Financial Literacyfor Middle School

University School at University of Tulsa

Presenters: Katie Abercrombie, Kelly O’Neil-Brown, Marilyn Howard, and Cyndie Yocham

Income

Living Expenses

Jobs and Careers

Investments

Credit

History Lessons

Savings TaxesCharity FDIC & Banks

Checking Accounts

Income Spending Needs Money for Saving and Investments

Spring SemesterFall Semester

THE BIG PICTURE

Income

Living Expenses

Jobs and CareersInvestments Credit

History Lessons

Savings

Taxes

Charity

FDIC & Banks

Checking Accounts

Interest CalculationsBUDGETBUDGET

INCOME

What Is The Source of My Family’s Income

Income

JobsInterest and dividendsAsset appreciationGiftsBenefit paymentsRetirement payments

Jobs and CareersIncome

The best way to start….Self-InventoryMiddle School Self-AssessmentLearning Styles, Study Tips, and Career Key Assessment

Who Am I?

Jobs and CareersIncome

What is a job versus a career? Does education really pay?Family Career TreeCareer Clusters Interest Survey Job Application Resume using templates from Microsoft Word or Publisher

Income Spending Needs Money for Saving and Investments

THE BIG PICTURE

BUDGET

What Are Spending Needs?

How Does My Family Spend Money

Spending Needs

Fixed ExpensesHousingCarsTaxesInsuranceEmergency Fund

Variable ExpensesUtilities / FuelFood / ClothingHousehold itemsEntertainmentCharity My child said to

me , “Thank you, I had no

idea….”.

Checking AccountsSpending

Needs

Terminology Write a Check Void a Check Endorse a Check Deposit a Check Keeping a Ledger Excel Project: Create a Ledger

Mortgages and Loans Spending Needs

Mortgage Amount = $150,000 with a 5% rate of interestMonthly Principal & Interest

Extra Payment per month

Pay-Off Date

360 payments ($)

Total Interest Paid

$805.23 --- Jan 2041 $289,883.68 $139,883.68$100 Aug 2034 $255,278.48 $105,278.48

$200 Jul 2030 $235,035.40 $85,035.40

Cost of Credit CardsSpending Needs

Example: If you had a credit card balance of $2,000, an 18% APR, stopped using your card and made only the minimum monthly payment, which was based on 2% of the outstanding balance or $20, whichever was greater, how long would it take to pay off your debt and how much was the total payout? 19.3 Years for $5,862

Lesson learned: Always pay more than the minimum monthly payment!!!

TaxesSpending Needs

What are taxes and how are they used?

FederalStateLocal (City/Country)

Government BudgetsSpending Needs

RevenuesIncome TaxProperty TaxSales TaxFees / LicensesFICA

ExpendituresDifferences between private and public services

Income

Spending Needs

Money for Saving

and Investme

nts

THE BIG PICTURE

BUDGET

What Are Investment Needs?

Loan and OwnSavings and Investing

Interest Bearing Accounts & Bonds

StocksPropertyCollectibles

Interest Inco

me

Capital Gains/Loss

Dividends

What Are Savings?Savings and Investing

Criteria:Lower risk for lossPrincipal more stableLower return

Types:Bank accountsCertificates of depositsU.S. government bonds

The Magic of CompoundingSavings and Investing

When you save, you earn interest.

When you take the interest out and spend it, it stops growing.

But if you leave the interest in your account so it can grow, you start to earn interest on the interest you earned previously. This is called compounding.

Interest on interest is money you didn’t work for. It is money your money makes for you!

The Magic of CompoundingSavings and Investing

• Molly starts saving at age 25 and adds $2080 annually to her account and draws interest at a rate of 4.25% per year. • After 20 years, she has accumulated $104,900.72 with the compounding interest. She then leaves the money in the account for 20 years without adding any more money to the accumulated amount. • She lets the compounding work for her and after 20 more years she has accumulated $241, 156.93!• Marcus decides to wait for 20 years to start his savings and begins with the same amounts and rate-of-growth as Molly did 20 years earlier. •Only he is 45 years old when he begins his savings. At age 65, he has only $104,900.72.

Lesson: Start Early and Give Your Money Time To Grow

What Are Investments?Savings and Investing

Criteria:Higher risk for loss = can lose principalHigher potential return = can gain principal

Types:Private businessStocksCorporate/municipal bondsMutual fundsReal estateCollectibles

FDIC and BanksSavings and Investing

What is the FDIC?When and why?What are the current levels of protections?

BondsSavings and Investing

Government BondsFederalMunicipal (Muni’s)

Corporate Bonds

Interest CalculationsSavings and Investing

Rule of 72

Years to double investment = 72 / Rate of Return

Rate of Return Amount of Time to Double 3% 24 Years 9% 8 Years 12% 6 Years 6% 12 Years 8% 9 Years

StocksSavings and Investing

What are stocks?Brokers / exchanges/ indexesMacro-economic concepts: inflation / recessionPortfolio diversificationHow to research a stock

Mutual FundsSavings and Investing

What are mutual funds?Advantages and disadvantagesTypes of mutual fundsHow to research mutual funds

OCEE Stock Market GameSavings and Investing

Online student team competitionTeacher training seminars availableFall and Spring games 10 weeks

J.A. Investor ChallengeSavings and Investing

Simulated stock market trading floorTeam competition

History Lessons

• How Money Is Made videos series from Modern Marvels on History.com

• The Great Depression• The Oregon Trail Simulation• Current News Events

Links

General:http://www.moneyinstructor.com/ Lesson plans, templateshttp://finance.yahoo.com/http://money.cnn.com/magazines/moneymag/money101/ 23 Financial Life Lessonshttp://www.econisok.org/ http://www.councilforeconed.org/ Online teacher training, lesson plans, Gen-I gamehttp://tulsa.ja.org/ Junior Achievement programs, interactives

Budget:http://www.jumpstart.org/reality-check.html Interactive budget/life game

http://www.personalbudgeting.com/

Links (cont.)

Jobs and Careers:http://www.educationplanner.org/education_planner/discovering_article.asp?sponsor=2859&articleName=Self-Assessment_Quizhttp://www.educationplanner.org/education_planner/discovering_article.asp?sponsor=2859&articleName=Middle_School_Checklist

http://www.breitlinks.com/careers/career_pdfs/familytreews.pdfhttp://www.careerclusters.org/ccinterestsurvey.phphttp://education.yahoo.com/http://www.bls.gov/emp/ep_chart_001.htm

Credit Card:http://www.studentpirgs.org/truth-about-credit/

http://www.controlyourcredit.gov/#frontdesk/00 The Bad Credit Hotel Game

Links (cont.)

Savings and Investment:http://ocee-ok.net/ OCEE Stock Market Gamehttp://www.fdic.gov/about/learn/learning/index.html FDIC Learning Bank for studentshttp://www.sec.gov/investor.shtml SEC Education

Taxes:http://www.irs.gov/individuals/students/index.html Tax information for students

History Lessons:How Money Is Made (5 part series) by WealthyAmbitionsCom: http://www.youtube.com/watch?v=_ICXBNynyTU

PASS Objectives

http://www.moneyisok.org/index.html

• This site is designed for classroom teachers implementing HB 1476: Oklahoma’s Passport to Financial Literacy. Included on this site is a listing of teacher resources for the 14 areas of instruction required for high school graduation.

• The web site is provided by the Oklahoma Council on Economic Education (OCEE).

• OCEE is designated by the State of Oklahoma to provide training, materials and support for teaching personal financial literacy in our state. We work closely with the State Department of Education and other organizations to ensure teachers are prepared to help students learn how to make good choices that impact their financial success, today and tomorrow.

Contact Us

For additional information, please email kelly-oneil-brown@utulsa.edu