a workbook for understanding personal finance teacherâ€™s guide

A WORKBOOK FORUNDERSTANDING

PERSONAL FINANCETEACHER’S GUIDE

A project of the

Endorsed by

Chief Financial Officer Florida Department of Financial Services

andCommissioner

Florida Department of Agriculture and Consumer Services

Teacher Guide Acknowledgements

Barbara Tranquila, Miami Killian Senior High School, MiamiPamela M. Brewer, JRE Lee Opportunity Middle School, South Miami

Mary Alexis Galeri, South Miami Senior High School, MiamiCharlie Anderson, G Holmes Braddock Senior High School, Miami

Elaine Silney-Basca, Academy of Finance, MiamiBernardo Montero, Charles R. Drew Middle School, Miami

800.707.4247 ©2006 Florida Council on Economic Education www.fcee.org

Managing Banking Job Consumer Buying an Auto Finding aCash Basics Search Credit Automobile Insurance Place to Live

Advertising • • • •

Benefits/Costs • • • • • • •

Career/Labor • •

Competition • • • • • •

Consumer/Personal Finance • • • • • • •

Demographics • • •

Employment •

Entrepreneurship • •

Law & Ethics • • • • • •

Decision Making • • • • • • •

Technology • •

Monetary Policy • • • •

International •

Fiscal Policy •

Opportunity Cost • • • • • • •

FINANCIAL FREEDOM CONTENT MATRIX

Managing Banking Job Consumer Buying an Auto Finding aCash Basics Search Credit Automobile Insurance Place to Live

Middle School • • • •

Academy of Finance • • • • • • •

Business/Office Education • • • • • • •

Consumer Economics • • • • • • •

Economics • • • • •

Journalism/English • • •

Math/Science • • • •

Social Studies • • •

School to Work • • • • • • •

FINANCIAL FREEDOM CONTENT MATRIX

Section 1.1


Section Focus: Managing cash is always a difficult task. Some individuals are better cash managers than others. Inorder for you to fully enjoy your cash flow, you must be able to manage it well. Ultimately, it comesdown to making wise choices about saving and spending to achieve control of your cash. If financialindependence is your goal, then learn to plan and manage your cash by making smart decisions.Remember, the choices you make today will shape your future.

Vocabulary: Cash Available cash Long-term needs Cash flow Immediate needs Realistic budget Financial independence

Questions for Discussion: 1. What is cash flow? Section 1.2. Amount of money you earn and amount of money you spend.2. What does building financial independence mean to you? Section 1.2. Getting control of your cash.

Taking care of yourself without asking your parents to pay for the things you need.3. List three steps you must carefully take in order to gain control of your cash flow.

Sections 1.2 - 1.12. a. Understanding your long-term cash flow – estimate money you receive and money you spend over one year. b. Tracking your short term spending on a weekly basis. c. Create a cash plan by making a monthly budget of expenses.

4. How does a cash flow estimate help you get control of your cash? Sections 1.3 - 1.4. Helps you to see how you can expect your money to come and go during a whole year.

5. How does a one-week cash flow help you get control of your cash? Sections 1.6 - 1.9. Helps track how you actually spend your money for a week.

6. Why is a monthly budget considered a good tool for getting control of your money? Sections 1.10 - 1.12. Helps individuals move from thinking about money as something that’s only here and nowto thinking about future plans.

7. What is the biggest factor in creating a successful budget? Section 1.11. Expectations of what will happen with savings and expenses.

Section 1: Managing Cash

Suggested Follow-up Activities: 1. Complete section 1.3 by assuming you have just completed your first year of college. Your first year

of college was totally funded through a scholarship (you did not budget your expenses). Unfortunately, your second year of college will not be fully funded. You are determined to continue your education even if it will cost you more. How can you stay at the same learning institution and financially overcome new costs? You will be making important decisions about how to spend your hard earned cash in college. You must find a way to deal with the expenses of tuition, room and board, books, parties, traveling expenses, fraternity/sorority fees, sporting events and recreational activities in your new financial circumstances. In order for you to enjoy financial independence during college, take the first step in understanding your cash flow by estimating your cash flow for one year.

Given: • Tuition, room, board, fees, books, and supplies = $13,000 (public college/university) • Part time job = $150 per week • Scholarship/Grants = $5,000

2. Complete section 1.4 and discuss in small groups. 3. Where does your money go on a weekly basis? Complete sections 1.6 - 1.9 and discuss in

small groups. 4. Complete section 1.12 and discuss in small groups. 5. Ask students to decide what college they would like to attend.

Things to consider in choosing a college: • Major. Is the college known for this major?• Expenses. Can differ dramatically between public/private and in-state/out-of-state.• Location. Distance from home.• Personality. Large classes or smaller, more personalized classes needed.• Greek organizations (fraternity/sorority).• Sports.

Once students have chosen a college, allow them to research it to find out tuition fees, housing costs,food costs, etc. Then visit http://money.cnn.com/pf/college/ and utilize theavailable resource links. Discuss how saving for college needs to be included in their budgets.

Section 1: Managing Cash

Section 1.2


Section Focus: Do you know all the services and products that a bank or credit union offers its customers? This section will help you to understand the basics of banking.

Vocabulary: Balance your account Bouncing a check Certificate of Deposit/CD Checking account register Commercial bank Consumable Credit Union Credit card Deposit Duplicate check FDIC Financial Interest Joint account Minimum balance Money Market account Opening deposit Service charges Signature card Statement savings account Traditional savings account

Questions for Discussion: 1. What does financial freedom or financial independence mean to you? Getting control of your

cash and taking care of yourself without asking your parents to pay for the things you need. 2. Name one way you can get your money to work as hard for you as you did for it. Section 2.2.

Put it in an interest-bearing account, i.e. a traditional savings account, a certificate of deposit, or a money market account.

3. What is the “out-of-sight-out-of-mind” factor? Section 2.2. If you do not see the money or have it in your possession, you are not as likely to spend it.

4. What are some fees a bank or credit union might charge you? Sections 2.2 – 2.4 and 2.10. Monthly maintenance fee for checking and savings accounts, a per-check fee, an ATM fee, check bouncing fee.

5. What compensation will you receive for putting your money in a bank or credit union? Section 2.7. Interest on the money.

Section 2.1


Section 2: Banking Basics

6. What compensation will you receive for putting your money into a certificate of deposit (CD)? Section 2.8. More interest on the money than a regular bank or credit union account.

7. What negatives are involved with CDs? Section 2.8. Must wait a set period of time before withdrawing the money for use or pay a penalty.

8. Which is better for you as a young adult just gaining your financial freedom – a credit card or a debit card? Section 2.11. Debit card prevents running up large bills, getting in credit trouble, usually no fee.

9. At what point is a credit card desirable for you? When accustomed to handling own finances for a year or two successfully.

10. Is it okay to bounce a check? Why? Section 2.10. No. Costs extra money, costs depositor money, inconvenience, black mark against credit.

Suggested Follow-up Activities: 1. Have students go to two local banks and two local credit unions and get the application to open

an account, as well as the literature about the accounts, services, and fees. Put students in groups to share their recommendations. (May also be done via the Internet)

2. Form groups to use the Internet to research interest rates on savings accounts, certificates of deposit, and money market accounts. Try various search engines and enter the following terms: • Savings account interest • Certificate of deposit • Money market account

3. Use this unit as an introduction to personal financial planning. Plan a follow-up unit on additionalfinancial choices available to young people with steady jobs, including: DriPs, 401(k) plans, company stock purchase plans, etc. Invite a retired person or other volunteer with investment knowledge to speak to the class.

4. Introduce students to the rule of 72. 1. Take the amount of money you have (lump sum). 2. Divide interest rate that you are drawing into the number 72. 3. The answer will be how long it will take that money to double. 4. Divide that number into the number of years that you have until you want to use that money (retirement). 5. Double the original amount that many times.

5. Introduce students to the power of compound interest and saving early in life. Go to www.dinkytown.com. Click on ‘Savings’ on the left sidebar for a savings calculator (includes many types of savings calculators).

Section 2: Banking Basics

Section 2.2


Section 3.1


Section Focus: Getting a job is a necessary part of gaining the individual freedom that every teenager wants. This section is a step-by-step plan that will take you through the decision making process about whetheryou are ready to handle the commitment that having a job entails. You will learn what type of job isbest for you and how to conduct a job search, including resume writing and locating potential jobs.This section also offers helpful hints about how to dress and act during the job search, filling out ajob application and appropriate follow-up techniques such as thank you letters.

Vocabulary: Attributes Minimum wage Disposable income Net income Entrepreneur Reference Gross income Resume Internship Retail Marketing Social Security tax Medicare tax Withholding tax

Questions for Discussion: 1. What are the advantages of getting a job at your age? Sections 3.4 -3.6. Possible answers include:

earning money to spend, saving for college, helping parents with household responsibilities, learning to balance responsibilities, learning to handle money, being exposed to the business world and career opportunities.

2. What are the disadvantages of getting a job at your age? Sections 3.4 - 3.6. Possible answers include: not enough time to study, less time with family and friends, having to choose between extra-curricular activities and working, not getting enough sleep.

3. How can you benefit from volunteering? Section 3.3. Possible answers include: easier to get an unpaid position than a paid position, on-the-job experience, networking with influential people, may become paid position, learning about different career opportunities.

4. What is an entrepreneur? Sections 3.8 - 3.9. A person who creates his/her own business.5. Name and explain some advantages of being an entrepreneur. Sections 3.8 - 3.9. More independence,

make own decisions, profit potential.

Section 3: Job Search

6. Name and explain some disadvantages of being an entrepreneur. Sections 3.8 -3.9. Have all the responsibilities, may be difficult to start, may fail, income is not assured. You may choose to have students create a table comparing advantages and disadvantages from #5 and #6.

7. Discuss the job search process. Sections 3.10 - 3.23. Answers may include making a list of places to look for job openings, keeping application information handy (address, social security number, names and addresses of references, past work experience), dressing appropriately, making contact with employers, preparing a resume, following up after interviews.

8. Why is it important to dress appropriately for job interviews? Section 3.15. It shows that you are capable of dressing professionally and that you are concerned about making the right impression.

9. What is a resume? Sections 3.16 - 3.21. A concise document given to a potential employer. 10. What types of information do you need to include on your resume? Sections 3.16 - 3.21. Include

your name, address, education, work experience, work goals, and any other pertinent information such as awards.

11. Why is it important to follow-up on job applications and interviews? Sections 3.21 - 3.22. Shows that you are really interested in the job. Demonstrates good manners. Keeps you fresh in the employer’s mind. You may do this by sending short thank you notes, calling, or stopping by.

Suggested Follow-up Activities: 1. Discuss with students how basic economic concepts such as tradeoffs and opportunity costs relate

to this section. Have students list the opportunity benefits and opportunity costs of choosing to work. Share and discuss.

2. Have students work in cooperative learning groups to brainstorm where to find a job. In addition to jobs they have seen advertised, tell them to think about the people they know who might provide a lead. Introduce the concept of networking. After the ideas are shared and discussed with the class, have the same small groups of students brainstorm entrepreneurial opportunities for teenagers. Share and discuss.

3. Conduct mock job interviews in class. Students to be interviewed should “dress the part.” Help the remaining students with potential questions and instruct them in what to look for when watching the interview. (http://interview.monster.com/ and http://www.quintcareers.com/sample_behavioral.html have interviewing and hiring tips.) After the interviews, have students critique the interviewees and vote on who would get the job.

4. Ask students (for extra credit) to volunteer at a homeless shelter, hospital, nursing home, or other organization. Have them share their experiences with the other students.

5. Discuss the traits of an entrepreneur with your students. (Self-awareness, self-motivation, courage, confidence, patience, decisiveness, experience, knowledge, perseverance, drive) Students may visit one or both of the following web sites to take entrepreneurial quizzes: http://www.2h.com http://www.realm.net/wayofthinking/quizzes/q2.cfm

Section 3: Job Search

Section 3.2


Section 4.1


Section Focus: The lure of a credit card is difficult to resist. It’s easy. It’s cool. It’s a step towards adulthood. Creditcan be a wonderful tool. However, if used unwisely, it can wreak havoc on your future. In this section, you will learn the basics of credit use.

Vocabulary: Annual percentage rate (APR) Available credit Bank credit card Co-signer Credit reporting agency Credit limit Credit rating Default Deferred payment price Delinquent account Finance charge Installment Principal Repossession Title Truth in Lending law

Questions for Discussion: 1. What are the advantages of having a credit card? Section 4.1. Do not need to carry cash, liable only

to certain amount, may dispute charges, ready line of credit for emergencies.2. What are the disadvantages of having a credit card? Section 4.10. Must pay interest, annual fees

often apply, late charges, may encourage spending beyond one’s ability to repay.3. What must you have/do before a creditor will lend you money? Sections 4.6 - 4.7. Permanent

address, steady employment, maintain a savings and checking account, pay bills on time, good credit history, be 18 or older.

4. What are common sources for loans? Section 4.8. Commercial banks, credit unions, sales financing companies.

5. If there is a fee of $24 to open a credit card account and an Annual Percentage Rate (APR) of 18%, what is the monthly fee for a $100 purchase 30 days past billing due date? Pro-rate the card fee to $2 a month. 18% interest on $100 for 12 months is $18. Cost for borrowing $100 for one month is $1.50. Add to that the prorated fee of $2. The total is $3.50 for a 30-day use of the money.

6. How is the minimum payment for a credit card determined? Section 4.13 It is a percentage of the total balance set by the credit card company.

Section 4: Consumer Credit (and Debit!)

7. How many years does it take for the owner of the Credit is U card to pay it off making only the minimum payments? Section 4.19 207 months - over 17 years

8. What do you think would happen if the owner of the Credit is U card paid more than the minimum amount each month? Section 4.24 The loan would be paid off more quickly and with less interest charged.

9. How many months would it take to pay off the loan if the holder of the Credit is U card paid $50 a month? Section 4.24 (Use http://www.cardratings.com/crfeditcardtrapcalc.htm)

10.Why is it important to have a correct credit history? Section 4.15. Errors may prevent someone from getting credit.

11.Where can you locate free credit reports? Section 4.15. Experian Information Services at 1-800-392-1122 (www.experian.com), Equifax at 1-800-685-1111 (www.equifax.com), Trans Union at 1-800-916-8800 (www.transunion.com). By law, you may now get a free credit report at www.annualcreditreport.com

12. When is credit a good investment? Section 4.29 When you use it to purchase an asset - something of enduring value.

13. What are some things that you might use credit for in the years to come? Section 4.29 Car, engagement ring, house, loan to start a business, tuition…

Suggested Follow-up Activities: 1. Divide the class into small groups. Ask each group to create a T-chart comparing necessary items

that require credit to purchase and nonessential items that may be delayed until money is available. Discuss with students.

2. Have students revisit the personal monthly budget they created in an earlier activity. Ask them to identify purchases that may justify use of credit. Discuss.

3. Divide class into groups. Ask half of the groups to create a commercial for a credit card company. Ask the other half of the groups to create a Public Service Announcement warning of the dangers of unwise credit use. Have students perform for each other.

4. Invite a guest speaker to visit the classroom and discuss bankruptcy with the students, as this is often the consequence of unwise credit use.

5. Create a classroom credit card for each student. As students go through their week, ask them to itemize on the back of the ‘card’ purchases that they would have made on a credit card. At the end of the week, discuss the results with students. Ask them: Are you able to pay off this debt? What would be the interest charges? Was it easy to spend this ‘money’?

6. Ask students if they know what ATM or debit cards are. Ask: What is the difference between a credit card and a debit card? Explain to students that there are two types of debit cards. One is called an on-line card. This is an immediate transfer of money from your bank account to the merchant’s bank account. It requires a PIN number. The other type of debit card is an off-line card. These cards create a debit against your account and process usually within 2-3 days. This does not require a PIN number, but you must sign a receipt as with a credit card. Have students create a


Section 4.2


Venn diagram comparing and contrasting credit cards and debit cards. Credit card – is really a loan, charges interest, make payments (potential for late payments), receive statement, some offer product protection. Debit card – comes directly from account, no interest, requires PIN number, easier to get than credit card, no grace period, must record spending. Both – safer than carrying cash, widely accepted, easier than writing checks, limited liability ($50 if reported within 2 days)

Visit www.cardweb.com or www.natlconsumersleague.org for more detailed information and resources.

7. Ask students to calculate minimum payments on different amounts of debt with different rates of interest. Make sure that students understand that these payoffs are only if the credit card is not used to charge anything else. (Use http://www.cardratings.com/crfeditcardtrapcalc.htm).

8. Have students create a T-chart listing the pros and cons of credit use. 9. Ask students to visit http://www.financial-education-icfe.org/ to learn more about credit cards

and their proper use.


Section 4.3


Section 5.1


Section Focus: You are a young adult who wants to take on more responsibilities. You have dreamt of moving out ofyour parents’ home. You love the idea of being your own boss and making your own decisions andchoices. Having a car of your own is your first major step towards independence. How do you goabout achieving this goal?

Vocabulary: As is Blue Book Dealer prep Demo Depreciation Express warranty Factory invoice Full warranty Limited warranty List price Odometer Options Service contract

Questions for Discussion: 1. What are the expenses of buying and maintaining a car? Sections 5.10 and 5.14. Cost of car itself,

insurance, gas, repairs, finance costs. This discussion leads into #2. 2. New or used? Section 5.5. Create a T-chart and list advantages and disadvantages of each.3. What are some sources of cars? Section 5.7. Friends, neighbors, new and used car dealers, auctions,

the Internet, newspaper ads. 4. What other costs may be incurred with a car? Section 5.14. Parking fees, toll fees, cleaning supplies,

decals, license tag fees. 5. How do you get a car warranty? Sections 5.4 - 5.7. Most dealerships, new or used, will offer some

sort of warranty on their cars. If purchasing from an individual, the car is usually sold “as is” – no warranty unless covered by the manufacturer’s warranty or service contract.

6. If purchasing from an individual or a used car dealership, should you have a trusted mechanic check the car first? Section 5.8. Yes. A reputable mechanic can tell you of any problems that are present or may soon be present in the car. You may use this information when negotiating the final price. You may also go to www.carfax.com and/or http://auto.consumerguide.com/ to get a history of the car you are purchasing. You must have the VIN (Vehicle Identification Number) to access these records.

Section 5: Automobiles

6. What about financing? Section 5.11. Interest rates on new cars are usually lower than those offered on used cars. However, because the cost of a new car is so much higher, it may be better for a young person to finance a used car.

7. How much is minimum down payment? Sections 5.6 and 5.12. This depends on the cost of the car, from where it is being purchased, and where it is being financed.

8. Can I finance a car on my own? Section 5.12. People under the age of 18 cannot legally enter into a contract without permission of parent or guardian. Therefore, if you need to finance the car, you will need a co-signer.

Suggested Follow-up Activities: 1. Play the Strive to Drive simulation provided to Florida teachers FREE of charge by the Florida

Council on Economic Education. Visit www.fcee.org or call 800.707.4247 to order the program. 2. Have students revisit their budget. Looking at their income and expenses, have them decide how

much they believe they could pay per month in car payments. Students may go on line to www.eloan.com and refer to How much will my vehicle payments be?, Which is better: a new or used vehicle?, or What vehicle can I afford? to assist with this assignment.

3. Contact a local bank or credit union. Have a loan representative come and speak to students about different options.

Section 5: Automobiles

Section 5.2


Section 6.1


Section Focus: Do you know what D.I.C.E. is? It makes up the four parts of an automobile insurance policy.

D – Declaration sheet. Gives information on the insured driver(s) and what is covered. I – Insuring agreement. What the policy will do for you. C – Conditions. What you must do as a policyholder. E – Exclusion. What the policy will not cover.

This chapter will tell you what insurance you need and what to do if you are involved in an accident.

Vocabulary: Appraisal Bodily Injury Liability insurance Comprehensive coverage Deductible No-fault insurance Premium Total loss Coverage Uninsured Motorist coverage Filing a claim Property Damage Liability insurance Collision insurance PIP (Personal Injury Protection) Full coverage

Questions for Discussion: 1. What kind of automobile insurance coverage is available? Section 6.4.

A. Collision – This is a first party coverage meaning it will only pay for damage to your car if it collides with another car or object.

B. Comprehensive Physical Damage – This covers damage to your car for things other than collision with another car or object. For example: theft of auto, fire damage, vandalism, windshield breakage, riot, windstorm, hail. This is also a first party coverage.

C. Property Damage Liability – If you are at fault in an accident, this will pay up to the limits purchased for property damage you cause to another person's car or property. Florida requires that you carry at least $10,000 of this coverage. This is third party coverage because it pays damages to another person.

Section 6: Automobile Insurance

D. Bodily Injury Liability – This pays damages to those you injure or kill in an accident when you are at fault. It also covers legal defense if the injured party sues you. This is third party coverage.

E. Uninsured Motorist Protection – Many motorists carry only the minimum insurance required by law in their state. People who don’t have enough insurance, hit and run, or those with no insurance are considered uninsured motorists. If you have this coverage, you can collect from your own company for injury or death claims.

F. Medical Payments – This covers you and others for medical bills related to the accident. G. Personal Injury Protection/No-Fault Insurance – PIP/No-Fault is coverage that will

compensate you for a loss due to bodily injury or death, regardless of who is charged with causing an accident. PIP applies to you, relatives who live in your home, passengers in your car who are not required to have PIP, as well as licensed drivers who do not have PIP and drive your vehicle with your permission. PIP insurance also protects you if you are injured as a pedestrian or bicyclist as long as the injury is caused by an accident involving a motor vehicle. Failure to carry the proper insurance can result in your license being suspended for up to three years and fines up to $500. Go to http://www.hsmv.state.fl.us/ddl/frfaqgen.html for Florida specific information.

2. How much coverage should I buy? Section 6.5. This depends upon your lender and other considerations such as whether or not you are a property owner who might be sued. Discuss this with your insurance agent. Make sure to speak to several different insurance companies before purchasing your insurance.

3. How much does automobile insurance cost? This depends on many things. An insurance company will consider: Your age - teenage drivers statistically are involved in more accidents and receive more violations than other age groups.Your driving record - previous violations or accidents make you a higher risk.Your gender - teenage boys have a higher incident of accidents and violations than teenage girls.Your address - this relates to possible vandalism to your car.How vehicle is used - for recreation… for deliveries?Marital status - married people are considered to be more responsible and less likely to have accidents or violation tickets.Year and make of the vehicle - a newer more expensive car will cost more to repair than anolder model. It may also attract thieves.Student conduct - good school conduct has been directly related to safe driving.Driving training certificates – many companies offer discounts if you have completed a drivers’ education course.Multiple car discounts – your parents may be able to get insurance for you more cheaply if they already have cars insured by the company. Go to www.allstate.com/tools/covguide to calculate coverage.


Section 6.2


4. What should I do if I am involved in an accident? Section 6.9. • Do not leave the scene of the accident. • Get help for the injured by calling 911. Do not try to move an injured person. • Call the police and fill out a police report. They may ask for your driver’s license and your

insurance card. • Write down information on other drivers including name, address, phone number, insurance

company, and insurance policy number. • Write down information from witnesses including names, addresses and phone numbers. • Call your insurance agent as soon as possible to report the accident. • See a doctor if you are injured. • Record the specifics of the accident such as time, date, location, and how it happened.

5. What is a DUI? Section 6.10. Driving Under the Influence. This means your driving, judgment, and reactions may be impaired. In Florida, a Blood Alcohol Content (BAC) of 0.08 is considered impaired. A BAC of over .20 will incur even higher fines and possible prison sentence. To calculate the number of drinks it takes a person your weight and gender to become impaired, go to:http://www.ou.edu/oupd/bac.htm.

6. What is the Florida Point System? Section 6.11. This system assigns points for certain kinds of traffic violations.

12 points within a 12-month period results in 30-day suspension of license. For a complete listing of the Florida Traffic Violation Point System, go to www.floridadrivers.com.

Suggested Follow-up Activities: 1. Ask students to call an insurance company or go to an insurance company’s web site to get a quote

for their dream car. 2. Ask a police officer to speak to students about driving safety.


Section 6.3


Section 7.1


Section Focus: At some point in your life, you will find your own place to live. This section will guide and introduceyou to the responsibilities and rewards of living on your own.

Vocabulary: Eviction Forfeiture Lease Landlord-Tenant Act Security deposit Sublease

Questions for Discussion: 1. How or where would one look to find a place to live? Section 7.6.

a. References from friends and relatives b. Newspaper classified ads c. Real estate agent d. Bulletin board at school or work e. Billboards

2. What features are important to you when finding a place to live? Section 7.5. a. Number of bedrooms b. Size c. Physical condition d. Distance from school e. Distance from work f. Distance from shopping g. Available transportation h. Furnishings i. Pool, exercise room, etc. j. Terms of lease k. Cost l. Neighbors m. Parking n. Safety o. Neighborhood

Section 7: Finding a Place to Live

3. What factors should you know about a lease? Section 7.9. a. Date you can move in b. Length of lease c. Renewal of lease d. Amount of rental payment e. Security deposit f. Date payment is due g. Late fees h. How paid i. What rent includes j. Pets allowed? k. Children allowed? l. Rent increases m. Regulations regarding changes n. Subletting rules o. Landlord obligations

4. What are some factors that should be checked before renting the property? Section 7.10. a. Laundry facilities b. Garbage services c. Maintenance d. Kitchen appliances working? e. Plumbing in good repair? f. Air conditioning and heating working? g. Walls and ceilings in good condition? h. Sound proofing i. Storage/closet space j. Parking k. Security l. Windows and locks m. Floor and carpet condition n. Fire extinguisherFor a more complete Apartment Inspection Checklist visit:www.springstreet.com/apartments/home.jhtml

5. When is it permissible, by law, for the landlord to enter your rental unit? Section 7.11. a. With the tenants’ permission b. In case of an emergency c. If consent has been unreasonably withheld d. If the legal presumption of abandonment has occurred


Section 7.2


6. What are some rental pitfalls and missteps? Section 7.12. a. Do not rent without signing a lease b. Always read the small print c. Be wary of signing a lease with ‘waiver provisions’ that would allow your landlord to evict you

before your lease is finished d. Do not sign a lease that makes you responsible for repairs and maintenance to the apartment e. Know if there is a cancellation clause in the lease that would allow the owner to sell the

property you are leasing and cancel your lease

Suggested Follow-up Activities: 1. Using the information from the preceding chapters and the information they have obtained from

this chapter, the students are to find a place to live that is within their means. By now, the students should have a portfolio containing all the information they would need to have in order to begin searching for a place to live.

2. Have students list pros and cons of having a roommate. Then, allow students to create a list of questions to ask a potential roommate. Possible answers: Pros: share rent costs, share utility costs, share food costs, companionship, security Cons: conflicts from difference in lifestyles, cleanliness issues, pets, money issues Possible questions: Who will actually pay the rent? How much will each person pay? Who gets what room? Who does the cleaning of common spaces? Okay to have overnight guests? What are acceptable noise levels? Smoking or nonsmoking? Go to www.springstreet.com/apartments/homeand click on Roommate Center for more suggestions.

3. Ask students to brainstorm a list of all the costs that would be associated with moving from their parents’ home to their own apartment. Be sure they include moving costs, furniture, cleaning supplies, etc.


Section 7.3


If you have any questions concerning Financial Freedom, please contact:

Florida Council on Economic Education1211 N. West Shore Blvd., Suite 305, Tampa, FL 33607

Phone: 813.289.8489 800.707.4247 FAX: 813.286.7090 E-mail: [email protected], visit us at: www.fcee.org

a workbook for understanding personal finance teacherâ€™s guide

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