes on the risks associated with that underwriting. In this product, the insurer is responsible for all aspects of the insurance claims, and this product makes money on a spread basis. The insurer bets that the medical costs will be lower than the premiums received based on its underwriting skills. The higher the spread, the more profitable the company is. In general, large multistate or multinational companies tend to use the ASO product, while smaller or mid-sized companies tend to use the full-service option.

In general, health insurers are non-cyclical, recession-resistant companies because they provide a necessary service. That said, these companies can feel the pinch of a rising 45

“The New Literacy Set” Project 2015-2017 unemployment rate, as their member growth will slow. In addition, during economic downturns, insured companies will try to reign in expenses, including healthcare, by increasing copays or deductibles for members or reducing medical services covered under the plan, resulting in a lower utilization by members and potentially lower medical costs for the insurer, but also lower premiums paid by the companies insured. As a result, investors need to track pricing and premium levels, medical costs and member growth over time, as well as the regulatory noise related to covered charges through the government health programs.

Proposed teaching method:

The training program should follow a method that starts from theoretical knowledge to arrive at practical knowledge using a learning system that privileges the involvement of students with laboratory methods that include the analysis of their financial experiences of daily life. Even though this workshop is quite theoretical in contents, graphs and simulators can be used in order to raise interest of the pupils.

References for preparing a lesson:

● Insurance Health: characteristics and patterns of De Angelis and Di Falco Publisher Il Mulino ● The Italian pension system by Anna M. Battisti Publisher Universitalia ● European Commission Green Paper: Towards adequate, sustainable and safe European pension systems ● Investing In Health Insurance Companies | Investopedia http://www.investopedia.com/articles/stocks/09/investing-in-health- insurance.asp#ixzz4YjlHe1nC

“The New Literacy Set” Project 2015-2017 5.9. SUBTOPIC 9 – STARTING A BUSINESS

Subtopic goals:

Students will get acquainted with the basic tools to run a business. This will enable them to achieve a better understanding of how business works and to be able to create their own business.

Expected outcomes:

At the end of the lesson students will be able to:

 Understand. If a business idea is concrete and can be launched in the market.  Apply. Implement actions to raise first money.  Analyse. Recognize their entrepreneurial potential.  Evaluate. A public satisfaction questionnaire will be used to evaluate the workshop.  Create. Be able to build their own business plan.

Content:

The company is an organization of people and resources oriented to the production of new wealth. The goal of achieving maximum economic management in order to achieve satisfactory profitability, postulates the existence of an initial proper management of financial resources in order to achieve an appropriate balance on the capital invested. This requires financially careful assessment of the sources of funding needed to carry out a balanced corporate investment (venture capital represented by shareholders and credit capital that is financing by third parties, such as for example banks). Know and understand the concepts of financial cycle and the business cycle in corporate management is an essential luggage to competently carry out business activities. The first condition to be met for starting a business is an analysis of the economic sector which intends to explore:

1. Territory, from the point of view of socio-demographic and infrastructure; 2. Necessary resources to start; 3. Validity of the project, tested with the Canvas and Lean models; 4. Entrepreneurial skills.

The business plan is essential to plan and estimate the financial and economic content and confirm the feasibility of the project. The budget is a document that is prepared for the programming of financial and economic objectives, usually on an annual basis, and allows you to orient the company choices and analyse any ex post deviations from the pre-assessments. Starting a company requires the fulfilment of all the administrative steps, accounting and tax, different in different countries, to formalize the existence of the economic activity. Among the 47

“The New Literacy Set” Project 2015-2017 sources of financing it deserves mention the process of crowfunding. This new form of collective funding is an external collection system via web platforms.

Financial balance (sources and uses) Businesses need finance to:

 Start up a business, for example: pay for their premises or new equipment and advertising.  Run the business, for example: having enough cash to pay salaries and suppliers on time.  Expand the business, for example: having funds to pay for a new branch.

New businesses find it difficult to raise money because they may have just a few customers and many competitors. Some sources of finance are short term and must be paid back within a year. Other sources of finance are long term and can be paid back over many years. Businesses can have internal sources of finance, these are funds found inside the business. For example, profits that are kept to finance expansion. Alternatively businesses can sell assets that are no longer really needed to free up cash.

External sources of finance are found outside the business, from banks and creditors. Sources of external finance to cover the short term include:  Overdraft facility, the bank allows a company to take out more money than it has in its bank account.  Trade credits, suppliers deliver goods now and wait for a number of days before payment.  Factoring, companies sell their invoices to a bank to get cash right away, rather than waiting to be paid the full amount.

Sources of external finance to cover the long term include:  Owners who invest money in the business.  Loans from a bank or from family and friends.  Mortgage, a loan to buy a property, the payments are spread over a number of years.  Leasing, monthly payments are made to use equipment such as a car.

Equity capital and borrowed capital

Sufficient capital is essential for starting, maintaining and growing a business. A company’s capital is a financial asset such as money. Equity capital comes from the sale of stock to investors. Stock is an ownership interest in a corporation. For example, a company may issue 5,000 shares of stock and sell some of the shares for 100 € per share. If the company sells all 5,000 shares, it will raise 500,000€ in equity capital.

A company can also raise capital through debt. Debt capital is capital that has been raised through borrowing from a source outside the company.

“The New Literacy Set” Project 2015-2017 A company can offer debentures to investors to raise money. A debenture is an unsecured debt obligation, such as a promissory note or a corporate bond that a corporation offers to investors in exchange for a loan. Since debentures are not secured by any property, investors must rely upon the creditworthiness of the company to decide whether to loan money. Investors will receive interest as compensation for use of their money.

Business plan

A business plan defines exactly what the company wants to achieve and how they plan to do it. It is the roadmap for the business and helps the company keep focused on their goals.

A good business plan sets out:

 The key objectives for the next two to three years.  The strategies the company plans to use to achieve its objectives  The company's priorities. The objective is that the company can plan, implement and measure what they are doing against their business plan, making adjustments to ensure they achieve what they have planned to do.

Some institutions like banks, external investors, grant providers or potential partners may request to see the company's business plan to decide on investing on the company, a business plan is therefore a document used to secure external funding.

Proposed teaching method:

In order to realize an effective learning, we suggest to use the Business Model Canvas method and the Lean Javelin method: both are strategic management and business tools that allow to describe, design, challenge, invent, and pivot your business model. The Business Model Canvas was proposed by Alexander Osterwalder based on his earlier book: Business Model Ontology. It outlines several prescriptions which form the building blocks for the activities. It enables both new and existing businesses to focus on operational as well as strategic management and marketing plan.

The Canvas is a very effective tool since everything related to the business idea is concentred on one page. You can describe your business model with words AND images, building blocks to enhance big picture.

“The New Literacy Set” Project 2015-2017

The Lean Startup tool is instead very useful to validate ideas with real customers, before time & money is ‘wasted’ pursuing a solution that users and customers may not use. Pursuing an idea using this method (Build – Measure – Learn) is very effective and interactive for the students.

“The New Literacy Set” Project 2015-2017 References for preparing a lesson:

● The Enterprise. Fundamentals - Various Authors - Issues McGraw-Hill 2016 ● General accounting and corporate financial statements - Andrei and Fellegara - Giappichelli Publisher 2016 ● The business plan. strategic and operational guidance - Ferrandina-Carriero Ipsoa 2012 ● The Budget - Piero Provenzali - EBC ● Crowdfunding in the knowledge era. Walter Vassallo - Franco Angeli 2014 ● https://strategyzer.com/canvas?_ga=1.160348731.767824181.1445418826 ● https://canvanizer.com/new/business-model-canvas ● https://www.leanstartupmachine.com/validationboard/ ● https://www.youtube.com/watch?v=F-5Iyj9A1MU

5.10. SUBTOPIC 10 – TAX BURDEN

Subtopic goals:

The workshop aim is making students understand how the tax system works, what is the role of taxes in the market economy and to distinguish the different types of taxes on person and on company. Furthermore, the relation between business and taxes will be explored.

Expected outcomes:

At the end of the workshop students will be able to:  choose and use key information about taxes,  understand the basic principle of taxation,  familiarize with different types of taxes (on the person, on companies, value-added tax…)  realize who is responsible for or developing and implementing tax policies and programs in their country,  comprehend “pay as you earn” principle of taxation,  debate about topics,  evaluate workshop and give personal opinion on tax regulations.

Content:

Taxes are fees or charges levied on individuals or business. They are enforced by a government in order to finance public works and services such as: fix roads and bridges, to pay for the military, to help education…

Tax evasion requires the use of illegal methods to avoid paying proper taxes, while tax avoidance uses legal means to lower the obligations of a taxpayer. 51

“The New Literacy Set” Project 2015-2017

There are countries that provide low or no tax liability. They are called “tax havens”.

TYPES OF TAXES Excise tax

Excise tax refers to an indirect type of taxation imposed on the manufacture, sale or use of certain types of goods and products. They are commonly included in the price of a product, such as cigarettes or alcohol.

Excise taxes fall into one of two categories: ad valorem and specific. Ad valorem excise taxes are fixed percentage rates assessed on particular goods or services. Specific taxes are fixed currency amounts applied to certain purchases. In some cases, governments levy excise taxes on goods that have a high social cost, such as cigarettes and alcohol, and for this reason, these taxes are sometimes called sin taxes.

Value Added Tax

The Value Added Tax (VAT) is broadly based consumption tax assessed on the value added to goods and services. Usually, it applies more or less to all goods and services that are bought and sold for use or consumption in the European Union. Goods or services which are sold for export are normally not subject to VAT. Conversely imports are taxed to keep the system fair for EU producers so that they can compete on equal terms on the European market with suppliers situated outside the Union. Value added tax is indirect tax and it applies to all commercial activities involving the production and distribution of goods and the provision of services. It's a consumption tax because it is borne ultimately by the final consumer. It's charged as a percentage of price, which means that the actual tax burden is visible at each stage in the production and distribution chain.

Corporate income tax

A corporate income tax (corporate tax or company tax) is a direct tax imposed by a jurisdiction on the income or capital of corporations or analogous legal entities. Many countries impose such taxes at the national level, and a similar tax may be imposed at state or local levels. The taxes may also be referred to as income tax or capital tax. A country's corporate tax may apply to:

• corporations incorporated in the country,

• corporations doing business in the country on income from that country,

• foreign corporations who have a permanent establishment in the country, or

• corporations deemed to be resident for tax purposes in the country.

“The New Literacy Set” Project 2015-2017 Company income subject to tax is often determined much like taxable income for individual taxpayers. Generally, the tax is imposed on net profits. In some jurisdictions, rules for taxing companies may differ significantly from rules for taxing individuals. Some types of entities may be exempt from tax.

Countries may tax corporations on its net profit and may also tax shareholders when the corporation pays a dividend. Where dividends are taxed, a corporation may be required to withhold tax before the dividend is distributed.

Tax on personal income

Tax on personal income is direct financial charge imposed on money you earn from various sources such as wages, interest on savings and dividend payments received from investments. The amount of personal income tax you owe usually depends on your total income. Usually it's progressive: the more money you make, the higher proportion of your income you must pay in income taxes. So, it means that higher-income earners pay a higher tax rate than people with lower earnings. Income taxes are used in most countries around the world. The tax systems vary greatly and can be progressive, proportional, or regressive, depending on the type of tax. Countries that tax income generally use one of two systems: territorial or residential. In the territorial system, only local income – income from a source inside the country – is taxed. In the residential system, residents of the country are taxed on their worldwide (local and foreign) income, while nonresidents are taxed only on their local income.

Proposed teaching method:

Teaching taxes can take a traditional approach as students complete downloaded worksheets, classroom activities, and assessment pages. Or, students can complete work online and take part in interactive activities and simulations. Since this topic can be heavy for the students, we suggest to organize role games and groups activity: we could ask students to plan opening a new business and brainstorm the list of expenses, including taxes, they will incur.

References for preparing a lesson:

● Sistema tributario italiano - ww.caafcgiltoscana.it Guida ● Ires - www.forexinfo.it - Fisco e Tasse ● Irap - www.pmi.it/tag/irap ● Iva - www.sardegnaimpresa.eu ● Convenzione doppie imposizioni - www.finanze.it ● „Discussion Paper No. 05-31 The Effective Tax Burden of Companies and on Highly Skilled Manpower: Tax Policy Strategies in a Globalized Economy” Christina Elschner, Lothar Lammersen, Michael Overesch and Robert Schwager 53

“The New Literacy Set” Project 2015-2017 ● Eichler, M. et al. (2005) Effective tax burden of companies and on highly qualified manpower ● Eichler, M. et al. (2006) Determinants of productivity growth ● Bénassy-Quéré, A. et al. (2004) Tax competition and foreign direct investment ● Hajkova, D., Nicoletti, G., Vartia, L.,Yoo K-Y. (2006) Taxation, business environment and FDI location in OECD countries ● OECD Tax Policy Studies, Tax Burdens: Alternative Measures (Chapter 6) ● OECD Tax Policy Studies, Using Micro-Data to assess average tax rates ● Schmidt-Faber, C. (2004) An implicit tax rate for non-financial corporations - Definition and comparison with other tax indicators ● Yoo, K.-Y. (2003) Corporate taxation of foreign direct investment income 1991-2001

5.11. SUBTOPIC 11 – BEHAVIORAL APPROACH TO MONEY

Subtopic goals: Students will reflect on their attitudes towards money and will learn how to avoid misbehaviours linked to a wrong use of money and savings.

Expected outcomes:

At the end of the lesson the student will be able to:  Understand better how money affects his/her life, from own approach to society rules and strategies.  Provide strategies for identifying emotions related to money.  Understand the relationship between emotions and situations.  Coaching skills for expressing feelings and needs associated with them.  Provide guidelines for accepting positive and negative emotional states and provide control techniques to regulate emotions.  Evaluate his/her own motivation to earn and save money.  Evaluate his/her own behaviour when consuming.  Recognize their own vulnerability financially speaking.  Learn personal abilities to cope with adversity: resilience, negotiation.  Apply some strategies to avoid personal financial crisis and stress.  Improve self-esteem and emotional autonomy.

Content:

PERSONAL ATTITUDE TOWARDS MONEY The Love of Money Scale (LOMS) (developed by Luna-Arocas and Tang) has been tested in several cultures, languages and religions. It is stated that we all relate with money according 54

“The New Literacy Set” Project 2015-2017 different five factors:

1. Budget, 2. Success, 3. Motivation, 4. Equity, 5. Evil

Using these factors, the authors performed a cluster analysis and identified four profiles of people in relation to money: 1. Apathetic Money Managers 2. Achieving Money Worshippers 3. Careless Money Admirers 4. Money Repellent Individuals.

The Apathetic Money Managers are more intrinsically satisfied, have internal locus of control, are more self-determined and therefore do not perform activities for the money but for the satisfaction that they provide. In Bhutan it is believed that the economic approach of western countries dehumanizes the development process. For this reason the government of Bhutan measures the success of the country by its remaining citizens' happiness. The index used is called Gross National Happiness (GNH) and is pursued by limiting access to foreign culture.

The Achieving Money Worshippers consider money a symbol of success and status and they also manage their money carefully. Thereby, they are more motivated by money than the other groups and best performed within a system of rewards for job performance.

Individuals classified as Careless Money Admirers are extrinsically satisfied, have external locus of control and are less self-determined. Individuals in this group are concerned with extrinsic rewards which lead to less intrinsic satisfaction. Money is an important motivator for these individuals and there is a possible implication, highlighted by more recent studies, that these individuals may be tempted to engage in unethical behaviour inside their organizations. The strive for money is quite strong for these people. Everybody has a price!

Finally the Money Repellent Individuals present more negative attitudes towards money. Individuals in this group characterize money as evil, they consider it not a reflection of success and it does not function as reinforcement for them.

Considering these four profiles, it is important to know that some organizations establish different strategies in order to motivate their employees as a whole and individually.

Related to this, it is worthwhile mentioning the famous Maslow Pyramid of needs which describes the pattern that human motivations generally move through.

The most fundamental levels of needs are at the bottom of the pyramid and the need for self- actualization at the top.

“The New Literacy Set” Project 2015-2017

If the 4 bottom layers are not met one feels anxious and tense. Maslow's theory suggests that the most basic level of needs must be met before the person focus on higher level needs.

SOCIAL ATTITUDE TOWARDS MONEY It cannot be denied that the corruption cases, financial and real-state speculation, food intoxication, environmental disasters, lack of truthfulness of advertising and politicians and their power abuse have led to citizens to demand that both enterprises and government act according to ethical principles and values: honesty, transparency, responsibility and commitment with the environment and the society.

Not only the problems listed above have contributed to this demand but also the boom of the globalization which has meant a growth of corporate power and besides the delocalisation of most companies. In this way the local laws have become insufficient and inadequate and thus the local government power has diminished. Besides the decisions of these companies affect millions of people (Google, Facebook, Microsoft...) therefore most people demand more responsibility of their actions.

Nowadays enterprises and politicians make an effort to bind themselves to ethical values and gain the confidence of consumers and voters. Moreover employees' satisfaction and motivation grows, raising also their productivity, improving attitude and drawing more qualified staff to the company.

Proposed teaching method:

The training program should follow a method that starts from theoretical knowledge to arrive at practical knowledge using a learning system that privileges the involvement of students 56

“The New Literacy Set” Project 2015-2017 with laboratory methods that include the analysis of their financial experiences of daily life.

So, after the theoretical part, the following methods will be used:

• working in groups • debate and self-criticism, • gamification.

References for preparing a lesson:

● Luna-Arocas and Tang, 2004 The love of money, satisfaction, and the Protestant work ethic: money profiles among university professors in the USA and Spain Journal of Business Ethics, 50 (2004), pp. 329–354 ● Lea and Webley, 2006 Money as tool, money as drug: The biological psychology of a strong incentive Behavioural and Brain Sciences, 29 (2) (2006), pp. 161–209

“The New Literacy Set” Project 2015-2017 5.12. SUBTOPIC 12 – ONLINE SHOPPING: SECURITY AND RESPONSIBILITY

Subtopic goals:

- To understand the main rookie errors associated with making an online financial transaction to purchase goods and services; - To understand the investigation of online scams, scam protection techniques and online consumer purchase rights

Expected outcomes:

At the end of the workshop, the students will know that:  Be able to make informed responsible choices around online financial transaction to purchase goods and services can protect your money;  Be able to protect your money and avoid common issue or rookie errors if you use safety methods for online financial transactions services including protection against scam, viruses, identity theft and password corruption.

Content:

Research shows that 70% of Europeans use the internet regularly. Almost half of EU consumers (45%) shop online, with 11% shopping from traders based in another European country. Consumers choose to shop online as it offers them greater choice and value for money, and such savings have been estimated to amount to €11.7 billion. The European Commission has set ambitious targets for the growth of e-commerce, with the Digital Agenda establishing targets of 50% of the population buying online and 20% buying online cross- border by 2015.

What is the online shopping?

Online shopping or e-shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser.

Alternative names are: e-web-store, e-shop, e-store, Internet shop, web-shop, web-store, online store, online storefront and virtual store.

The process for buying goods online commonly involves:

. browsing through the online catalogue . adding items to the virtual basket . visiting a virtual checkout

“The New Literacy Set” Project 2015-2017 . choosing payment and delivery method . order confirmation . shipping confirmation (via email or sms)

What are the advantages of online shopping?

1. It makes products easy to find: Finding a product online is much easier than looking for it in the local store. In a store, you have to search for the product you want; if it's not there, you may have to visit several locations, which is frustrating and time-consuming. However, online you can easily search for any product by using the website's search feature, and it's more likely to be in stock. If the website doesn't have it, you can simply go to another without wasting your time. For example, if you can't find the suitable product in eBay, you can look for it on Amazon. 2. Products are often more inexpensive: Products are often cheaper online than they are in stores. There are several reasons for this. For one, an online store doesn't have the overhead costs of renting their location and paying for the electricity, cashiers, etc. Also, sometimes a product can be much cheaper in another country than your country. 3. It saves time and energy: You don't have to waste your time going to stores, dealing with crowds, and standing in lines. The whole process of shopping from a local store becomes even more time-consuming if you do not have your own car. You can solve all of these hassles by shopping online. 4. Shopping online gives you access to a wider range of options: You have great freedom of choice when you shop online. The Internet provides a far wider range of products than that you would find in any local store. 5. It's easier to hunt for a great deal: You will also be able to enjoy the freedom of price flexibility. If you don't like the price of a product from an online shop, you can switch to another to look for a cheaper price. Of course, you could also follow this procedure in a normal shop, but it would take more time and energy to do so. 6. Customers are usually satisfied: Nowadays, shopping online is very reliable. Sellers are held accountable by user feedback and reviews. Even in online stores where you buy from other users, such as eBay, the percentage of satisfaction is very high. There, you will see that most of the sellers have 99%+ positive feedback. 7. There is buyer protection: Dependable websites like eBay provide buyer protection. This means that the website will give your money back if any seller fails to deliver the item or delivers an item that does not match the description. 8. It's easier to find rare products: Shopping online is very useful in buying rare products. For example, I recently bought a rare car part through eBay. Not only was I able to find it, but the part was relatively inexpensive. 9. Shopping online allows you privacy: There are some things that you just don't want to buy publicly. You can buy any kind of product online while maintaining your privacy.

“The New Literacy Set” Project 2015-2017 10. You can support e-businesses: The progress of online business is actually helping countless people. Now people who cannot afford to buy or rent a shop can easily open an online store and sell items from their homes. This is playing a very important role in reducing the unemployment rate.

So, we can say that online shopping is characterized by: convenience, wide variety of products, cheap prices and accessibility.

What are disadvantages of online shopping?

1. Delay before receiving your package: The main disadvantage of online shopping is that there is no instant gratification. Because the item must be shipped to you, you will have to wait a few days. 2. You may receive an inferior product: Because you cannot hold the it and look at it in your hands, you don't always know the quality of the product. Sometimes the description or photograph of the product might be of something slightly different. As a result, you might end up with an inferior-quality item. 3. Shipping charges: Though items are generally cheaper in online store, sometimes the addition of a shipping charge makes the total price similar or more expensive than that of your nearby store. 4. Delivery problems: This means that the seller might fail to deliver the specified product or he deliver a product that has been damaged during shipping. 5. Danger of being scammed: As online shopping becomes more and more commonplace, the number of online scams is also increasing. This is why a buyer should always buy from trusted websites only—trusted websites will take care of any fraud in order to maintain their reputations. 6. Difficulty to return items: Returning an item is more difficult when you buy it online. If your seller accepts returns, they will usually want the item within a short period of time, and you will likely also have to pay for the shipping charges. 7. Warranty issues: Many electronic items are sold without international warranty. So, if a warranty is important, make sure you contact the seller to verify whether the item has international warranty or not. 8. Miscellaneous trouble: There are some other rare problems that can occur, such as credit card fraud, spyware, etc.

So, we can say that online shopping is characterized by: problems about the security of payment by credit card over the Internet, not being able to physically inspect the goods before purchase, goods getting damaged during transport, goods not arriving in time or at all, concerns over what information retailers are storing about customers.

“The New Literacy Set” Project 2015-2017 Proposed teaching method:

The workshop is divided in three sections of work. In the initial phase, the students put their attention on their knowledge about the topic proposed during a brainstorming activity. In the second part, the teacher presents the topic of the lesson through a PowerPoint presentation and students can act spontaneously or react to teacher’s input.

In the third part the students will be engaged in two group activities: the first one involves the construction of an infographics about the rules to make safe purchases while the second one involves the evaluation of the assess whether a site is safe or not for purchases The lesson ends with a discussion on the topics addressed and the students will take a final test.

The methods used are Cooperative Learning, Peer Education, Problem Solving, talking, performing, writing and reporting results, critical thinking on their usage.

Class resources and supplies: Padlet Tools, PowerPoint Presentation, CMap Tools, papers and pencils, smart board, students’ worksheets, computer, Internet, Infographics Tools.

Links for infographics tools: https://venngage.com/ https://www.canva.com/ https://piktochart.com/ https://www.easel.ly/ https://www.visme.co/ http://visualize.me/ https://infogr.am/

References to prepare a lesson:

 http://europa.eu/youreurope/citizens/consumers/shopping/index_en.htm  http://teaching.moneysmart.gov.au/resource-centre/moneysmart-rookie  https://www.privacyrights.org  http://ec.europa.eu/consumers/ecc/docs/ecc-report-cross-border-e- commerce_en.pdf

“The New Literacy Set” Project 2015-2017 5.13. SUBTOPIC 13 – THE IMPACT OF MARKETING ON CHILDREN AND YOUTH

Subtopic goals:

Students will be aware of the real impact on media in their consumer decisions and this will allow them to be more conscious and responsible when watching commercials.

Expected outcomes:

 Remember. Students remember previous experiences in which the influence of the ad provokes them to react.  Understand. They understand the link of commercial messages and some of their own decisions when shopping. They also understand the real aim of ads in the media: to get consumers.  Apply. They put into practice the different techniques learned throughout the proposed activities in order to be aware of the real messages on ads and to from their real wishes.  Analyse. They analyse the results and identify the progress they have made in their level of consciousness, comparing this before and after the activities.  Evaluate. Students assess their awareness in front of new commercials.  Create. Throughout their own experience in this activity, students will create a sentence to sum up the content learned.

Content:

Advertising has an enormous influence on children and adolescents. Staggering statistics reveal that, on average, a child or adolescent watches up to 5 h of television per day and spends an average of 6 to 7 h viewing the various media combined.

Simultaneously, advertisers are targeting younger and younger children in an effort to establish “brand-name preference” at as early an age as possible. This targeting occurs because advertising is a $250 billion/year industry with 900 000 brands to sell, and children and adolescents are attractive consumers. Increasingly, advertisers are seeking to find new and creative ways of targeting young consumers via the Internet, in magazines, and whatever they can.

This exposure may contribute significantly to childhood and adolescent obesity, poor nutrition, and cigarette and alcohol use. Media education has been shown to be effective in mitigating some of the negative effects of advertising on children and adolescents.

The main effects are:

“The New Literacy Set” Project 2015-2017 1.1. - Eating disorders

Over the past 20 years, several articles have proposed a link between the thin female beauty ideal and the muscular male body ideal portrayed in the media with a range of psychological symptomatology including body dissatisfaction and eating disorders. Studies have reported a significant change in the weight and size of female and male models portrayed throughout the media in western society and the concept of the ‘perfect or ideal body’. Over time the cultural ideal for women’s body size and shape has become considerably thinner and leaner and men’s body size and shape has become stronger and more muscular.

Many researchers have hypothesized that the media may play a central role in creating and intensifying the phenomenon of body dissatisfaction and consequently, may be partly responsible for the increase in the prevalence of eating disorders.

Statistics:

- After controlling for weight status, school level and racial group, those who frequently read fashion magazines were twice as likely to have dieted and three times as likely to have initiated an exercise program to lose weight, than infrequent readers - 44% of adolescent girls believed they were overweight and 60% were actively trying to lose weight even though the majority of these young girls were within normal weight ranges - Adolescent girls generally want to weigh less, while adolescent boys want to be bigger and stronger. A meta-analysis of 25 studies involving female subjects, examined the effect of exposure to media images of the slender body ideal. Body image was significantly more negative after viewing thin media images than after viewing images of either average size models, plus size models or inanimate objects. This effect was found to be stronger in women younger than 19 years of age - The reported prevalence rate for anorexia nervosa is 0.48% among girls 15 to 19 years old. Approximately 1% to 5% of adolescent girls meet the criteria for bulimia nervosa 1.2. - Violence and the media

Over 3.000 medical and sociological studies in the last 50 years have proven conclusively that children are adversely affected by exposure to media violence; yet millions of parents allow their children to watch violent programs and spent hours role-playing in very and graphic video games. Viewers watching crime dramas on TV are exposed to a gun or bladed weapon every 3 minutes.

1.3. - Tobacco Advertising

Tobacco manufacturers spend $30 million/day ($11.2 billion/year) on advertising and promotion, in EUA Exposure to tobacco advertising may be a bigger risk factor than

“The New Literacy Set” Project 2015-2017 having family members and peers who smoke and can even undermine the effect of strong parenting practices. Two unique and large longitudinal studies have found that approximately one third of all adolescent smoking can be attributed to tobacco advertising and promotions. In addition, more than 20 studies have found that children exposed to cigarette ads or promotions are more likely to become smokers themselves. Recent evidence has emerged that tobacco companies have specifically targeted teenagers as young as 13 years of age.

1.4. - Alcohol Advertising

Alcohol manufacturers spend $5.7 billion/year on advertising and promotion (in US). Young people typically view 2000 beer and wine commercials annually, with most of the ads concentrated in sports programming. During prime time, only 1 alcohol ad appears every 4 hours; yet, in sports programming, the frequency increases to 2.4 ads per hour.42,43 Research has found that adolescent drinkers are more likely to have been exposed to alcohol advertising.44–50 Given that children begin making decisions about alcohol at an early age— probably during grade school exposure to beer commercials represents a significant risk factor. Minority children may be at particular risk.

Adolescents are frequent users of alcohol and increasingly consume it in a risky fashion. For example, in Europe, nearly all (over 9 in 10) 15- to 16-year-old students have drunk alcohol at some point in their life, starting on average just after 12½ years of age. Binge drinking in young people has increased across much of Europe in the last 10 years, although more so in the early part of this period.

Children and adolescents have greater vulnerability to alcohol than adults. As well as usually being physically smaller, they lack experience of drinking and its effects. They have no context or reference point for assessing or regulating their drinking, and, furthermore, they have built up no tolerance to alcohol. From mid-adolescence to early adulthood, there are major increases in the amount and frequency of alcohol consumption and alcohol-related problems.

We considered studies that examined the association between alcohol advertising and promotion, the portrayal of alcohol in mass media, and adolescent drinking. Studies that included adolescents 18 years of age or younger were reviewed with the exception of US- based studies, where the legal drinking age of 21 years was taken as the cut-off.

This review found consistent evidence to link alcohol advertising with the uptake of drinking among non-drinking young people, and increased consumption among their drinking peers. This evidence comes from high quality longitudinal studies and is corroborated by weaker cross-sectional ones. Because it focuses on mass media advertising, it almost certainly underestimates the impact of wider alcohol promotion and marketing. These findings are not 64

“The New Literacy Set” Project 2015-2017 surprising: exactly the same conclusions have emerged from reviews of the impact of tobacco and food marketing on young people.

1.5. - Drug Advertising

“Just Say No” as a message to teenagers about drugs seems doomed to failure given that $11 billion/year is spent on cigarette advertising, $5.7 billion/year is spent on alcohol advertising, and nearly $4 billion/year is spent on prescription drug advertising. Drug companies now spend more than twice as much on marketing as they do on research and development. The top 10 drug companies made a total profit of $35.9 billion in 2002— more than the other 490 companies in the Fortune 500 combined. Is such advertising effective? A recent survey of physicians found that 92% of patients had requested an advertised drug. In addition, children and teenagers may get the message that there is a drug available to cure all ills and heal all pain, a drug for every occasion (including sexual intercourse).

1.6. - Food Advertising and Obesity

On TV, of the estimated 40 000 ads per year that young people see, half are for food, especially sugared cereals and high-calorie snacks. Healthy foods are advertised less than 3% of the time; children rarely see a food advertisement for broccoli. Increasingly, fast food conglomerates are using toy tie-ins with major children’s motion pictures to try to attract young people. Nearly 20% of fast food ads now mention a toy premium in their commercials. Several studies document that young children request more junk food (defined as foods with high-caloric density but very low nutrient density) after viewing commercials. In 1 study, the amount of TV viewed per week correlated with requests for specific foods and with caloric intake. At the same time, advertising healthy foods has been shown to increase wholesome eating in children as young as 3 to 6 years of age.

1.7. - Sex in Advertising

Sex is used in commercials to sell everything from beer to shampoo to cars. New research is showing that teenagers’ exposure to sexual content in the media may be responsible for earlier onset of sexual intercourse or other sexual activities. What is increasingly apparent is the discrepancy between the abundance of advertising of products for erectile dysfunction (ED) (between January and October, 2004, drug companies spent $343 million advertising Viagra, Levitra, and Cialis) and the lack of advertising for birth control products or emergency contraceptives on the major TV networks. This is despite the fact that 2 American polls have found that a majority of Americans in favour the advertising of birth control on TV. Ads for ED drugs give children and teens inappropriate messages about sex and sexuality at a time when they are not being taught well in school sex education programs. Research has definitively found that giving teenagers increased access to birth 65

“The New Literacy Set” Project 2015-2017 control through advertising does not make them sexually active at a younger age.

Suggested teaching methods:

It’s important not to ask participants to learn all this content through lectures. Instead, the teacher could motivate them to learn through investigation and information-gathering exercises. So, the best way to introduce good and bad practices in the use of financial ads is to ask participants to: ● Work in groups of three ● Each group look for examples of good and bad practices of financial ads ● The result of each investigation is shown to the rest of the group

In this kind of work, it’s interesting that teacher begins a discussion with the rest of participants about the examples exposed.

References to prepare a lesson:

● www.davidealgeri.com/educare-i-figli-ad-usare-bene-il-denaro. ● Giovani e denaro. Percorsi di socializzazione economica - Rinaldi Emanuela – Edizione Unicopli ● www.esplosivamente.com/esplosivamente/adolescenti-e-denaro-istruzioni-per-luso

“The New Literacy Set” Project 2015-2017 5.14. SUBTOPIC 14 - BASKET OF GOODS IN DIFFERENT COUNTRIES

Subtopic goals:

The workshop aim is to make students understand term “basket of goods” and “consumer price index”. Furthermore, students will understand money value and differences between different currencies.

Expected outcomes:

At the end of the workshop students will be able to:

 understand the concept of “basket of goods”,  understand “consumer price index”,  make their own opinion on money, currencies and consumer price index.

Content:

Basket of goods can be imagined as a shopping basket. It contains everyday products such as food, clothing, furniture and a range of services. As the products in the basket increase or decrease in price, the overall value of the basket changes. Data on the costs is collected annually and it compares the price of the basket to the previous year. The resulting ratio is the CPI. Consumer price index measures inflation experienced by consumers. It can indicate the level of inflation and thus affect the monetary and fiscal policies of governments.

The goods and services in a basket of goods fall into eight major categories: food and beverage, housing, apparel, transportation, medical care, education, communication, recreation and other.

For example, the basket of goods can include food and beverages such as cereal, milk and coffee. It also includes housing costs and bedroom furniture. Apparel, transportation expenses, medical care costs, and recreational expenses including pets, toys and admissions to museums also make the list. Finally, education and communication expenses round out the basket's contents, and the government also includes a few random items such as tobacco, haircuts and funerals.

Suggested teaching methods:

As a first exercise, we will ask students to compose their basket of goods and compare it to the other partner countries baskets.

The following online tool will be used: https://www.numbeo.com/cost-of- living/basket_of_goods.jsp which allows to calculate and compare a sum of prices (goods and services) per city in quantities of choice.

“The New Literacy Set” Project 2015-2017

Then students will be asked to convert national currency in several foreign currency, then to compare the price of a given good by looking at online selling websites. A report should be made on this, with students working in groups.

References for preparing a lesson:

● Guide to financial markets – The Economist https://docs.google.com/fileview?id=0B_Qxj5U7eaJTZTJkODYzN2ItZjE3Yy00Y2M0LTk 2ZmUtZGU0NzA3NGI4Y2Y5&hl=en&pli=1

5.15. SUBTOPIC 15 – CARRIERS IN FINANCIAL SYSTEM

Subtopic goals:

The workshop will give a general outlook on the most known professions in the financial sectors.

Expected outcomes:

 The student should have a basic knowledge and understanding of the financial system.  Understand. If the jobs in the financial sector could be a possible future professional option.  Analyse. Recognize their entrepreneurial potential.  Reflect, argue, justify and discuss the advantages and disadvantages between financial broker and financial advisor.  Create and realize guiding about finances and job options for the future

Content:

The complex world of finance can be difficult to navigate, especially for those just getting started. When you need to effectively manage your wealth for your future and want to start investing, it is often the best idea to get financial advice from a professional in order to get the help you need to make more informed financial decisions. But what you might not realize is that how that professional gets paid matters in terms of the quality of advice and service that you receive.

The financial system of any country consists of the network of economic structures through which the financial asset is practiced in various areas of expertise. In the monetary and credit 68

“The New Literacy Set” Project 2015-2017 market, that of investment or insurance, operating several intermediaries, both institutional and private organizations. The subjects can be classified into banks, leasing companies, insurance companies, securities firms, investment, etc. Considering the size of the market and the variety of instruments and existing products, there are many job opportunities for young people.

Handling and spending other people's money commands at high level of responsibility and requires a certain type of person. So employers within the banking, accounting and financial services sector look for candidates who possess a number of key skills and qualities to ensure that their investment in you will be one of the best they make.

There are many possible jobs in the financial system. For example, some of them are:

1. Financial analysts work to businesses to help them or their clients make investment decisions. Analysts must have a bachelor's degree, often in business administration, accounting, statistics or finance, analysts with a master's degree in business administration will find themselves among the most desirable employees. Average salary: $ 58,205 / year * With benefits and bonuses: $ 73,594

2. Personal financial advisors use their knowledge of investments, tax laws and insurance to recommend financial options that help individuals meet their short- and long-term goals. Advisors with a bachelor's degree in accounting, finance, economics, business mathematics or law will have the best job opportunities in their field. Average salary: $ 66,405 / year With benefits and bonuses: $ 85,553

3. Accountants analyze, plan, evaluate and advise on matters of accounting theory and practice. A bachelor's degree in accounting or a related field is usually required, but those with a master's degree or experience to boot will have better job opportunities. Average salary: $ 43,215 / year With benefits and bonuses: $ 52,813

4. Auditors examine and analyze accounting records and prepare financial reports for clients. Auditors usually need a bachelor's degree, but with accountants, experience and advanced degrees increase their chances of getting hired. Average salary: $ 57,365 / year With benefits and bonuses: $ 68,138

5. Loan officers assist individuals and organizations in applying for loans, assess the individuals' creditworthiness and help them determine the most appropriate type of loan for his / her needs. Employers usually require loan officers to have a bachelor's degree in finance, economics or a related field. Loan officers will find experience in banking, lending or sales and knowledge of computers to be huge assets in their job search. Average salary: $ 48,318 / year

“The New Literacy Set” Project 2015-2017 With benefits and bonuses: $ 58,685

6. Collectors keep track of accounts that are overdue and attempt to collect payment on them, making computer literacy and good communications skills a must in this job. Most collectors are required to have at least one high school diploma; However, employers prefer workers who have completed some college or who have experience in other occupations that involve contact with the public. Average salary: $ 27,960 / year With benefits and bonuses: $ 33,215

7. Bank tellers cash checks, accept deposits and loan payments and process withdrawals. They also may sell savings bonds and travelers' checks, accept bill payments and process paperwork. Most tellers have at least a high school diploma, but people with a bachelor's degree in business, accounting or liberal arts may get jobs as tellers to break into banking with the hopes of being promoted. Average salary: $ 19,828 / year With benefits and bonuses: $ 24,793

8. Buyers buy the goods and services a company needs either to resell to customers or for the establishment's own use. Educational requirements vary with the size of the organization, but many manufacturing firms prefer applicants with a bachelor's or master's degree in engineering, business, economics or one of the applied sciences. Average salary: $ 44,919 / year With benefits and bonuses: $ 54,428

9. Treasurers direct an organization's financial goals, objectives and budgets. Their duties may include overseeing the investment of funds and executing capital-raising strategies. Employers require a bachelor's degree in accounting, finance, economics or business administration; However, employers are increasingly placing emphasis on advanced degrees in these fields. Average salary: $ 97,645 / year With benefits and bonuses: $ 130,957

10. Budget analysts provide analysis and assistance to help companies develop their annual budgets, decide how to allocate current resources and estimate future financial requirements. A bachelor's degree - often in finance, economics, accounting, business, statistics, political science or sociology - is the minimum requirement for most employers, but an advanced degree is often preferred and sometimes required. Average salary: $ 55,566 / year With benefits and bonuses: $ 67,586

Proposed teaching model: After having introduced the main features of the brokers and of the advisor, students will be asked to write on a paper sheet the personal and professional characteristic of both profession. Then, they will have to simulate a job interview to select a broker and an advisor 70

“The New Literacy Set” Project 2015-2017 in a famous financial company. The teacher will play the role of the HR manager and will make questions aimed at assessing both soft and hard skills.

References for preparing the lesson:

● Careers Opportunities in Banking, Finance and Insurance, By Thomas Fitch. ● Careers in Finance by Trudy Ring, VGM Career Horizons. ● Opportunities in Financial Careers, By Michael Sumachrast.

“The New Literacy Set” Project 2015-2017 6. LITERATURE

● The currency and payment instruments to cash - Educational Notebooks by the Italian National bank ● Compendio Of Banking Technique - Authors Concetta Salicone - Edition Simone ● http://europa.eu/youreurope/citizens/consumers/financial-products-and- services/bank-accounts ● http://eur-lex.europa.eu/legal-content/ ● I Markets and financial instruments. Discipline and organization of the stock exchange. A. Banfi ● www.borsaitaliana.it ● www.milanofinanza.it ● http: //www.soldionline.it/guide/mercati-finanziari/la-storia-delle-borse-valori-nel- mondo ● http: //www.treccani.it/enciclopedia/borsa-valori/ ● http://www.econedlink.org ● http://www.borsaitaliana.it/varie/loginservices/borsavirtuale/intro/borsavirtuale.ht m ● https://www.diventaretrader.com/giocare-in-borsa-simulazione ● http: //crescitaindividuale.com/2016/03/finanza-personale/ ● “How to manage the relationship with the investor in times of crisis” by Vincenzo Pacelli - Bancaria Editrice ● “The Private real estate saving” of Ugo Mattei - Bancaria Editrice ● https://www.moneyadviceservice.org.uk ● http://www.investopedia.com ● Insurance Health: characteristics and patterns of De Angelis and Di Falco Publisher Il Mulino ● The Italian pension system by Anna M. Battisti Publisher Universitalia ● European Commission Green Paper: Towards adequate, sustainable and safe European pension systems ● Investing In Health Insurance Companies | Investopedia http://www.investopedia.com/articles/stocks/09/investing-in-health- insurance.asp#ixzz4YjlHe1nC ● The Enterprise. Fundamentals - Various Authors - Issues McGraw-Hill 2016 ● General accounting and corporate financial statements - Andrei and Fellegara - Giappichelli Publisher 2016 ● The business plan. strategic and operational guidance - Ferrandina-Carriero Ipsoa 2012 ● The Budget - Piero Provenzali - EBC ● Crowdfunding in the knowledge era. Walter Vassallo - Franco Angeli 2014

“The New Literacy Set” Project 2015-2017 ● https://strategyzer.com/canvas?_ga=1.160348731.767824181.1445418826 ● https://canvanizer.com/new/business-model-canvas ● https://www.leanstartupmachine.com/validationboard/ ● https://www.youtube.com/watch?v=F-5Iyj9A1MU ● Sistema tributario italiano - ww.caafcgiltoscana.it Guida ● Ires - www.forexinfo.it - Fisco e Tasse ● Irap - www.pmi.it/tag/irap ● Iva - www.sardegnaimpresa.eu ● Convenzione doppie imposizioni - www.finanze.it ● „Discussion Paper No. 05-31 The Effective Tax Burden of Companies and on Highly Skilled Manpower: Tax Policy Strategies in a Globalized Economy” Christina Elschner, Lothar Lammersen, Michael Overesch and Robert Schwager ● Eichler, M. et al. (2005) Effective tax burden of companies and on highly qualified manpower ● Eichler, M. et al. (2006) Determinants of productivity growth ● Bénassy-Quéré, A. et al. (2004) Tax competition and foreign direct investment ● Hajkova, D., Nicoletti, G., Vartia, L.,Yoo K-Y. (2006) Taxation, business environment and FDI location in OECD countries ● OECD Tax Policy Studies, Tax Burdens: Alternative Measures (Chapter 6) ● OECD Tax Policy Studies, Using Micro-Data to assess average tax rates ● Schmidt-Faber, C. (2004) An implicit tax rate for non-financial corporations - Definition and comparison with other tax indicators ● Yoo, K.-Y. (2003) Corporate taxation of foreign direct investment income 1991-2001 ● Luna-Arocas and Tang, 2004 The love of money, satisfaction, and the Protestant work ethic: money profiles among university professors in the USA and Spain Journal of Business Ethics, 50 (2004), pp. 329–354 ● Lea and Webley, 2006 Money as tool, money as drug: The biological psychology of a strong incentive Behavioural and Brain Sciences, 29 (2) (2006), pp. 161–209 ● http://europa.eu/youreurope/citizens/consumers/shopping/index_en.htm ● http://teaching.moneysmart.gov.au/resource-centre/moneysmart-rookie ● https://www.privacyrights.org ● http://ec.europa.eu/consumers/ecc/docs/ecc-report-cross-border-e- commerce_en.pdf ● www.davidealgeri.com/educare-i-figli-ad-usare-bene-il-denaro. ● Giovani e denaro. Percorsi di socializzazione economica - Rinaldi Emanuela – Edizione Unicopli ● www.esplosivamente.com/esplosivamente/adolescenti-e-denaro-istruzioni-per-luso ● Guide to financial markets – The Economist https://docs.google.com/fileview?id=0B_Qxj5U7eaJTZTJkODYzN2ItZjE3Yy00Y2M0LTk 2ZmUtZGU0NzA3NGI4Y2Y5&hl=en&pli=1 73

“The New Literacy Set” Project 2015-2017 ● Careers Opportunities in Banking, Finance and Insurance, By Thomas Fitch. ● Careers in Finance by Trudy Ring, VGM Career Horizons. ● Opportunities in Financial Careers, By Michael Sumachrast.