http://fffl.councilforeconed.org/grade-levels.php

Wynne Lum – Philanthropy Manager, Bank of America

Doug Young – Director, Center for Economic and Financial Education at The Council for Economic Education

Brian Page, Teacher, Reading Community Schools, Reading, Ohio

Benefits of Financial Fitness For Life

• K – 12 curriculum• Correlated with national standards• Emphasizes skills for life• Will be tied to Common Core Standards• Lessons stress decision making• Critical Thinking Skills as the Program Progresses• Utilizes active learning strategies• Parent guide (K-5, 6-12)

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Rigor/Relevance Framework

• Knowing the standard deductions in a paycheck.

• Identify the various types of payment methods.

• Knowing the basics of banking and savings .

• How to setup a budget and calculate net worth.

• Understanding inflation and deflation.

• Understanding diversification and asset allocation .

• Difference in actual cash value versus replacement value in a renters policy. .

• Knowing the pros and cons of the “Five Plastics.”

• Compound interest and the Rule of 72.

• Comparing the costs of your federal student loans given the 6 options available to you with no job.

• Having your credit card stolen in a foreign country.

• Being denied a lease on an apartment due to a bad credit report.

• Paying bills after a cutback in pay, with a mortgage, car loan and college loans due in two weeks.

• How much $100 in a 2% savings account would earn in one year.

• Your net gain or loss if savings is1% a year and inflation is 2% a year

• If Interest rates rise, what will happen to your bond investments.

• Figuring the opportunity cost of a 15 yr. fixed mortgage versus a 30 year fixed.

The Economic Way of Thinking

• Productive resources are limited.• People cannot have everything they want.• People must make choices• Every choice involves a cost• People’s choices have consequences• People respond to incentives

FFFL: 6-8

Lessons are linked to:National Standards in EconomicsNational Standards in Personal FinanceNational Standards in Mathematics

5 FFFL Themes for FFFL (K-2)Theme 1: Earning Income

Lesson 1 – A Good Day for Money Lesson 3 – What is Money?Lesson 2 – Working for Income

Theme 2: SavingLesson 4 – Money Lets Us Choose Lesson 6 – How We Save

Lesson 5 – Why We Save Lesson 7 – Saving Makes Us Wait

Theme 3: Spending Lesson 8 – We Are Consumers Lesson 10 – We Plan for Spending

Lesson 9 – We Decide to Spend Lesson 11 – Ads make Us Spend

Theme 4: CreditLesson 12 – We Are Borrowers Lesson 14 – We Owe Money Lesson 13- We Are Lenders

Theme 5: Money ManagementLesson 15 – We Make a BudgetLesson 16 – We Manage Our Money

5 FFFL Themes for FFFL (3-5)Theme 1: Earning Income

Lesson 1 – Resources are Scarce Lesson 3 – People Pay taxesLesson 2 – Urban Mouse and Rural Mouse

Theme 2: SavingLesson 4 – That Grasshopper and the Ant Lesson 5 – Saving Starts with Wanting More

Theme 3: Spending and CreditLesson 6 – Consumers Want More Goods Lesson 10 – Why Do I Want All That Stuff?Lesson 7 – To Choose Is to Refuse Lesson 11 – This One or That OneLesson 8 – How Would You Like to Pay? Lesson 12 – Credit Is Based on Trust Lesson 9 – More About Methods and Payments Lesson 13 – Buddy, Can You Spare a Dime?

Theme 4: Money ManagementLesson 14 – Managing MoneyLesson 15 – It’s a Balancing Act

5 FFFL Themes for FFFL (6-8)Theme 1: The Economic Way of Thinking

Lesson 1 – Resources are Scarce Lesson 3 - The Economic Way of ThinkingLesson 2 – Making Decisions

Theme 2: Earning IncomeLesson 4 - Why Stay in School? Lesson 6 - Productivity Lesson 5 - Choosing a Career

Theme 3: Money ManagementLesson 7 - Managing Cash Lesson 9 - What Taxes Affect You?Lesson 8 - Choosing and Using a Checking Account

Theme 4: SavingLesson 10 - Why Save? Lesson 13 - Who Pays and Who Receives?Lesson 11 - Let Lenders and Borrowers Be Lesson 14 - Stocks and Mutual FundsLesson 12 - Types of Savings and Investments

Theme 5: Spending and CreditLesson 15 - Cash or Credit? Lesson 17 - Comparison ShoppingLesson 16 - Establishing Credit Cards

5 FFFL Themes for FFFL (9-12)Theme 1: The Economic Way of Thinking:

Lesson 1 – How to Really Be a Millionaire Lesson 3 - Decision Making Lesson 2 – The Economic Way of Thinking

Theme 2: Earning Income:Lesson 4 - Looking for a Job Lesson 6 - Why Some Jobs Pay More Than OthersLesson 5 - Making Your Own Job Lesson 7 – Uncle Sam Takes a Bite

Theme 3: Money Management:Lesson 8 - Managing Your Money Lesson 10 - Managing Risk Lesson 9 - Banking Basics

Theme 4: Spending and Credit:Lesson 11 – What is Credit? Lesson 16 – Shopping for a MortgageLesson 12 - Making Credit Choices Lesson 17 – Shopping for an Auto LoanLesson 13 - Applying for Credit Lesson 18 – Consumer Credit Protection Lesson 14 - All About Interest Lesson 19 – Scams and SchemesLesson 15 - Shopping for a Credit Card

Theme 5: Saving and Investing: Lesson 20 – What’s the Cost of Spending Lesson 22 – Internet Tools and InvestingLesson 21 – There is No Free Lunch in Investing

Components– Teacher guide—17 lessons– Student workbook– Parent guide– Online support

• http://fffl.councilforeconed.org/6-8

Types of Savings Plans and Investments

Lesson 12Financial Fitness For Life

Presentation Goal

• Provide attendees with tools, resources, and activities correlating with Lesson 12 in the middle school Financial Fitness For Life curriculum.– Lesson 12 focuses on “Type of Savings Plan and

Investments”

Best Practices

• Stress concepts and tools that allow students to make wise and informed financial choices for themselves– Examples as it relates to savings…

• The power of compound interest and time• “Save First – Spend Second” or “Pay Yourself First”• Make saving automatic• Risk vs. Reward; Time Horizon; Risk Tolerance; Liquidity

– It’s not necessary to demand the memorization of arbitrary numbers

Why Save?

• Emergencies• Opportunities• Future Purchases• Freedom

Role Play

• Attendees will play the role of a middle school student.

• You will need– Paper– Something to write with– Phones out but screens down

• …and no, you do not get to throw paper airplanes to test my classroom management techniques.

Objective: Identify and explain the opportunity cost associated with saving and investing.

• Step 1: Write down everything you have bought in the last week. (For kids, it could be with their allowance, or anything their parents have bought them beyond basic necessities)

• Step 2: Create an ‘In Out’ list, and complete the list based on regrettable and satisfying spending choices.

• Step 3: Illustrate with a financial calculator the opportunity cost of their spending choice if their ‘out list’ would have been saved at 2% for 5 years. (For kids, what could they buy as juniors in high school?)

– Variation – plug in higher interest rates over longer time– Compound Interest (Key Concept) Calculator:

http://www.moneychimp.com/calculator/compound_interest_calculator.htm

Objective: Identify types of risk associated with various savings plans and investments.

• It’s a Wonderful Life Bank Run• Differences between saving and investing

– Risk & Reward– Liquidity– Insured

• FDIC• NCUA

Objective: Explain why it is important to shop around for savings instruments.

• Think: If you only had $5 and needed to grab something to eat, where would you go? What are your options? Why would you make that choice?

• Pair: Pair up with someone. You have to make a collective choice.

• Share: What did you choose and why?• Key point: Shopping for the right savings instrument is similar.

What may be a good fit for one person may not be a good fit for another. Considerations: Minimum balance requirements, liquidity, insurance (FDIC/NCUA), time horizon, location, interest rates

Objective: Identify the advantages and disadvantages of various savings instruments.

Simple Savings Account• 1% Interest• No minimum

balance requirements

• No fees

3 Year Certificate of Deposit• 3% interest• $1,000

minimum• 10% penalty

for early withdraw

Money Market Deposit Account• 2% interest• $500 minimum

balance• $25 below

minimum balance fee

5 Year U.S. Savings Bond• 4% interest• $2,000

minimum• Can’t be

redeemed early without loss

Based on what you have learned, write down the advantages and disadvantages of each of the savings instruments above.

Objective: Select a savings instrument suited to a given set of needs at a particular time.

Simple Savings Account• 1% Interest• No minimum

balance requirements

• No fees

3 Year Certificate of Deposit• 3% interest• $1,000

minimum• 10% penalty

for early withdraw

Money Market Deposit Account• 2% interest• $500 minimum

balance• $25 below

minimum balance fee

5 Year U.S. Savings Bond• 4% interest• $2,000

minimum• Can’t be

redeemed early without loss

Connect each scenario with the appropriate saving instrument & explain why• Julie: 16 years old. Less than $25 saved. Makes around $30 a week. Saving

for prom in 3 months. • Dan: 13 years old. Just received a $2,000 check for his birthday for college.• Susie: 25 years old. Has a full-time job but has trouble saving for future

purchases. She knows she will need a new computer in a few years andwants to put money aside for the future expense.

• Brian: 28 years old. Is looking for a new house. Has around $10,000 saved.Wants to grab a deal if he finds one.

It’s Hard To Save, To Wait For Something You Want

• Marshmallow Study• Make saving automatic

– Save First – Spend Second• Direct Deposit• Piggy Bank

http://fffl.councilforeconed.org/grade-levels.php