THEME III: Money Management
Why do I need to have long range goals for my spending and saving? What trade-offs must I make because my income is less than I need to get me everything I want? Why would I need a checking account? How much risk can I afford with my savings? Why do I have to worry about my credit rating?
Money management has become much more complex. The savings rate in the United States went into negative numbers two years ago while credit card debt soared. Choices for the individual households have exploded and information, both reliable and unreliable, is available to a majority of the population through the internet. Making financial decisions and evaluating the consequences of these decisions begins as soon as a person takes his first job. Keys related to money management require in-depth examination of budgeting, banking services, saving and investing, and credit.
Money Management Lessons Overview
A. Budgeting
Lessons in this unit focus on goal setting, short and long term planning. The
students are taught that the better the plan, the more accurate the record
keeping, and the continuing analysis of one's spending and saving patterns
should result in more control over one's life. Included are the mechanics of
reading pay stubs, completing W-4 forms, reading tax tables, etc. Demonstrating
the connections between values, priorities, and one's income becomes a critical
piece as the students develop actual budgets. They will use the entry level
annual salary from the career they chose in the previous theme. This will be
their base salary for the whole course.
B. Banking
Services
Accurate record keeping makes handling one's finances
easier and gives one more control. Students are made aware of the services
offered by full service banks from checking accounts to safe deposit boxes.
Using the internet, they will compare checking accounts within the same bank
and between banks. Included in these lessons are all the forms, vocabulary, and
mechanics related to having a checking account from signing up to reconciling
the monthly balance.
C. Saving and
Investing
Goals are revisited so that students acquire an
understanding of what total amounts are necessary to purchase and maintain a
car, obtain a house, finance a college education, plan for retirement, etc.
Emphasis is placed on using saving rather than credit to achieve these goals.
Borrowing reduces future spending, which, limits a person's long term choices
and freedom. Students are encouraged to begin saving while young. Various
saving and investing options will be explored and evaluated. Just as in the
checking area, students will do a comparison shopping process for saving
instruments. Becoming familiar with the world of investing requires familiarity
with vocabulary, mechanics and risks. During this unit students will
participate in a stock simulation.
D. Credit
Saving
for future spending has given way for many to financing a lifestyle through
credit. Borrowing just for big ticket items has been replaced by the use of
credit cards for everything including items which are only consumed once. Lost
in this shift has been the ability of many consumers to face the limits of
their income which has created severe financial problems for them. Ultimately
many have found themselves filing for bankruptcy. Students will investigate
responsible use of deferred payment which can help consumers maximize their
resources. Activities include how to compare credit card offers, to build and
maintain a good credit rating and to differentiate among legitimate offers and
ones that are not.
Vocabulary
Sources of Curriculum
Internet Theme Bookmarks