Personal Financial Literacy. For Grade 4 6 Classrooms

Transcription

1 Personal Financial Literacy For Grade 4 6 Classrooms

2 Personal Financial Literacy For Grade 4 6 Classrooms These lessons are a part of the Texas Council on Economic Education Smarter Texas program and based on the 2012 Math Personal Financial Literacy Texas Essential Knowledge and Skills This publication was made possible through funding provided by the Texas Credit Union Foundation. The Texas Council on Economic Education (TCEE) 1801 Allen Parkway Houston, TX economicstexas.org smartertexas.org Copyright 2013, Texas Council on Economic Education Copying for non-profit, educational use is permitted. All other rights reserved.

3 Editors Chief Editor and Author Cindy Manzano Director of Smarter Texas Texas Council on Economic Education Editor Laura Ewing President and CEO Texas Council on Economic Education Web Editor Allen Reding Texas Council on Economic Education Reviewers Anne Papakonstantinou, Ed.D. Project Director Richard Parr Executive Director School Mathematics Project Susan Troutman Associate Director for Secondary Programs Carolyn White Associate Director for Elementary and Intermediate Programs

4 Authors Carolyn Elender Independent Elementary Mathematics Consultant Jean Frankie Secondary Mathematics Consultant Valerie Johse Elementary Math Consultant Texas Council on Economic Education Mary Kemper Secondary Mathematics Instructional Coach & Teacher Coppell High School, Coppell ISD Cindy Manzano Director of Smarter Texas Texas Council on Economic Education Mary Kemper Secondary Mathematics Instructional Coach & Teacher Coppell High School, Coppell ISD

5 Lesson Table of Contents Grade 4 Lessons Texas Essential Knowledge and Skills Lesson 1: Not Enough Bucks 4.10A Lesson 2: Ideas for Raising Profit 4.10B Lesson 3: Saving is Not Just Child s Play 4.10C Lesson 4: Divide and Conquer 4.10D Lesson 5: Smart Cash 4.10E Lesson Grade 5 Lessons Texas Essential Knowledge and Skills Lesson 1: The Case of the Disappearing Paycheck 5.10A, 5.10B Lesson 2: How Will I Pay? 5.10C Lesson 3: Where Does All My Money Go? 5.10D Lesson 3: Savings Options PowerPoint Lesson 4: Money In, Money Out 5.10E, 5.10F Lesson Grade 6 Lessons Texas Essential Knowledge and Skills Lesson 1: Best Payment Option: Debit or Credit 6.14B Lesson 2: Checks and Balances 6.14A, 6.14C Lesson 3: Credit Reports 6.14D, 6.14E, 6.14F Lesson 4: Which Job is Best for Me? 6.14H Lesson 5: Paying for College 6.14G

6 Grade Level: 4 Not Enough Bucks Lesson: 1 Lesson Description This lesson includes an initial activity to introduce students to the unit on personal financial literacy. Students construct a KWL chart on what they know about money. Students revisit the chart at the conclusion of the unit. The students learn about fixed and variable expenses. Given an appropriate grade level scenario, students identify fixed and variable expenses. They will calculate the total of fixed and variable expenses on a weekly basis, comparing the sum of fixed expenses with the sum of the variable expenses. Students then decide on a reasonable amount Buck s parents should increase his weekly allowance and support their argument with logical reasoning. Texas Essential Knowledge and Skills (Target standards) Texas Essential Knowledge and Skills (Prerequisite standards) National Standards (Supporting standards) CEE - Council for Economic Education CCSS - Common Core State Standards PFL Math 4.10A: distinguish between fixed and variable expenses Math 4.1: Mathematical process standards Math 4.4A: add and subtract whole numbers and decimals to the hundredths place using the standard algorithm Math 4.2C: compare and order whole numbers to 1,000,000,000 and represent comparisons using the symbols >, <, or = CCSS Math: Standards for Mathematical Practice CCSS Math 4.OA: Use the four operations with whole numbers to solve problems. CCSS Math 4.NBT: Use place value understanding and properties of operations to perform multi-digit arithmetic. Time Required Two 45-minute classes PFL Terms Fixed expenses Variable expenses Materials Required Chart paper and markers or interactive white board Money: coins and bills Red colored pencil or crayon for each student Green colored pencil or crayon for each student A copy of Activity for each student A copy of Activity for each student A copy of Activity for each student Paper and pencil for each pair of students P a g e 1

7 Grade Level: 4 Not Enough Bucks Lesson: 1 Procedure Unit engagement activity 1. Hold up real bills and coins in your hands for the class to see. Class, who knows what I am holding? (coins and/or bills) From where does money come? What can you do with it? What do you really know about money? 2. Tell the class that today they are going to begin learning about the power of money. Let s see what you already know about money. 3. Create a KWL chart on chart paper or on your interactive white board. Use the prompts listed below to lead discussion. Complete the K and W sections with your class. Record all students ideas whether correct or not. K What you know Money can look like. Cash in bills and coins Debit cards Checks Money comes from. Banks ATM machines Paychecks Federal Reserve Money can help me buy things like. Food Clothes Entertainment Toys Money can get me into financial trouble by. Borrowing money I can t repay Money can be saved and spent Money W What you want to know L What you learned 4. Save the KWL chart for an end of unit closure activity. Tell students that you will revisit their ideas and what they want to know after they have learned more about personal financial literacy. Engage 5. Distribute Activity to each student. Tell students that they will be using Readers P a g e 2

8 Grade Level: 4 Not Enough Bucks Lesson: 1 Theater to learn about fixed and variable cost. Assign the roles of Mr. Cash, a fourth grade teacher, and Buck, one of his students. Have those students read their parts of Activity After the students read the Readers Theater on Activity 4.1-1, pose this question to students: Using what Mr. Cash and Buck discussed, what do you think are fixed expenses? 7. Allow time for students to discuss what they think might be fixed expenses and why are they called fixed. (Fixed expenses are expenses that do not change from week to week or from month to month. They stay the same.) Explore/Explain 8. Direct students attention back to Activity Instruct each student to use a red colored pencil or red crayon and underline all fixed expenses that Buck mentioned in his discussion with Mr. Cash. Accept all answers as long as each student can justify their response. For example, one student may state that a cell phone bill is a fixed expense because if you have unlimited minutes and text, the cost will remain the same each month. Another student may state that a cell phone bill is a variable cost if the consumer does not have unlimited minutes and text. One month the consumer may have additional charges for going over the limit. For months where the consumer does not exceed these limits, the cost will be less. Ask students if they spend the same each day for their school lunch. Discuss that for some students this may not be a fixed expense. In Buck s case this is a fixed expense because he spends $2.00 each day for lunch. 9. Are there expenses that Buck mentioned that you did not underline? (yes) Which ones? (Possible responses are: food for Sparky, snacks, game room, movies, and bike repair) Why aren t they considered fixed expenses? (These are expenses that change from week to week or month to month. They may or may not occur on a regular basis.) Ask students to explain why Sparky s food expense might change week to week. (The cost may change if you use a coupon or if there is a sale.) 10. Write the word VARY on the board. Tell students that expenses that are not fixed expenses vary. These expenses are called variable expenses. Write variable expenses on the board. What are variable expenses? (Variable expenses are expenses that change from week to week or month to month. They may or may not occur on a regular basis.) Elaborate 11. Direct students attention back to Activity Instruct each student to use a green colored pencil or green crayon and underline all variable expenses that Buck mentioned in his discussion with Mr. Cash. (Students should underline food for Sparky, snacks, game room, movies, and bike repair in green.) 12. Once students can distinguish the difference between fixed and variable expenses, distribute Activity Tell students that Mr. Cash asked Buck to create a list of expenses. Based on this list, have the students determine if the expenses for Buck are variable of fixed. (In the previous activity, students were allowed to determine if the expense was variable or fixed based on their experience. They should now use context clues to determine Buck s situation. Buck s expenses are listed at the top of the page. P a g e 3

9 Grade Level: 4 Not Enough Bucks Lesson: Do you notice anything about Buck s expenses? (Some items are per day, others are per week or per month) Have students use the box with equation outlines to help them convert daily and monthly expenses into weekly expenses. Evaluate/End 14. Distribute Activity to students and have them use the information given in Activities and to complete the chart on Buck s weekly expenses. Direct the students to sort the list into fixed and variable expenses and write the weekly cost to the right of each item. 15. Students determine the sum of each column and answer the questions below the chart. 16. To reinforce the idea of fixed and variable expenses, have students work with a partner to list three examples of fixed expenses that a responsible adult may have. Also list three examples of variable expenses that a responsible adult may have. (Examples of fixed expenses: rent, mortgage, car payment, insurance, retirement savings. Examples of variable expenses: gasoline, utilities, clothing, dining out, entertainment) 17. Have a few students share their lists. Ask the class if they agree or disagree with the expenses listed and justify their responses. In closing ask: What are fixed expenses? (Fixed expenses are expenses that do not change from week to week or from month to month. They stay the same.) What are variable expenses? (Variable expenses are expenses that change from week to week or month to month. They may or may not occur on a regular basis.) EXTENSIONS 1. Have students write a letter either to Buck s parents persuading them to increase Buck s allowance or to Buck encouraging him to reduce his spending. Tell students that they should use the terms variable expenses, fixed expenses, and saving in their letter. 2. Buck s variable expenses are greater than his fixed expenses. Do you think the same is true for adults? Explain why or why not. Support your answer with real-world examples. P a g e 4

10 Grade Level: 4 Not Enough Bucks Lesson: 1 Activity Name Class Period Directions: Your teacher will assign the roles for Mr. Cash, a fourth grade teacher, and Buck, one of his students. Those students will have an opportunity to practice reading their parts first for the Readers' Theater below and then they will read them for the class. Listen to directions from your teacher. MR. CASH: Now class, you have told me what you already know about money. What do you want to learn about money? BUCK: Mr. Cash, I have something I d like to learn. MR. CASH: What would that be? BUCK: My parents give me $20.00 each week to spend. I have to pay for my school lunches, my Scout dues, and food for Sparky, my dog. They also expect me to pay $12.00 each month toward the cost of my cell phone. It sounds like I get a lot of money, but there is nothing left for the extra things I want to do. Last week I went to the movies, bought an after-school snack on three days and went to the game room with my friends on Friday. Then my bike had a flat tire and had to be fixed. I had to beg my parents for the extra money. My parents want me to be more responsible with my money. How am I going to learn to manage money if I don t ever have any money left over to manage and I have to ask them for anything extra that comes up? MR. CASH: It sounds like the money you get is all going toward your fixed expenses. BUCK: What are fixed expenses? P a g e 5

11 Grade Level: 4 Not Enough Bucks Lesson: 1 Activity Name Class Period Below are Buck s expenses. School lunch - $2.00 per day Buck eats in the cafeteria every day. After-school snack about $2.00 per day for 3 days Game room about $5.50 per visit Buck s portion of family cell phone bill - $12.00 per month Boy Scout dues - $1.50 per week Sparky s food about $5.50 per bag Sparky eats 1 bag each week. Bike repair about $10.00 Movies $5.50 per movie Directions: Calculate Buck s weekly expenses for the items below. You may need to refer back to Activity to find missing information. CONVERTING DAILY AND MONTHLY EXPENSES INTO WEEKLY EXPENSES 1. School lunch X = Daily cost Number of school days Weekly expense 2. Cell Phone Bill 4 weeks per month = Monthly cost Weekly expense 3. After school snacks x = Daily cost Number of Days Weekly expense P a g e 6

12 Grade Level: 4 Not Enough Bucks Lesson: 1 Activity Name Class Period Directions: Complete the chart below by sorting Buck s fixed and variable expenses. List the weekly cost to the right of each expense. When all the expenses are listed, find the sum of each column. Buck s Weekly Expenses FIXED EXPENSES Weekly Cost Boy Scout dues $1.50 VARIABLE EXPENSES Weekly Cost Total Total 1. Compare the sum of Buck s fixed expenses with the sum of his variable expenses. Write a mathematical comparison statement. Be sure to use greater than, less than or equal to symbols. Then write the statement in words using the terms fixed expenses and variable expenses. 2. What would be a reasonable amount for Buck s parents to increase his weekly allowance? Why do you think this? P a g e 7

13 Grade Level: 4 Not Enough Bucks Lesson: 1 Key Name Class Period Below are Buck s expenses. School lunch - $2.00 per day F Buck eats in the cafeteria every day. After-school snack about $2.00 per day for 3 days V Game room about $5.50 per visit V Buck s portion of family cell phone bill is $12.00 per month F Boy Scout dues - $1.50 per week F Sparky s food about $5.50 per bag Sparky eats 1 bag each week. V Bike repair about $10.00 V Movies $5.50 per ticket V Directions: Calculate Buck s weekly expenses for the items below. You may need to refer back to Activity to find missing information. CONVERTING DAILY AND MONTHLY EXPENSES INTO WEEKLY EXPENSES 1. School lunch $2 X 5 = $10 Daily cost Number of school days Weekly expense 2. Cell phone bill $12 4 weeks per month = $3 Monthly cost Weekly expense 3. After school snacks $2 x 3 = $6 Daily cost Number of Days Weekly expense P a g e 8

14 Grade Level: 4 Not Enough Bucks Lesson: 1 Key Directions: Complete the chart below by sorting Buck s fixed and variable expenses. List the weekly cost to the right of each expense. When all the expenses are listed, find the sum of each column. Buck s Weekly Expenses FIXED EXPENSES Weekly VARIABLE EXPENSES Weekly Cost Cost Boy Scout dues $1.50 After-school snacks $6.00 School lunches $10.00 Game room $5.50 Cell phone bill $3.00 Bike repair $10.00 Movies $5.50 Sparky s food $5.50 Total $14.50 Total $ Compare the sum of Buck s fixed expenses with the sum of his variable expenses. Write a mathematical comparison statement. Be sure to use greater than, less than or equal to symbols. Then write the statement in words using the terms fixed expenses and variable expenses. $14.50 < $32.50, fixed expenses are less than variable expenses 2. What would be a reasonable amount for Buck s parents to increase his weekly allowance? Why do you think this? Answers may vary but should be reasonable. P a g e 9

15 Grade Level: 4 Ideas for Raising Profit Lesson: 2 Lesson Description This lesson continues with characters from Mr. Cash s fourth grade class. The students want to raise money for the playground fund at Capital Elementary School. Students are to determine the supplies needed for each fundraising project, decide which of the supplies can be donated and which supplies must be purchased, and find the cost of the purchased supplies given necessary information. For each fundraising project, additional information is provided so students can compute the amount of money collected for each project. Students will calculate the profit for each project and determine the total profit earned by Mr. Cash s class. Texas Essential Knowledge and Skills (Target standards) Texas Essential Knowledge and Skills (Prerequisite standards) National Standards (Supporting standards) CEE - Council for Economic Education CCSS - Common Core State Standards PFL Math 4.10B: calculate profit in a given situation Math 4.1: Mathematical process standards Math 4.2E: represent decimals, including tenths and hundredths, using concrete and visual models and money Math 4.4A: add and subtract whole numbers and decimals to the hundredths place using the standard algorithm CEE Earned Income 4.6: People who own a business can earn profits, which is a source of income. CCSS Math 4.OA: Use the four operations with whole numbers to solve problems. CCSS Math 4.NBT: Use place value understanding and properties of operations to perform multi-digit arithmetic. Time Required One 45-minute period class PFL Terms Profit Expenses Revenue Materials Required Chart paper and markers or interactive white board Paper and pencil for students A copy of Activity for each student A copy of Activity for each student P a g e 1

16 Grade Level: 4 Ideas for Raising Profit Lesson: 2 Procedure Engage 1. Introduce this lesson by informing students that Capital Elementary School is getting ready to begin a fundraiser to buy additional playground equipment for their school. Mr. Cash s fourth grade class has asked if they could work together to help with the project. 2. Review the idea of Readers Theater. Activity is to be read by students playing the parts of Penny, Buck, Richey, Bill, and Mr. Cash, a fourth grade teacher. Students should be allowed to practice reading their parts prior to presenting the story to the class. Explore/Explain 3. After reading the Readers Theater on Activity 4.2-1, ask students: What are some of the things each team will need to consider before you can put your fund raising plan into effect? List all responses given by the class. Introduce any of the following ideas that students did not mention: supplies, setting the price, school store location(s), starting date and ending date for sales, date profits must be turned in. 4. Divide the class into four teams. Assign each team one of the projects described in the Readers Theater. Each team should work together to create a supply list needed to carry out their fund raising project. Teams need a recorder and a reporter. Allow 5 minutes for teams to brainstorm. 5. Bring the class back together. Have the reporter from each team share their list as you record it on a class chart. After you record the responses for a group, ask the remainder of the class if they have any other suggestions for materials needed for that fund raising project. Add any other responses. Have each team share in this manner. Below are some possible responses. Dog Shampooing Aunt Sally s Dog Grooming Tub Source of water/sprayer Shampoo Towels Leash Blow dryer Brush Change box Pencil Sales Pencils Boxes of pencils Change box Cookie Sales Flour Sugar Oven Cookie Sheets Bowls Spoons Recipe Eggs Spices Chocolate chips Baggies Change box Bracelet Sales Pony Beads: red, white, blue, purple, green, gold, yellow, orange, pink, black Elastic stretch cord Scissors Change box P a g e 2

17 Grade Level: 4 Ideas for Raising Profit Lesson: 2 6. Have each team review their needs list and distinguish between Items that must be purchased and items that will be borrowed or donated. Students circle all items that must be purchased. Elaborate 7. Remind students that Mr. Cash told his class that they must make more in sales than they spend on supplies in order to make a profit. Let s find out how to calculate profit. Give the class the following example: Yesterday my neighbor bought a birdhouse that I made. I spent $1.50 for wood and 25 for nails to make the birdhouse. I already had glue and paint. My neighbor gave me $5.00 for the birdhouse. How much profit did I make? 8. Allow a few minutes for each team to determine the profit from selling the birdhouse. Have students share their procedure(s) by modeling their calculations. This can be done by adding the cost of the supplies and then subtracting from the amount paid or subtracting the cost of the wood from the amount paid and then subtracting the cost of the nails from the difference. 9. Distribute Activity to each student. Tell the students that this worksheet has the results of Mr. Cash s class fund raiser. Read the directions to the students. Guide students through finding the profit for the Dog Shampooing. They should complete the remaining three fundraising projects independently. Be sure students answer the two questions on the bottom of the second page of Activity Evaluate/End 10. On the back of Activity have each student do a quick-write and explain which of the fundraiser projects they would most like to be a part of. Students should tell why they made that decision. They should consider their talents, the amount of money made or even how much fun the project might be. If time allows, have a few volunteers share their responses with the class. EXTENSION Pose this question to students: If you were in Mr. Cash s class, what other fundraising project would you suggest? Then instruct students to determine the cost of your supplies and the price of your goods or services. Be realistic about how many units you might sell. Determine your profit. P a g e 3

18 Grade Level: 4 Ideas for Raising Profit Lesson: 2 Activity Name Class Period Directions: Your teacher will assign the roles of Penny, Buck, Richey, Bill, and Mr. Cash for the Readers' Theater below. Those students will practice their parts first and then read their parts. Listen to directions from your teacher. PENNY: Mr. Cash, we have been thinking that it would only be fair for our class to help with the fundraising for the new playground equipment project. MR. CASH: Penny, that would be wonderful! What are some of your ideas for raising money? PENNY: I like to bake cookies, so we could make cookies and sell them here at school, at the carnival, or at the next PTA meeting. BUCK: Kids always need pencils. My uncle can get us a great deal on big boxes of pencils. We could sell them in the cafeteria before school. MR. CASH: Great ideas! Who else has an idea? RICHEY: My aunt has a dog grooming shop. She said we could use her dog bathtub one Saturday. We can keep whatever we make and donate it to the school project. Aunt Sally said it might even be good for her business. BILL: My sister makes bracelets with beads. Her friends like to wear the ones she makes for them. I ve got a great idea! We can make some for girls, but we can make them in team colors and guys would wear them. They re fun and easy to make. MR. CASH: OK, let s get started. Let me remind you that it is important that our fund raising projects make a profit. That means that we need to make more in sales than we spend on supplies. Will each one of you head up a team? ALL FOUR STUDENTS: YES, SIR!!! P a g e 4

19 Grade Level: 4 Ideas for Raising Profit Lesson: 2 Activity Name Class Period Directions: Use the information given to find the total expenses for each of the projects. Then determine the total amount of money each project earns. This is called revenue. Use the total expenses and the total amount each project earned to calculate the profit. Your teacher will help you with the first one. Dog Shampooing Dog Shampoo 2 bottles x $6.18 per bottle = Cookie Sales Chocolate chips 2 bags x $5.68 per bag = Grooming Brush $4.97 Flour $2.44 Sugar $2.88 Eggs $1.18 Baggies $2.98 Total Expenses: Total Expenses: If the class shampoos 15 dogs and charges $8 for each shampoo, what is the total revenue collected for shampooing dogs? This recipe makes 3 dozen cookies. 4 batches of 3 dozen cookies makes cookies. If there are 6 cookies in a package, how many packages can be made with 4 batches of 3 dozen cookies? Calculate Profit: Total Revenue: If these packages are sold for $2 each, what is the total revenue collected from the cookie sale? Total Revenue: Calculate Profit: Revenue for dog shampooing Revenue from cookie sales Expenses Profit: Expenses Profit: P a g e 5

20 Grade Level: 4 Ideas for Raising Profit Lesson: 2 Pencil Sales Large box of pencils (1 gross) (Recall that 1 gross = 144) Total Expenses: Sell 144 pencils for 50 per pencil 144 x 50 = Bracelet Sales $31.99 Pony beads 1 package of each color: red, white, blue, pink, purple, yellow, green, black, orange, and gold $2.99 per package x packages = Elastic stretch cord $8.99 Total Expenses: Sell 97 ten-inch bracelets for $1 each 97 x $1 = (Be sure to change the cents to dollars. Use a calculator if needed.) Calculate Profit: Total Revenue: Revenue from pencil sales Calculate Profit: Total Revenue: Revenue from bracelet sales Expenses Profit: Expenses Profit: 1. Order the amounts of profit from each team project from least to greatest. 2. The fundraiser was a success! All four groups sold out. What is the total amount of money Mr. Cash s class will donate to the playground equipment fundraiser for Capital Elementary School? Show your work in the space below. P a g e 6

21 Grade Level: 4 Ideas for Raising Profit Lesson: 2 Key Name Class Period Directions: Use the information given to find the total expenses for each of the projects. Then determine the total amount of money each project earns. This is called revenue. Use the total expenses and the total amount each project earned to calculate the profit. Your teacher will help you with the first one. Dog Shampooing Dog Shampoo 2 bottles x $6.18 per bottle = Cookie Sales $12.36 Chocolate chips 2 bags for $5.68 per bag = $11.36 Grooming Brush $ 4.97 Flour $ 2.44 Sugar $ 2.88 Eggs $ 1.18 Baggies $ 2.98 Total Expenses: $17.33 Total Expenses: $20.84 If the class shampoos 15 dogs and charges $8 for each shampoo, what is the total revenue collected for shampooing dogs? $ This recipe makes 3 dozen cookies. 4 batches of 3 dozen cookies makes 144 cookies. If there are 6 cookies in a package, how many packages can be made with 4 batches of 3 dozen cookies? 24 If these packages are sold for $2 each, what is the total revenue collected from the cookie sale? $48 Total Revenue: $ Total Revenue: $48.00 Calculate Profit: Calculate Profit: Revenue for dog shampooing $ Revenue from cookie sales $48.00 Expenses $17.33 Expenses $20.84 Profit: $ Profit: $27.16 P a g e 7

22 Grade Level: 4 Ideas for Raising Profit Lesson: 2 Pencil Sales Bracelet Sales Large box of pencils (1 gross) $31.99 Pony beads 1 package of each color: red, white, blue, pink, purple, yellow, green, black, orange, and gold $2.99 per package x 10 packages = $29.90 Elastic stretch cord $ 8.99 Total Expenses: $31.99 Total Expenses: $38.89 Sell 144 pencils for 50 per pencil 144 x 50 = 7200 Sell 97 ten-inch bracelets for $1 each 97 x $1 = $97 (Be sure to change the cents to dollars. Use a calculator if needed.) Total Revenue: $72.00 Total Revenue: $97.00 Calculate Profit: Calculate Profit: Revenue from pencil sale $72.00 Revenue from bracelet sales $97.00 Expenses $31.99 Expenses $38.89 Profit: $40.01 Profit: $ Order the amounts of profit from each team project from least to greatest. $27.16,_$40.01,_$58.11,_$ (Cookie Sales,_Pencil Sales,_Bracelet Sales,_Dog Shampooing) 2. The fundraiser was a success! All four groups sold out. What is the total amount of money Mr. Cash s class will donate to the playground equipment fundraiser for Capital Elementary School? Show your work in the space below. $ $ $ $ = $ P a g e 8

23 Grade Level: 4 Saving is Not Just Child s Play Lesson: 3 Lesson Description Where shall the children in Mr. Cash s class put the funds they raised for the playground equipment? This lesson presents various savings options: a basic savings account, a certificate of deposit, a money market account or a school safe. After a brief introductory slide show, students explore the advantages and disadvantages of each of the options and then choose the one they think is best. Students must justify their choice. At the end of the lesson, each student votes for the best savings option. Texas Essential Knowledge and Skills (Target standards) Texas Essential Knowledge and Skills (Prerequisite standards) National Standards (Supporting standards) CEE - Council for Economic Education CCSS - Common Core State Standards PFL Math 4.10C: compare the advantages and disadvantages of various savings options Math 4.1: Mathematical process standards Math 4.2C: compare and order whole numbers to 1,000,000,000 and represent comparisons using the symbols >, <, or = CEE Saving 4.3: People can choose to save money in many places, for example, at home in a piggy bank or at a bank, credit union, or savings and loan. CEE Saving 4.4: People set savings goals as incentives to save. CEE Financial Investing 4.1: After people have saved some of their income, they must decide how to invest their savings so that it can grow over time. Time Required Two 45-minute class periods PFL Terms Basic savings account Certificate of deposit Money market account Financial institution Bank Credit union Materials Required Slide show: Savings Options A copy of Activity 4.3-1a-c for each student A copy of Visual Chart paper and markers or interactive white board Procedure Engage 1. Remind students that Capital Elementary just finished a fundraiser to buy new playground equipment for their school. Money has been donated through many projects, including projects done by Mr. Cash s class. The boys and girls have to make a decision where to keep the money until it is needed. Ask: Where should the school place the fundraiser P a g e 1

24 Grade Level: 4 Saving is Not Just Child s Play Lesson: 3 money? (Consider all suggestions.) Explore/Explain 2. Tell students that Mr. Cash shared the following slide show with his students. Share slide show Savings Options about making choices among the different kinds of financial institutions as well as various saving options. Slides include an example of various interest rates and their return on a $100 investment. 3. Tell students that Mr. Cash s students were still a bit confused about interest. How would the bank get money to pay you money for using your money? Choose students to act out the parts of a scenario with Buck (The Saver), Penny (The Borrower), and Bill (The Bank). Each student participating in this scenario should wear a sign with the title of their role The Saver, The Bank, The Borrower. a. Buck (The Saver) has $60 to deposit in a savings account. (Give Buck $60 in play money.) He decides to put it in the bank so that his money will be safe. b. Buck (The Saver) deposits his money by handing it to Bill. c. Penny (The Borrower) needs to borrow $60 so that she can pay a doctor s bill. She promises the bank that she will pay the money back in 2 months or the bank will take her ipod. d. Bill (The Bank) hands the $60 to Penny. Penny (The Borrower) is now able to pay her doctor s bill. e. Two months pass and Penny (The Borrower) comes to the bank to pay back the $60 she borrowed. f. Ask: Is it that easy to borrow money? Why not? (Students should explain that there is a fee for borrowing money.) If students do not know this, the teacher must explain it to them. What is this fee called? (Interest) g. Ask the class what they think should be an appropriate amount of interest to pay for borrowing $60 for two months. If students need guidance, help them determine a reasonable amount. A reasonable amount may be $3. h. Penny (The Borrower) pays back the $60 she borrowed from the bank plus $3 in interest. Penny (The Borrower) gives Bill (The Bank) $60 plus three one-dollar bills. i. Buck (The Saver) decides that he wants to withdraw the money he put in the bank to purchase a new video game. Bill (The Bank) gives Buck $60. j. Ask: Is that all Buck gets? (No) What else does Buck get? (Interest) k. Ask the class what they feel would be an appropriate amount of interest for leaving $60 in the bank for two months. Help students understand that this amount must be less than $3 as the bank must make money to pay its employees, pay for the building, pay for utilities, etc. Students may decide that one or two dollars is reasonable. l. Bill (The Bank) hands this amount of money to Buck. P a g e 2

25 Grade Level: 4 Saving is Not Just Child s Play Lesson: 3 m. Ask: When someone borrows money from a bank and then they pay that back to the bank later, they must also pay a little more for borrowing the money. What is this called? (Interest) The person who deposits money into a bank savings account also gets interest. What is this kind of interest? (This is a lesser amount of money that the bank pays someone for letting the bank use their money while the bank keeps it safe for them.) Explain Elaborate 4. Display Grade 4 Lesson 3 PowerPoint. Read each slide to the students. This presentation will serve as an introduction to savings. 5. Distribute Activity 4.3-1a, Activity 4.3-1b, and Activity 4.3-1c to each student. 6. Read and discuss the first section Activity 4.3-1b titled Basic Savings Account. Clarify any terms that are not familiar to students. 7. Using student input, complete the first row of the graphic organizer on Activity 4.3-1a. Instruct students to fill in the information as the teacher models. 8. Have students look carefully at the other three savings options. Allow time for any questions about the information given. Now students are ready to work with a partner to complete the comparison chart. Evaluate/End 9. Once students have completed the graphic organizer on Activity 4.3-1a, discuss the plans for purchasing the playground equipment for Capital Elementary School located on Activity 4.3-1c. Capital Elementary School has raised $4,200 toward their goal. They plan to purchase the playground equipment 7 months from now. More fund raisers are planned for the spring. The final goal is to raise $10, Using this additional information, conduct a class discussion on the advantages and disadvantages of each savings option. 11. Direct students attention back to the completed graphic organizer on Activity 4.3-1a. Have students work with either a partner or their group to select the best savings option(s) for Capital Elementary School. Students should be ready to justify their choices by explaining why they think their choices are the best options. Students may choose a single option or a combination. Considerations when making choices: o Once the CD is purchased, additional money cannot be added within the 7 months. o Money cannot be withdrawn from a CD for preliminary work that must be done early on. o If a CD is purchased, additional money raised may be secured in a basic savings account. Therefore, a combination of the options is possible. o The principal may decide to use the money for something other than the playground equipment. P a g e 3

26 Grade Level: 4 Saving is Not Just Child s Play Lesson: List all student suggested savings options for the playground equipment money on chart paper or on the board. Students should provide a convincing argument to justify their choice when sharing their selection. 13. After all choices are listed, have students vote by secret ballot on the choice they feel would be the best savings option for Capital Elementary School. EXTENSIONS 1. Students may research current interest rates of basic savings accounts and/or money market accounts at 3-6 local banks. They can compare rates of adult savings accounts and also those designed for students. 2. Students may also research current interest rates at credit unions. They should make note of which credit unions they (or their families) would be eligible to join. 3. Invite a speaker from a local financial institution visit the class to discuss available savings options. P a g e 4

27 Grade Level: 4 Saving is Not Just Child s Play Lesson: 3 Activity 4.3-1a Name Class Period Where should we save our money? Directions: Use the information on Activity 4.3-1b to complete the chart below. Yearly Interest Rate Time Restrictions Minimum Deposit Is it insured? Basic Savings Account Money Market Account 6 month Certificate of Deposit School Safe P a g e 5

28 Grade Level: 4 Saving is Not Just Child s Play Lesson: 3 Activity 4.3-1b Savings Options Basic Savings Account Ready Money Certificate of Deposit (CD) Time = Money Earns less than 0.5% interest a year Less than $10 can get you started Interest paid monthly Easy to deposit and withdraw funds Interest rates are subject to change Does not earn much interest Can use online banking for convenience FDIC Insured for banks and NCUA for credit unions Purchase CD at local financial institution $1000 minimum deposit Money stays in account for 6 months Penalty for early withdrawal Locked in interest rates ranging from 1.00% to 2.00% FDIC Insured for banks and NCUA for credit unions Money Market Account More Time = More Money School Safe Time = Money Open at local financial institution Easy to deposit and withdrawal funds No time restriction Balances of $2500 or more earns between 0.5% and 1% interest Balances below $2500 will earn no interest Some financial institutions place a limit on the number of withdrawals per month FDIC insured for banks and NCUA for credit unions Every day convenience Monitored by the school secretary, the principal, and/or the assistant principal Approval for spending given by the principal No time restrictions What you put in is what you get out no interest earned No penalties No insurance if money is taken P a g e 6

29 Grade Level: 4 Saving is Not Just Child s Play Lesson: 3 Activity 4.3-1c Directions: Read the additional information. Discuss with your class both the advantages and disadvantages of each savings option. Capital Elementary School has raised $4,200 toward their goal. They plan to purchase the playground equipment 7 months from now. More fund raisers are planned for the spring. The final goal is to raise $10,000. After discussing the advantages and disadvantages of each savings option, return to the completed chart of Activity 4.3-1a. Work with your partner to select the best savings plan for Capital Elementary School. Justify your thinking by explaining why you think this is the best plan. P a g e 7

30 Grade Level: 4 Saving is Not Just Child s Play Lesson: 3 Key Name Class Period Directions: Use the information on the following page to complete the chart below. Where should we save our money? Yearly Interest Rate Time Restrictions Minimum Deposit Is it insured? Basic Savings Account less than 0.5% none $10 yes Money Market Account Between 0.5% and 1% none at least $2500 to earn interest yes 6 month Certificate of Deposit 1% to 2% 6 months (no additional deposits or withdrawals) $1000 yes School Safe none none none no P a g e 8

31 Grade Level: 4 Divide and Conquer Lesson: 4 Lesson Description It s time for Grant, Mr. Cash s five year-old son to begin getting a weekly allowance. Grant must allocate his allowance among spending, saving, and sharing. The fourth graders share their ideas about how Grant should divide his allowance. Then students construct a foldable and show how they would allocate a $5.00 weekly allowance among the three categories. Texas Essential Knowledge and Skills (Target standards) PFL Math 4.10D: describe how to allocate a weekly allowance among spending; saving, including for college; and sharing Texas Essential Knowledge and Skills (Prerequisite standards) Math 4.1: Mathematical process standards Math 4.2E represent decimals, including tenths and hundredths, using concrete and visual models and money Math 4.4A add and subtract whole numbers and decimals to the hundredths place using the standard algorithm National Standards (Supporting standards) CEE - Council for Economic Education CCSS - Common Core State Standards CEE Buying Goods and Services 4.7: Planning for spending can help people make informed choices. A budget is a plan for spending, saving, and managing income. CCSS Math 4.OA: Use the four operations with whole numbers to solve problems. CCSS Math 4.NBT: Use place value understanding and properties of operations to perform multi-digit arithmetic. CEE PFL Savings 4.1: Income is saved, spent on goods and services, or used to pay taxes. Time Required One 45-minute class period PFL Terms allowance spend save share Materials Required Paper and pencil for each student 3 clear containers, such as clear plastic cups 3 index cards to create these labels: SAVE, SPEND, SHARE Ten dimes A copy of Template for Foldable for each student, copied front and back Scissors Crayons or colored pencils A copy Half Dollar Coin page enough for each student to receive one column of coins Glue 3 x 5 index cards, 3 per student Spring clothespin, one per student P a g e 1

32 Grade Level: 4 Divide and Conquer Lesson: 4 Procedure Engage 1. Ask students: Do you remember Mr. Cash in Lesson 3? Who is he? (He is a fourth grade teacher.) What do you know about him? (His class learned about fixed and variable expenses; they did projects to raise money for new playground equipment; and then they decided where the best place would be to save the money until they are ready to spend it.) What did we learn to call the money the children made from their projects? (Profit.) 2. Ask students if they know anyone who receives an allowance. Then lead a discussion in which students discuss what chores might be required for them to earn their allowance. After the discussion say: Well, Mr. Cash wants to teach his five-year-old son about financial responsibility. He has decided to give Grant, his son, a one dollar allowance each week. Mr. Cash knows that his son should learn early on how to manage his money. Grant will receive his allowance in dimes. How many dimes will he get each week? (10 dimes) How do you think Grant should use his 10 dimes? (Answers will vary.) Explore/Explain 3. Have students record how they think Grant should use his ten dimes. Students can record this on their own paper or in a journal. 4. As students are writing, place three clear containers where students can see them. 5. Once students have had sufficient time to write their response, direct students attention to the three containers. Explain that Mr. Cash would like his son to think of using his allowance in 3 categories. He wants to allow Grant to spend a portion of his allowance. Attach a SPEND label to the first container. How do you think Grant might want to spend a portion of his allowance? Accept any reasonable answers. 6. Mr. Cash also wants Grant to save a portion of his allowance. Attach a SAVE label to the second container. Why might Grant want to save a portion of his money? Accept reasonable answers. If students do not suggest saving for college or a school where he can learn about working, be sure to mention it. 7. Grant also needs to understand sharing. Attach a SHARE label to the third container. What are some ways Grant might want to share his money? If students don t suggest ideas, some possible thoughts might be giving money to buy food for the local animal shelter or donations to a cause such as a homeless shelter or the cancer society. 8. Knowing Mr. Cash s ideas about budgeting money, would one of you volunteer to show how you think Grant might now use his dimes? Have a student volunteer come to the front of the classroom and demonstrate how he/she would allocate the ten dimes. This is not what students wrote down at the beginning of the lesson but showing how he/she would divide the dimes among the three containers: Spend, Save, and Share. Ask the volunteer to explain his/her thinking about allocating the dimes in this way. 9. Direct the students to draw three circles on their paper. Students should label the circles Spend, Save, and Share. Students will draw small circles to represent dimes or P a g e 2

33 Grade Level: 4 Divide and Conquer Lesson: 4 use tally marks to show how they would distribute the ten dimes. 10. As you monitor students working, select several students with differing ideas to share their representations of Grant s budgeting of his money. Check to be sure all representations total $1.00. Elaborate 11. Distribute the Template for Foldable. Be sure it is copied on both the front and back. Direct students to follow the directions below: First, fold your paper on the fold line along the long line of symmetry. Cut on the dotted lines up to the fold line in order to have three sections. Be sure you are only cutting on the half of the paper with the dotted lines. Using crayons or colored pencils, label the section on the left SPEND, the middle section SAVE, and the section on the right SHARE. Spend Save Share Distribute one column of the Half Dollar Coins to each student. This is ¼ of the original page. Instruct students to cut apart the ten rectangles that represent a $5.00 allowance given in half dollar coins. On the inside, fill in the blanks completing Things I want to spend my money on, Things I want to save for, and Ways I want to share my money. These are found on the top of the flipped page. Have students distribute their $5.00 weekly allowance in a way that would follow Mr. Cash s suggestions. Each category must have at least 50. Students should glue coins in the selected categories. Find the total for each category and write it in the corresponding blank. You may also wish to add the sums of the three categories to check that the total is $5.00. Students have now developed a plan for allocating a weekly allowance among spending, saving, and sharing. You may choose to display the foldables or have a few students share theirs with the class. Evaluate/End 12. Give each student three 3 x 5 index cards and one spring clothespin. Students write the word SPEND in red crayon or colored pencil on one card. On the second card, they write SAVE in black crayon or colored pencil. On the third card, they write SHARE in green crayon or colored pencil. 13. As you read each of the following statements, students clip the card that describes the action on the clothespin and hold it up on the teacher s count of I went to the store and bought a candy bar. Spend I bought canned goods for the food bank. Share I put fifty cents into my piggy bank. I want a new CD. Save P a g e 3

34 Grade Level: 4 Divide and Conquer Lesson: 4 I put $10 of my birthday money into the bank for college. Save My best friend and I went to the movies. Spend I participated in Jump Rope for Heart. Share I donated a pair of gently used tennis shoes I bought at a garage sale to our church clothing drive. Share I bought tickets at the game room. Spend I bought a toy for my puppy at the dollar store. Spend I did chores around the house and put the money in my secret emergency box. Save EXTENSIONS 1. If you save $0.50 a week for 52 weeks, how much would you have saved in one year? You can also think of your savings as saving $1.00 every two weeks for a total of 26 weeks. Which is easier to calculate? Are the totals the same? If you save $0.50 a week for 52 weeks, could that amount make a difference to a rescued dog or cat in the local shelter? What could it buy? 2. Contact your local animal shelter and ask them to tell you their greatest needs. Ask if any of your friends would like to combine their money and donate it to the shelter for a period of six weeks. Plan a visit with your friends to the shelter to deliver the donation. P a g e 4

35 Grade Level: 4 Divide and Conquer Lesson: 4 P a g e 5

36 Things on which I want to spend my money: Things for which I want to save: (consider saving for college or job-related training) Ways I want to share my money: Paste coins here Paste coins here Paste coins here Total for Spending: Total for Saving: Total for Sharing:

37 Fold line

38 Grade Level: 4 Smart Cash Lesson: 5 Lesson Description As in Mr. Cash s class, your students will play a game called Smart Cash. Groups of 3-4 students will use a game board and a set of game cards. Each player reads a selected game card aloud that will contain information about the main purposes of financial institutions. The cards provide new learning as well as a review of the main ideas of the previous four lessons. After students have played the game, the teacher reviews critical points located on the game cards. Texas Essential Knowledge and Skills (Target standards) Texas Essential Knowledge and Skills (Prerequisite standards) National Standards (Supporting standards) CEE - Council for Economic Education CCSS - Common Core State Standards PFL Math 4.10E: Describe the basic purpose of financial institutions, including keeping money safe, borrowing money, and lending Math 4.1: Mathematical process standards CEE Saving 4.3: People can choose to save money in many places, for example, at home in a piggy bank or at a bank, credit union, or savings and loan. CEE Savings 4.6: When people deposit money into a bank (or other financial institution), the bank pays them interest. Banks attract savings by paying interest. People also deposit money into banks because banks are safe places to keep their savings. Time Required PFL Terms Materials Required Two 45-minute class periods Financial institution Bank Credit Union Deposit Withdrawal Smart Cash Game Board for each group of 3-4 students (Game Board can be enlarged. Heavy laminate can also be used for durability.) Smart Cash Game Cards for each group of 3-4 students Zip bags or rubber bands to secure cut apart cards Scissors Game pieces or small counters (one per student) P a g e 1

39 Grade Level: 4 Smart Cash Lesson: 5 Procedure Engage Explore/Explain 1. Tell students that Mr. Cash s class earned a reward for their hard work earning money for the new playground equipment. The class had a game day. Students brought in board games to play with their classmates. Penny brought a game called Smart Cash that everyone liked. So today, we are going to play Smart Cash, too. Ask students if they have ever made a smart decision when they received money. 2. If you have never before played Smart Cash, you must first have students cut the cards apart. Once the three pages of cards are cut apart, be sure to keep them in a zip bag or rubber banded together. 3. Explain the structure of the game to students. Players: small group of 3-4 students Objective: Be the first player to reach or pass the space marked Financial Success! Directions: Shuffle the cards. Place the cards face down on SMART CASH in the center of the game board. The student in the group whose first name is closest to the end of the alphabet goes first. Play then moves in a clockwise direction. The first player draws a card and reads it aloud to the group. o o If it is an informational card, the student simply follows the direction. If it is a question the student must answer, the group members must agree that the answer is correct before the student moves forward. If the group decides the answer is incorrect, the student follows the direction for an incorrect answer on the card. If students cannot agree, the teacher should be consulted. Play then moves to the player on the left. Play continues in this manner until a student has moved around the board and has reached or passed Financial Success! If all the game cards are used before a player reaches or passes Financial Success!, shuffle the game cards again and continue to play with the reshuffled deck. Elaborate 4. Divide students into groups of three or four to play the game. Make adjustments if needed. 5. Provide time for students to play Smart Cash. Monitor groups as they play. Evaluate/End 6. After playing the game for the first time, have a class discussion on information encountered while playing the game. Most financial institutions have a special room in which people can rent a space to store small valuables. What are these small spaces called? (Safe deposit boxes) If you need to conduct banking business when most banks are closed, what would P a g e 2

40 Grade Level: 4 Smart Cash Lesson: 5 be a good way for you to bank? (Online banking) What is it called when you put your paycheck or other money into the bank or credit union? (A deposit) If you have money that you don't plan to use soon, you may want to invest it so that it can make more money for you. For instance, you save $5 a week for one year in a savings account at a bank/credit union. How much will you have saved at the end of the year? ($260) The bank/credit union pays you money to let them use your money so you will have more than $260 at the end of one year. What is the money the bank pays you called? (Interest) What does ATM mean? (Automatic teller machine What does it do? It lets you withdraw money from your account or deposit into your account without having to go inside the bank.) Banks are secure and also insure your money so that it is guaranteed to be there for you. Because of this, what is one of the main reasons people deposit money in the bank/credit union? (To save their money) What are bills called that are the same amount every month, such as apartment rent or car payments? (Fixed expenses) What are expenses called that may change from month to month, such as an amount spent on clothing or entertainment? (Variable expenses) What does profit mean? (Profit is the value of money that is left after expenses are paid.) How is saving your money in a savings account different from saving in a Certificate of Deposit? (A CD locks your money in at a higher interest rate for the term of the CD. A savings account pays a lower rate of interest but you can withdraw money at any time.) Banks/credit unions lend people money when they do not have enough money for what they want. What do financial institutions want to know before lending money? (They want to know if you have the resources to pay it back, with interest, in a certain period of time.) What kind of financial institution lends its members money at a lower interest rate than most banks? (Credit Unions) Many financial institutions offer services to their customers such as automatic bill pay, free checks, and free use of their coin machine. Why do most people use financial institutions? (To have a checking account and/or a savings account, to borrow money, to keep their money safe) 7. Ask a few volunteers to share helpful information that they learned from today s lesson. EXTENSION Work with a partner and design your own game about how to be smart with money. You may think about Penny s game, Smart Cash, or pattern your game after a popular game such as Words with Friends, Wheel of Fortune, Jeopardy, Monopoly, Chutes and Ladders, or another game with which you are familiar. Students can share the games they made during a game day. P a g e 3

41 P a g e 4

42 It is 11 o clock at night and you remember that a bill is due tomorrow and you don t have enough money in your checking account. Luckily you have set up on-line banking and at any time of day or night you can move money from your savings account into your checking account. Good planning! GO AHEAD 5 SPACES Your parent s credit union gives out free popcorn on Friday afternoons. Your mother always deposits her check there on Fridays. That means free popcorn after school. Happy snacking! GO AHEAD 2 SPACES Your father owns a very valuable set of baseball cards that he wants to protect. He is renting a safe deposit box in the bank s huge walk-in safe. That should do it! GO AHEAD 3 SPACES Your parent just won the lottery. Congratulations! There is now enough money to send you to college if the money can make money in the next 8 years. Your parent decides to visit with a financial advisor who can help invest the money. GO AHEAD 6 SPACES Every one of your relatives has sent you money for your birthday. You fill out a deposit slip and give it to the teller in the lobby. The teller checks your addition and finds that you really have $5.00 more than you put on the deposit slip. You thank the teller for finding your mistake! GO AHEAD 3 SPACES There is a huge sale at the mall and you would like a new pair of jeans but you don t have any cash. You go to the bank s ATM and withdraw $30. That didn t take long! You are so glad you have been saving part of your money. GO AHEAD 6 SPACES P a g e 5

43 You are at the mall and see the newest computer game on sale. The only problem is that you haven t been saving. Your parent warned you about spending all of your allowance. GO BACK 4 SPACES You have decided at the last minute to stop by the ice cream shop and have a chocolate sundae. Is this a fixed or variable expense? If the others players agree then GO AHEAD 6 SPACES If your answer is wrong GO BACK 3 SPACES True or False If you put your money into a Certificate of Deposit, you can withdraw that money at any time without losing any of your money. If the other players agree then GO AHEAD 3 SPACES If your answer is wrong GO BACK 3 SPACES You are explaining to your friends that you have to pay fixed expenses with your allowance. Name one fixed expense you might have to pay. If the other players agree then GO AHEAD 3 SPACES If your answer is wrong GO BACK 3 SPACES Your class decided to sell cookies at the school carnival. The class made a profit of $6. Did they make $6 or did they lose $6? If the other players agree then GO AHEAD 3 SPACES If your answer is wrong GO BACK 3 SPACES True or False A credit union can often loan money at a lower interest rate because they are there to serve their members and don t have to make as great a profit as some banks. If the other players agree then GO AHEAD 3 SPACES If your answer is wrong GO BACK 3 SPACES P a g e 6

44 True or False There are 3 areas among which we often divide money. They are spend, save, share. If the other players agree then GO AHEAD 3 SPACES If your answer is wrong GO BACK 3 SPACES True or False When you make a checking account deposit, you are putting money into your checking account. If the other players agree then GO AHEAD 3 SPACES If your answer is wrong GO BACK 3 SPACES You have not been responsible about paying your bills in the past. The bank/credit union says you have a bad credit score. They won t give you a money loan. GO BACK 3 SPACES True or False When you make a checking account withdrawal, you are putting money into your checking account. If the other players agree then GO AHEAD 3 SPACES If your answer is wrong GO BACK 3 SPACES True or False It never makes sense to save for an unexpected expense. Emergencies just don t happen to nice people. If the other players agree then GO AHEAD 3 SPACES If your answer is wrong GO BACK 3 SPACES You have paid your bills on time for the last 3 years. The bank/credit union says you have an excellent credit score. They will loan you $500. Congratulations! GO AHEAD 4 SPACES P a g e 7

45 You decide to borrow money from The First Bank of Texas because they will only charge you $3 for every $100 you borrow. The Second Bank of Texas wants to charge you $5 for every $100 you borrow. Good choice! GO AHEAD 3 SPACES Safe Road Credit Union will print your first box of checks at no charge. You think this is a nice service they provide for their customers. GO AHEAD 3 SPACES ABC Bank of Texas has security guards in every bank to help keep your money safe. You appreciate their effort. GO AHEAD 1 SPACE Lee Credit Union of El Paso will take money out of your checking account each month and mail a check to the company that provides you with electricity. You will not miss a payment because this is a service they provide. GO AHEAD 4 SPACES You love the drive-through banking that Simmons Bank provides. The teller at the window is so nice and always gives your dog treats! GO AHEAD 3 SPACES Your piggy bank is getting really full. It s time to trade in your nickels and dimes for dollar bills. One Stop Credit Union has a machine that will do this at no charge. GO AHEAD 1 SPACE P a g e 8

46 You opened a college savings account at your credit union. Now your savings will be safe! GO AHEAD 3 SPACES You have been saving $3 a week in a savings account for 22 months. The financial institution pays you $2.34 in interest. The bank helps you save for your future! GO AHEAD 2 SPACES You borrowed $200 from the financial institution. You paid off the loan after 6 months and had to pay an additional $33.92 in interest. You use online banking to verify the balance of your checking account. GO BACK 2 SPACES GO AHEAD 2 SPACES P a g e 9

47 Grade Level: 5 The Case of the Disappearing Paycheck Lesson: 1 Lesson Description In this lesson students first offer what they know about taxes. They then jigsaw an article on taxes written by a fellow fifth grader. Groups present the information that they feel is important to the class. After each presentation, students construct a flip book that gives the most important information about income tax, payroll tax, sales tax, and property tax. Students define gross income and net income, and then using information provided on gross income and various taxes, they calculate net income. At the conclusion of the lesson, students return to what they originally thought they knew about taxes to confirm and correct information. Texas Essential Knowledge and Skills (Target standards) Texas Essential Knowledge and Skills (Prerequisite standards) National Standards (Supporting standards) CEE - Council for Economic Education CCSS - Common Core State Standards PFL Math 5.10A: define income tax, payroll tax, sales tax, and property tax PFL Math 5.10B: explain the difference between gross income and net income Math 5.1: Mathematical process standards Math 5.3A: add and subtract positive rational numbers with fluency CEE Earned Income 4.2: People earn an income when they are hired by an employer to work at a job. CCSS Math 5.NBT: Perform operations with multi-digit whole numbers and with decimals to the hundredths PFL Terms Income tax Payroll tax Sales tax Property tax Gross pay Net income Employer Employee Time Required One 45-minute class period Materials Required 4 sheets of chart paper Markers 1 copy of Activity for each student 1 copy of Visual sheet of chart paper for each group 1 sheet of lined notebook paper for each student P a g e 1

48 Grade Level: 5 The Case of the Disappearing Paycheck Lesson: 1 Scissors for each student Procedure Engage Before students enter the classroom, prepare for a word splash. A word splash is a collection of terms or concepts that students believe connect to the concept they are preparing to study. After the lesson, the predictions are checked against new learning. Label 4 sheets of chart paper with each of the following: Income Tax, Payroll Tax, Sales Tax, or Property Tax. Have markers accessible for students responses. 1. Direct students to write any word or phrase or draw a picture on each chart paper to show what they already may know about each tax. Do not eliminate or correct anything that students write on the splashes at this time. 2. Say: Whenever you buy gum, candy, or a new CD, you know that you pay more than the price marked on the item. You probably also know that it s called tax. Where does that money go? What is it used for? Allow a brief time for students to share what they think they know. Explore 3. Have students number off from 1 to 4. Assign an area of the room for each number 1-4. Direct students to move to the area that represents their number. 4. Display Visual Have students create a flipbook by using the directions below. The teacher will model each step. Fold a sheet of notebook paper along the longest line of symmetry. Lay the flipbook on your desk so the fold faces left. Divide the paper into four equal sections by drawing 3 horizontal lines. fold Cutting lines In each of the four sections, write the following tax categories: Income Tax, Sales Tax, Payroll Tax, and Property Tax. Cut the top flap of the paper to the fold along the drawn lines to produce a flipbook. Each tab should open right to left. 5. Distribute Activity to each student. Tell students you have an article for them to read written by a fifth grader named Yul Taxem. Yul reports information for his school newspaper. He does such a great job that his articles are often reproduced in student publications across the nation. You found this article in The School Scoop. P a g e 2

49 Grade Level: 5 The Case of the Disappearing Paycheck Lesson: 1 Explore 6. Read and explain the group assignment below. Each group will be assigned one tax category. Your group s assignment is to become experts on your assigned tax. Group 1 will become experts on income tax. Group 2 will become experts on payroll taxes. Group 3 will become experts on sales tax. Group 4 will become experts on property tax. Each member of your group should carefully read the section about your tax category. The group will then discuss the important points about your tax category. Each group will then create a visual on chart paper that communicates the important information about your assigned tax. Your visual may include short phrases. Be sure that your pictures and words are large enough for the class to see. Next, plan your presentation. Think about how you will explain your tax category. Each person in the group should participate in the presentation. You will have minutes to read, create the visual, and plan the presentation. Be sure to read only the section of the article that explains your assigned tax category. Explain 7. Have each group display their visual and make their presentation. Allow other groups to ask questions. 8. After each presentation, allow time for students to work in their assigned groups to capture at least three main points about the tax. These points are to be written under the flap for that tax category in their flipbook. (See Key 5.1-2) 9. Pose this question to students. Now that you know more about taxes, where does the money come from that one uses to pay taxes? (Money to pay taxes comes from earned income.} 10. Instruct students to read the last section of Activity 5.1-1, The Case of the Disappearing Paycheck by Yul Taxem. 11. Ask students to explain gross pay and net income. (Gross pay is how much an individual makes before taxes or deductions are taken out. Net income is what is left after taxes and deductions are subtracted from your gross pay. This is the amount the employee actually receives.) 12. Direct students to turn their flipbook over to the back and write the definitions for gross pay and net income in their own words on the upper portion of the paper. 13. Instruct students to read the scenario on Activity in the box at the bottom of the third page. Have students write the information and complete the calculations on the P a g e 3

50 Grade Level: 5 The Case of the Disappearing Paycheck Lesson: 1 lower portion of the back of the flip book. (See Key 5.1-2) Here s what Mr. Cash made in a one week period. He worked 40 hours and made $14.50 per hour. This means that he earned $ that week. His federal withholding tax was $47.00, Social Security tax paid was $35.96, and his Medicare tax contribution was $ How much did Mr. Cash pay in taxes that week? $91.37 What was his final net income? $ How did you determine his net income? Gross income taxes = net income Evaluate/End 15. Have students summarize the lesson by explaining the role taxes play in gross pay and net income. 16. Direct students attention back to the paper splashes done earlier and note which information is correct, which information needs minor tweaking, and which information should be deleted. P a g e 4

51 Grade Level: 5 The Case of the Disappearing Paycheck Lesson: 1 Activity Name Class Period The Case of the Disappearing Paycheck By Yul Taxem Have you ever wondered why you have to pay more for items than what is listed on the tag? If Mom makes $10 an hour and she works 40 hours a week, why is her weekly check less than $400? Why do people have to pay money to the government on or before April 15 th of every year? I learned a great deal when my parents were working on their taxes. What is a tax? A tax is money sent to our government. This money is used to support programs in our country. They pay for such things as our military, helping people in need, and providing money for education, along with many other government programs. Let me share with you what I learned. Income Tax Income tax is money paid to the federal government based on your income, how much money you earn. Individuals who earn less money pay less in income taxes than someone who earns much more money. Everyone who makes a certain amount of money is required to pay income taxes or face penalties. There are ways that people can reduce the amount of money they must pay. Subtracting these expenses is called deductions. Some examples of deductions include the interest paid on your home loan, certain medical expenses, and charitable donations. Another way income taxes are reduced is by the number of people supported by your household income. The more people who are in the family and receive their housing, food, and other necessary expenses from the family, the higher deduction the family can take. A small family gets a much smaller deduction than a large family. Federal income tax is due every year by April 15 th. In addition to federal income taxes, many states have a state income tax. Texas is not one of these states. Texans pay only federal income tax. P a g e 5

52 Grade Level: 5 The Case of the Disappearing Paycheck Lesson: 1 Payroll Tax There are two types of payroll taxes: Social Security tax and Medicare tax. Both of these taxes are taken out of your paycheck and paid to the federal government. Social Security is money that one gets back when one retires or becomes disabled. Medicare helps pay for many medical services for people 65 years or older. Half the payroll tax is paid by the employer and the other half by the employee as money withheld from earnings. The employer matches, or pays the same amount, that is withheld from the employee s paycheck for Social Security and for Medicare. In addition, the employer also pays for unemployment insurance. If one loses his/her job, he or she may collect unemployment insurance to help pay his bills for a reasonable time. Sales Tax Sales tax is a tax paid by consumers on purchased goods and on some services. Most states require consumers to pay sales tax when they buy or rent goods. The rate that must be paid can vary from as little as paying 5 cents to 10 cents for every dollar spent. So, for a $10.00 shirt, you may have to pay as little as 50 in sales tax to as much as $1.00, depending on where you live. Although a state sets a specific percentage of the purchase price as the sales tax, local governments may add an additional amount to this rate. In 2013, the sales tax rate in Texas was 6.25%, but some areas paid as much as 8.25% in sales tax because of additional local taxes. In most states, items that are considered essential to basic survival are exempt from sales tax. Some of these items that are exempt from sales tax are unprepared food and medical prescriptions. Most of the money collected from sales taxes is used for transportation (roads and bridges), public education, and aid to local governments for services they provide the citizens. P a g e 6

53 Grade Level: 5 The Case of the Disappearing Paycheck Lesson: 1 Property tax Property tax is tax that is paid to the local government on real estate. Buildings, homes and land are considered real estate. The local government decides on the value of the real estate and then bills the owner for a percentage of that value. If improvements are made to the real estate, then the taxes on that property will most likely increase. Improvements would be things such as building an in-ground swimming pool in your yard, adding an addition to your house, or putting in a new garage. Anything that makes the property more valuable and/or better is an improvement. On the other hand, if the value of the property decreases due to poor maintenance or the age of the building, then property taxes may go down. Property taxes are mainly used to support local education, police and fire protection, the work of the local government, and some free medical services. Gross Pay and Net Income Your gross pay is how much you make before taxes and deductions are taken out. It is the figure people are looking for when they ask how much you make in a month or in a year. Net income is calculated by starting with the gross income amount on a paycheck and then subtracting all the taxes paid to the government. These taxes include Social Security tax, Medicare tax and income tax. The result is the amount of money you can actually take home to spend, save, and share. Your teacher will give you directions how to calculate net income using the following information: Here s what Mr. Cash made in a one week period. He worked 40 hours and made $14.50 per hour. This means that he earned $ that week. His federal income tax was $47.00, Social Security tax paid was $35.96, and his Medicare tax was $8.41. What was his gross pay and net income? P a g e 7

54 Grade Level: 5 The Case of the Disappearing Paycheck Lesson: 1 Visual On front of flap On back of flip book Income Tax Gross Pay: (student s definition) Net Income: (student s definition) Property Tax Sales Tax Payroll Tax P a g e 8

55 Grade Level: 5 The Case of the Disappearing Paycheck Lesson: 1 Key On front of flap On back of flip book Income Tax Paid to the federal government based on your income Citizens do not pay taxes, or they pay reduced taxes, on deductions such as medical expenses, interest on home payments, charitable donations Due April 15 th Gross Pay: The amount you earn before taxes are paid. Net Income: The amount you receive after taxes are paid. Payroll Tax Paid to federal government Deductions from pay for income tax, Social Security tax, and Medicare tax Employer pays matching amount into Social Security and Medicare, plus pays for unemployment insurance Gross Pay: $ Income tax: $47.00 Sales Tax Paid on goods and some services Items essential for basic survival are exempt Used for transportation (roads and bridges), public education, and aid to local governments for their citizens Social Security tax: $35.96 Medicare tax: $8.41 Total payroll taxes: $91.37 Property Tax Paid to local government based on value of real estate Can increase or decrease Used to support local education, fire and police protection, the work of the local government, and some free medical services Gross Income: $ Payroll taxes: $91.37 Net Income: $ P a g e 9

56 Grade Level: 5 How Will I Pay? Lesson: 2 Lesson Description This lesson gives students the opportunity to explore the different methods a consumer can pay for goods and services. Students first identify something they want to purchase. They then create a list of ways to pay for the purchase. In small groups, students list what they know about each payment option. This list is then categorized as either an advantage or disadvantage. Examples of purchases will be given and students will choose a method of payment. Finally, the students read about the spending and savings habit for an assigned character. Using the items listed on the board at the beginning of the lesson, they will decide which payment method would be best for each item for their assigned character. Texas Essential Knowledge and Skills (Target standards) Texas Essential Knowledge and Skills (Prerequisite standards) National Standards (Supporting standards) CEE - Council for Economic Education CCSS - Common Core State Standards PFL Math 5.10C: identify the advantages and disadvantages of different methods of payment including check, credit card, debit card, and electronic payments Math 5.1: Mathematical process standards CEE PFL Using Credit 4.1: Interest is the price the borrower pays for using someone else s money. CEE PFL Using Credit 4.2: When people use credit, they receive something of value now and agree to repay the lender over time or at some date in the future, with interest. CEE PFL Using Credit 4.3: By using credit to buy durable goods, such as cars, houses, and appliances, people are able to use the goods while paying for them. CEE PFL Using Credit 4.4: Borrowers who use credit cards for purchases and who do not pay the full balance when it is due pay much higher costs for their purchases because interest is charged monthly. A credit card user can avoid interest charges by paying the entire balance within the grace period specified by the financial institution. Time Required One 60-minute period Materials Required 1 copy of Activity 5.2-1, Activity 5.2-2, Activity and Activity for each student 1 copy of Visual sheet of chart paper for each group 2-4 markers for each group 1 pair of scissors for each student Glue or tape for each student P a g e 1

57 Grade Level: 5 How Will I Pay? Lesson: 2 PFL Terms Check Credit card Debit card Cash Procedure Engage 1. Divide the class into groups of three or four. Distribute one sheet of chart paper and 2-4 markers per group. Assign each group a method of payment; check, debit card, credit card, cash. Some groups may have the same method of payment. 2. Instruct groups to list on the chart paper everything they know about the assigned method of payment. 3. Have one group at a time hang their chart paper in the front of the room. Have the entire group explain what they know about their payment option. Do not comment about items explained on the poster. Students will have an opportunity at the end of the lesson to correct errors and/or add to the list. Explore 4. Distribute Activity 5.2-1, a pair of scissors and glue to each student. Display Activity and read the description about a check to the students. Tell students that at the bottom of the page are fact cards about checks. Direct students to cut the cards out. 5. Instruct students to have different group members read the cards one at a time. The group should then decide if the fact card represents an advantage for using checks as a method of payment or if it is a disadvantage for using checks as a method of payment. Once the group has made a determination, each student should glue the fact card on Activity in the appropriate column; advantage or disadvantage. 6. Have all students stand. Explain that you are going to read the check fact cards one at a time. If the student glued the fact card in the advantage column, he or she should sit down. If the student glued the fact card in the disadvantage column, he or she should remain standing. Then have a student explain their choice. The teacher will use the key to elaborate. 7. Repeat steps 5 and 6 for Activity and Activity Distribute Activity to each student. Point out to students that the fact cards for cash are blank. Instruct groups to think about their experience with cash. As a group, they are to develop cash fact card. 9. Students are to cut out the cash fact cards. The group should then decide if the cash fact card represents an advantage for using cash as a method of payment or if it is a disadvantage for using cash as a method of payment. Once the group has made a determination, each student should glue the fact card on Activity in the appropriate column; advantage or disadvantage. 10. Have one or two people from each group share an advantage and a disadvantage for using cash. P a g e 2

58 Grade Level: 5 How Will I Pay? Lesson: 2 Explain 11. Lead a class discussion by using the questions below. a. What is same and what is the difference between a debit card and a credit card? (Both cards have a magnetic strip on the back and can be read by an electronic card reader. When you use a debit card for payment, the money comes from your checking account. When you use a credit card, you are borrowing money from a financial company.) b. What are possible fees that someone who uses a credit card might pay? (He or she may have to pay late fees if he doesn t make the payment by the due date. He may pay interest if the balance is not paid in full. Some credit card companies charge an annual fee.) c. Which methods of payment transfer money from the checking account? (check and debit card) What do you think would happen if someone purchases an item for $20 with a debit card and only has $10 in their checking account? (The debit card could be denied which means the purchase cannot be made. Or the bank or credit union might charge an additional fee.) Explain that this fee is often between $20 and $30 for each occurrence. [Source: Elaborate 12. Post signs in different areas of the room for each methods of payment: cash, credit card, check, and debit card. The signs should be in an area where a large group of students can gather. 13. Display Visual Tell students that each character shown on the visual has different spending and savings habits. Based on the character s habits and situation, you will decide which method of payment will be the best choice for each character. Explain that for most of the questions, there is no wrong answer. 14. Introduce one character at a time. Then read one question below the character. Instruct students that to move to the sign with the method of payment that they believe is the best choice for the character. 15. After students have made their choice, the teacher will use the Guide 5.2-1, to ask each group of students questions based on their choice. Repeat this process for each question on Visual Have students return to Activity Assign each student one of the characters on Visual Write the assigned character s name on Activity in the heading section of column 4. Tell students that they are to use what they know about payment methods and their character s spending and savings habits to identify the best payment method for each item listed on the board at the beginning of class. Ask students to write the item in the row that describes the chosen payment method. 17. Have one person from each group report what adjustments were made to their chart. Evaluate 18. To end the lesson, have students write three sentences to answer the following questions. Is there one method of payment that is better in most circumstances? Why? P a g e 3

59 Grade Level: 5 How Will I Pay? Lesson: 2 Activity Name Class Period Check A check is a small official preprinted note that contains information about a checking account. To get a check book, a person has to open a checking account at a financial institution and deposit money. The owner of the account enters the amount of payment, the date and signs the check. By signing the check the account owner is giving the credit union or bank permission to pay for a purchase out of the account. Advantage Disadvantage Check If you write a check for more than the amount in the checking account, you will pay a fee. Check A check can be used to prove that a payment was made. Check If a payment has to be mailed, sending a check is safer than sending cash. Check If your checks are lost or stolen, someone might try to write checks on the account. Check Some stores do not accept checks. Check Most people who write checks keep track of their spending since the check register is in the check book. P a g e 4

60 Grade Level: 5 How Will I Pay? Lesson: 2 Activity Name Class Period Debit Card A debit card is a small plastic card issued by a financial institution. This card has a magnetic strip on the back. The card is swiped through a card reader and a Personal Identification Number (PIN) is entered. This process will allow for the owner of the card to make a payment or withdraw funds from their checking account. To get a debit card, a person has to open a checking account and deposit money. Advantage Disadvantage Debit Card PIN is a secret number code that only the owner of the account and the bank or credit union knows. Debit Card If you don t keep track of your spending, you run the risk of spending more than what is in the account. You may have to pay a fee. Debit Card Debit cards are easy to carry and use. Debit Card If your debit card is stolen or lost, report it to your financial institution immediately. They will cancel the card and issue a new card. Debit Card Some financial institutions charge fees for using a debit card. P a g e 5

61 Grade Level: 5 How Will I Pay? Lesson: 2 Activity Name Class Period Credit Card A credit card is a small plastic card issued by a financial company. When the card is swiped through a card reader, the owner of the card is borrowing money from the financial company to make the payment. The amount of the purchase is transferred from the financial company who issued the credit card to the store s account. Each month the owner of the card will get a bill or a statement from the financial company that states all the purchases, returns and payments. This statement will have a due date. This is the day payment for all the purchases should arrive at the financial company. Advantage Disadvantage Credit Card If only part of the balance is paid, the owner of the credit card will have to pay a fee which is called interest. Credit Card If there is an emergency and no money is available, a credit card can be used to pay for the emergency. Credit Card Credit cards can be used to make online purchases. Credit Card Some credit cards have additional fees such as annual fees. This is a fee that is charged once a year for providing this service to its customer. Credit Card If the payment is paid after the due date, a late fee will be charged. Credit Card Credit cards are small and easy to use. P a g e 6