Leader’s Manual Consumer Choicesflorida4h.org/projects/fcs/Consumer...

Florida 4-H Leader’s Manual

Consumer Choices

2008

The 2008 Teaching Guides and Youth Pieces were prepared by Selena Garrison, Graduate Assistant and Michael Gutter, Assistant Professor, with editing, layout and design by Jessica Kochert and Joy Jordan, Department of Family, Youth and Community Sciences, IFAS, University of Florida. Content reviewers for this document included Linda Bobroff, Hyun-Jeong Lee, Dale Pracht, Department of Family, Youth and Community Sciences, IFAS, University of Florida.

COOPERATIVE EXTENSION SERVICE, UNIVERSITY OF FLORIDA, INSTITUTE OF FOOD AND AGRICULTURAL SCIENCES, Larry R. Arrington, Director, in cooperation with the United States Department of Agriculture, publishes this information to further the purpose of the May 8 and June 30, 1914 Acts of Congress; and is authorized to provide research, educational information, and other services only to individuals and institutions that function with non-discrimination with respect to race, creed, color, religion, age, disability, sex, sexual orientation, marital status, national origin, political opinions, or affiliations. Single copies of extension publications (excluding 4-H and youth publications) are available free to Florida residents from county extension offices. Additional information and copies are available at the 4-H curriculum website: http://florida4h.org. Original publication date September 2007.

CONSUMER CHOICES TEACHER GUIDE PAGE 1

Situation: In a time of long work hours, packed schedules, and little time for meals, any product offering an effortless energy boost is sure to sell. Multiple brands of energy bars are being marketed as quick snacks, meal replacements, and workout supplements in grocery stores, big box stores (ex. Wal-Mart, Target), drug stores, and health food stores. While some energy bars may be healthier snack options than candy bars, it is important for consumers to understand what they are purchasing and decide whether these products are actually beneficial to them. According to Consumer Reports, in recent years Americans have spent over $1.4 billion a year on “energy bars.”1 These bars were originally created about fifteen years ago to fuel endurance athletes such as marathon runners by supplying the carbohydrates needed during an endurance event. The original bars were chewy, high carbohydrate, low fat bars containing high fructose corn syrup and fruit juice concentrates, as well as some added vitamins and minerals.2 Today, there are many different types of energy bars that are being marketed, including protein bars, cereal bars, snack bars, and diet bars of all kinds. The marketing approach is to claim that these are “energy bars,” not just a meal replacement or a snack like breakfast bars or granola bars. While these bars do provide energy in the form of calories that are used by the body to fuel activity (as all calorie-containing foods do), they can be very expensive, high in fat and sugars, and may not provide other nutrients that are available in whole foods. Many also contain 100% or more of the daily value of several vitamins and minerals, which is unnecessary since these nutrients are provided from other foods consumed throughout the day. According to Consumer Reports, chronic overconsumption of certain vitamins and minerals can lead to health problems.1

Key Concepts to Teach: • When used as a snack, energy bars are more nutritious than candy bars.1 • Unless you are an endurance athlete, the carbohydrates provided by energy bars will

not be beneficial to your workout. 2 • A two ounce energy bar usually contains 200 to 300 calories, and is not as filling as the

amount of whole foods, such as fruits and vegetables, that you could eat for the same calorie content. 2 Energy bars do provide energy, but that just means that they contain calories from carbohydrates and proteins, which your body can convert to energy to fuel its activities or store as fat. This does not necessarily mean that they will make you feel energetic. 2

Energy Bars The 2008 Teaching Guides and Youth Pieces were prepared by Selena Garrison, Graduate Assistant and Michael Gutter, Assistant Professor, Department of Family, Youth and Community Sciences, IFAS, University of Florida. Contents reviewed by Linda Bobroff, IFAS, University of Florida.

Goal: Youth will: make an informed choice regarding the purchase and consumption of energy bars; defend their choices given a particular consumer situation. Objectives: Program Participants will: • Understand the

nutritional value of energy bars.

• Calculate the cost associated with energy bars.

• Identify situations in which energy bars could be a useful dietary supplement.

• Identify healthy whole food alternatives to energy bars.

Materials: • Consumer Choices

Member Guide for each participant.

• Teacher’s Guide with background information and suggested activities (includes worksheets).

• Online advertising site examples of a variety of energy bars, showing their range of purposes, nutrition values, and prices.

• If possible, examples of actual energy bars for participants to examine and sample.


• All foods that contain carbohydrates, fat, and/or protein provide energy in the form of calories. • Using energy bars as a meal replacement can cause you to miss out on nutrients, fiber, and phytochemicals

that are in whole foods, but not energy bars.2 Preparation: 1. Review recent Consumer Reports information on energy bars: www.consumerreports.org. 2. Review and read additional information at the following websites on energy bars:

• http://www.netwellness.uc.edu/healthtopics/diet/nutribyte2003oct.cfm • http://www.cspinet.org/nah/12_00/barexam.html • http://mdsports.wordpress.com/2007/11/30/candy-bars-not-much-different-than-energy-bars-for-

athletes/

Suggested Activities: 1. Test cost effectiveness by making your own energy bars! Use the recipe on the Activity 1 Worksheet to make

your own energy bars and then compare the price of your energy bars with the prices of energy bars sold in stores.

2. Use the chart on the Activity 2 Worksheet to comparison shop for both energy bars and candy bars. After completing the chart, answer the questions and determine which bar would be the best choice for you personally.

Introduction and Background Grocery stores, health food stores, and even vending machines market a variety of energy bars as quick snacks, meal replacements, or workout supplements. Their claim is that eating one bar will increase the consumer’s level of energy. While these energy bars may be a healthier snack option than candy bars, it is important for consumers to understand what they are purchasing and decide whether these energy bars are actually beneficial to them.1 Today, there are many different types of energy bars that are being marketed, including protein bars, cereal bars, snack bars, and diet bars of all kinds. The marketing approach is to claim that these are “energy bars,” not just a meal replacement or a snack like breakfast bars or granola bars.1

Where Did Energy Bars Come From?

Energy bars were originally created in 1987 to keep endurance athletes from “crashing” during long events such as marathons. They have come a long way in the last 15 to 20 years. Energy bars were designed to provide the extra carbohydrates that the athlete’s body needs to compete for long periods of time (i.e. more than one hour of intense exercise). As other people became interested in using these energy bars, manufacturers began to add additional ingredients such as nuts, oats, and fruit, to make the original taffy-like bars better tasting, similar to granola bars


or cookies. Today there are a multitude of types and brands of energy bars, with advertised purposes ranging from weight loss to muscle gain to a simple boost in energy.2 According to Consumer Reports, Americans have recently spent over $1.4 billion a year on “energy bars.”1

What Is “Energy,” Anyway?

There are several questions that consumers should ask when considering which energy bars meet their individual needs including “What is energy?” and “How will my body use energy that I consume from that food?” In the world of nutrition, the word “energy” means “calories.” The body processes the calories taken in as food is eaten. It then uses this “energy” to fuel the body’s activities. Thus, any food containing calories could be considered an energy food. The three nutrients that provide calories are carbohydrate, protein, and fat. When more calories are eaten than will be used, the body stores those extra calories as fat. Being aware of this concept is important, since “energy” bars can supply between 200 to 300 calories per serving, while possibly not adding to the actual feelings of increased energy2 and, in most situations, not being the healthiest choice.

Types of Energy Bars3

While there are many different brands of energy bars, most of them can be broken down into just three categories based on the amount of carbohydrates and protein that they contain.

High Carbohydrate Bars

Like the original energy bar, these high carbohydrate bars marketed by PowerBar™, Clif™ and Boulder™, among others, are aimed at endurance athletes. The extra carbohydrates are supposed to give the body the extra fuel needed to compete in persistent strenuous exercise that lasts one hour or longer (like a cross country race or a marathon). For people who are not endurance athletes, however, these bars could add more calories to their diet than they will use by exercising. Also, a study conducted by David Pearson and colleagues at Ball State University showed that there was no difference in performance between athletes who ate a bagel and those who ate a high carbohydrate energy bar before an hour of running.

The use of trade names or images in this publication is solely for educational purposes of providing specific information. UF/IFAS does not guarantee or warranty the products named, and references to them in this publication do not signify our endorsement of or approval to the exclusion of other products of suitable composition.


40-30-30 Bars

These bars, such as Balance™, Ironman™, and ProZone™, replace some of the high fructose corn syrup found in high carbohydrate bars with protein and fat to create a 40-30-30 ratio of carbohydrates to protein to fat. The protein in these bars usually comes from whey or soy protein, while the fat often comes from palm kernel oil. This oil is saturated enough that it will stay solid at room temperature (preventing a mess on the hands). However, it is important to note that this form of oil is twice as saturated as lard. So, eating one of these bars for lunch may be a better alternative than eating a fast food cheeseburger and more closely resembles normal dietary ratios of carbohydrates, protein, and fat than the high carbohydrate bars, it is probably still best to limit intake.

High Protein Bars

High protein bars, such as Ultimate Lo Carb™, Met-Rx Protein Plus™, and Promax™, are typically aimed at body builders. They usually contain milk or soy protein and are usually larger in size than other energy bars (about 3 ounces instead of 2) and higher in calories. There really is not any proof that there is a difference in the effects on performance between high protein bars and high carbohydrate bars. Also, the protein in these bars can be obtained from other foods, so it is not necessary to eat these bars in order to reach the recommended amount of protein per day.

Energy Bars vs. Candy Bars According to a study conducted by Steve Hertzler of The Ohio State University, the effects of energy bars on athletes do not significantly differ from the effects of candy bars. He tested four “meals” on athletes who had been fasting for twelve hours. The four meals were: four slices of white bread, a Snickers™ bar, an IronMan PR Bar™, or a PowerBar™. Results showed that there was not a significant difference in their effects on the athletes’ blood glucose levels.4 (Blood glucose is a source of readily available energy for performance.) As far as calorie content, both candy bars and energy bars usually contain between 200 and 300 calories. On the other hand, energy bars usually contain some extra vitamins and nutrients that candy bars don’t have, which are also available from foods eaten throughout the day.3



Energy Bars vs. Whole Foods While energy bars are convenient to grab and eat on the go, they do not contain any secret ingredients that can’t be found in whole foods. In fact, using energy bars as meal replacements can cause a deficit of nutrients and phytochemicals that are available in whole foods but not energy bars.

Research has shown that an athlete’s performance may be enhanced by an extra supply of carbohydrates during strenuous exercise lasting more than one hour, but it is the type of carbohydrates, not the source that is important. This means that it does not matter whether the carbohydrates come from bread or from an energy bar, as long as they are the right types of carbohydrates.2

According to Consumer Reports, there may also be a difference in the quality of nutrition from energy bars in comparison to whole foods. For example, some energy bars contain low-quality sources of protein like collagen or gelatin, which lack essential amino acids that are available in other food proteins. In addition, many energy bars contain highly saturated fats such as palm-kernel oil, which often contribute to clogged arteries. So, when using energy bars, be sure to look for ones with high-quality sources of protein, such as milk, egg, or soy, and ones that are low saturated fat and trans fat.

The Bottom Line

Energy bars can be convenient sources of calories and some vitamins and nutrients, especially in lieu of skipping a meal or picking up fast food. They are conveniently packaged and most contain a variety of nutrients. However, this convenience may come at a high price, since the cost of energy bars typically ranges between one and three dollars per bar. It is important to remember, however, that “energy,” in nutritional terms, simply means “calories” and that “energy bars” may not necessarily provide an energy boost. In effect, any food containing calories can be considered an “energy” food. Also, energy bars usually contain between 200 and 300 calories in a two ounce bar, making them very calorie-dense. For the same amount of calories, larger amounts of fruits, vegetables, or other foods could be consumed. These healthier choices would sustain a satisfied feeling longer and provide a variety of needed nutrients. Many bars also contain highly saturated oils that are used to


increase the shelf-life of the product, but do not provide healthy fat choices. Many also contain 100% or more of the daily value of several vitamins and minerals, which is unnecessary since other foods consumed throughout the day provide an ample supply. According to Consumer Reports, chronic overconsumption of certain vitamins and minerals can lead to health problems.1

In the end, no energy bar can compete with the nutritional value of whole foods (fruits, vegetables, whole grain foods, and dairy products) needed for good health.5,6 However, more important than choosing to eat energy bars or not is making sure that there is a proper amount of protein, carbohydrates, and fats from a variety of foods to fuel the body throughout the day. This nutritional balance and exercise create the keys to a healthy lifestyle.3 For more information on creating a balanced diet for various lifestyles, visit www.mypyramid.gov.

References and Sources

1 Consumer Reports: Energy Bars; http://www.consumerreports.org/cro/food/food-shopping/snacks-sweets/energy-bars/energy-bars-705/index.htm

2 Brehm, B.J.; Energy Bars: Better Than a Candy Bar?; NetWellness http://www.netwellness.uc.edu/healthtopics/diet/nutribyte2003oct.cfm

3 Liebman, B. & Schardt, D.; Bar Exam: Energy Bars Flunk. Nutrition Action Healthletter. http://www.cspinet.org/nah/12_00/barexam.html

4 Hertzler, S.; Candy Bars Not That Much Different Than Energy Bars for Athletes. MD Sports Weblog. http://mdsports.wordpress.com/2007/11/30/candy-bars-not-much-different-than-energy-bars-for-athletes/

5 USDA. CNPP. My Pyramid. http://www.mypyramid.gov 6 USDA, USDHHS. Dietary Guidelines for Americans, 2005. http://www.cnpp.usda.gov/dietaryguidelines.htm

Photo Credits:

p. 3, 9, 12 - Photo of Clif Bar™ (Carrot Cake) - http://www.urbanadventuregear.com p. 3, 9, 11 - Photo of PowerBar™ (Vanilla Crisp) - http://www.bostonrunningcenter.com p. 4 - Photo of 40-30-30 Bars - http://www.nutritionexpress.com/bars/40+30+30+bars

p. 4 - Photo of MetRx Bar™ (Mud Pie Fusion) - http://www.bodyhut.com/ProdImages/protein-plusbar-large.jpg

p. 4, 9, 12 - Photo of ProMax Bar™ (Cookies ’n Cream) - http://www.promaxnutrition.com p. 9, 11 - Photo of Detour Bar™ Original (Caramel Peanut) - http://www.worldpantry.com


Make Your Own Energy Bars While energy bars may offer some convenience while on the run, they can be rather expensive, with an average of about $1 per bar. With a little advanced planning, you can make you own energy bars for about half the price. Search the web for a variety of recipes for energy, cereal or protein bars. Study the variety of ingredients to look for those that provide the nutritive needs to fit your situation. For example, compare those that use granola and whole grains for sources of carbohydrates. Take a close look at the amount and types of sugar as well. Most bars use dried fruits for natural sources of sugar. Nuts, peanut butter, eggs are also ingredients added for protein sources. Take your list of desired ingredients to the grocery store to read labels before you finalize your choice of a recipe. Questions: • Based on the price of the ingredients

and the number of bars yielded from the recipe, what is the price per bar for the bars that you made?

• How does this price compare with the prices you would pay in stores for an energy bar?

• Calculate the nutritive values —grams of carbohydrates (including sugar/fiber), fat and protein — and compare the results to your favorite energy bar.

Activity 1 Worksheet - All Age Groups

Try this recipe! Granola Energy Bar

1 cup of granola 1/2-3/4 cup slivered almonds (or other nut

of your choice) 1/2 c. raisins 1 1/2 ounces, approximately 1/3 cup each of

coarsely chopped dried pineapple, dried cranberries or other fruits of your choice.

1/2 c. white chocolate chips (or similar product) 1 large egg 1/2 c. unsweetened applesauce 1/3 c powdered milk (optional)

Preheat the oven to 350 degrees. Lightly coat the inside of a 8 x 8 inch pan using a nonstick baking spray. Mix together the granola, nuts, dried fruit and chocolate chips. Place the egg in medium bowl and beat well, add the applesauce. Stir in the dry milk, followed by the grains, nuts and dried fruit mixture. Spread and press in your oiled pan. Bake for 30 minutes. Once the mixture has cooled completely, cut into squares, wrap individually or store in an airtight container for 1 to 2 days.

Energy Bars vs. Candy Bars

Which product is the most expensive? Which product is the least expensive?

So, based on this information, which product do you think would be the best choice for you personally?


Brand Name

Net Weight Calories Total

Fat Saturated Fat Protein Carbohydrates Fiber Cost

Energy Bar #1

Energy Bar #2

Energy Bar #3

Candy Bar #1

Candy Bar #2

Candy Bar #3

Let’s analyze. Which product has the highest: • Net Weight

• Calories

• Total Fat

• Saturated Fat

• Protein

• Carbohydrates

• Fiber

Which product has the lowest: • Net Weight

• Calories

• Total Fat

• Saturated Fat

• Protein

• Carbohydrates

• Fiber


Practice Consumer Situation for Energy Bars Jason is 15 and just began playing Junior Varsity football. In between class and football practice, he needs to eat a snack that will provide him with the calories he needs to get through practice. He forgot to bring a snack from home, but the vending machine contains four different types of energy bars. Jason has $3.00 to use for a snack and wants the biggest energy bar with the highest number of calories for as little money as possible. He wants a bar with an equal balance of carbohydrates and protein and no more than 10 grams of fat. Help Jason choose which energy bar is the best choice for his consumer needs. Rank them in order from 1 (best choice) to 4 (least desirable choice).

1. Detour™ Energy Bar. Price $2.59. 3 ounces, 340 calories, 10 grams of fat, 30 grams

of protein, and 33 grams of carbohydrates. 113 calories per ounce. $0.86 per ounce.

2. PowerBar™ Performance. Price $1.29. 2.3 ounces, 230 calories, 2.5 grams of fat, 9 grams of protein, and 45 grams of carbohydrates. 100 calories per ounce. $0.56 per ounce.

3. Promax™ Bar. Price $1.60. 2.64 ounces, 290 calories, 6 grams of fat, 20 grams of protein, and 38 grams of carbohydrates. 110 calories per ounce. $0.61 per ounce.

4. Clif™ Bar. Price $1.59. 2.4 ounces. 240 calories, 4.5 grams of fat, 10 grams of protein, and 45 grams of carbohydrates. 100 calories per ounce. $0.66 per ounce.

Placings: 3-1-2-4 Cuts 3-6-3

Notes/Reasons:

#3 The Promax™ Bar is the first pick for Jason’s needs. It provides a good portion of calories per ounce, along with a good balance of protein and carbohydrates with the least amount of fat. It is also the most economical at 61¢ per ounce versus 86¢ per ounce (the Detour™ Bar).

#1 The Detour™ Energy Bar is the second choice because though it fulfills Jason’s consumer needs with a balance of carbohydrates and protein, it has both higher fat content and greater cost per ounce than the Promax™ Bar.

#2 The PowerBar™ edges out the Clif™ Bar for third place. While the calorie content, size, and the balance between protein and carbohydrates are almost identical, the PowerBar™ costs $.30 less than the Clif™ Bar and has less fat.

#4 The Clif™ Bar comes in last place because, although it beats the PowerBar™ by 10 calories, it costs more than the PowerBar™ and is higher in fat than the PowerBar™.

*Nutritional Information and pricing taken from www.gnc.com and based on the price of one individual bar in a pack of twelve or fifteen. Sales tax not included.



Practice Consumer Situation for Energy Bars

Jason is 15 and just began playing Junior Varsity football. In

between class and football practice, he needs to eat a snack

that will provide him with the calories he needs to get through

practice. He forgot to bring a snack from home, but the

vending machine contains four different types of energy bars.

Jason has $3.00 to use for a snack and wants the biggest

energy bar with the highest number of calories for as little

money as possible. He wants a bar with an equal balance of

carbohydrates and protein and no more than 10 grams of fat.

Help Jason choose which energy bar is the best choice for

his consumer needs. Rank them in order from 1 (best choice)

to 4 (least desirable choice).


Detour.™ Price: $2.59. 3 ounces 340 calories 10 grams of fat 30 grams of protein 33 grams of carbs

113 calories per ounce $0.86 per ounce

1.

2.

The use of trade names or images in this publication is solely for educational purposes of providing specific information. UF/IFAS does not guarantee or warranty the products named, and references to them in this publication do not signify our endorsement of or

PowerBar.™ Price: $1.29. 2.3 ounces 230 calories 2.5 grams of fat 9 grams of protein 45 grams of carbs



3.

4.


Promax.™ Price: $1.60. 2.64 ounces 290 calories 6 grams of fat 20 grams of protein 38 grams of carbs


Clif Bar.™ Price: $1.59. 2.4 ounces 240 calories 4.5 grams of fat 10 grams of protein 45 grams of carbs

100 calories per ounce

$0.66 per ounce


Situation: In 1992, the US Environmental Protection Agency (EPA) introduced a voluntary labeling system called ENERGY STAR®, which was created to both identify and promote energy-efficient products in an effort to reduce greenhouse gas emissions, which are currently linked to global warming. In order to achieve the ENERGY STAR® status, products must pass rigorous inspections and meet criteria set by the US government. This program has been quite successful, saving both energy and a consumer cost of $16 billion in 2007 alone.1

One of the products evaluated by ENERGY STAR® is the compact fluorescent light bulb (CFL), which is being used to replace the incandescent light bulbs invented by Thomas Edison in 1879. Only those CFLs that meet ENERGY STAR® standards receive the label, but there are other CFLs available. According to ENERGY STAR®, approved CFLs use about 75 percent less energy and last up to 10 times longer than the old fashioned bulbs. Consumers can also save $30 or more in electricity costs over the lifetime of each bulb, which are available in different shapes and sizes to fit both indoor and outdoor light fixtures. In addition, CFLs produce 75 percent less heat than incandescent bulbs, so they can cut energy costs associated with home cooling.2 Key Concepts to Teach: • ENERGY STAR® approved CFLs use about 75% less energy and last 10 times longer

than incandescent bulbs. • CFLs produce 75% less heat than incandescent bulbs, so they can cut energy costs

associated with home cooling. • Different sizes and shapes of CFLs have different uses inside and outside the home. • CFLs contain trace amounts of mercury, so it is important to follow directions on

disposal, as well as cleanup in case of a break. • Standards of quality may not be a factor in brand comparison between store and brand

name.

Preparation: 1. Review recent Consumer Reports information on compact fluorescent light bulbs.

www.consumerreports.com 2. Review and read additional information at the following websites on compact

fluorescent light bulbs. • http://www.energystar.gov/index.cfm?c=cfls.pr_cfls – on this website, click

the icon that says “Choose a Light Guide” and complete the exercise. • http://www.edf.org/page.cfm?tagid=609

Energy Efficient Light Bulbs The 2008 Teaching Guides and Youth Pieces were prepared by Selena Garrison, Graduate Assistant and Michael Gutter, Assistant Professor, Department of Family, Youth and Community Sciences, IFAS, University of Florida. Contents reviewed by Hyun-Jeong Lee, IFAS, University of Florida.

Goal: Youth will: make an informed choice regarding the purchase of compact fluorescent light bulbs; defend their choices given a particular consumer situation. Objectives: Program Participants will: • Understand how

compact fluorescent light bulbs differ from incandescent light bulbs.

• Understand how compact fluorescent light bulbs can be used most effectively to influence energy use levels and costs.

• Identify which types of compact fluorescent light bulbs should be used in which places inside and outside of the home.

• Be able to identify several of the guidelines required for a CFL to receive ENERGY STAR® approval.


Member Guide for each participant


• Recent review of CFLs from an unbiased source such as Consumer Reports or the ENERGY STAR® government website.

• If possible, examples of actual compact fluorescent light bulbs of different shapes and sizes, as well as examples of


Suggested Activities: 1. Have youth go to the ENERGY STAR® website on compact fluorescent light bulbs (http://

www.energystar.gov/index.cfm?c=cfls.pr_cfls). Have them click on the icon that says “Choose a Light Guide” and have them complete the exercise. They will be able to choose different sizes and shapes of CFLs and see where there are used in the home and why. Using this guide, have youth complete the Activity 1 Worksheet.

2. Use the chart on the Activity 2 Worksheet to comparison shop between compact fluorescent light bulbs and incandescent light bulbs. After completing the chart, answer the questions and determine which type of light bulb would be the best choice for your family.

Introduction and Background

When asked to picture in their mind a “light bulb”, most people probably picture the incandescent light bulb, invented by Thomas Edison in 1879. However, a new type of light bulb is becoming more popular in both homes and work environments. This new light bulb, which is often recognized due to its spiral-like shape, is called the compact fluorescent light bulb, or CFL. 3 The concept of the CFL is not all that new. The idea actually dates back to 1856 when Henry Geissler, a glassblower and physicist, sealed gas in a metal tube and used an induction coil to excite the gas and create a bluish glow. Later, in 1894, D. McFarlane Moore created a commercial gas discharge lamp, which used nitrogen and carbon dioxide gases to create a pink and white light. Peter Cooper Hewitt, in 1901, created a mercury-vapor lamp that emitted a bluish green glow and was used in photography. Finally, in 1926, Edmund Germer and some of his coworkers used a fluorescent tube coated inside with a fluorescent powder to turn ultraviolet light into a more normal and uniform white colored light. General Electric bought the patent from Mr. Germer in 1938 and brought the fluorescent lamp into commercial application. These are the long slender fluorescent lights that we see in office buildings today.3 After years of having fluorescent lights in the workplace, these light bulbs are now available in a compact version that is about the size of a regular incandescent light bulb. When CFLs first became available in the early 1980s, they were expensive to make and sold for about $15 each.4 Today, these light bulbs can be purchased for as little as $1 to $3 a piece, with the price increasing based on the size, shape, wattage and use of the bulb.


Compact Fluorescent Light Bulbs vs. Incandescent Light Bulbs In 1992, the US Environmental Protection Agency (EPA) introduced a voluntary labeling system called ENERGY STAR®, which was created to both identify and promote energy-efficient products in an effort to reduce greenhouse gas emissions, which are currently linked to global warming. In order to achieve the ENERGY STAR® status, products must pass rigorous inspections and meet criteria set by the US government.1 One of the products evaluated by ENERGY STAR® is the compact fluorescent light bulb. Only those CFLs that meet ENERGY STAR® standards receive the label, but there are other CFLs available. According to ENERGY STAR®, approved CFLs use about 75 percent less energy and last up to 10 times longer than the incandescent bulbs. Consumers can also save $30 or more in electricity costs over the lifetime of each bulb, which are available in different shapes and sizes to fit both indoor and outdoor light fixtures. In addition, approved CFLs produce 75 percent less heat than incandescent bulbs, so they can cut energy costs associated with home cooling.2

Approved compact fluorescent light bulbs are especially useful in fixtures that are turned on for at least 15 minutes at a time or for several hours a day, because continually turning the bulb on and off can result in shortening the life of the bulb. These fixtures can usually be found in places such as family and living rooms, kitchens, dining rooms, bedrooms, and outdoors.5 However, there are a few downsides to CFLs. The first, and most obvious, is that they initially cost more than incandescent light bulbs. This problem, however, quickly resolves itself when you consider the 10,000 hour life span and the reduced electricity costs. The second problem is that CFLs do not automatically reach full brightness like incandescent bulbs do. While the color and brightness of the two types of bulbs are similar, CFLs can take up to a couple of minutes to reach their full brightness potential.

Did you know that CFLs contain trace amounts of mercury? Mercury has been shown to have negative side effects on both people and the environment if handled incorrectly.5 Fortunately, the amount of mercury is so small that it can easily be prevented from causing problems with proper use and disposal. In addition, using CFLs actually reduces the amount of mercury being released into the air by power plants because they use so much less electricity than incandescent bulbs. While CFLs contain about 4mg of mercury, power plants emit about 10mg of mercury to produce the electricity to run an incandescent bulb and only 2.5mg to run a CFL for the same amount of time.5 For information about disposing of broken CFLs, turn to page 19 (page 13 in member’s guide).


Terms to Look For When Purchasing Compact Fluorescent Light Bulbs6

There are several terms that should be understood before purchasing CFLs:

Lumen

A lumen is the unit of measurement that indicates the brightness of the light given off by that CFL: the higher the number of lumens, the brighter the light. For example, a candle produces only 13 lumens, while a 100-watt incandescent bulb produces about 1,750 lumens. Watt

A watt is the unit of measurement that indicates the amount of electrical power consumed by that CFL. For instance, a 100-watt light bulb consumes 100 watts of electricity in order to function. Different energy use levels may produce different brightness levels, however, so it is not accurate to compare only watts when judging energy efficiency of different light bulbs. Lumens per Watt (LPW or efficacy)

This is the real measure of energy efficiency. The LPW is the brightness that can be generated by one watt of energy use; the higher the LPW, the greater the efficiency. LPW is calculated by dividing the number of lumens by its wattage. CFLs have much higher lumens per watt than incandescent light bulbs, which is why they are more energy efficient. Color Correlated Temperature (CCT)

This term refers to the tone of the light provided by the bulb. In other words, it is how “warm” or “cool” the light color is. While the CCT may be indicated by a number, not all packaging displays the CCT number for the bulb. Instead, the CCT may be indicated by words such as “bright white,” “soft white,” or “daylight.” The lower the CCT, the warmer (more yellow) the light color will be. As the CCT number goes up, the cooler (bluer) the light color will be.


Types of Compact Fluorescent Light Bulbs7

There are many different shapes and sizes of compact fluorescent light bulbs, and each type is designed for specific uses. It is important to become familiar with each type of CFL and the use for each before choosing to use them in either a household or office setting:

Spiral Bulbs are the most popular type of CFL. They emit similar amounts of light as incandescent bulbs while using less energy. These bulbs can be used in most places where traditional incandescent lights are used, including ceiling fans and lamps. They come in a variety of colors, from warm to cool. Some can even be used with dimmers and three way switches, but only if indicated on the packaging. For those who do not like the look of the Spiral bulbs, A-Shape Bulbs combine the look of incandescent bulbs with the efficiency of spiral bulbs and can be used anywhere that incandescent bulbs are used. Some can be used with dimmers and three way switches, but only if indicated on the packaging. A Globe Bulb is basically just a spiral bulb with a globe-like decorative cover. They provide the same efficiency of spiral bulbs and are ideal for places where the bulbs are seen, such as bathroom vanity bars and ceiling pendant lights. Tube Bulbs are basically straight versions of the spiral bulbs and were some of the first CFLs qualified by ENERGY STAR®. They are especially useful in lamps that have slender covers, such as wall sconces, but can be used in other lamps as well. Three-Way Bulb are typically spiral shaped and are designed specifically for use in three-way lamps. They are a little larger than their incandescent counterparts and may be a little difficult to install, but they still use only one third as much electricity. They usually come in the Soft White color temperature. Candle Bulbs are useful in decorative fixtures where the light bulb can be seen. The shape of these bulbs also makes them useful in tight fitting light fixtures where a covered globe will not fit.


Indoor Reflectors are perfect for recessed ceiling lights in kitchens or ceiling fans. They are much smaller than the outdoor versions, and some can be used with a dimmer, but only if indicated on the packaging. Outdoor Reflectors are larger than the indoor reflectors and are designed specifically for outdoor use to protect them from rain and snow. They should not be used with photocells, timers, or motion sensors, because this type of use will shorten the life of the bulb. Only Dimmable CFLs can be used with dimmable light fixtures. These come in several shapes and sizes as previously indicated, but only if indicated on the packaging. While incandescent light bulbs dim smoothly from 100 percent of their light output to no output, dimmable CFLs dim to 10% to 40% of their original brightness. Also, dimmable incandescent bulbs change from a bright white to a warmer yellow as they dim, but dimmable CFLs maintain light color more consistently.

Purchasing Compact Fluorescent Light Bulbs For the most part, CFLs are available anywhere that incandescent light bulbs are sold: grocery stores, hardware stores (ex. Lowes and Home Depot), retail stores (ex. Wal-Mart, Target), bulk purchasing warehouses (ex. Sam’s Club, Cosco), and online versions of all of these places, just to name a few. When purchasing CFLs, it is important to make wise consumer choices in order to get the most for the money spent. Many times, by purchasing items in packs of two or more, the price paid per item will be less than if the bulbs were purchased individually. If purchasing a large number of CFLs, checking prices at a bulk purchasing warehouse. These warehouses often offer discounted prices with large purchases. Price differences should also be considered between different brands of CFLs. If two CFLs are both ENERGY STAR® approved and have exactly the same size, shape, use, wattage, etc., and one costs more than the other, then the extra cost is most likely attributed to nothing more than the brand name on the label.


How Do Compact Fluorescent Light Bulbs Work? In order to understand how CFLs reduce energy use, there needs to be an understanding about how they function differently from incandescent light bulbs. In traditional incandescent bulbs, there is a piece of resistive wire inside of a glass bulb. An electric current is passed through this wire, which causes it to become very hot and glow. The light gets brighter as the temperature of the wire increases.8 A typical incandescent light bulb emits on 10% of its energy as light, while wasting 90% of its energy as heat.9

Compact fluorescent lights function in a completely different manner. In CFLs, a long sealed glass tube is either bent into a zigzag or a circular cork screw. The inside of this tube is covered with a fluorite coating and filled with a very small amount of mercury. Each end of the tube has a small heating element that warms the mercury into a vapor, since mercury is electrically conductive. When the electric current flows through this vapor, the atoms begin to move around quickly and give off ultraviolet light. The fluorite coating on the inside of the tube then absorbs the light, causing it to give off visible light, also known as fluorescence.8 As a result of the difference in the way that they produce light, compact fluorescent light bulbs use less electricity to function, as well as produce less heat as a bi-product.

How Do I Dispose of Compact Fluorescent Light Bulbs and What Do I Do If a CFL Breaks?

As indicated on page 15, CFLs contain trace amounts of mercury and must be handled carefully. The Environmental Protection Agency recommends that consumers take advantage any available local recycling options for CFL bulbs, but many places do not have such facilities. According to EPA, if the state permits it, consumers should put used CFLs in two plastic bags and put it in the regular outside garbage. Do not incinerate CFLs, because this will release mercury into the air. If an ENERGY STAR® qualified CFL has burned out within its warrant period, visit the manufacturer’s website and contact costumer service about a refund or replacement bulb.2 Remember that compact fluorescent lights are made out of glass and are just as fragile as incandescent light bulbs. In the case that a CFL breaks in your home, there EPA provides specific instructions on how to clean it up. Visit http://www.epa.gov/mercury/spills/index.htm#flourescent to view these instructions in the event of a broken CFL.



1 ENERGY STAR: History of ENERGY STAR; http://www.energystar.gov/index.cfm?c=about.ab_history 2 ENERGY STAR: Compact Florescent Light Bulbs; http://www.energystar.gov/index.cfm?c=cfls.pr_cfls 3 A Short History of Compact Fluorescent Lamps; http://www.brightfluorescentlighting.com/history.htm 4 Compact Fluorescent: The Challenge of Manufacturing; http://inventors.about.com/gi/dynamic/offsite.htm?

site=http://americanhistory.si.edu/lighting/20thcent/invent20.htm%23in4 5 Environmental Defense Fund: Tips for Buying and Using Energy-Efficient Bulbs; http://www.edf.org/page.cfm?

tagid=609 6 Lee, H., Ruppert, K. C., Porter, W. A., & Allen, K. K. (2008). Energy efficient homes: Fluorescent lightings (EDIS

FCS3262). Institute of Food and Agricultural Sciences, University of Florida, Gainesville, FL. http://edis.ifas.ufl.edu/FY1023

7 ENERGY STAR: Choose a Light Guide; http://www.energystar.gov/index.cfm?c=cfls.cfls_choose_guide 8 Energy 4 You: About Compact Fluorescent Light Bulbs; http://www.energy4you.net/aboutcfl.htm 9 GE Consumer and Industrial Lighting: Compact Fluorescent Light Bulb FAQ’s; http://www.gelighting.com/na/

home_lighting/ask_us/faq_compact.htm#heat_rads

Photo Credits:

p. 23, 25 - Photo of Great Value 18W CFL - http://www.walmart.com

p. 23, 25 - Photo of Great Value 13W CFL -http://www.walmart.com

p. 23, 26 - Photo of GE Mini 13W CFL - http://www.walmart.com

p. 23, 26 - Photo of GE 10W CFL - http://www.walmart.com



Matching Bulbs with Fixtures For this exercise, you will have to use the ENERGY STAR® Choose a Light Guide found at www.energystar.gov/index.cfm?c=cfls.pr_cfls. Use this guide to help you determine which types of CLFs will work with the different fixtures in your house. Using the following chart, determine how many of each type of fixture you have in your house, as well as the types of CFLs that can be used with each fixture.

Fixture Total number

in home How many dimmable?

How many three-way?

Type(s) of CFLs

Ceiling Fixtures

Recessed Cans

Pendant Fixtures

Ceiling Fans

Wall Sconces

Floor Lamps

Motion Detected Outdoor Exposed

Fixtures

Regular Outdoor Exposed Fixtures

Motion Detected Outdoor Covered

Fixtures

Regular Outdoor Covered Fixtures

Now, Review Your Findings... Use the information that you have gathered, as well as the information from your Member Guide, to answer the following questions. Which type of CFL is compatible with the most fixtures in your home?

Which fixture in your home is compatible with the most types of CFLs?

Which fixtures in your home are used for at least 15 minutes at a time?

Why is it important to know the amount of time that each fixture is turned on when you are choosing between CFLs and incandescent bulbs?

Based on your answers to numbers 3 and 4, would it be economical to replace every incandescent light bulb in your house with a CFL?

Thinking about question 5, which light fixtures in your home would be the most economical choices for CFLs?

Why is it important to know whether or not your fixtures are dimmable or three-way?

Why is it important to know if your outside lights are motion detected?

Activity 1 Worksheet (continued)

Comparison Shopping Use the following chart to comparison shop between compact fluorescent light bulbs and incandescent light bulbs. After completing the chart, answer the questions and determine which type of light bulb would be the best choice for your family. Find the following information on the light bulb package:


Incandescent Light Bulbs

Size/Shape Price Watts Lumens Lumens per Watt Lifespan (hrs)

Regular

Globe

Outdoor

Other Type

Compact Fluorescent Light Bulbs

Size/Shape Price Watts Lumens Lumens per Watt Lifespan (hrs)

Regular (Spiral)

Globe

Outdoor

Other Type

Now, Review Your Findings... Which light bulb is the most energy efficient? (Hint: Look for the highest number of lumens per watt.)

Which light bulb is the least energy efficient? (Hint: Look for the lowest number of lumens per watt.)

Overall, between incandescent light bulbs and CFLs, which type is more expensive to purchase. Overall, between incandescent light bulbs and CFLs, which type saves you the most money over its lifespan? (Hint: Divide the price by the lifespan.) So, from the information that you have gathered, which type of light bulb, incandescent or CFL, would be the best choice for your home?



Practice Consumer Situation for Energy Efficient Light Bulbs Jackie, age 12, has been learning about compact fluorescent light bulbs at school and her parents have asked her to find out which type of CFLs they should use in their house. Jackie’s parents want to put CFLs in 6 fixtures (4 lamps and 2 ceiling fans) that are turned on for substantial amounts of time during the day. All of the fixtures currently require no higher than 60-watt regular incandescent bulbs, and Jackie’s parents would prefer to replace them with ENERGY STAR® approved CFLs. They also want to spend the least amount of money possible per CFL. Help Jackie choose which type of CFL is the best choice for her family’s consumer needs. Rank them in order from 1 (best choice) to 4 (least desirable choice).

1. Great Value™ CFL Light Bulb: 18 Watt (75W Equiv), 4-Pk. $7.58, ENERGY STAR® approved. $1.89 per bulb.

2. Great Value™ CFL Light Bulb: 13 Watt (60 Watt Equivalent), 6-pack. $9.88, ENERGY STAR® approved. $1.65 per bulb.

3. GE™ CFL Light Bulb, Mini: 13 Watt (60 Watt Equivalent), 4-pack. $16.88, ENERGY STAR®

approved. $4.22 per bulb.

4. GE™ CFL Light Bulb: 10 Watt (40 Watt Equivalent), 6-pack. $15.26, ENERGY STAR® approved. $2.52 per bulb.


Notes/Reasons:

#2 The best choice for Jackie and her family is number 2, the 6-pack of Great Value™ 13-Watt CFL Light Bulbs. They will only have to purchase one package, and at $1.65 a bulb, it is the best value per bulb. These bulbs are also ENERGY STAR® approved and are compatible with 60-watt fixtures.

#4 Second place goes to the 6-pack of GE™ 10-Watt CFL Light Bulbs. At $2.52, they cost a little more than the 18-watt CFL bulbs, but they are still compatible with the fixtures. These bulbs are also ENERGY STAR® approved and will require purchasing only one box. A downside to the 10-Watt bulbs is that they likely produce less lumens than the 13-Watt bulbs, which cost less.

#3 Third place goes to the 4-pack of GE™ 13-Watt Mini CFL bulbs. While they are compatible with the current fixtures and are approved by ENERGY STAR®, they cost $4.22 per bulb. In addition, the family would have to buy two packages of these bulbs to be able to replace the incandescent bulbs in the six fixtures.

#1 Last place goes to the 4-pack of Great Value™ 18-watt CFL Bulbs. While these bulbs are ENERGY STAR® approved and are more cost effective than choices two and three, they are not compatible with the current fixtures. At 18-watts, these bulbs are equivalent to 75-watt incandescent bulbs, which is too much wattage for the current 60-watt fixtures.

* Prices and pictures of CFLs taken from www.walmart.com.



Practice Consumer Situation for Energy Efficient Light Bulbs

Jackie, age 12, has been learning about compact fluorescent

light bulbs at school and her parents have asked her to find

out which type of CFLs they should use in their house.

Jackie’s parents want to put CFLs in 6 fixtures (4 lamps and

2 ceiling fans) that are turned on for substantial amounts of

time during the day. All of the fixtures currently require no

higher than 60-watt regular incandescent bulbs, and Jackie’s

parents would prefer to replace them with ENERGY STAR®

approved CFLs. They also want to spend the least amount of

money possible per CFL.

Help Jackie choose which type of CFL is the best choice for

her family’s consumer needs. Rank them in order from 1

(best choice) to 4 (least desirable choice).


Great Value.™ Price: $7.58.

4-pack 8 watts (75W equivalent)

Energy Star® approved

$1.89 per bulb

1.

2.


Great Value.™ Price: $9.88.

6-pack 13 watts (60W equivalent)


$1.65 per bulb


3.

4.


GE.™ Price: $16.88. 4-pack 13 watts (60W equivalent)


$4.22 per bulb

GE.™ Price: $15.26. 6-pack 10 watts (40W equivalent)


$2.52 per bulb


Situation: While MP3 players have been popular for quite a while, in recent years they have evolved from music players into multimedia devices. Newer features include full color displays, the ability to transfer and view digital photos from your computer, and the ability to playback movies, music videos, and TV shows downloaded from the internet. Some models even allow you to watch videos recorded on your camcorder, download and share content wirelessly over a Wi-Fi connection, and make recordings directly from a TV.1

With all of the options available to consumers, it is important to understand what features play a part in the purchase price of an MP3 media player. Although iPod™ is dominating the scene, there are other brands available, all at different prices with different features. There are also different subscription services depending on which brand of media player purchased. In order to choose a player that best meets a consumer needs, it is important to analyze the options available and evaluate the intend use of the player. 1

This guide to MP3 media players has been compiled to help youth analyze and evaluate key considerations and options to help determine the best MP3 player for their needs. Key Concepts to Teach: • The brand and type of MP3 player purchased should be based on individual needs

and uses.

• MP3 media players are not “one size fits all;” there are many different options available.

• When looking to purchase an MP3 media player, consumers should do their research and find the best value for their money, based on their needs.

Preparation: Review recent Consumer Reports information on MP3 media players. www.consumerreports.com

MP3 Media Players The 2008 Teaching Guides and Youth Pieces were prepared by Selena Garrison, Graduate Assistant and Michael Gutter, Assistant Professor, Department of Family, Youth and Community Sciences, IFAS, University of Florida. Contents reviewed by Dale Pracht, IFAS, University of Florida.

Goal: Youth will: select an economical and quality MP3 media player; defend their decision in a given consumer situation. Objectives: Program Participants will: • Become knowledgeable

about the different functions that MP3 players have to offer.

• Differentiate between different brands of MP3 players based on features and media subscriptions.

• Understand the key considerations and options that should be weighed before purchasing an MP3 media player.




• Recent review of MP3 players from an unbiased source such as Consumer Reports.

• If feasible, examples of different types of actual MP3 media players. Otherwise, pictures and descriptions of different types of MP3 media players will suffice.



Suggested Activities: 1. Have youth use the Activity 1 Worksheet to assist them in determining their needs and wants in an MP3 media

player. 2. Have youth use the Activity 2 Worksheet to conduct their own consumer ratings report. 3. Have youth use the Activity 3 Worksheet to assist them in examining the features of different types of MP3

media players.

Introduction and Background

It seems that MP3 players are all over the place these days, but these players are evolving into much more than just devices to store and listen to music. In recent years, MP3 players have evolved into multimedia devices, with features including full color displays, the ability to transfer and view digital photos from your computer, and the ability to playback movies, music videos, and TV shows downloaded from the internet. Some models even allow viewing videos recorded from a camcorder, downloading and sharing content wirelessly over a Wi-Fi connection, and make recordings directly from a TV.1

With all of the options available to consumers, it is important to understand what features play a part in the purchase price of an MP3 media player. Although iPod is dominating the scene, other brands are also available, all at different prices with different features. There are also different subscription services depending on the brand of media player purchased. In order to choose a player that best meets a consumer needs, it is important to analyze the options available and evaluate the intend use of the player. 1

This guide will provide youth with an overview on MP3 media players, including a short introduction on the technology, a review of the different options available to consumers, and a discussion about several common brands of MP3 players.

The MP3 Format

While MP3 players have been around for quite a while, many people do not really understand what an MP3 file actually is. In the late 1990s, music distribution was revolutionized by the MP3 file format, at which time, file-swapping services and the first portable MP3 players also made their first appearance. 2 MP3 is one method of compressing audio files (in other words, making them smaller), and a similar technology is used to compress video files in much the same way.



The MP3 compression system is used to reduce the number of bytes in a song and still maintain CD-like quality to the music. While some sound quality may be lost, the compressed files allow more music to be carried on a smaller storage system. These smaller file sizes also allow for faster downloads from the internet. 2 Imagine that, on average, songs are about four minutes long. If one four minute song was stored on a CD, it would use about 40 megabytes (MB). That same song would use only about 4 MB if it was compressed through the MP3 format. An hour of music in MP3 format uses about 64 MB of storage space, so a 1 gigabyte (GB) (approximately 1000 MB) MP3 player can carry about 240 songs. To store the same amount of music on CD would require 20 CDs! 2 While MP3 is the most well known format for audio files, other file formats can also be played on MP3 players. Most players can support multiple different formats, but not all formats are supported by every player. It is important to know which types of formats are compatible with your player. Some of these formats include WMA, WAV, MIDI, AAC, Ogg Vorbis, ADPCM, ASF, and VQF. More information on these different formats can be found through a simple internet search. 2

How Do MP3 Media Players Work? An MP3 player is just a data storage device with software that allows you to transfer MP3 files to the player. While models vary, the typical MP3 player contains several different parts: a data port, memory, a microprocessor, a digital signal processor (DSP), a display, playback controls, an audio port, an amplifier, and a power supply. Most MP3 players use your computer’s USB port to transfer the files from your computer to the player through the player’s data port.2 Once the files are transferred and stored on the player, the songs can be played back and listen to through headphones or speakers. All of this happens through an almost instant process when you press “Play” on your playback control. First, the

Podcasting Podcasting, a combination of the words “iPod” and “broadcasting,” is a service that allows free audio file access from podcasting websites. These files are then available for listening to on a personal computer or MP3 player. But, don't be fooled by its name - it's not just iPods that can play podcasts. Any portable media player or computer can be used to listen to a podcast about the environment, politics, fashion, literature, and many more. In fact, podcasts can even be used to listen to missed classes!6


microprocessor, which is basically the brain of the MP3 player, pulls the song file from the player’s memory, uses a formula through DSP to decompress the MP3 encoding, and converts the decompressed bytes into sound waves by running them through a digital to analogue converter. Once the file is changed into sound waves, the amplifier amplifies the analogue signal, which allows the music to be heard through the connected headphones or speakers. 2 A similar process is used to convert video files into a format that can be watched on an MP3 media player with that function.

MP3 Players with Video Playback3

Many newer models of MP3 players do much more than just play MP3 audio files. On top of listening to favorite music, now downloaded music videos, movies, and TV shows can be played back and enjoyed on the consumer’s time schedule. Some players even allow for wireless file exchange through built-in Wi-Fi, patch into wireless networks at home in order to connect to a PC, or to even browse the internet from any location. With all of these options, however, there are a few things to consider when looking for a media player:

Internet Connection

Videos take much longer than music to download, so it is important to ensure a broadband connection that can download at rates of at least 1 megabit per second. If the connection is slower, a favorite TV show may take more time to download than it does to watch it. Battery Life

Playback time may be greatly reduced by watching videos, so it will probably be necessary to recharge more frequently than if the player were being used for listening to music. Content Compatibility

Not all content will work with every player, so consider this when looking to purchase an MP3 media player. For example, iTunes™ content currently works only with iPods. Player Size

Although they have small screens, many video-enabled players are bigger and heavier than models that do not have video playback capabilities.



Screen Size

Typically, MP3 media players have screens that range from 1.5 inches to 3 inches in size, which is relatively small compared to other video-ready products like lap top computers and portable DVD players. Therefore, choosing a media player for watching videos will require getting used to viewing the content on a small screen size. Upgradeability

Due to the ever evolving nature of video formatting, it is especially important to make sure that the player has firmware (the internal operating instructions) that can be upgraded so that the player does not become outdated. What’s Available?

The major brands of MP3 players, according to Consumer Reports, are Apple™, Archos™, Cowon™, Creative Labs™, Philips™, RCA™, Samsung™, SanDisk™, Sony™, and Toshiba™. However, there are also smaller companies that have brands on the market. Different brands and models offer different options and subscription services, so it is important to research the various models before purchasing an MP3 player. Other factors to consider when looking for an MP3 player are whether a flash memory or hard disk memory system would work best, what features are available with each model, and which subscription services are compatible with each player.1

Flash Memory vs. Hard Disk

There are two basic kinds of MP3 players dominating the market today: flash memory players and hard disk players. The flash memory player is typically the smaller and lighter of the two, but the hard disk players usually have considerably more storage.2 Flash memory players have no moving parts and are referred to as being “solid state.” They usually have longer audio playback than hard disk players and have storage capacities ranging from 512MB (about 120 songs) to 32 GB (about 8,000 songs). Some models come with memory card expansion slots so that you can add more storage, but the extra cards can cost anywhere from $15 to $30. 1 Because they have no moving parts and are smaller in size, flash memory players are very useful to people who like to exercise with their player, as the device is less bulky and the content will not skip if it gets jostled around. Some flash memory players also have photo and video capabilities, and depending on the type of use, batteries can last up to 28 hours. 2



Hard disk (also known as hard drive) players are typically bigger and heavier than flash memory players and can hold up to 80GB of music, video, photographs, and data, with some models offering the option of podcast recording. Because of all these options and the hard drive, these players use more power. If you are just listening to music on your player, the batteries can last up to 20 hours, but most will last only six hours if you are watching videos. Unlike the flash memory players, hard disk players have moving parts and might skip if they get jostled around, although some come with anti-skip protection or anti-shock buffers. 2

Features4

Depending on the brand and model of MP3 player, different features and options are available. Some common features to consider are:

Software - Most players come with software in order to convert CDs into a format that can be played back on that specific player, and all come with software that allows the consumer to move content between the personal computer and the player by way of a USB connection. While all players work with a Windows PC, only some support Macintosh. Upgradeable Firmware - As we discussed earlier, firmware needs to be upgradeable so that the player does not become out of date with newer technology, especially on video playback models. Display Type - Different models have different display features. Most displays at least show the basics: the song title, track number, remaining memory, and battery life. While most allow scrolling for a desired song through a list of tracks, some only allow searching one track at a time. Color Screens - Most players with color screens allow for looking at pictures in JPEG format, while some allow for TIFFs and BMPs as well as other lesser-known formats. Many even allow viewing pictures as a slideshow, complete with music and transitions between pictures. Screen Size - Screen sizes on MP3 players range from 1.5 to 4 inches wide, so considerations for this will need to be made if videos are going to be viewed on the screen. Note that larger screens usually mean a bulkier player. Headphones/Speakers - While almost all players come with headphones, lower quality ones may reduce the sound quality on both music or videos. Some larger players come with built-in speakers.


Video Storage and Playback All video players come with software that converts unprotected videos into a format that is supported by the player, but only some can play copy-protected videos. Some allow for hooking up to an external display, like a TV, in order to watch videos. With additional accessories, it is even possible to record directly from your TV, cable box, or DVR. Equalizer This allows for an adjustment in the tone of the sound. Some players allow for individually adjusted bass and treble levels, while others come with presets like “rock” or “jazz.” Playback Controls All players have volume, play/pause, and forward/reverse controls. Most also allow for preselected songs to repeat or for randomly playing tracks on “shuffle” mode. Other Types of Content In addition to music, video and pictures, some players also allow for storing and viewing text and PDF files. Other Features Some MP3 players have other features including an FM radio tuner, options for voice recording, and adapters to play music through car stereo systems.

Subscriptions

An important area to consider when purchasing a MP3 media player is the intended method for getting content for the player. While songs can be transferred from CDs to a personal computer and then transferred to the player, there are other ways of getting music and video files for the MP3 player through the internet. However, it is crucial to remember that not all content works on every player, therefore it is necessary to find out which provider(s) will work with that particular player. Since 2007, some record companies have allowed portions of their music to be downloaded without copy protection from online stores such as iTunes™ and Amazon™. Since these songs are unprotected, they can be shared with anyone no matter what brand of MP3 player they have. They also have potentially better sound quality than protected versions because they are recorded at a higher bit rate. 1



Prices of content also varies depending on which provider is used and whether the content is protected or unprotected. For example, on iTunes, unprotected songs cost $1.29 in comparison to 99 cents for the copy-protected versions of the same songs. Other internet sources like Wal-Mart™, Best Buy™, and Amazon™ usually charge less than 99 cents for unprotected songs. In general, whole albums usually cost around $10, while music videos, episodes of TV shows, and short films cost about $2 each and full feature length movies cost between $10 and $15. 1

Another option is renting content. Usually for flat fee of about $15 a month, some sights like Napster™ and Rhapsody™ will allow for downloading music to a PC. The player must be periodically docked to a PC that is connected to the internet to make sure that the account is in good standing, ore else the music will stop playing. Feature films can also be rented from sites like iTunes™, Amazon™, and Cinema Now™ for less than $5, allowing about 24 hours to watch the film once the movie file has been opened.1 Before renting anything however, it is important to confirm that the player will work with the content. As of now, iTunes™ content only works with iPods™ and Cinema Now™ only works with players that handle Windows formats that are copy-protected.

Price

One of the biggest concerns, of course, is finding an MP3 media player to meet specific needs for a specific price. Depending on the brand of MP3 player and the features, prices can vary from as little as $40 for a player such as the 1 GB Creative Zen Stone™ to as much as $500 for the 32GB iPod Touch™.5 Also it is important to consider the cost of extra accessories such as cables to connect to a TV if the player can show videos on an external display, protective cases, and higher quality headphones if you want them.

How to Choose1

With the large variety of options available, choosing an MP3 player that meets the needs of the consumer all depends on how the MP3 player will be used and how much money has been budgeted for this purchase. Consumer Reports suggests several areas to consider:

Will you get an iPod™ or another brand?

Although Apple’s iPod™ family of players is very widespread and easy to use (due in large part to the excellent combination of iPod players with iTunes software), there are some downsides. For instance, iPods™ tend to cost a little more than players from other brands that have comparable storage capacity. They also do not come with some of the feature offered by other brands, such as an FM tuner, AC charger, or voice recorder.



Will you be watching more or listening more?

If watching videos is more important than listening to music, it will be important to choose a display that is large enough for comfortable viewing over long periods of time. Also, be sure to consider the file size of the content as well as how the content will be procured (recording from TV, downloading, etc.) in order to ensure the player’s memory will meet the needs. Capacity vs. Size

Capacity refers to the amount of content that can be stored on the player, while size refers to how large or small the player is. This is where the distinction between flash memory and hard disk players comes into play. Often, an MP3 player that is more compact will also have less memory while an MP3 player that is a little larger may be able to store an entire music collection as well as a couple of movies. Download Choices

Be sure that the player chosen is compatible with whatever content source is chosen so that the music and videos that are downloaded are able to be used on that player. Upgradeability

Again, it is important that ensure that the player has upgradeable firmware so that updates can be made as technology advances, especially for video players. Headphone Quality

While almost all players come with headphones, some of them can lessen the sound quality that can be heard. Most standard headsets perform well, but for those who are very particular about sound quality, the purchase of higher quality headphones may also be necessary. Power Consumption and Battery Type

There is a wide variation in battery life between different players, ranging from 9 to 60 hours depending on player settings and uses. Different players sometimes use different batteries; some players use AA or AAA batteries, while many have internal rechargeable batteries that are charged via a computer’s USB port.


After looking at all of the options and analyzing needs and preferences, it should be possible to choose and MP3 media player that best meets consumer needs. Consumer Reports (www.consumerreports.com) has information and ratings on 58 models of MP3 players from different companies and is a great resource for a one-stop place to compare products. However, the use of this site requires a subscription to use the service.


1 Consumer Reports: Buying Advice MP3 Players; http://www.consumerreports.org/cro/electronics-computers/audio-video/audio/ipods-mp3-players/reports/how-to-choose/index.htm

2 K. Bonsor and J. Tyson and C. Freudenrich: How MP3 Players Work; http://www.howstuffworks.com 3 Consumer Reports: Video in your pocket; http://www.consumerreports.org/cro/electronics-computers/audio-video/

audio/ipods-mp3-players/reports/video-mp3-players/overview/index.htm 4 Consumer Reports: Important Features MP3 Players; http://www.consumerreports.org/cro/electronics-computers/

audio-video/audio/ipods-mp3-players/reports/features/important-features/index.htm 5 Consumer Reports: MP3 Players Ratings; http://www.consumerreports.org/cro/electronics-computers/audio-video/

audio/ipods-mp3-players/reports/ratings/ratings/index-ps.htm 6 S. Watson: How Podcasting Works; http://computer.howstuffworks.com/podcasting.htm

Photo Credits:

p. 41, 42 - Photo of Cowan™ D2 - http://www.consumerreports.org/

p. 41, 43 - Photo of Apple iPod™ Nano - http://www.consumerreports.org/

p. 41, 43 - Photo of SanDisk Sansa™ e280 - http://www.consumerreports.org/

p. 41, 43 - Photo of Sony Walkman™ NWZ-S618F - http://www.consumerreports.org/


MP3 Media Players: Identifying Needs and Wants How would you use your MP3 media player? (check yes or no)

To listen to music? ___ Yes ___No To watch full length feature films? ___Yes ___No To watch music videos? ___Yes ___No To watch TV shows? ___Yes ___No To listen to podcasts? ___Yes ___No To voice-record in class or elsewhere? ___Yes ___No To view pictures as a slideshow? ___Yes ___No

When would you use your MP3 media player? (check yes or no) When you commute to school or work? ___Yes ___No When you exercise? ___Yes ___No On long trips? ___Yes ___No Several different times throughout the day? ___Yes ___No

Based on your answers, which options are the most important to you when purchasing an MP3 media player? (Think about battery life, media options, screen size, etc.)


Conduct Your Own Consumer Report Identify 3 people that own different MP3 media players and interview them using the following questions, as well as any questions of your own.

What make and model of MP3 media player do you own? How long have you had your MP3 media player? How many hours, on average, does your battery last? Does your MP3 media player have both audio and video playback? If so, do you use your MP3 media player more for watching or listening? What other features are included in your player? Are you satisfied with the sound and visual quality of your player? On average, how many hours a week do you use your MP3 media player? What is the storage capacity of your player? If you were shopping for MP3 media players again, would you purchase the same make and model or choose another option? If you could change one thing about your MP3 media player, what would it be? Overall, are you satisfied with the features and quality of your MP3 media player? Additional Questions:


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Brand

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Storage

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Form

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Battery Life

Screen

Size

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Video

Playback?

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Now, Review Your Findings... How did the players compare in price? Which brands were more affordable? Which brands offered more types of players from which to choose? Which players did you like best? Why? Which product has the most features for the price? Based on your needs and wants that were identified in the Activity 1 Worksheet, as well as the data that you have gathered here, which of these MP3 media players would be the best choice for you, personally?



Practice Consumer Situation for MP3 Media Players Lisa, age 14, has been savings up the money she has earned from doing chores and wants to buy a MP3 media player. She wants a player that can play music and movies. Lisa’s budget is $200, and she wants a player that has at least 8 gigabytes (GB) of storage, as well as a large screen for watching movies. She would also like a player with a microphone so that she can record her classes to help her study. Help Lisa choose which MP3 media player is the best fit for her consumer needs. Rank them in order from 1 (best choice) to 4 (least desirable choice).

1. Cowon™ D2 – $150 – 8 GB of storage, plays music and video, has built in

microphone for voice recording, screen is 1.6 inches high and 2 inches wide.

2. Apple iPod™ Nano – $200 – 8 GB of storage, plays music and video, does not have built in microphone for voice recording, screen is 1.6 inches high and 1.2 inches wide.

3. SanDisk Sansa™ e280 – $180 – 8 GB of storage, plays music and video, has built in microphone for voice recording, screen is 1.3 inches high by 1.1 inches wide.

4. Sony Walkman™ NWZ-S618F – $180 – 8 GB of storage, plays music and video, does not have built in microphone for voice recording, screen is 1.5 inches high and 1.2 inches wide.


Notes/Reasons:

#1 First place goes to the Cowon™ D2 because it meets all of Lisa’s consumer needs for the lowest price. It plays music and video, has 8 GB of storage, has the largest screen size, and has a microphone. It is also well within her budget and will leave her $50 to purchase any accessories that she may want.

#3 Second place goes to the SanDisk Sansa™ e280. While it does have the smallest screen size, she will still be able to watch movies, and it meets all of her other needs. It plays music and video, has 8 GB of storage, and has a microphone. It also is within her budget and will leave her $20 to purchase other accessories.

#4 Third place goes to the Sony Walkman™ NWZ-S618F. This player is the same price as the SanDisk Sansa™. It has a slightly larger screen than choice two, but still smaller than choice one. The main reason that this player is in third place is that it does not have a microphone and costs $30 more than choice one.

#2 Last place goes to the Apple iPod™ Nano. This player will spend every penny of Lisa’s budget, while offering her almost the same size screen as choice three, with no microphone. It also costs $50 more than choice one.



Practice Consumer Situation for MP3 Media Players

Lisa, age 14, has been savings up the money she has

earned from doing chores and wants to buy a MP3 media

player. She wants a player that can play music and movies.

Lisa’s budget is $200, and she wants a player that has at

least 8 gigabytes (GB) of storage, as well as a large screen

for watching movies. She would also like a player with a

microphone so that she can record her classes to help her

study.

Help Lisa choose which MP3 media player is the best fit for

her consumer needs. Rank them in order from 1 (best

choice) to 4 (least desirable choice).


Cowan D2.™ Price: $150.

8 GB of Storage Plays music and video Built in microphone for voice recording

Screen : 1.6 inches high 2.0 inches wide

1.

2.


Apple iPod Nano.™ Price: $200

8 GB of Storage Plays music and video No microphone for voice recording

Screen : 1.6 inches high 1.2 inches wide


3.

4.


SanDisk Sansa.™ Price: $180

Version: e280 8 GB of Storage

Plays music and video

Built in microphone for voice recording Screen : 1.3 inches high 1.1 inches wide

Sony Walkman.™ Price: $180

Version: NWZ-S618F 8 GB of Storage

Plays music and video

No microphone for voice recording Screen : 1.5 inches high 1.2 inches wide


Situation: Choosing a savings account involves many considerations and may be difficult, especially for young people who are doing so for the first time. However, it is important to begin this habit early and accounts such as basic savings accounts are gateways to more advanced financial accounts one will need throughout life. Because everyone has different needs, goals, and amounts of money to contribute, there is no one solution that is right for everyone. Students have several options available to them, including passbook savings accounts, high yield savings accounts, and special student accounts. This guide will help youth make informed decisions about what type of savings account they would like to utilize; this skill can then be applied to other financial accounts as they become relevant to the participants. Key Concepts to Teach: All Ages

• Saving is important to everyone, no matter how young or old. • There are many different savings options available. • There is no one-size-fits-all answer to savings; this decision should be made based on the

individual’s needs and wants. • It is important to research different options at different banks to make sure that consumers

choose the right accounts to fit their specific needs. Preparation:

All Ages Research several different banks and credit unions in your area and ask for information on accounts available to youth. Ask about interest rates, minimum balances, whether parents have to cosign, etc. Seniors Only - Ages 14+ Use www.bankrate.com to compare interest rates at different banks in your area. Click on the “Checking and Savings” tab at the top of the page. On the left side under “Savings,” choose MMA/Savings from the drop-down menu. Choose your state, then the closest city, then “MMA and Savings Account.” A list of banks and accounts in your area will come up, and you can sort it depending on several variables to compare the banks and the accounts.

Suggested Activities:

1. All Ages - Setting a savings goal. Have youth use the Activity 1 Worksheet to identify short-term, intermediate, and long term savings goals. Every goal should answer What, When, and How Much.

2. All Ages - Compare Financial Institutions. Using the Activity 2 Worksheet, survey two or three local banking institutions and find out different options available to you in your community. Be sure the correct table is used (Juniors/Intermediates or Seniors)

3. Intermediates/Seniors - Determine How to Double Your Money using the Rule of 72 to demonstrate compounded interest with Activity Worksheet # 3.

4. Seniors - Using basic TVM tables, how much does one need to save.

Savings Accounts The 2008 Teaching Guides and Youth Pieces were prepared by Selena Garrison, Graduate Assistant and Michael Gutter, Assistant Professor, Department of Family, Youth and Community Sciences, IFAS, University of Florida. Contents reviewed by Travis Mountain, IFAS, University of Florida.

Goal: Youth will: make informed decisions regarding where and how they will save their money; defend their decision given a particular consumer situation. Objectives: All Ages Program Participants will: • Understand the

importance of saving at any age.

• Understand the basics of savings accounts.

• Choose an account that fits their needs for savings.

• Understand and be able to differentiate between the different savings options available to students.

Seniors Only - Ages 14+ Program Participants will: • Learn how to research

and compare interest rates in their area via websites such as bankrate.com.




• Brochures from several banks in the area that contain advertisements for different services.

• Calculators and writing utensils for the students. (optional)


Introduction and Background Dropping spare change into a piggy bank in order to save for a specific item or just in case something came up that you wanted to purchase is the most basic way to save money; the money is kept in a personal location, kept count of by the owner of the piggy bank, and only allows the owner to take out the same amount of money put in. However, another way of saving is beneficial no matter how young or old. This requires placing money in some sort of bank account that will gain interest. We will discuss interest and how it works in later sections, but it is basically money paid by the bank to an account for the right to borrow the money that is in that account. Choosing a savings account or a different investment opportunity may be difficult, especially for young people who are doing so for the first time. Because everyone has different goals and different amounts of money to contribute, there is no one solution that is right for everyone. Options may include passbook savings accounts, high yield savings accounts, certificates of deposit, or money market accounts, depending on how much money is able to be invested and how much access is needed to that invested money. This guide will help youth make informed decisions about the type of savings would be best for their needs.

Why Save?

There are many reasons why money should be saved, but the most important is that it helps develop good saving and spending practices that will aid future choices. Saving early in life is

very important; the longer money is saved, the more interest the money will earn. This is known as the time value of money - the earlier money is saved in an interest-bearing account, the more money will end up in the account over time. It is also important to save so in order to have money for future purchases, like a video

game, a DVD, or supplies for a favorite hobby. Begin by setting specific goals for the desired product, including a time limit for reaching those goals, and then determine how

much money will be needed to meet those goals. Timeframes for different types of goals may change depending on the nature of the goal.

Short term goals are for things that may be happening in the next few days or weeks, such as saving for a new pair of shoes or new sunglasses. For adults, short term goals usually happen within a year. Intermediate goals are for things that may be happening in several weeks or a few months, such as saving to go to a special summer camp or for buying a new MP3 player. For adults, intermediate goals usually happen within 1 to 3 years.


Long Term Goals are for things that may be happening in several months or a few years, such as saving to buy a car or to pay for college. For adults, long term goals usually happen within 3 or more years.

It is also a good idea to have some extra savings set aside for unplanned expenses or emergencies. Experts set different levels of money that adults should have saved for emergencies, like medical bills or house repairs. Teenagers, on the other hand, may want to have enough money saved for minor car repairs or unplanned outings with their friends. Younger kids may not really need this; just having any savings at all is a good start. Even if they do not need to buy things, learning the habit of saving is a valuable skill to build, and given the time value of money, starting early is always a good thing.

How Much to Save?

How much to save probably depends on savings goals. However, a general rule is to save about 10% of the income. This does not mean to only save ten percent of the money left over after everything else has been purchased. It does mean that 10% of the allowance or paycheck should be taken off the top. Pay yourself first by putting a percentage of it into savings. After doing that, use the leftover money on everyday expenses.

Key Terms

In order to adequately discuss saving, some terms must be defined and explained:

Teller - A teller is a person who is an employee at a bank or other financial institution and works with customers to receive deposits and give out withdrawals. ATM - An Automated Teller Machine (ATM) is a computer-run machine that is usually located outside of a bank or credit union and performs many of the functions that can be performed by a human teller. Deposit - A deposit is money that you put in to an account. Withdrawal - A withdrawal is money that you take out of an account. Transfer - A transfer is money that is moved from one account to another. Principle - The principle is the amount of money put in to an account. (Example - If opening an account with $5, the principle would be the $5.)


Account Balance - The account balance is how much money is in an account. Interest - Interest is the money that the bank puts in to an account as “rent” on the use of that money while it is deposited in their bank. Interest Rate - This fee for lending them the money or “interest” is based on a percentage of that account’s balance. (Ex. If $5 is put into an account, the bank pays a 1% interest rate (5 cents) and places that into the account. So, 5 cents have been earned as interest on the $5.00 principle) Simple Interest - Simple interest is interest that is gained based only on the principle. Compound Interest - Compound interest is interest that is gained based on the total amount of money that is in the account, including both the principle and any previous interest that has been gained. Compounding Method - Interest can be compounded daily, weekly, monthly or yearly. The amount of interest gained will be affected by the compounding method. Daily compounding will produce the highest amount of interest. APR - The annual percentage rate (APR) represents the true cost of debt per each year. APY - The annual percentage yield (APY) represents the true return on a savings account per each year. Statement - A statement is a list of deposits, withdrawals, and transfers from an account that the bank sends every month. It also includes the account balance. Minimum Balance - A minimum balance is the lowest amount of money allowed in your account without penalty; in other words this is the amount that must always remain in the account. Fees - Fees are charges that the bank makes against an account for different reasons, including going below a minimum balance or using certain services.

Choosing a Financial Institution The first step in opening up a savings account is choosing which financial institution to work with. Since there are probably several

different banks in any community, choosing just one may be a difficult task. To do this, there are several different factors to consider.


To begin, consider what type of financial institution there are to work with. While there are several different options, including Savings Banks and Savings and Loan Associations, two common options are Commercial Banks and Credit Unions. Both usually offer services such as checking accounts, savings accounts, credit cards, and ATMs.

Commercial Banks are privately owned by corporations and are chartered by either the federal or state government.1 (A charter is a document that outlines the conditions under which the bank is organized, as well as the rights and privileges of the corporation). 2 Commercial Banks are also insured by the Federal Deposit Insurance Corporation (FDIC), which insures each account up to $100,000. This means that any account with $100,000 or less deposited is completely protected. Almost any kind of banking service is available at a commercial bank, including checking accounts, savings accounts, investment services, safe-deposit boxes, financial counseling, credit cards, automatic transfer of funds, and loans.1 Credit Unions are owned by their members, and membership is restricted to people who have something in common, such as people living in a specific location, employees working for the same employer, members of a certain organization, etc. Members bring all of their resources together to provide funds for loans to one another. Many Credit Unions offer the same services as Commercial Banks and usually offer low or no fees. Like Commercial Banks, Credit Unions are usually chartered by either the federal or state government. Those with federal charters are insured through the National Credit Union Association (NCUA) up to $100,000. Those with state charters are either insured by NCUA or other state-approved programs.1

The second factor to consider is the types of accounts offered by the financial institution. There are several different types of accounts available. Understanding what the differences are helps when making decisions about which bank or credit union to use. Below are several different saving options:

Basic Savings Account

A basic savings account allows for depositing money and gaining a low interest rate. This type of interest-bearing account allows the consumer to make withdrawals, but the number of withdrawals allowed each month may be limited. Savings accounts may be linked to checking accounts so that money transfers can be made between the two. Many banks offer either passbook savings or statement savings. Passbook savings require the consumer to record deposits, withdrawals, and transfers in a record book. In statement savings, however, the financial institution mails or emails you a statement that shows you all deposits, withdrawals, and transfers that month. Like other accounts, there may be some fees associated with savings accounts, and may require a minimum balance.3


High Yield Savings Account

A high yield savings account is much like a basic savings account except that consumers are required to maintain a higher minimum balance. It is also common that banks will give higher interest rates when greater amounts of money are placed into an account. Usually, checks are not able to be used with this type of savings account, but they are often linked it to a checking account to make deposits and withdrawals.4 Student/Senior/Special Accounts

Some banks offer special accounts to children, students, senior citizens, or for special occasions. Usually these accounts do not have any fees, and they may include benefits like free checks, use of ATMs, and other perks.2 Money Market Accounts

These accounts are for people who want their money to earn a higher interest rate than an ordinary savings account. While the interest rate can fluctuate (change over time), it is usually higher than a basic or high-yield savings account. Along with the higher interest rate, however, comes a higher minimum deposit and minimum balance requirement (about $1000-$10,000 depending on the financial institution). One unique feature is the ability to write checks directly from this type of account, however, there is a monthly limit on the number of checks that can be written.3,5 Certificates of Deposit (CDs)

Certificates of Deposit provide a guaranteed interest rate for a specific amount of time. Most banks offer different options depending on the amount of money for deposit and the length of time the money is intended to be kept in the CD. The interest rates usually increase with larger amounts of money and longer time periods. Once a time period is chosen, ranging from months to years, all of the money placed into the account must be left in the CD or a significant fee is assessed in order to withdraw it before the time period ends.3 Checking Accounts

With the exception of interest-bearing checking accounts, which require a high minimum balance, checking accounts do not gain interest. This type of account is for someone who usually keeps a low balance and uses their account for daily expenses and paying bills. To avoid fees, some accounts require certain conditions, like a low minimum balance. Checking accounts can usually be linked to another account, such as a savings account. Types of checking accounts include interest-bearing, joint, express, and no-frills checking.3

Custodial Accounts Many financial institutions require that people under the age of 18 have a parent or legal guardian cosign on their accounts. By cosigning, the parent or legal guardian has full access to make deposits to or withdrawals from the account.


Marketing of Savings Accounts Recently commercials on TV and the radio have increased for different banks or credit unions. Phrases such as “free checking,” “no monthly fees,” and “high annual percentage yield” catch the attention of consumers and draw them in to find out more about such accounts. Not to say that financial institutions try to trick consumers, but it is very important to read the fine print before opening an account. Sometimes there are strict guidelines that must be followed in order to claim all of the rewards offered by such accounts.

Choosing an Account

With all of the different options to choose from, there are a few factors to consider in order to determine which account best suits specific needs.

Interest Rates are one of the first things to look at in comparing different accounts. On some accounts, there may be higher introductory rates that last for a certain amount of time, with the rates dropping lower when that time period comes to an end. While comparing accounts, it is common to see that the interest rate is lower than the Annual Percentage Yield (APY). This is because the APY takes into account the total amount of interest gained in that year, including compound interest. Also make sure that the Minimum Balance is within an appropriate range for the situation. Although accounts with higher minimum balances may offer higher interest rates, they require the consumer to have that amount of money in the account at all times. If keeping a large amount of money in the account is not feasible, then look for one with a low minimum balance or no minimum balance at all. Next, consider how Accessible the money is. That means how long will it take to get money out of the account if the need arises. Ask questions such as how long does it take to get from home to the bank or how many deposits and withdrawals can be made each month without penalty. If instant access to money is important, then a Money Market account or CD is probably not a good fit, because these types of accounts present some barriers, such a limited withdrawals and time restraints, which make it more difficult to access the money. Regular savings accounts do not usually have those barriers, and accessibility often becomes easier if the savings account is linked to a checking account. Also find out if the financial institution offers Special Accounts for Students. Many banks offer student savings accounts that have low or no minimum balance, as well as checking accounts that have limited or no fees. Also ask about free checks, ATM use, and special interest rates. There are also programs to help students save for college. Finally, look over all Account Guidelines and Fees. While one account may have a higher interest rate, the fees may out way the benefits. Take a careful look at each account to make sure the guidelines and fees are acceptable before making a commitment.


The Bottom Line When looking for a savings account, make sure to weigh all the options and choose a plan that best fits the needs of the situation. Just like with any other consumer product, it is important to shop around, online or on foot, to find the best deal that will provide the most services for the money. Remember that opening an account is not a lifetime commitment; if another account will serve the needs better, simply change banks and accounts. By setting savings goals and paying yourself first, you will be well on your way to a sound financial future.


1 Torres, N.I. Banking Your Dollars; EDIS FCS7015. http://edis.ifas.ufl.edu/HE159 2 Dictionary.com. http://dictionary.reference.com/ 3 Metlife™. Choosing a Bank; http://www.metlife.com/Applications/Corporate/WPS/CDA/

PageGenerator/0,4132,P1635,00.html 4 LendingTree.com™. Tips for Choosing a Savings Account; http://www.lendingtree.com/smartborrower/Managing-

your-money/Tips-for-choosing-a-savings-account.aspx 5 BusinessDictionary.com. http://www.businessdictionary.com/

Photo Credits: p. 63 - FDIC™ Icon - http://www.fdic.gov/

p. 63 - NCUA™ Icon - http://www.ncua.gov/

p. 70, 72 - Florida Credit Union™ Icon - http://www.flcu.org/

p. 70, 72 - Allstate Bank™ Icon - http://www.allstatebank.com/Allstatebank_homepage.asp

p. 70, 73 - Heartland Bank Direct™ Icon - https://www.heartlandbankdirect.com/home/home

p. 70, 73 - Capital One Direct Banking™ Icon - http://www.capitalone.com/directbanking/


Setting Savings Goals Use the chart below to set your short-term, intermediate, and long term savings goals. Include what the goal is, a time by which you want to complete the goal, and the amount of money the goal will cost. You can choose more than one goal for each category.

1. How much money would you need to save each day to meet your short-term goal(s) by the time you want?

2. How much money would you need to save each week to meet your intermediate goal(s) by the time you want?

3. How much money would you need to save each week to meet your long term goal(s) by the time you want?

4. Based on your current allowance or income, is it possible for you to meet all of your goals?

5. What are some ways that you can earn extra money to reach your goals?


Goal Date To Be Completed By

Estimated Cost

Short Term (A few days to a

few weeks)

Intermediate (Several weeks to a few months)

Long Term (Several months to a few years)

Com

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Activity 2 Worksheet - Juniors/Intermediates

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Min

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Activity 2 Worksheet - Seniors

Nam

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M

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Using the Rule of 72 Use this rule to answer the following questions. You can use a calculator or pencil and paper do solve the equations.

How many years will it take you to double your money if you have an interest rate of 2 percent? (answer: 72/2=36. It will take 36 years to double your money.) How many years will it take you to double your money if you have an interest rate of 4 percent? (answer: 72/4=18. It will take 18 years to double your money.) How many years will it take you to double your money if you have an interest rate of 8 percent? (answer: 72/8=9. It will take 8 years to double your money.)

What interest rate will you need in order to double your money in 8 years? (Hint: Change the equation to look like this: 72/years to double your money=interest rate) (Answer: 72/8=9. You will need an interest rate of 9% in order to double your money in eight years.)

Activity 3 Worksheet – Intermediates & Seniors Only

The rule of 72 is a mathematical equation you can use to figure out how long it will take you to double your money depending on your interest rate. The equation looks like this: For example, if your interest rate is 6%, it will take you 12 years to double your money, because 72 divided by 6 is 12! Try it out!

Time Value of Money - Growing $1 The following table illustrates how money can grow over time, depending on the interest rate.

Future Value of $1 Compounded Yearly As you can see from this table, the higher your interest rate and the longer you leave your money in the account, the larger your money will grow. Use this table to answer the following questions. If you put $1.00 in your savings account at 2% interest, how much will that same dollar be worth in 5 years? (Answer: $1.10) To turn $1.00 in to $6.72 in 20 years, what interest rate would you need? (Answer: 10%) At a 5% interest rate, how long would it take to turn $1.00 into $1.28? (Answer: 5 years)

Activity 4 Worksheet - Intermediates Only

# of Years 1% 2% 5% 10% 15%

1 $1.01 $1.02 $1.05 $1.10 $1.15

5 $1.05 $1.10 $1.28 $1.61 $2.01

10 $1.10 $1.21 $1.63 $2.59 $4.05

20 $1.22 $1.49 $2.65 $6.72 $16.37

50 $1.64 $2.69 $11.47 $117.39 $1083.66

Time Value of Money - Growing $100 The following table illustrates how money can grow over time, depending on the interest rate.

Future Value of $100 Compounded Yearly As you can see from this table, the higher your interest rate and the longer you leave your money in the account, the larger your money will grow. Use this table to answer the following questions. If you put $100.00 in your savings account at 2% interest, how much will that same dollar be worth in 5 years? (Answer: $110.41) To turn $100.00 in to $672.75 in 20 years, what interest rate would you need? (Answer: 10%) Imagine that you deposited $1000.00 instead of $100.00. Approximately how much money would you have at the end of 50 years if you had an interest rate of 5 percent? (Answer: $114,674)

Activity 4 Worksheet - Seniors Only

# of Years 1% 2% 5% 10% 15%

1 $101.00 $102.00 $105.00 $110.00 $115.00

5 $105.10 $110.41 $110.25 $161.05 $201.14

10 $110.46 $121.90 $162.89 $259.37 $404.56

20 $122.02 $148.59 $265.33 $672.75 $1636.65

50 $164.46 $269.16 $1146.74 $11,739.09 $108,365.74


JUNIORS/INTERMEDIATES Practice Consumer Situation for Savings Accounts

Mallorie, age 11, receives a $10 allowance each week for doing chores at home. She has been saving her money in her piggy bank and has saved up $100.00 so far. Now she is trying to decide whether or not to open a savings account. She is saving to buy a horse in two years. She wants to find an account that has the highest interest rate and low or no monthly fees. Help Mallorie choose which account is the best fit for her consumer needs. Rank them in order from 1 (best choice) to 4 (least desirable choice).

1. Wachovia™ Premium Savings Account - $100 to open the account, $5 monthly

service fee, $300 minimum balance to avoid service fee, 0.15% Interest.

2. Campus USA Credit Union™ Campus Kidz Account – no minimum deposit to open the account, no monthly service fee, no minimum balance, 3.04% interest.

3. Florida Credit Union™ Youth Savings Account - $5 to open the account, no monthly service fee, $0.01 minimum balance, 0.35% interest.

4. Washington Mutual™ Statement Savings Account - $5.00 to open account, $3 monthly service fee, $300 minimum balance to avoid service fee, 3.25% interest.

Placings: 2-3-4-1 Cuts

Notes/Reasons:

#2 The obvious first choice for Mallorie is the Campus USA Credit Union™ Campus Kidz Account. With the highest interest rate and no monthly fees, it is the best fit for Mallorie’s needs.

#3 Placed Second is #3 Florida Credit Union™ Youth Savings Account. Mallorie has more than enough money to open the account, and it has a very low minimum balance. The account, although low interest rate, has no monthly fees, it would also be a good fit for her needs.

#4 Placed third is #4 Washington Mutual™ Statement Savings Account. She has enough money to open the account, but not enough to avoid the $3 monthly service fee. This account has the second highest interest rate, but she would have to pay $3 a month until she earned enough allowance to put $300 into this account.

#1 Last place goes to the Wachovia™ Premium Savings Account. This account will provide Mallorie with the same problems as number three, as well as charge her a higher monthly service fee and give her a lower interest rate.



JUNIORS/INTERMEDIATES

Practice Consumer Situation for Savings Accounts

Mallorie, age 11, receives a $10 allowance each week for

doing chores at home. She has been saving her money in

her piggy bank and has saved up $100.00 so far. Now she is

trying to decide whether or not to open a savings account.

She is saving to buy a horse in two years. She wants to find

an account that has the highest interest rate and low or no

monthly fees.

Help Mallorie choose which account is the best fit for her

consumer needs. Rank them in order from 1 (best choice) to

4 (least desirable choice).


1.

2.


Wachovia.™ Premium Savings Account Minimum amount to open account: $100 Minimum balance to avoid service fee: $300 Monthly service fee: $5 0.15% Interest.

Campus USA Credit Union.™ Campus Kidz Savings Account No minimum amount to open account No minimum balance Monthly service fee: None APY: 3.04%


3.

4.


Florida Credit Union.™ Youth Savings Account Minimum amount to open account: $5 Minimum balance to avoid service fee: $0.01 Monthly service fee: None 0.35% interest

Washington Mutual.™ Statement Savings Account Minimum amount to open account: $5.00 Minimum balance to avoid service fee: $300 Monthly service fee: $3 3.25% interest


SENIORS Practice Consumer Situation for Savings Accounts

Jeremy, age 14, has saved up $1000.00 from mowing his neighbors’ lawns and has decided to put his money into some sort of account so that it can gain interest. He is saving towards a car for his sixteenth birthday and wants an account with a high APY and a minimum balance of $1000 or less. He does not plan on withdrawing any money from the account for two years, but he does plan on depositing money on a regular basis. He would prefer to deposit his money in person at a local branch, and his mom is willing to cosign with him on any account. Help Jeremy choose which account is the best fit for his consumer needs. Rank them in order from 1 (best choice) to 4 (least desirable choice).

1. Bank of America Standard Term CD. Minimum amount to open account: $1000.00. Interest can be withdrawn monthly without penalty. APY: 3.36% for a 2 year maturation period. Bank in person and online.

2. Washington Mutual™ Relational Savings Account - $1.00 to open account. Minimum balance to avoid monthly charge: $300.00. Monthly service fee: $4.00. APY: 3.25% but you must open a checking account with WaMu in order to receive this rate. Minors under the age of 18 must have a guardian cosign for a checking account. Bank in person and online.

3. Campus USA Credit Union™ Campus Kidz Savings Account. No minimum amount to open account. No minimum balance. Monthly service fee: None. APY: 3.04%. Bank in person and online.

4. Capital One Direct Banking™ High Yield Money Market Account. Minimum amount to open account: $1.00. No minimum balance. Monthly service fee: None. APY: 3.00%. Bank online only.

Placings: 2-3-4-1 Cuts

Notes/Reasons:

#2 First place goes to the Washington Mutual™ Relational Savings Account. Although it offers a lower APY than the Bank of America Standard Term CD, this account allows Jeremy to make unlimited deposits. He also has enough money to avoid the monthly service charge. He can also have the added benefit of a checking account.

#3 Second place goes to the Campus USA Credit Union™ Campus Kidz Savings Account. This has a lower APY than WaMu or Bank of America, but Jeremy can make unlimited deposits at local branches and online, has no monthly service fee, and does not need his mom to cosign.

#4 Third place goes to Capital One Direct Banking™ High Yield Money Market Account. While he can’t bank in person at a local branch, Jeremy can make unlimited online deposits into this account and still earn a competitive interest rate.

#1 Last place goes to the Bank of America Standard Term CD. While this account offers the highest APY, as well as local branches, it does not allow him the flexibility of making unlimited deposits, which is his primary concern. Once he puts in his $1000, he cannot put any more money into the account for at least two years.



SENIORS

Practice Consumer Situation for Savings Accounts

Jeremy, age 14, has saved up $1000.00 from mowing his

neighbors’ lawns and has decided to put his money into

some sort of account so that it can gain interest. He is saving

towards a car for his sixteenth birthday and wants an account

with a high APY and a minimum balance of $1000 or less. He

does not plan on withdrawing any money from the account

for two years, but he does plan on depositing money on a

regular basis. He would prefer to deposit his money in person

at a local branch, and his mom is willing to cosign with him

on any account.

Help Jeremy choose which account is the best fit for his

consumer needs. Rank them in order from 1 (best choice) to

4 (least desirable choice).


Bank of America.™ Standard Term CD $1000 minimum to open Interest can be withdrawn monthly without penalty 3.36% APY for a two-year maturation period You can bank in person or online

1.

2.


Washington Mutual.™ Relational Savings Account $1 minimum to open Minimum balance to avoid fee: $300 Monthly service fee: $4 3.25% APY BUT you must also open a checking account *Minors under the age of 18 must have a guardian cosign for a checking account. You can bank in person or online


3.

4.


Campus USA Credit Union.™ Campus Kidz Savings Account No minimum amount to open account No minimum balance Monthly service fee: None APY: 3.04% Bank in person and online.

Capital One Direct Banking.™ High Yield Money Market Account Minimum amount to open account: $1.00 No minimum balance Monthly service fee: None APY: 3.00% Bank online only.

Leader’s Manual Consumer Choicesflorida4h.org/projects/fcs/Consumer...

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