volunteer instructor notes - securefutures · how much do you have left for the weekend? key points...

Volunteer Instructor Notes

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Key

Distribute Handout

Student Activity

Important Note

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Introduce Yourself

Introduce yourself in a welcoming manner and make students feel comfortable.

Who are you?

What do you do?

Why do you volunteer for Make A Difference - Wisconsin?

What is Make A Difference - Wisconsin?

It’s an organization that delivers financial education to high school students

in Wisconsin.

We focus on providing teens with the financial education and tools needed to

form good financial habits.

Explain why financial education is important.

Set Ground Rules

Share these, or your own expectations for student behavior.

Participate: ask and answer questions.

Listen when others are talking.

Have fun.

Discuss how to earn an incentive (if you’re offering one).

Distribute Pre-Program Survey

Surveys will be completed at the beginning and end of all three lessons to gauge what students know before and after participating. This is important because it allows us to measure program outcomes.

Have each student complete a survey to determine their current knowledge and experience. Make sure students include their name on all surveys.

If students don’t know an answer, instruct them to select “I don’t know” rather than guessing.

Collect the surveys when complete. Do NOT review answers with students.

Transition: Let’s see what we’re going to cover in this lesson…

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Discussion Ask a question to get students talking right away.

Why is it important to form good personal financial habits?

Expand on student responses. Summarize why personal finance is important and share what the consequences of poor money management are.

Transition: Let’s get started by talking about income…

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Distribute “Sample Pay Stub” Handout

Discussion

Does anyone have a job? Where do you work?

Have you ever seen your paystub?

What do you notice about your paycheck; what kind of info is on it?

Key Points

Ask students to identify John’s…

Hourly wage

Hours worked this pay period

Gross Pay

Net Pay

Stories, Examples & Notes

Transition: Let’s talk about what comes out of a paycheck…

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Discussion

What is automatically deducted from John’s paycheck?

What is FICA? (Federal Insurance Contributions Act)

Discuss what Social Security is and how it works. You can also comment on how contributions fund Medicare.

Key Points

A percentage of your income is taken out due to taxes.

FICA is taken out on all incomes up to $117,000.

Maximum Social Security = $7,254 and Maximum Medicare = $1,697

Employers also pay the same amount on behalf of each employee (and if self-employed you pay both)

Concerns related to long-range financing of Social Security:

Size of baby boom generation collecting benefits vs. size of the current workforce. A smaller group of people is funding a larger group.

Increases in life expectancy. People are collecting benefits for a longer period of time.

Long-term saving is required to reach retirement goals.

Transition: What other deductions come out of adult’s paychecks?

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Discussion

Key Points

Other deductions:

Health Insurance

Disability Insurance

Retirement Contributions


Transition: It’s important to understand what your net pay is when creating a budget and savings plan. Let’s talk about expenses next…

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Discussion

Ask students what they spend their money on.

After getting some responses, ask if anyone keeps track of how much they spend. Move to next slide.

Let’s say you have $100 and this is how you spent it. Are these realistic types of expenses that you have from time to time?

Someone do the math for me. What do the expenses add up to?

How much do you have left for the weekend?

Key Points


Transition: Let’s take a look…

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Discussion

How would you change your spending so you have more money available for the weekend or for savings?

Key Points

Small purchases add up quickly.

It’s important to know how you spend your money. This is the first step to creating a budget.

It’s important to plan your expenses and to live within your means.


Transition: When you are living on your own, it becomes even more important to understand your expenses and plan how to spend the money you make.

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Discussion

How much does it cost to live on your own?

What types of expenses will you have?

Key Points

When you’re living on your own, you will have a lot of responsibilities. Managing your finances well will be key for success.


Transition: Let’s look at an example of regular monthly expenses for someone living independently.

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Discussion

What types of expenses are missing in this example?

Clothing, entertainment, internet, car maintenance, car payment, unexpected emergencies, etc.

Key Points

To cover $1,300 in expenses per month, you would need to work 40 hours per week and net $8.13 per hour after tax. This means you would need to make $11 per hour gross.

You can reduce your expenses by having a roommate and making good spending decisions.


Transition: After high school, some of you will likely continue your education and some of you may enter the work force. Let’s talk about these options for a few minutes.

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Discussion

What are your plans for after high school? (school, work, possible careers)

If you decide to go to college, what’s it going to take?

If you decide to continue schooling, what can you do now to prepare financially?

Save money from a part time job for books, tuition, etc.

Distribute “College Justificator” Booklets

Review the College Justificator and discuss the “Lifetime Earning Potential” bar graph for the various professions.

Students need to plan for how they will pay for their education and understand the income potential they’ll have after obtaining a degree.

Higher education leads to higher incomes and potentially more debt. For example, an annual salary for a High School Dropout could be as low as $13,500 compared to $121,000 for those with a Professional Degree, while student loan debt can range from $10,100 to $93,200.

Key Points

The decision to enter the work force or continue your education is a personal choice. There’s no right or wrong decision. Do what is best for your situation.

You can be financially successful without a college degree; live within your means.

Look for scholarship opportunities. Work hard in school to get good grades and get involved in activities. Be sure you fill out the FAFSA.

Transition: Whether you go on to work or more school, it will take some planning to reach your goals…

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Discussion

What is a budget?

Review the answers on the next slide.

Key Points

A budget alone won’t keep you from going broke.

Budgets should be used to plan how you will spend your money. Following your plan leads to success.


Transition: Let’s take a look at how you build a budget…

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Discussion

What is a fixed expense and what is a flexible expense?

Key Points

A fixed expense is a recurring expense of approximately the same amount.

An expense is flexible when you have control over when and how much you spend.

Review the various components of a budget.

Income – Expenses = Potentials Savings. This needs to be a positive number!


Transition: Now we are going to create our own budgets...

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Distribute Budget Handouts: “Career Salaries & Expenses”

“Monthly Income and Expense Worksheet”

Budget Activity

Have students choose a career or assign the four careers equally across the class. Make sure all four careers are selected by or assigned to students. Feel free to let students work together.

Review the handout with students. Be clear that students should use their blank budget worksheet to create a budget for their career.

Help students get started by pointing out the income and expense categories. Students will need to choose whether they think each expense is fixed or flexible and then write it down on their budget worksheet.

Have students complete the math to come up with their potential savings.

Walk around and help students.

Give them a time limit and tell them to complete as much as they can.


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Discussion

Before moving to the answer slides, ask students to share what they calculated for each category.

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Discussion

Why does the surgeon have a lower savings amount than the Vet Tech and Librarian? (Large student loan debt, more expenses)

What is something you would like to save for and how are you going to do this?

Key Points

Savings aren’t determined just by your income. How you choose to spend your income is a key factor in saving money.

Even with a lower income, you still have the opportunity to save (eg. the housekeeper was able to save and spend money on entertainment).

Budgeting doesn’t mean you are trapped and can’t enjoy life. It helps you have enough money to enjoy your life—without the stress of going broke!


Transition: So how can you be sure to save money each month?

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Discussion

What do you want/need to save money for? Challenge students to set at least one goal and have them write it down. Ask for responses.

Key Points

Add “PAY YOURSELF FIRST” as a fixed expense in your budget.

This is important for:

Saving for future expenses and goals

Having money saved for emergencies or unexpected expenses

Investing for your future (e.g. going to college or moving into your own place)

If you get spending money or an allowance from family members, save a little of what you receive each time (e.g. 10-20%).


This is the Natural Lesson Break – End Session 1 Here

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Discussion

How many of you thought of something to save for? Ask for responses. What are some ways you can start saving(you can start with $1 a day)? What could you do this week to start saving more money?

Key Points

Using a check cashing store may seem more convenient than using a checking account, but they have high fees.

If you’re doing Check It Out with this class, there’s no need to explain how check cashing stores work here. You will review it in more detail during the next lesson. If you’re not doing Check It Out, share the following:

Check cashing stores charge you a minimum fee of $4-$5. Some stores also charge up to 5% of the check amount (5% of a $250 check would be a $12.50 fee).

If you cash two paychecks a month, you could be charged five times as much as you would at a bank or credit union. In most cases, your bank or credit union cashes your check for free.

A payday loan or paycheck advance is a small, short-term loan that is intended to cover a borrower’s expenses until their next payday. Typical loans are $100 - $1500, they have a two week term, and they have interest rate charges in the range of 390-900%!


Transition: Have you ever thought of decreasing your spending as one way to save money?

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Discussion

What are some ways you can decrease spending? (e.g. bring a drink or snack from home rather than stopping at the gas station on your way to school)

Key Points

Carry a small amount of cash. It’s easier to spend money when you have it on you vs. needing to withdraw it from a bank account.

Using direct deposit ensures your paycheck is safely deposited rather than putting a bunch of cash in your pocket.

Let your budget guide what you buy. This will stop you from overspending and ensure that you save.


Transition: If you want to start saving, but you don’t have any money left after expenses, you have three options: 1. Increase your income; 2. Decrease your spending; or 3. Both. Let’s talk about “needs” vs. “wants” and see how this can help you save.

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Discussion

What’s the difference between a need and a want?

Call on students and ask them if they view each item on the slide as a need or a want, and why. Explain that opinions may differ and that everyone needs to make personal choices.

Key Points

Some items like shoes may be a need, but buying a less expensive pair will help you save. Shopping around will help you find the best deal.

You should set spending priorities so you can get what you need/want and still have money to save.


Transition: Let’s watch a video of a real life scenario of wants vs. needs acted out by student actors.

Some classrooms may not have the capability to play videos, or

they may not have proper audio equipment. Please check with the teacher before you begin presenting.

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Discussion

What is compound interest?

Gauge how familiar the students are with this concept to determine how thorough your explanation should be.

Key Points

Compound interest is interest that you earn on both the principal and interest earned. Simple interest is interest paid on just the principal alone.


Transition: Let’s look at an example of how compounding works…

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Discussion

Illustrate how much more purchasing power you have when your money compounds. What could you do with $25k vs. $10k?

Could you save a dollar a day if you had to? How? (e.g. skip the fries at McDonalds)

Key Points

If you save more than a dollar a day these numbers will be much higher.

Compounding is very powerful over time. The longer you save and compound interest, the more purchasing power you have.

How much you earn in interest (investment return) has a big impact on how fast your money grows.

While today’s interest rates are nowhere near 5% as shown in the example, the

goal is to illustrate how compounding works.


Transition: Let’s take a look at an example of what’s possible if you save for a long time and earn a higher rate.

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Discussion

Key Points

Review this scenario and use it as an example of people saving for retirement:

Kelly learned about financial literacy in high school so she understood the benefits of saving early. She started saving right after college.

John had huge credit card debt when he graduated from college and it took him years to pay off. He didn’t know how important it was to start saving early so he waited until he was age 35.


Transition: Who will have more money at age 65? (After getting responses, review the next two slides.)

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Distribute “The Benefits of Saving Early” Handout

Discussion

What if Kelly kept saving until she was 65?

Key Points

Stress how much more money John saved before interest.

John ended up with nearly $100,000 less than Kelly at age 65 because he started saving later.


Transition: The type of product you choose to save/invest your money in has an impact on how fast it can grow. Let’s talk about some investment options…

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Distribute “Types of Saving/Investment Products” Handout

Discussion

Ask for a volunteer to describe a savings account. After getting a response, review the description on the slide to fill in any blanks. Do same for certificates of deposit and stocks.

You can open a savings account NOW! Get help from a parent or find an institution where you can open an account without a parent. Accounts can be opened with as little as $5.

Key Points

Savings Account

An account used to deposit money at a bank or credit union and earn interest on the account over time and provide safety of principle. It’s used to build money for important future purchases you want to make rather than to cover day to day expenses. Money can be added or removed from the account by visiting the bank or credit union, or using an ATM. Usually you can add or withdraw funds at any time; there is no cost to do so. Banks may require a minimum to open or maintain the account.

Certificates of Deposit (CDs)

CDs are accounts where you leave your money for a set period of time, such as six months, one, two, or five years, called a term. You usually earn a higher rate of interest than in a regular savings account. The longer you promise to keep your money in a CD, the higher the interest rate. Be sure to think about your cash needs before opening a CD because you will pay a penalty if you withdraw your money early.

Stocks

When you buy stocks (shares), you become part owner of the company. If the company does well, you might receive periodic dividends. Dividends are part of a company’s profits it gives back to you when you own stock in the company. If the company does poorly, you might lose your money. (note that Savings Accounts & CDs do not lose the principal amount invested whereas stocks can)

If time permits, discuss the importance of diversification and mutual funds.

Diversification: This means you spread the risk of loss in a variety of savings and investment options. It’s the concept of “don’t put all your eggs in one basket.”

Mutual Funds: A mutual fund is a professionally managed collection of money from a group of investors. A mutual fund manager invests your money in some combination of various stocks, bonds, and other products. The fund manager determines the best time to buy and sell the products in the fund. By combining your resources with other investors in a mutual fund, you can diversify even a small investment, which should reduce risk.

http://kidmoney.about.com/od/savingmoney/g/Interest.htm

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Distribute Post-Program Survey

Have each student complete a post-survey to determine their knowledge now.

Once students are finished, collect the surveys. Make sure there is a name on each one (remind students to use the same name they used on the pre-survey).

If time permits, you can go over the surveys with the class. Ask students to provide the answers. The idea here is learning by repetition; the students first saw the concept in the pre-program survey, then in-depth during the presentation, then again in the post-program survey, and now in this review.

Encourage students to join our Facebook page. We have pictures of program students, information on jobs and scholarships, and more.

Please return all surveys to Make A Difference – Wisconsin after

you have completed your entire program commitment. Thank you for making a difference!

Make A Difference – Wisconsin, Inc. 710 N Plankinton Ave. Suite 310

Milwaukee, WI 53203 414-273-8101

volunteer instructor notes - securefutures · how much do you have left for the weekend? key points...

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