welcome to personal financial literacy workshop! please complete the registration form on page 2. 1
TRANSCRIPT
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Welcome to Personal Financial Literacy Workshop!
• Please complete the registration form on page 2.
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Helping young people learn to think, choose, and make better economic and financial choices in a global economy
Cindy ManzanoDirector of Smarter Texas
1801 Allen Parkway Houston, TX 77019
C: 713.503.5338F: 713.655.1655
www.smartertexas.org
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Agenda
What is personal financial literacy and why do we need it?
Grade 5 – The Case of the Disappearing Paycheck
Grade 5 – Money In, Money Out Grade 6 – Debit or Credit Grade 6 – Checks and Balances How to access resources
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Personal Financial Literacy is making thoughtful, well-informed decisions about important aspects of finances.
Why do we need it?
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Nationwide Financial Capability Study • 39% of individuals in Texas used a form of non-bank borrowing,
i.e. an auto title loan, pay day loan, pawn shop loan, or other high interest uneconomical source of debt
• 54% of individuals in Texas broke even or spent more than their annual income
• 57% of individuals in Texas did not have enough money saved to cover expenses for three months
• 67% of individuals in Texas scored 60% or less on a financial knowledge test, which comprised of questions regarding basic economics and finance concepts encountered in everyday life
http://usfinancialcapability.org/results.php?region=TX
2014 Student Loan Debt – The total outstanding student loan balance is $1.2 trillion. – Reasons for rising student debt:
• Rising cost of education• Students with little to no credit history are being approved for
thousands of dollars• Students don’t understand the terms of getting a loan• Students did not save or plan for the cost of college
– After graduation:• Loan debt exceeds annual salary• Many can’t find a job• Graduates are delaying buying a home or car• Unable to start a business• Unable to save for the future 6
. . . then why get a higher education?
– The demand for higher education in the job market is increasing.
– The potential to earn more increases as the level of education increases.
– The percent of unemployment decreases as educational attainment increases.
Higher education is still the best investment in your future.
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TCEE: Grade 5, Lesson 1The Case of the Disappearing Paycheck
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The Case of the Disappearing Paycheck
TCEE created lesson
Grade 5, Lesson 1
• PFL Math 5.10A: define income tax, payroll tax, sales tax, and property tax
• PFL Math 5.10B: explain the difference between gross income and net income
10Word Splash
• Write any word or phrase or draw a picture on each chart paper to show what you know about each tax.
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The Case of the Disappearing Paycheck
• Create a tax flipbook• Number 1-4
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The Case of the Disappearing Check
• Group 1 will become experts on income tax.• Group 2 will become experts on payroll taxes.• Group 3 will become experts on sales tax.• Group 4 will become experts on property tax.
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The Case of the Disappearing Paycheck
• Read the section about your tax category.• Discuss the important points about your tax
category.• Create a visual on chart paper that
communicates the important information about your assigned tax.
• Plan your presentation.
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The Case of the Disappearing Paycheck
• What points will you write in your flipbook?• Now that you know more about taxes, where
does the money come from that one uses to pay taxes?
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The Case of the Disappearing Paycheck
• Here’s what Mr. Cash made in a one week period. He worked 40 hours and made $14.50 per hour. This means that he earned $580.00 that week. His federal withholding tax was $47.00, Social Security tax paid was $35.96, and his Medicare tax contribution was $8.41.
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The Case of the Disappearing Paycheck
• How much did Mr. Cash pay in taxes that week?
• What was his final net income? • How did you determine his net income?
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TCEE: Grade 5, Lesson 2How Will I Pay?
18How Will I Pay?
Grade 5, Lesson 2
• 5.10C: identify the advantages and disadvantages of different methods of payment including check, credit card, debit card, and electronic payments
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TCEE: Grade 5, Lesson 3Where Does All My Money Go?
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Where Does All My Money Go?
Grade 5, Lesson 3
• 5.10D: develop a system for keeping and using financial records
21Takeaways
• I can’t spend more than I make• I need a plan to buy something I want• By tracking my spending, I can see if I
spend too much on frivolous items• I need to track my income and expenses
before I make a budget
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TCEE: Grade 5, Lesson 4Money In, Money Out
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Money In, Money Out
Grade 5, Lesson 4
• PFL Math 5.10E: describe actions that might be taken to balance a budget when expenses exceed income
• PFL Math 5.10F: balance a simple budget
Column AWeekly Income
Column BWeekly Expenses
Source Amount Item Amount
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Column AWeekly Income
Column BWeekly Expenses
Source Amount Item Amount
allowance for household chores $10.00
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Column AWeekly Income
Column BWeekly Expenses
Source Amount Item Amount
allowance for household chores $10.00
mow the yard
$15.00
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Column AWeekly Income
Column BWeekly Expenses
Source Amount Item Amount
allowance for household chores $10.00
mow the yard
$15.00
bathe the dog $5.00
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Column AWeekly Income
Column BWeekly Expenses
Source Amount Item Amount
allowance for household chores $10.00 dues for Scouts $2.00
mow the yard
$15.00
bathe the dog $5.00
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Column AWeekly Income
Column BWeekly Expenses
Source Amount Item Amount
allowance for household chores $10.00 dues for Scouts $2.00
mow the yard
$15.00 cell phone $5.00
bathe the dog $5.00
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Column AWeekly Income
Column BWeekly Expenses
Source Amount Item Amount
allowance for household chores $10.00 dues for Scouts $2.00
mow the yard
$15.00 cell phone $5.00
bathe the dog $5.00 college savings $5.00
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Column AWeekly Income
Column BWeekly Expenses
Source Amount Item Amount
allowance for household chores $10.00 dues for Scouts $2.00
mow the yard
$15.00 cell phone $5.00
bathe the dog $5.00 college savings $5.00
Column AWeekly Income
Column BWeekly Expenses
Source Amount Item Amount
allowance for household chores $10.00 dues for Scouts $2.00
mow the yard
$15.00 cell phone $5.00
bathe the dog $5.00 college savings $5.00
entertainment $10
Column AWeekly Income
Column BWeekly Expenses
Source Amount Item Amount
allowance for household chores $10.00 dues for Scouts $2.00
mow the yard
$15.00 cell phone $5.00
bathe the dog $5.00 college savings $5.00
entertainment $10
Total: $30.00
Column AWeekly Income
Column BWeekly Expenses
Source Amount Item Amount
allowance for household chores $10.00 dues for Scouts $2.00
mow the yard
$15.00 cell phone $5.00
bathe the dog $5.00 college savings $5.00
entertainment $10
Total: $30.00 Total: $22.00
Column AWeekly Income
Column BWeekly Expenses
Source Amount Item Amount
allowance for household chores $10.00 dues for Scouts $2.00
mow the yard
$15.00 cell phone $5.00
bathe the dog $5.00 college savings $5.00
entertainment $10.00
saving for basketball shoes
Total: $30.00 Total: $22.00
Column AWeekly Income
Column BWeekly Expenses
Source Amount Item Amount
allowance for household chores $10.00 dues for Scouts $2.00
mow the yard
$15.00 cell phone $5.00
bathe the dog $5.00 college savings $5.00
entertainment $10.00
saving for basketball shoes $16.00
Total: $30.00 Total: $22.00
Column AWeekly Income
Column BWeekly Expenses
Source Amount Item Amount
allowance for household chores $10.00 dues for Scouts $2.00
mow the yard
$15.00 cell phone $5.00
bathe the dog $5.00 college savings $5.00
entertainment $10.00
saving for basketball shoes $16.00
Total: $30.00 Total: $22.00
Column AWeekly Income
Column BWeekly Expenses
Source Amount Item Amount
allowance for household chores $10.00 dues for Scouts $2.00
mow the yard
$15.00 cell phone $5.00
bathe the dog $5.00 college savings $5.00
entertainment $10.00
saving for basketball shoes $16.00
Total: $30.00 Total: $22.00 $38.00
Expenses• Fixed expenses are those expenses
that remain the same each week or month.
Expenses• Fixed expenses are those expenses
that remain the same each week or month.
Expenses• Fixed expenses are those expenses that
remain the same each week or month.
• Variable expenses are those expenses that vary from week to week or month to month.
Expenses• Fixed expenses are those expenses that
remain the same each week or month.
• Variable expenses are those expenses that vary from week to week or month to month.
Column AWeekly Income
Column BWeekly Expenses
Source Amount Item Amount
allowance for household chores $10.00 dues for Scouts $2.00
mow the yard
$15.00 cell phone $5.00
bathe the dog $5.00 college savings $5.00
entertainment $10.00
saving for basketball shoes $16.00
Total: $30.00 Total: $22.00 $38.00
Column AWeekly Income
Column BWeekly Expenses
Source Amount Item Amount
allowance for household chores $10.00 dues for Scouts - f $2.00
mow the yard
$15.00 cell phone $5.00
bathe the dog $5.00 college savings $5.00
Entertainment $10.00
saving for basketball shoes $16.00
Total: $30.00 Total: $22.00 $38.00
Column AWeekly Income
Column BWeekly Expenses
Source Amount Item Amount
allowance for household chores $10.00 dues for Scouts - f $2.00
mow the yard
$15.00 cell phone - f $5.00
bathe the dog $5.00 college savings $5.00
entertainment $10.00
saving for basketball shoes $16.00
Total: $30.00 Total: $22.00 $38.00
Column AWeekly Income
Column BWeekly Expenses
Source Amount Item Amount
allowance for household chores $10.00 dues for Scouts - f $2.00
mow the yard
$15.00 cell phone - f $5.00
bathe the dog $5.00 college savings - f $5.00
entertainment $10.00
saving for basketball shoes $16.00
Total: $30.00 Total: $22.00 $38.00
Column AWeekly Income
Column BWeekly Expenses
Source Amount Item Amount
allowance for household chores $10.00 dues for Scouts - f $2.00
mow the yard
$15.00 cell phone - f $5.00
bathe the dog $5.00 college savings - f $5.00
entertainment - v $10.00
saving for basketball shoes $16.00
Total: $30.00 Total: $22.00 $38.00
Column AWeekly Income
Column BWeekly Expenses
Source Amount Item Amount
allowance for household chores $10.00 dues for Scouts – f $2.00
mow the yard
$15.00 cell phone - f $5.00
bathe the dog $5.00 college savings - f $5.00
entertainment – v $10.00 $2.00
saving for basketball shoes – v $16.00
Total: $30.00 Total: $22.00 $38.00
$30.00
Jordan can reduce his entertainment from $10 to $2 for 5 weeks.
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Check for Understanding
• How would you describe a budget?• Why is having a budget important?• What may happen if you do not stick
to your budget?
53Ginger’s Budget
We’ve worked on Jordan’s budget together to make sure he has a balanced budget. Now it’s your turn to help Ginger.
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Plan a weekly budget for yourself.
• You must have at least $30.00 weekly income. No more than $15.00 can be allowance. You must show jobs that you can do and would be willing to do every week.
• You must save at least $5.00 of your weekly income in a college savings plan.
• You must share/donate some of your income with others.
• You must spend some of your money. Your spending must be reasonable for someone your age.
• Your expenses may not exceed your income.
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TCEE Grade 6 Lesson 1Best Payment Option: Debit or Credit
56Best Payment Option: Debit or Credit
Grade 6 Lesson 1
• Math 6.14B distinguish between debit cards and credit cards
57Sorting Activity
• Bridgette would like to buy her parents an alarm clock for their anniversary. How might Bridgette pay for the alarm clock?
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59Venn Diagram
• Create a Venn diagram that represents the similarities and differences between a debit card and a credit card.
Debit Card
Credit Card
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61Debit or Credit?
• Money is withdrawn directly from a checking or savings account.
• Each purchase is a loan that is repaid later.
• Consumers can purchase items now and pay for them later.
• Hefty fees may be charged if you spend more than what is in the account.
62Debit or Credit?
• Eric purchased a movie ticket with his card. This money will come straight out of his checking account. What card did he use?
• Rosa’s gas pump went out as she was driving her car to work. Since she did not have enough money to cover the cost to replace the pump, she used a card that allowed her to pay later. What card did she use?
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TCEE Grade 6 Lesson 2
Checks and Balances
64Checks and Balances
Grade 6 Lesson 2
• Math 6.14A compare the features and costs of a checking account and a debit card offered by different local financial institutions
• Math 6.14C balance a check register that includes deposits, withdrawals, and transfers
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Deposit Withdrawal
Balance
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Deposit Withdrawalin
+
out
-
Balance
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Identify the Bank Transaction
Debbie paid her rent by writing a $400 check to her landlord.
Identify the Bank Transaction
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Money is automatically transferred into Debbie’s checking account for earnings from her job.
Identify the Bank Transaction
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Debbie went shopping for some treats for her dog, Bruno, and a new leash at Pet City. When she checked out, she entered her personal identification number (PIN) at the register and paid with the debit card.
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Identify the Bank Transaction
Debbie wanted cash to pay for the cost of a movie ticket and popcorn. She stopped at an ATM machine, entered a code and took cash out of the machine.
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Identify the Bank Transaction
Debbie received two checks for her birthday. She went to her bank, filled out a slip and gave the check to the bank teller.
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VocabularyTransaction: Any activity with money such as a deposit, a withdrawal, or a transfer.
ATM Surcharge: An Automatic Teller Machine (ATM) fee financial institutions charge for withdrawing money.
Insufficient Funds: This term describes the circumstance of not having enough money in a checking account to make a payment or to withdraw money.
Overdraft fee: This is a fee charged by the financial institution for making a purchase against your checking account in which there is not enough money in the account to cover the payment.
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Overdraft protection example:• Debbie had $385 in her checking account when
the $400 rent check was processed.
$385 - $400 = -$15
• Bank charges Debbie an overdraft fee of $25.
-$15 - $25 = -$40
Why is this feature called overdraft protection?
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Example of no overdraft protection:
• Debbie had $385 in her checking account when the $400 rent check was processed. • Check bounces; Debbie is charged a $30 bounced check
fee.
$385 - $30 = $355
• Landlords don’t receive payment; they charge Debbie a $40 late fee.
• Landlords ask Debbie to pay the return check fee of $25.
What was the cost of this transaction?
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Example of no overdraft protection:
• $30 bounce check fee to bank• $40 late fee to landlords• $25 return check fee to landlord
$95 total in fees
Debbie still has to pay her rent.
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What is the best option?
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Activity 6.2-1
SafeMoney Bank Terms: Monthly service fee of $15 is
applied if the account falls below $100
Monthly debit card fee of $1 An overdraft fee of $20 for each
overdraft. ATM cash withdrawals will be
denied if the account has insufficient funds.
ATM Surcharge for Local Financial Institutions: MY Credit Union: $3.00
Wise Bank: $2.00
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My Credit Union Game RulesShuffle game cards and place them face down in one stack. Each player should have a check register to record his or her transactions. The person with the birthdate latest in the year goes first and the turn to play passes to the next player. Choose the top card in the stack. Document the transaction on your check register. For each transaction, write today’s date. For each check withdrawal write a 2-digit check number beginning with 01. Then calculate your balance. Place this card in the discard pile. The game ends after all the cards have been drawn or when a player has filled the check register. The person with the greatest balance is the winner.
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SPECIAL RULES:• If you draw a card that is a check withdrawal and you do not
have enough money for the transaction, you must subtract the payment as well as an overdraft fee of $20. Use an additional line to record this overdraft fee if applicable.
• If you use your debit card to purchase a good or service or to withdraw money and you have insufficient funds, the credit union will decline the card. Put the card in in the discard pile. You lose your turn.
• If you withdraw cash using your debit card at a bank or credit union that is not My Credit Union, subtract an additional $2.00 for ATM surcharge. Use an additional line to record this surcharge if applicable.
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CHECK FOR UNDERSTANDING
• What happens when your checking account balance is low?
• Why is it so important to keep a record of your transactions and balance?
86ACTIVITY 6.2-3
• Compare the features and costs of a checking account and a debit card offered by different local financial institutions.
A Proven Tool that Increases the Learning in the Classroom
Personal Financial Literacy Challenge
• Middle and High School
• Fall and spring online challenges will determine state finalist candidates
• “State Play-Offs” in Austin with cash awards for two top teams
• HS national finals at Fed in St. Louis
• Bellaire HS Houston 2nd in nation 2012
The TCEE programs are made possible by the following TCEE partners.
copyDR.
EnviroChemServices, Inc.
Trout Foundation
John Anderson
Less B. FoxRBC Wealth Management