Financial Literacy
Course Description
All students need to understand the basics of financial literacy and be prepared to make informed
financial decisions. Students will develop skills and strategies that promote personal and
financial responsibility related to financial planning, savings and investment. Financial literacy
includes the application of knowledge, skills, and ethical values when making consumer and
financial decisions that impact the self, the family, and the local and global communities. Each
student will learn financial literacy concepts, enabling them to succeed in a complex global
environment.
Course Objectives
Upon completion of the course, students will be able to:
1. Develop an awareness and understanding of basic terms and concepts in financial
literacy.
2. Accept responsibility for and understand personal and societal consequences of financial
decisions.
3. Analyze how educational achievement, career choice, and entrepreneurial skills all play a
role in achieving a desired lifestyle.
4. Be engaged in establishing career goals that will provide adequate income and personal
fulfillment.
5. Explain how tax policies, personal taxes, and employee benefits affect disposable
income.
6. Establish and evaluate short- and long-term financial goals and plans regarding income,
spending, and saving.
7. Demonstrate an understanding of personal financial planning and sound money
management skills.
8. Develop, analyze, and revise a personal budget.
9. Make informed credit management choices about sources of credit while understanding
the cost of credit.
10. Understand that credit worthiness is dependent on making informed credit decisions and
managing debt responsibly.
11. Apply basic economic principles which lead to wiser decisions for individual and family
planning.
12. Identify and evaluate the risk, return, and liquidity of various savings and investment
decisions.
13. Develop the ability to prioritize wants and needs to assist in making informed
investments, purchases, and decisions.
14. Demonstrate an understanding of the responsibility to the broader community while
developing personal wealth and an understanding of the legal rights and responsibilities
of being a good citizen.
15. Develop a risk management plan that includes life, automobile, property, health, and
income protection/disability insurance.
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16. Describe rights and responsibilities of buyers, sellers, and creditors under various
consumer protection laws.
Course Content
1. Income and Careers.
A. Various forms of income and factors that affect income.
Sources of income (e.g., wages, investments, self-employment).
Common employee benefits (e.g., insurance, leave, retirement).
Compare income to the cost-of-living in various geographical areas.
How economic conditions affect income.
B. Required income withholdings.
Relationship between government programs and services and taxation.
Purposes of compulsory government programs (e.g., Social Security, Medicare).
Calculate net income from an employee payroll record.
Demonstrate how to complete personal state and federal income tax forms, including
1040EZ and 1040A.
Analyze the impact of the collective bargaining process on benefits, income, and fair
labor practice.
C. Criteria for selecting a career and the impact of career choices on income and financial
stability.
The correlation between income and a worker’s skills, education, the value of the
work to society, condition of the economy, and the supply and demand for workers.
Develop career plan(s) that include educational requirements, skill development,
income potential, and possible debt.
2. Money Management.
A. How setting financial goals, decision-making, and planning affect personal financial
choices and behaviors.
Prioritize financial decisions by systematically considering alternatives and possible
consequences.
Personal values that affect financial choices (e.g., home ownership, work ethic,
charity, civic responsibility).
Compare strategies for saving and investing and the factors that influence how much
should be saved or invested to meet financial goals.
Construct a plan to accumulate emergency "rainy day" funds.
Components of a financial plan (e.g., goals, net worth statement, budget, income and
expense record, an insurance plan, a saving and investing plan).
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Compare short-term and long-term financial goals.
Design a plan to reach a specific financial goal.
Advantages of designing and following a personal financial plan.
B. Developing and maintaining a personal budget.
Analyze how income and spending plans are affected by age, needs, and resources.
Analyze how changes in taxes, inflation, and personal circumstances can affect a
personal budget.
Design and utilize a simulated budget to monitor progress of financial plans.
Develop a plan that uses the services of various financial institutions to meet personal
and family financial goals.
C. Opening and maintaining a checking account
How to compare banking services.
How to open a checking account.
How to maintain a check register.
How to write and endorse a check.
The correct use of deposit slips.
How to interpret and reconcile a bank statement.
D. Opening a savings account and comparing bank services.
3. Credit and Debt Management.
Compare and contrast the financial benefits of different products and services offered
by a variety of financial institutions.
Compute and assess the accumulating effect of interest paid over time when using a
variety of sources of credit.
Analyze the information contained in a credit report and explain the importance of
disputing inaccurate entries.
Basic types of credit (e.g., credit cards, installment loans, service credit, revolving
credit, student loans, etc.).
Explain the rights and responsibilities of buyers and sellers under consumer
protection laws and discuss common unfair or deceptive business practices..
Methods of establishing and maintaining a good credit rating and credit score.
The relationship between a credit rating and the cost of credit and factors that affect
credit worthiness
Warning signs of credit abuse (e.g., late fees, missed payments, collection notices,
bounced checks) and ways to correct credit problems.
Calculating costs associated with the use of credit (e.g., finance charges, interest, late
fees, default rates, closing costs).
Evaluate the implications of personal and corporate bankruptcy for self and others.
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4. Planning, Saving, and Investing.
A. The value and use of savings in financial planning.
B. The value of investing and types of investments in the financial planning process
Relate savings and investment results to achievement of financial goals.
Differentiate among various investment products and savings vehicles and how to
use them most effectively.
o Types of investment vehicles (e.g., stocks, bonds, real estate, hard assets).
o Strategies for investing (e.g., diversification, dollar cost averaging.)
o Assess the role of revenue-generating assets as mechanisms for accruing
and managing wealth.
o Long-term and short-term investments.
o Risk, return, liquidity, and costs for savings and investments.
Compare and contrast the past and present role of government in the financial
industry and in the regulation of financial markets.
o Government regulations that protect investors.
Determine the impact of various market events on stock market prices and on
other savings and investments.
o Effects of inflation on savings and investments.
Evaluate how taxes affect the rate of return on savings and investments.
Analyze how savings, retirement plans, and other investment options help to shift
current income for purposes of tax reporting and filing.
Sources of investment information (e.g., prospectus, annual reports, financial
publications, online information) and ways to buy/sell investments (e.g., full
service and discount brokers, investment advisors, online brokers).
5. Becoming a Critical Consumer:
Analyze and apply multiple sources of financial information when prioritizing
financial decisions.
Determine how objective, accurate, and current financial information affects the
prioritization of financial decisions.
Evaluate how media, bias, purpose, and validity affect the prioritization of
consumer decisions and spending.
Evaluate business practices and their impact on individuals, families, and
societies.
Evaluate written and verbal contracts for essential components and for obligations
of the lender and borrower.
Apply consumer protection laws to the issues they address.
o Fair Credit Reporting Act
o Fair Credit Billing Act
o Equal Credit Opportunity Act
o Fair Credit Collection Practices
o Consumer Credit Protection Act
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o Federal Trade Commission Act
o Consumer Product Safety Act
o Consumer Leasing Act
Relate consumer fraud, including online scams and theft of employee time and
goods, to laws that protect consumers.
Determine when credit counseling is necessary and evaluate the resources
available to assist consumers who wish to use it.
Determine reasons for the increase of identity theft worldwide and evaluate the
extent to which victims of identity theft are successful in fully restoring their
personal identities.
6. Civic Financial Responsibility.
How limited financial resources affect the choices people make.
The influence of peer pressure as it relates to purchasing decisions (e.g., fashion,
acceptance from others, and need for latest gadget).
How scarcity relates to needs and wants.
The impact of marketing, advertising, and sales strategies/techniques on purchasing
decisions (e.g., impulse buying, delayed payment).
The role of emotions when making financial decisions.
Recognize that individuals are responsible for their finances.
Consequences of excessive debt (e.g., increased consumer costs, inflation, family
instability).
7. Risk Management and Insurance.
A. Risk-management strategies to protect against financial loss.
B. Analyze risks and benefits in various financial situations and at various life stages.
C. Compare the cost of various types of insurance for the same product or service, given
different liability limits and risk factors.
D. Compare insurance policy coverage limits and related premiums and deductibles to
minimize costs.
E. Estate planning (wills, trusts).
F. Consequences of being under-insured.
G. The concept of the time value of money.
H. The relationship between risk and return.
I. Appropriate financial products for different financial goals (e.g., savings accounts,
stocks).
J. Common types of insurance:
Home and Auto Insurance
• Importance of property and liability insurance
• Types of coverage and policies for homes
• Personal property
• Renter’s insurance
• Factors influencing the amount of coverage and cost of home insurance
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• Types of auto insurance coverage
• Factors affecting the cost of auto insurance
Health and Disability Insurance
• Why costs are increasing
• Define health insurance and disability income insurance and their
importance in financial planning
• Benefits and limitations of various types of health care coverage including
long-term healthcare
• HMOs and PPOs
• Private sources of health insurance and health care
• Sources of government health care programs
• When you change employers - COBRA
Life Insurance
• Definition of life insurance, its purpose and principle
• Determination of life insurance needs
• Comparison of policies and types of life insurance companies
• Important provisions in life insurance contracts
• How annuities provide financial security
K. Financial preparation for retirement.
Financial resources needed for specific retirement activities and lifestyles.
The characteristics of retirement plans (e.g., individual, employer-sponsored, Social
Security).
The role of individual responsibility in planning for retirement.
The power of compound interest and the importance of starting early in implementing
a financial plan for retirement.
8. Transportation options
A. Estimate costs of owning and operating a car
B. Purchase a new or used car?
C. Leasing a vehicle
D. Public transportation
9. Housing options
A. Available housing alternatives
B. Costs and benefits associated with renting
C. Home-buying process
D. Costs associated with owning a home
E. Lenders
F. Using a professional realtor
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Resources:
Textbook: Managing Your Personal Finances 5th Edition, Joan S. Ryan, Thomson South-
Western, 2006.
Simulation: On Your Own, A Personal Budgeting Simulation, Mary Queen Donnelly, Thomson
South-Western, 2004.
Software Simulation: Experiencing Financial Literacy, Go Venture, Margaret Williams and
Mathew Georghiou, 2005.
Personal Finance Program: Taking Control of Your Financial Future, Developed for the NY
City Department of Education by the Muriel F. Siebert Foundation, 2003.
Choice, Chance Control: That’s Life, Insurance Education Foundation, 1998. (video and binder
with activities for students)
Insuring Your Future, Next Generation, Life and Health Insurance Foundation for Education
(LIFE). (video, poster, student guides) FAX: 1-800-358-5218
Websites:
www.ny.frb.org The Federal Reserve Bank of NY maintains a Public Information Catalog for
the entire Federal Reserve System and offers numerous publications on money.
www.jumpstartcoalition.org The website includes a listing of over 100 free publications on
financial literacy.
www.ncee.net The National Council on Economic Education is a nonprofit network promoting
economic literacy in youth. Lesson plans and materials are available.
www.bls.gov US Bureau of Labor Statistics supplies information about job markets, earnings,
employment rates, etc.
www.consumerfed.org Consumer Federation of America provides extensive consumer
information including topics relating to financial services.
www.federalreserve.gov Federal Reserve Board provides downloadable informational brochures
on credit, credit cards, credit reports, etc.
www.ftc.gov The complete text of the Fair Credit Reporting Act is on this site.
www.consumerfed.org On this consumer site there are research studies and news articles on
bankruptcy legislation.
www.treas.gov/education/faq/taxes/liability.html Answers questions about paycheck deductions
and tax liability.
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www.irs.gov All federal tax forms and instructions can be downloaded as PDF files. Federal tax
information is also available.
www.irs.gov/app/understandingTaxes/jsp/teacher_home.jsp A website developed by the Internal
Revenue Service for teachers and students. The 36 downloadable lesson plans are correlated to
national and state educational standards.
www.taxfoundation.org This nonprofit research organization has analyzed tax and budget policy
from all levels of government and published its findings.
www.amex.com The American Stock Exchange site features AMEX market news, stock quotes,
and photos.
www.dowjones.com This site includes answers to questions about the Dow.
www.nyse.com The New York Stock Exchange site has stock news as well as educational
information.
www.smgww.org The Stock Market Game. An online educational program that simulates a
real-world stock portfolio for students.
www.ssa.gov The official site of the Social Security Administration. Many pamphlets are
available under Publications. Most information can be downloaded.
www.ftc.gov Federal Trade Commission (FTC) educates consumers about the importance of
personal information privacy.
Suggested Strategies:
Budgeting Simulation – On Your Own, A Personal Budgeting Simulation
Teacher-prepared PowerPoint presentations
Task cards
Vocabulary sheets
Internet search assignments
Role Playing
Stock Market Game (online)
Excel spreadsheets
Information cards (prepared by teacher or students and distributed to class)
Personal Opinion Essays – express feelings about an issue or subject
Crossword Puzzles – review/introduce vocabulary
Student Handout with topics highlighted (teacher prepared) for class notes
Evaluation:
Tests and quizzes
Products of performance: projects, presentations, simulations. portfolios