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© Take Charge Today – August 2013 – Choose to Save Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona

RECOMMENDED GRADE

LEVELS AVERAGE TIME TO COMPLETE

EACH LESSON PLAN IS DESIGNED AND CONTINUALLY

EVALUATED “BY EDUCATORS, FOR EDUCATORS.” THANK YOU

TO THE FOLLOWING EDUCATORS FOR DEVELOPING

COMPONENTS OF THIS LESSON PLAN.

10‐12

Anticipatory Set & Facilitation: 105 minutes

Conclusion/Assessment Options: 20‐60 minutes

Time does not include the vocabulary activity or potential modifications.

Tracey Newman, Family and Consumer Sciences Educator, Ste. Genevieve, Missouri

Margie Chinadle, Family and Consumer Sciences Educator, Rudyard, Montana

NATIONAL STANDARDS LESSON PLAN OBJECTIVES

The curriculum is aligned to the following national standards: National Standards for Financial Literacy American Association of Family and Consumer

Sciences Council for Economic Education National Business Education National Jump$tart Coalition Common Core English Language Arts

Upon completion of this lesson, participants will be able to: Evaluate the importance of saving money Assess the importance of developing financial goals

when saving money Analyze the trade‐offs and opportunity costs when

saving money Implement the pay yourself first strategy Summarize the time value of money concept Identify the benefits of compounding interest on

savings

MATERIALS

MATERIALS PROVIDED IN THIS LESSON PLAN

MATERIALS SPECIFIC TO THIS LESSON PLAN

BUT AVAILABLE AS A SEPARATE DOWNLOAD

MATERIALS TO ACQUIRE SEPARATELY

DEPENDING ON OPTIONS TAUGHT

My Savings Quest 2.4.1.A1

Take a Chance Tracking 2.4.1.A2

Choose to Save reinforcement worksheet 2.4.1.A3

To Save or Not To Save Essay Rubric 2.4.1.B1

Choose to Save Vocabulary List 2.4.1.E1

The Roommates: Saving Script 2.4.1.E3

Choose to Save Information Sheet 2.4.1.F1

Take a Chance Cards 2.4.1.H1

Choose to Save Note Taking Guide 2.4.1.L1

Choose to Save Answer Key 2.4.1.C1

The Roommates: Saving Prezi Presentation 2.4.1.E2

Choose to Save PowerPoint presentation 2.4.1.G1

Saving and Investing Unit Multiple Choice Test Bank & Answer Key 2.4.0.M1 & C1

Bingo markers (could be beans, buttons, glass rocks, etc.)

Children’s books about saving

Large bag of Jelly Beans (or other candies or markers) with a minimum of six colors

Clear containers (Ziploc sacks, clear bowl, graduated cylinder, clear piggy bank, etc.)

CHOOSE TO SAVE Advanced Level

www.takechargetoday.arizona.edu

http://takechargetoday.arizona.edu/about-fefe/master-educator/margie-chinadle

http://takechargetoday.arizona.edu/about-fefe/master-educator/tracey-newman

https://takechargetoday.arizona.edu/curriculum/standards

http://takechargetoday.arizona.edu/lessonplans/choose-save

http://takechargetoday.arizona.edu/lessonplans/advanced-level-course-test-banks


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RESOURCES

EXTERNAL RESOURCES

External resources referenced in this lesson plan: Consumer Jungle: www.consumerjungle.org

Saving Money in Plain English: www.commoncraft.com/video/saving‐money‐compound‐interest

TAKE CHARGE TODAY RESOURCES

Similar lesson plan at a different level: The Secrets of Saving 1.4.1

Optional lesson plan resources: Bingo Active Learning Tool 3.0.16 Children’s Book Integration Active Learning Tool

3.0.35 Penny Power Active Learning Tool 3.0.2 A Little Goes a Long Way Visual Aid 4.4.1 Time Value of Money Magic! Active Learning Tool

3.0.25 Time Value of Money Math Lesson Plan 2.4.2

CONTENT

EDUCATOR MATERIALS PARTICIPANT READING

Materials to support educators when preparing to teach this lesson plan are available on the Take Charge Today website.

Choose to Save Information Sheet 2.4.1.F1

OPTIONAL ADVANCE INSTRUCTION

This lesson is designed to be taught as a stand‐alone lesson. However, background content knowledge from the following lesson plans is directly related to this lesson and may be helpful for participants.

Setting Financial Goals 2.1.4 Financial Decisions 2.1.3 Statement of Financial Position 2.2.3 Income and Expense Statement 2.2.4 Spending Plan 2.2.5 Getting Paid 2.3.9

LESSON FACILITATION

PREPARE

Visual indicators to help prepare the lesson INSTRUCT

Instructions to conduct the lesson facilitation CUSTOMIZE

Potential modifications to lesson facilitation

VOCABULARY ACTIVITY Activity that may be conducted before, during and/or after instruction depending upon the activity and needs of participants.

Bingo

Approximate time: 20 minutes prior to instruction and 20 minutes at the end Materials to prepare for vocabulary activity:

Bingo Active Learning Tool 3.0.16 o 1 Bingo‐ Side One and 1 Bingo‐ Side Two 3.0.16.H1 printed front to

back per person

12 bingo markers (could be beans, buttons, glass rocks, etc.) per person

Choose to Save Vocabulary List 2.4.1.E1

http://takechargetoday.arizona.edu/lessonplans/secrets-saving

http://takechargetoday.arizona.edu/lessonplans/bingo

http://takechargetoday.arizona.edu/lessonplans/childrens-book-integration

https://takechargetoday.arizona.edu/lessonplans/penny-power

http://takechargetoday.arizona.edu/lessonplans/little-goes-long-way-poster

http://takechargetoday.arizona.edu/lessonplans/time-value-money-magic

http://takechargetoday.arizona.edu/lessonplans/time-value-money-math

http://takechargetoday.arizona.edu/lessonplans/setting-financial-goals

http://takechargetoday.arizona.edu/lessonplans/financial-decisions

http://takechargetoday.arizona.edu/lessonplans/statement-financial-position

http://takechargetoday.arizona.edu/lessonplans/income-and-expense-statement

http://takechargetoday.arizona.edu/lessonplans/spending-plans

http://takechargetoday.arizona.edu/lessonplans/getting-paid


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1 Choose to Save Information Sheet 2.4.1.F1 per participant

1. Conduct the Bingo activity – side one, definitions. Directions are included in the Bingo Active Learning Tool 3.0.16.

o The object of Bingo is for a player to have a row, column or clear their bingo board as a result of matching vocabulary words throughout the activity.

ANTICIPATORY SET OPTIONS There are two anticipatory set options provided for this lesson. 1. Option 1: Children’s Book Integration 2. Option 2: Penny Power

Option 1: Children’s Book Integration Approximate time: 30 minutes (depending on the number of groups) Materials to prepare: Children’s Book Integration Active Learning Tool 3.0.35

o 1 Money Stories 3.0.35.A2 per participant 1 children’s book about saving per 3‐4 participants. Examples include:

o The Tale of the Tortoise Buffett by Lucas Remmerswaal – Participants learn about the role money plays in life including making your money work for you.

o If You Made a Million by David Schwartz – Participants learn about spending, saving, interest, borrowing, and lending.

o One Grain of Rice by Demi – Participants learn about the time value of money.

o A list of additional savings books is available in the Children’s Book Integration Active Learning Tool 3.0.35

1. Divide participants into groups of 3‐4. 2. Complete the Option 2: Graphic Organizer activity as described in the

Children’s Book Integration Active Learning Tool 3.0.35.

Option 2: Penny Power Approximate time: 15 minutes Materials to prepare:

Penny Power Active Learning Tool 3.0.2 o Penny Power PowerPoint presentation 3.0.2.G1

1. Conduct the Penny Power demonstration as instructed.

a. Penny Power introduces the concept of compounding interest by showing the power a penny can have if doubled every day.

Increase the number of terms available by using vocabulary lists from topics that supplement this lesson including goal setting, financial decisions, income and expense statement, etc.

If time is limited, choose one children’s book and conduct a class discussion. Tips are provided in the Children’s Book Integration Active Learning Tool 3.0.35.






https://takechargetoday.arizona.edu/lessonplans/penny-power

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RECOMMENDED FACILITATION

PowerPoint Presentation Approximate time: 75 minutes Materials to prepare: Choose to Save PowerPoint presentation 2.4.1.G1 1 My Savings Quest 2.4.1.A1 per participant Time Value of Money Magic! Active Learning Tool 3.0.25

o Large bag of Jelly Beans (or other candies or markers) with a minimum of six colors

o 2 clear containers (Ziploc sacks, clear bowl, graduated cylinder, clear piggy bank, etc.)

o Time Value of Money Magic PowerPoint presentation 3.0.25.G1 Present the Choose to Save PowerPoint presentation 2.4.1.G1. Split participants into groups of two to three. Participants will work in small groups to discuss prompts as presented in the PowerPoint. Part 1: What is Saving? 1. Slide 1: Choose to Save 2. Slide 2: What is Saving?

a. Saving is an essential part of a financial plan. 3. Slide 3: Why Save?

a. Without savings, a household may not have the money to pay for an unanticipated expense, regardless of their income.

b. Saving may be used for short‐term goals for expenses that aren’t typically a part of a spending plan such as a vacation or new furniture.

c. In groups, brainstorm examples of emergency expenses. Examples include:

i. Automobile repair ii. Medical emergency

4. Slide 4: Saving Reduces Financial Risk and Uncertainty a. Remind participants of the curriculum principle, investing helps you

cope with risk and uncertainty. By having saving, individuals reduce their financial risk.

b. In groups, brainstorm examples of monetary assets they might have. Answers may include:

i. Cash ii. Saving account

iii. Checking account 5. Slide 5: How Much Money Should Be Saved?

a. Six months of expenses is recommended to provide financial security or for loss of income. However, the exact amount varies for each individual.

b. This is accomplished by saving 10‐20% of net income each time money is received.

6. Slide 6: Saving on an Income and Expense Statement a. On an income and expense statement, saving is both an expense

(when an individual saves) and a form of unearned income when an individual uses money saved to pay for an expense.

The Choose to Save Note Taking Guide 2.4.1.L1 is provided but not included as part of the recommended facilitation instructions or approximate time.

Show the “Saving Money in Plain English” clip from the Common Craft website to explain the concept of compounding interest.

Give each group a white board to document their discussion.





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7. Slide 7: My Saving Quest Part 1 a. Provide each participant with My Saving Quest 2.4.1.A1. This

worksheet will be completed individually throughout the lesson. b. Instruct participants to brainstorm three items of monetary value

that would be on their wish list. c. Have particpants estimate how much each item would cost to

purchase. d. Ask participants if they have enough money today to purchase all of

the items on their list. Typically, individuals do not and must prioritize what they would like to save for.

e. Ask participants to place a star next to the item they would like to start saving for today.

Part 2: How to Save Money 8. Slide 8: Identifying Money to Save

a. Reducing or eliminating large, monthly expenses result in greater saving. However, these expenses are often contractual which makes them harder to change and is why individuals should carefully evaluate the short and long‐term implications of signing any contract.

b. In groups, brainstorm ways to reduce spending. Examples include: i. Cancel/reduce television

ii. Use public internet rather than paying for it at home iii. Eat out less iv. Purchase in bulk v. Walk, ride a bike or use public transportation

vi. Don’t make impulse purchases 9. Slide 9: Identifying Money to Save

a. Sometimes, decreasing expense is not a realistic option. In this case, individuals should explore ways they can increase their income.

b. Another way to reduce expenses is by doing things yourself rather than paying for a service. However, an individual must consider if they have the time and skills required to complete do it yourself tasks.

c. In groups, brainstorm what they can do themselves to save money. Examples include:

i. Eat at home and/or cook rather than purchase convenience foods

ii. Do your own transportation and housing maintenance and repairs

iii. Do your own cleaning 10. Slide 10: Create a Savings Plan

a. Saving is achieved by setting financial goals. Goals help you to identify a reason for saving.

b. There are many resources, including tablet applications, to help individuals set and track goals including:

i. Websites ‐ Piggy Mojo and Stickk ii. Spending plan programs –Mint

iii. Programs offered by depository institutions 11. Slide 11: Make Sure Your Goal is Realistic

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a. If goals are not realistic, they will not be achieved. b. Ask participants to think about what they would give up to receive

the item on their wish list. This is a trade‐off. c. Then, ask participants to think about the value of the item they are

giving up. This is their opportunity cost. d. Opportunity cost helps an individual analyze what matters to them

most in order to decide what trade‐offs to make. e. Ask participants to discuss, in groups, why saving can be difficult.

i. Saving requires that individuals give something up in the present to have money for the future.

ii. For saving goals to be realistic and attainable, an individual must carefully consider the trade‐offs and opportunity cost of what they are giving up in the present.

12. Slide 12: My Saving Quest Part 2 a. Have participants refer back to their My Saving Quest 2.4.1.A1. b. Have participants think about their current individual income and

spending. Instruct them to identify at least three ways they could either increase their income or reduce their expenses today.

c. For each change, have participants identify one trade‐off they will be making.

d. Have participants place a star next to items with a realistic opportunity cost.

Part 3: Making Saving Automatic 13. Slide 13: Pay Yourself First

a. Emphasize that the savings choices they make today will impact their future.

b. The most effective way to pay yourself first is to make the process automatic by using tools such as automatic depository institution transfers or payroll deductions

Part 4: Time Value of Money 14. Slide 14: Saved Money Provides for Your Future Self

a. Money saved can increase in value because of the time value of money. The potential to earn interest.

15. Slide 15 and 16: What is Interest? a. Interest can be paid (such as credit) or earned (such as saving). b. Individuals should save money in a depository institution account that

earns the highest interest rate possible while still being low risk and liquid.

c. Compounding interest is what makes the time value of money work. d. An additional $225 in interest is earned when saving $1000 at a 5%

interest rate rather than a 1% interest rate for five years. 16. Slide 17: How does Time Affect the Time Value of Money?

a. Stress that the longer an individual saves money for, the more time money has to increase in value because of compounding interest.

b. Point out how much more Savannah’s parents had to save ($350/month) to reach the same savings goal.

c. Felix’s parents earned $8,856 in interest and Savannah’s parents only

Use the A Little Goes a Long Way Visual Aid 4.4.1 to illustrate the Time Value of Money.

If a further math emphasis is desired, complete the Time Value of Money Math Lesson Plan 2.4.2 at this point in instruction. This lesson focuses on the math and calculations of simple and compounding interest.

http://takechargetoday.arizona.edu/lessonplans/little-goes-long-way-poster

http://takechargetoday.arizona.edu/lessonplans/time-value-money-math

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earned $2,676 in interest because they started later. 17. Slide 18: How does Money Affect the Time Value of Money?

a. Individuals should continue adding to their principal through ongoing saving to maximize the interest being earned.

18. Slide 19: Time Value of Money Magic a. Complete the Time Value of Money Magic! Active Learning Tool

3.0.25 as a visual demonstration that corresponds with the Time Value of Money Magic slide. The demonstration utilizes colored jelly beans to show how compounding interest works.

19. Slide 20: Maximize Your Return a. Discuss how participants can use time, money, and interest rates to

take full advantage of the time value of money and maximize their return.

20. Slide 21: My Saving Quest Part 3 a. Have participants refer back to their My Saving Quest 2.4.1.A1. b. Based upon their assessment of changes they can make to increase

income or decrease expenses and how realistic these changes are, have participants identify how much they could realistically save each week.

c. Have participants write a financial goal to make their saving plan actionable.

d. Ask participants to also identify one way they will make their saving process automatic.

21. Slide 22: Savings is an Essential Component of a Financial Plan

CONCLUSION OPTIONS There are two conclusion options provided for this lesson. 1. Option 1: Bingo 2. Option 2: Take a Chance

Option 1: Bingo Approximate time: 20 minutes Materials to prepare:

Bingo Active Learning Tool 3.0.16

1 Bingo‐ Side One and 1 Bingo‐ Side Two 3.0.16.H1 printed front to back per person (found in the Bingo Active Learning Tool 3.0.16)

12 bingo markers (could be beans, buttons, glass rocks, etc.) per person

Plastic bag or bowl

Choose to Save Vocabulary List 2.4.1.E1 1. Conduct the Bingo activity – side two, using the word. Directions are included

in the Bingo Active Learning Tool 3.0.16.

Option 2: Take a Chance Approximate time: 45 minutes Materials to prepare: 1 Take a Chance Tracking 2.4.1.A2 per participant Take a Chance Cards 2.4.1.H1 – 1 card per participant 1. Provide each participant with a Take a Chance Tracking 2.4.1.A2.

The graph in the PowerPoint can be used as a standalone demonstration if time and supplies do not allow for the completion of the jelly bean demonstration.

Use the Consumer Jungle website to access a variety of online games about saving.


http://consumerjungle.org/

http://consumerjungle.org/game_link



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2. Part 1: My Income by indicating that they work at Indulgence Bakery and this is their paycheck stub. Their challenge in this activity is to analyze their spending and saving habits.

a. Have them record their paycheck information in the actual column on the income and expense statement.

3. Part 2: My Spending. a. Point out that column one in their income and expense statement is

their spending plan. b. Have them complete the income and expense statement as

instructed. Have participants color code similar categories to simplify calculations when determining the total expenditure for each category.

c. Have participants reflect on their spending habits and analyze the tradeoff’s to changes they would make if they wanted to start saving for a financial goal by completing the reflection questions.

4. Part 3: Take a Chance a. Let participants know that it is the end of the month and an

unexpected event has occurred. Distribute one Take a Chance Cards 2.4.1.H1 to each participant and have them record their event.

5. Part 4: Reflection a. Instruct participants to complete the Part 4: Reflection Questions to

determine how they would have paid for that expense considering their current Income and Expense Statement.

6. Discuss the reflection questions as a class.

ASSESSMENT OPTIONS There are three assessment options provided for this lesson. 1. Option 1: Reinforcement Worksheet 2. Option 2: To Save or Not to Save 3. Option 3: Elementary Education

Option 1: Reinforcement Worksheet Approximate time: 20 minutes Materials to prepare: 1 Choose to Save 2.4.1.A3 per participant 1. Complete the Choose to Save 2.4.1.A3 reinforcement worksheet.

Option 2: To Save or Not to Save Approximate time: 30 minutes Materials to prepare: The Roommates: Saving Prezi Presentation 2.4.1.E2 1 To Save or Not Save Rubric 2.4.1.B1 per participant 1. Share the story of Hannah and Morgan using The Roommates: Saving Prezi

Presentation 2.4.1.E2. 2. Participants will write a short essay about what advice Morgan would give

Hannah about managing her money. Provide each participant with a To Save or Not Save Rubric 2.4.1.B1 with the writing assignment.

Simplify the activity by providing participants with a completed Income and Expense Statement and focus on the Take a Chance discussion (steps 4‐8).

Provide participants with envelopes with play money representing their spending plan. They must remove money from their envelopes to account for all expenses to determine how much money they have available for their Take a Chance card.

The Roommates: Saving Script 2.4.1.E3 is available to have participant work in small groups rather than using the Prezi.

https://takechargetoday.arizona.edu/roommates-saving-prezi

https://takechargetoday.arizona.edu/roommates-saving-prezi

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Option 3: Elementary Education Approximate time: varies Materials to prepare: Children’s Book Integration Active Learning Tool 3.0.35 Children’s books and workshop supplies

1. Have participants work in small groups to develop a lesson and activity to

educate elementary aged students about the importance of saving. a. Children’s Book Integration Active Learning Tool 3.0.35

i. Facilitation option 4



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Choose to Save Vocabulary List

TERM DEFINITION

1 Compound interest Earning interest on interest

2 Consumption The purchase of goods and services

3 Do it yourself When you complete a task yourself rather than paying someone else

4 Emergency savings Cash set aside to cover the cost of unexpected events

5 Interest Price paid for using someone else’s money

6 Interest rate Percentage rate used to calculate interest

7 Liquidity How quickly and easily assets can be accessed and converted into cash

8 Pay yourself first Saving for the future by putting money aside before paying regular monthly bills or using income for discretionary purchases

9 Principal The original amount of money saved or invested

10 Saving Accumulation of excess funds by intentionally spending less than you earn

11 Savings Portion of income not spent on consumption

12 Time value of money Money available at the present time (today) is worth more than the same amount if received in the future

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My Wish List

My Saving Quest

Total Points Earned

Name

20 Total Points Possible

Date

Percentage

Class

Part 1: My Wish List (7 points)

What are three things on your personal wish list? Include anything of monetary value. Approximately how much does each item cost? Place a star next to the item you would like to start saving for today.

$

$

$

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Part 2: My Current Spending (7 points)

Identify three changes you are willing to make today to your current income or spending to start saving for the future.

What is the trade‐off for each change? Place a star next to items with a realistic opportunity cost.

Part 3: Implementing My Saving Quest (6 points)

•Trade‐off: •Trade‐off: •Trade‐off:

How much can you realistically save each week for your item?

What is one strategy you will use to make the saving process automatic?

What is your financial goal?

Describe how your goal can be reached using the time value of money.

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Why save?

Choose to Save Note Taking Guide

Total Points Earned

Name

Total Points Possible

Date

Percentage

Class

Saving ‐

Results in...

Savings ‐

What type of asset is saving?

Define liquidity How much should be saved?

Identify three ways money can be saved.

By saving money

___________________

You will have financial

security in the

___________________

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Describe pay yourself first.

How can you make the process automatic?

Why is setting a financial goal an important part of

the saving process?

Why should trade‐offs be considered when saving?

Why is time value of money important to saving?

Describe interest.

How does compounding interest work?

How does each factor affect the time value of

money?

Interest Rate

Money

Time

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Take a Chance Tracking

Total Points Earned

Name


Date

Percentage

Class

Part 1: My Income Congratulations, its payday! You work full‐time at Indulgence Bakery earning $10.25 per hour and working 40 hours per week. You are paid monthly with direct deposit into your depository institution account. Use your paycheck stub to enter your gross income and deductions on your income and expense statement.

Employee Information Pay Date: 6/11/2013

Name Identification Number Address Pay Rate Pay Period

Your Name 00112233 Your Address $10.25 5/1 – 5/31/2013

Summary

Gross Income Total Personal Deductions Net Income

Current $1,640.00 $473.81 $1,166.19

YTD (year

to date) $8,200.00 $2,369.05 $5,830.95

Earnings

Type Rate Hours Current YTD

Regular $10.25 160 $1,640.00 $8,200.00

Deductions

Type Personal Deduction Employer Contribution

Federal income tax $181.35 0

State income tax $29.00 0

Social Security $101.68 $101.68

Medicare $23.78 $23.78

Retirement plan $50.00 $50.00

Health insurance $88.00 $325.00

Workers’ compensation 0 $11.80

Unemployment insurance 0 $4.26

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Part 2: My Spending 1. You used an application on your phone to create an electronic list of all expenses. Identify the category

each expense would be in the income and expense statement. 2. Use this information to update your actual spending column on your income and expense statement. 3. Once you have entered all of the income and expenses, calculate the expense total and net gain or loss. 4. Calculate the difference for each category in the difference column on your income and expense

statement.

Company Amount Income and Expense Statement Category

Where I Live $325.00

Town and County Grocer $25.30

Keep the Lights On Utility Company $48.20

Quick Stop Fuel $48.90

Edwards Pizzeria $13.50

Pro Sporting Events $52.00

Love to Drive Auto Sales $160.00

Keeping Your Car Insured $42.00

JJ’s Trendy Clothing $48.00

Town and Country Grocer $84.60

Talk all Night Communications $70.00

Savings Account $40.00

Quick Stop Fuel $52.70

The All‐Inclusive Convenience Store $17.38

Town and County Grocer $32.00

The Mongolian BBQ $23.50

Hearts and Homes Charity Donation $50.00

Reflect on your May Income and Expense Statement: 5. How much, if any, money did you have left at the end? What would you use that money for?

6. You have realized that you want to start saving an additional $45 each month for a new tablet. What are at least two ways you would adjust your current spending to free up the $45? What are the tradeoffs to each spending adjustment?

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Income and Expense Statement for: You!

Time Period: May 1‐31st

Spending Plan Actual Amount

Spent Difference

Income

Earned Income

Wages or salary before deductions $1640.00

Commissions/tips/bonuses

Unearned Income

Money from savings and investments to help pay expenses during this time period

Scholarships from non‐government sources

Total Income $1640.00

Expenses

Deductions Often Taken from Paychecks

Federal and State Income tax $210.35

Social Security $101.68

Medicare $23.78

Saving and Investing (Pay Yourself First)

Contribution to emergency savings $40.00

Contribution to savings for a financial goal $0.00

Retirement $50.00

Insurance Premiums

Health insurance $88.00

Automobile insurance $42.00

Life insurance $0.00

Housing Costs

Housing payment (rent or mortgage) $325.00

Utilities (gas, electricity, water, garbage) $50.00

Transportation Costs

Car payment $160.00

Fuel (gasoline/diesel) $110.00

Automobile repairs and maintenance $30.00

Food Costs

Food at the grocery store $135.00

Meals at restaurants $54.19

Other: $0.00

Communication and Computers

Cell phone $70.00

Medical Costs Not Covered by Insurance

Medical care and medications $0.00

Clothing and Personal Care

Clothing $50.00

Personal care (shampoo, haircuts, cosmetics, laundry, etc.) $25.00

Educational Expenses

Tuition for private school or higher education $0.00

Entertainment

Movies, books, toys, and other entertainment $75.00

Credit Costs

Credit card payment $0.00

Giving

Donations $0.00

Total Expenses $1640.00

Net Gain or Net Loss (Income less Expenses) $0

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Part 3: Take a Chance 7. Often, unexpected expenses and situations may arise. Draw a “Take a Chance Card” and record your

event here: Part 4: Reflection 8. Based upon your current spending for the month, how will you pay for this expense?

9. If you did not have savings, how would you have paid for this expense?

10. Was the unanticipated expense a need or want? What alternatives could you choose to avoid spending money on the expense?

11. Why is it important to pay yourself first when creating a spending plan?

Page | 19 2.4.1.H1


Take A Chance Cards

You have a good friend unexpectedly in town and go out to eat at a

restaurant. $25

You have not had a haircut in months

and decide to pamper yourself. $45

Your car breaks down and you need to

repair it immediately. $100

You have been having headaches and go to the eye doctor. You not only

have to pay your insurance co‐insurance but also buy a new pair of

glasses. $200

Your friend needs a loan and you

decide to help out. $25

Your car registration is due this

month. $75

It is your mother’s birthday and you

buy her a gift. $40

You were speeding and got caught!

$80

You get carried away at the online music store downloading music.

$25

You need a new pair of shoes for a

job interview. $60

A friend is moving away and you are asked to bring an appetizer to her

party. $15

You catch a cold and need to

purchase medicine. $25

2.4.1.H1 2.4.1.H1

2.4.1.H1 2.4.1.H1

2.4.1.H1 2.4.1.H1

2.4.1.H1 2.4.1.H1

2.4.1.H1 2.4.1.H1

2.4.1.H1 2.4.1.H1

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Choose to Save

Total Points Earned Name

25 Total Points Possible Date

Percentage Class

Directions: Match the correct term with the correct definition by placing the letter on the appropriate blank. 1. _____ How quickly and easily assets can be accessed and converted into cash. 2. _____The price of money. 3. _____The portion of current income not spent on consumption. 4. _____Everything an individual or household owns with monetary value. 5. _____A measurement of how much a person or household owns once

all debts have been paid. 6. _____The percentage rate paid on money invested or saved. 7. _____The original amount of money saved or invested. 8. _____The end result of something a person intends to acquire, achieve, do,

reach, or accomplish. Directions: Fill in the blank to complete each statement. 9. A saving strategy that states to set aside a predetermined portion of money for saving each time a

person is paid before using any of the money for spending is called:_____________ ______________

__________.

10. A ___________ ____________ is giving up one thing for another.

11. _____________ ____________ is the value of the next best alternative that must be forgone as a

result of a decision.

12. Earning interest on interest is _________________ ___________________.

A. Assets

B. Goal

C. Interest

D. Interest Rate

E. Liquidity

F. Principal

G. Savings

H. Wealth

Page | 21 2.4.1.A3


Directions: Answer the following questions by writing a short answer. 13. Describe how to use each of the factors affecting time value of money to maximize the amount of savings

earned. (3 points)

Time

Money

Interest Rate

14. Why do experts suggest that your emergency savings be in a very liquid savings tool? 15. Explain why “pay yourself first” is an essential component of personal financial management.

16. What are three ways people can find money to save?

17. Why is it important to set goals when saving? Directions: Determine if each statement is true or false and indicate T for true and F for false. 18. _____It is important to consider opportunity cost and trade‐offs when determining how to save money. 19. _____Experts suggest that emergency savings equal to 6‐9 months of a person’s expenses be held in

liquid assets for unplanned events. 20. _____The longer an individual invests money for, the more compounding interest accrues. 21. _____An important part of the savings process is to write a savings goal. 22. _____It is important to have a low interest rate when saving.

23. _____Savings is an investment asset on the Statement of Financial Position.

Page | 22 2.4.1.B1


To Save or Not to Save Essay Rubric

Total Points Earned

Name


Date

Percentage

Class

Directions: After learning about Hannah and Morgan, imagine that you are Morgan. Hannah is telling you about her financial situation and asking for your advice. Write what Morgan might say to Hannah to explain the importance of intentionally saving money in a savings account.

In your conversation with Hannah, describe why these concepts are important and how they relate to saving:

Opportunity cost Trade‐offs Emergency fund Setting SMART financial goals

Provide at least two strategies Hannah may implement today to begin saving.

Exemplary Satisfactory Unsatisfactory No Performance

Score

Content: Opportunity cost, trade‐offs, emergency

fund and financial goals are all described At least two savings strategies are

identified Answer are thoughtful, reflective and

accurate

9‐7 6‐4 3‐1 0

Writing Skills: Sentences are fluent and effective Very few errors in mechanics,

punctuation and word choice Essay includes an introduction, body, and

conclusion

6‐5 4‐3 2‐1 0

Effectiveness of Presentation: Clearly prepared Easily read and neatly assembled Minimum of one‐page, double‐spaced

with 12 font and 1‐inch margins.

6‐5 4‐3 2‐1 0

Total Points Earned

Total Points Available 21

Percentage

Page | 23 2.4.1.E3


The Roommates: Saving Script

Morgan and Hannah are roommates in their third year of college. They have a lot of fun together, but are

also very different. Hannah has a part time job at a women's clothing store in the mall. She regularly uses a

spending plan to manage her finances and pays all of her bills on time. When Hannah has leftover cash after

paying her bills, she stores it in a piggy bank to pay for unexpected expenses, like going out with friends,

traveling, and when there is a great sale at her job. Hannah is lucky to get a discount at work and takes

advantage of sales on clothing items.

Morgan is Hannah's roommate. She also works part time, but at an insurance office. Morgan takes a different

approach to saving money for unexpected expenses. Each time Morgan gets paid, she puts 20% of her

paycheck into a savings account. This habit has helped Morgan in the past, like the time her car needed

expensive repairs, and again when the landlord raised the price of her rent. Morgan was also really glad to

have established this habit when she lost her job last year. Because she made saving a habit, she was able to

have enough money to pay her bills even though she was out of work temporarily.

Hannah has now found herself in a similar type of emergency. Last month while playing softball, she broke

her ankle and she just received the bills from the hospital and doctor. Because she had health insurance,

Hannah was confident she would have no expenses from the injury, but since then she has learned

otherwise. While her insurance paid the majority of her expenses, after her deductible and co‐insurance,

Hannah was responsible for $1,750 in medical expenses. Unfortunately, she has only $530 in her piggy bank

to help with those expenses.

This problem has created stress for Hannah and has been negatively impacting her well‐being. She shared

her situation with Morgan.

Imagine that you are Morgan. What advice would you have for Hannah about saving for the future? Be sure

to include terms like tradeoffs, opportunity costs, SMART goals, and emergency funds in your conversation.

© Take Charge Today – August 2013 – Choosing to Save – Page 1 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Ins tute at The University of Arizona

2.4.1.F1

Choose to Save Advanced Level

Saving money is an essen al part your financial plan. When you save you accumulate funds by inten onally

spending less than you earn. Savings is the por on of income not spent on consump on (the purchase of goods

and services).

An important reason to have savings is for emergency expenses. Without savings, paying cash for an unexpected

expense may be difficult. Emergency savings (cash set aside to cover the cost of unexpected events) creates a

sense of financial security. The lack of an emergency fund not only creates financial stress, but also drives the

consumer into debt.

Savings contributes to your net worth (wealth) and is recorded as a financial asset on your Statement of Financial

Posi on. Be sure this financial asset (your emergency fund) is in an “easily‐accessible” account (usually a savings

account) that can be accessed in a day or two without penalty. Financial assets easily converted into cash are called

liquid. Liquidity is defined as how quickly and easily you can access your assets and convert them into cash.

How much money to save

Most experts recommend having between 3‐6 months of expenses put aside in emergency savings. Let’s say your

goal is to save six months of expenses. If you normally have $2,000 in expenses each month then you should try

to build up a total of $12,000 in emergency savings. Be careful

not to confuse the funds you’ve saved for emergencies with

funds you’d like to spend on vaca ons with friends and family or

on big expenses like a new flat screen TV or newer furniture.

Emergency funds are just that; funds set aside only to be used in

an emergency!

How to save money

Saving is an important part of se ng and reaching financial goals. Your

goal may be to build your emergency savings fund or to buy a car, new

furniture or the down payment on your first home. You begin by se ng

your financial goal and working backwards to determine a realis c amount

you can save during a specific me period. Saving money for future

consump on always requires not purchasing something today. You must

ensure the trade‐offs are realis c and the opportunity cost of what you are

giving up won’t nega vely impact your well‐being.

What savings goal do you have in

place?

What are examples of emergency expenses a household may encounter?

$2,000 6

months $12,000


2.4.1.F1

How to save money con nued…

Your spending plan helps you determine how much you can save based on your income and expenses. A frequent

assessment of what you spend your money on is a good habit to develop.

Here are a few money‐saving sugges ons:

Examine current spending – Examine expenses in your Income and Expense Statement and your Spending Plan

to determine changes that can be made to decrease your spending. Start with small expenses (your daily

coffee shop drink, new clothes) and then review your larger expenditures (cable and cell phone plans and

some mes grocery bills) to see if there are opportuni es to decrease your spending.

The following are ps to decrease spending:

1. Communica on ‐ Could you cancel your cable/satellite television or

reduce the cost of your current package? Could you reduce the cost of

your cell phone package? Could you drop your home Internet and use

public Internet at places such as a library?

2. Food ‐ Could you eat at restaurants less? Could you purchase items in

bulk instead of at a vending machine or gas sta on?

3. Transporta on ‐ Could you use public transporta on instead of owning

a vehicle?

4. Housing ‐ Would you consider moving to a smaller or less expensive

home or apartment in order to reduce your mortgage/rent payment and/or u li es?

A er reviewing your monthly expenditures, if you s ll can’t reach your saving goal you might consider:

1. Increasing your income by lobbying for a raise, switching to a job that pays more or taking on a part

me job if even only for a short period of me to increase your savings.

2. DIY – You’ve seen the “do it yourselfers” on TV, so why not try a couple of personal tasks on your own.

Not only can this save you money (if you do it right the first me!) it but it can also give you a sense of

accomplishment! However, the cost to you of doing something on your own is your investment of me

(and materials) in place of the money you otherwise would spend. Make sure you are willing to give up

the me and have the proper skills needed to complete do it yourself tasks.

The following examples are Do It Yourself (DIY) ac vi es:

Food ‐ Pack your lunch and prepare food/beverages from scratch instead of purchasing ready‐to‐eat

items such as coffee and frozen meals.

Transporta on – Develop skills that allow you to take care of very basic vehicle maintenance and

repairs.

Housing ‐ Maintain the inside and outside of your home; visit your local home improvement center to

learn about home DIY projects.

It may be difficult to decrease

or remove contractual

expenses from your spending

plan. With a contractual

expense, you have signed a

contract that requires you to

pay that expense for a specific

amount of me. Make sure to

consider the consequences of

a contract before signing.

What are three ways you could start saving today?


2.4.1.F1

Having solid savings habits helps you reach your financial goals. A successful saving

strategy for many is to “pay yourself first.” Paying yourself first means saving for

the future by pu ng money aside before paying your regular monthly bills or

using your income for discre onary purchases.

Make paying yourself first automa c. Ways to accomplish this include:

Automa c transfers ‐ Most depository ins tu ons allow you to set up

automa c transfers among accounts within their depository ins tu on or to

accounts at other ins tu ons. Once the ini al setup is complete, the money is

automa cally moved from one account to another on dates designated by

you.

Payroll Deduc on ‐ Many employers offer payroll deduc on to employees.

With this type of payroll deduc on, you designate a certain percentage or

specific amount of your paycheck to be deposited into an account of your

choice.

Many resources are out there to help you reach saving goals. Websites like h ps://secure.piggymojo.com and

h p://www.s ckk.com, help you develop goals and s ck to them with peer support. Internet‐based spending

plan programs such as h ps://www.mint.com, and programs offered by depository ins tu ons offer goal

tracking through online/mobile banking.

Increasing the value of money

Saved money can increase in value while providing for your future. Time value of money is the idea that money

available at the present me (today) is worth more than the same amount if received in the future. That’s

because if you have it today, it can grow over me. Understanding this core principle of personal finance will help

mo vate you to save early and o en. The factors that affect the size of your savings balance in the future are

me, the interest rate, and the amount you save each period.

Interest rate

Interest is the price paid for using someone else’s money. The interest rate is the percentage rate used to

calculate interest. Interest is earned (if you are the lender) or paid (if you are the borrower). When you save

money in an interest earning account you earn interest. Savings tools are products offered by depository

ins tu ons that, in most cases, allow your deposits to earn interest.

If you don’t withdraw the interest earned from an account, the interest has an opportunity to earn addi onal

interest. Earning interest on interest is known as compound interest.

Graph 1 is an illustra on of how higher interest rates and compound interest

increase the value of savings.

$1,000 Saved for 5 Years with Compounding Interest

To maximize your return:

Save at the highest

interest rate possible!

Save for as long as

possible!

Save as much as

possible, as o en as

possible!


2.4.1.F1

Your present self impacts your

future self. By saving money

today you will have financial

security in the future

Time

Time is necessary for money to increase in value. The longer you save, the more me your money has to grow. Take

Felix and Savannah for example:

Felix

Saved for: 18 years

Contributed: $50/month

Total Contribu on: $10,800

Interest Earned: $8,856

Total Balance: $19,656

Savannah

Saved for: 4 years

Contributed: $350/month

Total Contribu on: $16,800

Interest Earned: $2,676

Total Balance: $19,426

Felix’s parents began saving $50.00 per month for

Felix’s college educa on when he was born, and

saved un l he was 18. Savannah’s parents waited

un l she was a freshman in high school and only

had 4 years to save un l she turned 18. Both

accounts earned the same interest rate (6%) and

had the same balance when the students turned 18

(about $19,500). However, Savannah’s parents had

to save significantly more ($350/month) to reach

the same savings goal, because they started later.

Amount of Money

The more you save, the larger the value of your

savings will be. The principal is the original amount

of money saved or invested. Table 3 illustrates the

difference in value for different amounts of

principal if le to grow at 3% interest for 5 years.

3% interest for 5 years

Principal Value of Savings

$100 $115.93

$1,000 $1,159.27

$10,000 $11,592.74

Saving is an essen al component of your

financial plan. Having savings reduces future

financial uncertainty and nega ve emo ons

such as stress by helping to ensure you will

be able to immediately pay for unexpected

expenses with cash. An added bonus of

saving money is the opportunity for savings

to increase in value if saved in an interest‐

earning account... Saving money will require

that trade‐offs be made. Saving money for

future consump on will always means that

you give up the purchase of something in

the present. Once a commitment to saving

money has been made, saving is best

accomplished if you automa cally pay

yourself first.

What are you willing to give up today to start saving for your

future?

Time

Money

Interest Rate

Save for as long as possible!

Save at the highest interest rate possible

Save as much as possible, as o en

as possible!

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