Taking Control of Your Credit Teacher’s Guide By Grant C Black Center for Economic Education Indiana University-South Bend Lesson Plan Organization The lessons in this Teacher’s Guide provide teachers with all the information necessary to effectively teach the concepts presented in and related to the PBS39 Video Field Trip, Taking Control of Your Credit Each lesson clearly outlines every category of instructional elements to help teachers quickly assess the purpose and strategy of the lesson Video Field Trip Connection This section identifies the chapter marker(s) on the Taking Control of Your Credit DVD corresponding to the concepts targeted for the lesson Key Concepts This section lists the concepts introduced in the Taking Control of Your Credit Video Field Trip DVD chapters identified in the Video Field Trip Connection section Key concepts are numbered based on the lesson number and order of concepts For example, Key Concept 1.2 is the second concept in Lesson Additional Concepts This section lists concepts not directly discussed in the Taking Control of Your Credit Video Field Trip DVD but related to its content The additional concepts are included to enhance the coverage of the Taking Control of Your Credit Video Field Trip DVD Additional concepts are numbered based on the lesson number and order of concepts (including Key Concepts) For example, Additional Concept 2.10 is the tenth concept in Lesson Content Standards and Performance Expectations This section identifies the Indiana content standards and performance expectations associated with the Key Concepts and Additional Concepts for each lesson These standards and expectations outline the specific learning goals for students who complete the lesson The standards are identified by the codes designated in the Indiana Academic Standards by the Indiana Department of Education Vocabulary This section lists relevant vocabulary terms associated with the Key Concepts and Additional Concepts for each lesson How the suggested instructional strategies teach the vocabulary terms vary across lessons Some lessons include explicit strategies while others recommend the teacher’s own methods Overview This section provides a brief description of the lesson’s objectives and procedures to give teachers a concise summary of the purpose of each lesson Procedures This section outlines the suggested procedures to teach the concepts associated with each lesson Background information, teaching strategies, and assignments and activities are described as applicable Any document identified in the procedures in bold text is included at the end of each lesson Assessment This section describes suggested methods to assess student learning of the concepts associated with each lesson Because students learn differently, using a variety of assessment tools is encouraged Additional Resources This section lists additional resources, including internet sources, which provide useful information to supplement the lesson Content Standards and Performance Expectations The resources in this Teacher’s Guide are designed to correspond to the Indiana content standards and performance expectations Each lesson lists the specific standards associated with its topics To help with overall lesson planning, the following content standards and performance expectations are related to the resources in this Teacher’s Guide: Personal Finance PF 1.1.5 PF 1.1.7 PF 1.1.10 PF 1.2.5 Create and analyze a personal balance sheet Develop financial goals for the future and a financial plan based on one’s lifestyle, expectations skills, and career choices Identify various traditional and technology resources available for obtaining financial information Distinguish between simple and compound interest PF 3.3.1 PF 3.3.2 PF 3.3.3 PF 3.3.5 PF 3.6.3 PF 3.6.4 Develop and modify a personal budget for income, saving, and fixed, variable and discretionary expenses Compare and contrast disposable and discretionary income Discuss the importance of the concept of “paying yourself first” in relationship to saving for meeting one’s financial goals Analyze alternative actions for dealing with financial difficulties, such as credit overextension, loss of job, and disability Evaluate the advantages and disadvantages of electronic banking such as direct deposit, debit cards, ATM, and online banking Analyze privacy and security issues associated with financial transactions, endorsements and electronic banking PF 4.1.2 PF 4.1.4 PF 4.1.5 PF 4.3.1 PF 4.3.2 PF 4.3.3 PF 4.3.4 PF 4.3.5 PF 4.3.7 PF 4.3.8 PF 4.5.1 PF 4.5.2 PF 4.5.4 Analyze impulse purchasing and how marketers employ techniques to stimulate impulse buying Investigate goods and services, buying options, and present sound financial recommendations Compare and contrast the advantages and disadvantages of purchasing and using credit Analyze sources and types of credit Analyze credit components such as principal, interest, payment periods, grace periods, credit limits, incentive buying, fees, and minimum payments Analyze credit marketing techniques, features and pitfalls Create a plan for repaying debt Select an appropriate form of credit for a particular buying decision Explain the impact of credit reporting, the 5C’s of credit scoring, and FICO scoring on consumer’s credit worthiness Evaluate the current laws involving consumer rights and responsibilities Evaluate the effects of living beyond one’s means Analyze the various alternatives to resolving credit problems Explain identity theft and its potential impact PF 5.1.1 PF 5.1.2 PF 5.1.3 PF 5.1.4 PF 5.1.5 Use clear and legible handwriting in all written work and communication Demonstrate active listening skills Use discussion skills to assume leadership and participant roles Use research, composition, and oral skills to present information for a variety of situations utilizing appropriate technology Work cooperatively with peers and authority figures PF 5.1.6 PF 5.1.7 PF 5.1.8 Use clear and concise writing skills to describe, explain, and inform various audiences Follow and interpret directions, graphs, charts and diagrams found in technical writing Use appropriate industry terminology Economics E.1.2 E.1.4 E.1.5 E.1.11 E.6.1 E.6.5 E.6.8 Explain how consumers and producers confront the condition of scarcity, by making choices which involve opportunity costs and tradeoffs Describe how people respond predictably to positive and negative incentives Predict how interest rates will act as an incentive for savers and borrowers Formulate a savings or financial investment plan for a future goal Explain the basic functions of money Compare and contrast credit, savings, and investment services available to the consumer from financial institutions Formulate a credit plan for purchasing a major item comparing different interest rates Consumer Economics CE.1.1 CE.1.4 CE.2.4 Demonstrate components of critical thinking, creative thinking, and reasoning Apply management, decision-making, and problem solving processes to accomplish tasks and fulfill responsibilities Examine interrelationships of standards, wants, needs, goals, and consumer satisfaction Pre-Test and Post-Test To assess students’ overall level of learning from the Video Field Trip, Taking Control of Your Credit, it is recommended to administer pre- and post-tests to students Results from the pretest can also guide the teaching strategies and concepts to emphasize based on the lessons included in this Teacher’s Guide Prior to watching the Taking Control of Your Credit Video Field Trip DVD or introducing any related concepts, have students complete the following pre-test The pre-test includes ten true/false and multiple-choice questions The pre-test and pre-test answer key are included For immediate feedback in the classroom, have students exchange their test with another student after everyone has completed the pre-test Review the answers to each question of the pre-test and have the students grade one another’s tests Have students return the pretests so each student can review their understanding Collect the pre-tests to assess students’ understanding of the main concepts After watching the Taking Control of Your Credit Video Field Trip DVD and completing the accompanying lessons in this Teacher’s Guide, have students take the following post-test The post-test is identical to the pre-test, with ten true/false and multiple-choice questions The post-test and post-test answer key is included As with the pre-test, have students exchange their test with another student after everyone has completed the post-test Review the answers to each question of the post-test and have the students grade one another’s tests Have students return the post-tests so each student can review their understanding Collect the post-tests to assess students’ understanding of the main concepts taught using the Taking Control of Your Credit Video Field Trip DVD The included pre-test, post-test, and answer keys serve only as templates and can be modified by teachers to tailor the material to their teaching strategies Pre-Test Name: What Do You Know about Credit? For questions 1-5, indicate whether the given statement is true or false A credit card is the same as a debit card TRUE / FALSE From the borrower’s perspective, an interest rate is the cost of borrowing money, usually determined as a percentage of the amount borrowed TRUE / FALSE Using a credit card to pay for consumable goods like food and beverages is a good idea TRUE / FALSE Some employers or schools may review a person’s credit report and deny employment or acceptance to people with bad credit histories TRUE / FALSE The grace period on a credit card is the time period between when you receive your credit card bill and when you have to pay it TRUE / FALSE For questions 6-10, choose the alternative that best answers the question To keep your credit card interest payments as low as possible, a pay the minimum monthly payment b try to pay off your credit card bill in full every month c pay off your credit card bill only after saving enough money to pay it in full, no matter how long it takes d switch to a different credit card that has a higher interest rate It is generally recommended that the proportion of your net income used for credit payments not exceed: a 50% b 30% c 20% d 5% According to a 2007 survey by the New Hampshire Higher Education Assistance Foundation, the percentage of college freshmen who are at least four months behind on their credit card payments is: a 7% b 21% c 38% d 70% To help prevent the abuse of credit usage, a smart consumer will: a compare needs versus wants b usually only use credit to buy expensive, long-lasting goods c save money to plan for emergencies and future spending d all the above 10 Someone with significant credit problems due to overusing credit cards should contact the: a Better Business Bureau (BBB) b Internal Revenue Service (IRS) c Consumer Credit Counseling Service (CCCS) d Securities and Exchange Commission (SEC) d 5% According to a 2007 survey by the New Hampshire Higher Education Assistance Foundation, the percentage of college freshmen who are at least four months behind on their credit card payments is: a 7% b 21% c 38% d 70% Pre-Test Answer Key What Do You Know about Credit? A credit card is the same as a debit card FALSE From the borrower’s perspective, an interest rate is the cost of borrowing money, usually determined as a percentage of the amount borrowed TRUE Using a credit card to pay for consumable goods like food and beverages is a FALSE Some employers or schools may review a person’s credit report and deny employment or acceptance to people with bad credit histories TRUE The grace period on a credit card is the time period between when you receive your credit card bill and when you have to pay it FALSE To keep your credit card interest payments as low as possible, a pay the minimum monthly payment b try to pay off your credit card bill in full every month c pay off your credit card bill only after saving enough money to pay it in full, no matter how long it takes d switch to a different credit card that has a higher interest rate It is generally recommended that the proportion of your net income used for credit payments not exceed: a 50% b 30% c 20% d 5% According to a 2007 survey by the New Hampshire Higher Education Assistance Foundation, the percentage of college freshmen who are at least four months behind on their credit card payments is: a 7% b 21% c 38% d 70% To help prevent the abuse of credit usage, a smart consumer will: a compare needs versus wants b usually only use credit to buy expensive, long-lasting goods c save money to plan for emergencies and future spending d all the above 10 Someone with significant credit problems due to overusing credit cards should contact the: a Better Business Bureau (BBB) b Internal Revenue Service (IRS) c Consumer Credit Counseling Service (CCCS) d Securities and Exchange Commission (SEC) Post-Test Name: What Do You Know about Credit? For questions 1-5, indicate whether the given statement is true or false A credit card is the same as a debit card TRUE / FALSE From the borrower’s perspective, an interest rate is the cost of borrowing money, usually determined as a percentage of the amount borrowed TRUE / FALSE Using a credit card to pay for consumable goods like food and beverages is a good idea TRUE / FALSE Some employers or schools may review a person’s credit report and deny employment or acceptance to people with bad credit histories TRUE / FALSE The grace period on a credit card is the time period between when you receive your credit card bill and when you have to pay it TRUE / FALSE For questions 6-10, choose the alternative that best answers the question To keep your credit card interest payments as low as possible a pay the minimum monthly payment b try to pay off your credit card bill in full every month c pay off your credit card bill only after saving enough money to pay it in full, no matter how long it takes d switch to a different credit card that has a higher interest rate It is generally recommended that the proportion of your net income used for credit payments not exceed a 50% b 30% c 20% d 5% Overview In the Taking Control of Your Credit Video Field Trip DVD, Julian and her friend learn how to use credit wisely by following a budget, controlling spending, having saving and spending plans, understanding the details of credit card accounts, and using credit cards only in limited situations This lesson informs students about properly using credit cards to avoid their pitfalls, offering advice on smart credit card use and spending habits In this lesson, students will create a personal budget, develop a personal spending and saving plan, and engage in an online spending game that teaches them how to be smart spenders Throughout this lesson, students develop communication and critical thinking skills through classroom activities and personal exercises Procedures Watch the Taking Control of Your Credit Video Field Trip DVD (at least chapters 5, & 7) Ask students for their reactions to the DVD Encourage any responses without trying to initially steer the direction of the discussion Review the vocabulary as appropriate throughout the lesson to ensure students clearly understand the concepts being discussed Ask students if anyone thinks much about how they spend their money Do they “count their pennies” or spend carelessly without thinking about their income? Do they think about saving any of their money or is it just for spending? Has anyone ever made a budget? Discuss the importance of using a budget to understand one’s financial situation Use the Sample Budget sheet to show students how to categorize and record their income and expenses Fill in the budget using a hypothetical college student, asking students for help in estimating the income and expense data Highlight the differences between fixed and variable expenses Discuss the importance of recognizing the impact of time on the flow of income and occurrence of expenses For example, income from a summer job is not earned most the year while rent is an expense faced every month For more information on budgeting, refer to excellent resources from the CARE Program: Creating A Realistic College Budget That You Can Stick To (http://careprogram.squarespace.com/free-care-downloads/handouts/Budget%20Article%20 Handout%20new%20logo.pdf); Creating a Budget (http://careprogram.squarespace.com/free-care-downloads/handouts/create.pdf); Why Do I Need a Budget (http://careprogram.squarespace.com/free-care-downloads/handouts/why%20budget.pdf); and Pitfalls To Avoid (http://careprogram.squarespace.com/free-care-downloads/handouts/pitfalls.pdf) Analyzing the information derived from a budget can help students make important decisions Notice the application of cost-benefit analysis Comparing the costs (expenses) to the benefits (income) helps determine the amount of net income and how it can be used It can also suggest changes to spending and saving behavior to improve one’s financial situation Discuss the use of spending and saving plans to help control the use of one’s income A spending or saving plan describes a course of action to achieve a financial goal, such as buying a new car or paying for college Ask if students ever strategize about how they spend or save for specific purposes If so, why? If not, why not? Emphasize that spending and saving plans not have to be complicated or long lasting They are merely a tool to help make better financial decisions Distribute Exercise 6.1 Building a Budget to students Explain that this exercise asks students to create a personal budget based on their projected expenses and income when starting college As part of the exercise, they must begin by setting a goal of something they want to buy but must save for Using their budget, students will develop a spending and saving plan to reach their goal Students will use the budget builder at https://www.citicards.com/cards/ wv/html/cm/student/flash/bb.htm to create their budget and plan During class open the online budget builder to demonstrate how to use it This exercise can be done at school or at home, depending on computer access As an alternative or additional exercise, use the budget activity available on the CARE Program website (http://careprogram.squarespace.com/free-care-downloads/quizzes-andgames/) Distribute Exercise 6.1b Building a Balanced Budget to students Explain that this exercise asks students to create a balanced budget using information from one of three different scenarios Each scenario describes a hypothetical person experiencing realistic situations This exercise can be done individually or in groups, and at school or at home, depending on computer access The three scenarios and budget spreadsheet (in Microsoft Excel format) can be downloaded at http://careprogram.squarespace.com/free-care-downloads/quizzes-and-games/budget-exercise/ Before assigning this exercise, review the budget spreadsheet in class and an example of how to complete it to make sure students understand the process 10 Being a smart consumer means making wise spending and saving decisions In this lesson students have learned about the importance of budgets and spending/saving plans to help them move in the right direction In previous lessons students have learned a lot about credit cards as part of their spending decisions, including the consequences of misusing credit Discuss ways to appropriately use credit cards Use the Credit Card Tips sheet to highlight simple guidelines that can help students use credit wisely To supplement classroom discussion, watch the short videos available on the CARE Program’s website (http://careprogram squarespace.com/free-care-downloads/videos-and-newscasts/) to highlight how to use credit wisely 11 Using a credit card wisely requires understanding the details of a credit card account With all the credit card gimmicks and ads, deciphering this information may seem difficult To help consumers, Federal law requires that every credit card application or solicitation must include key information in a special box for easy identification Use the Sample Credit Card Account Information sheet to review the type of information that every student should understand to help them choose the best credit card for them To supplement classroom discussion, examine real-life credit card disclosures at http://www.cardtrak.com/cards/categories/student.html 12 While controlling spending is important to being a wise consumer, saving cannot be ignored either Ask students why saving matters Emphasize the benefits of saving, including providing money to pay for emergencies, avoiding the consequences of credit by not having to use it, having money to buy things in the short- and long-term future, and earning more income from the interest earned on savings To demonstrate the impact of saving – even small amounts – use the saving calculator at http:// www.econedlink.org/lessons/MM603/MM603_popupActivity.html This online tool graphically generates the growth of savings over time As an example, enter $10 as the amount of sav- ings per month, 18 as the age at which saving is started, and 5% as the expected interest rate; the projected savings equals $22,644 by age 65 Ask students for alternative scenarios and calculate the impact on the level of savings 13 Distribute Exercise 6.2 The Spending Game to students Explain that this exercise asks students to participate in a fun online spending game The game simulates the challenge of making wise financial decisions when facing different real-life situations The object of the game is to use one’s income as wisely as possible over a simulated four-month period, deciding whether to spend or save, what to spend it on, whether to use cash or credit, and how to be prepared for emergencies Students must apply all the knowledge they have learned about making smart financial decisions During class open the online game to demonstrate how to play To play the game, go to http://www.themint.org/kids/take-the-spending-challenge.html This exercise can be done at school or at home depending on computer access To stimulate willing participation, create competition among students by offering rewards to those who perform best on the game 14 To wrap up this series of lessons on credit cards and being a smart consumer, review the Ten Tips for Financial Success Emphasize the importance of following a budget, regularly saving, thinking carefully about spending choices, minimizing the use of credit, and paying off any debt as quickly as possible 15 To summarize concepts addressed in these lessons and review students’ understanding, a fun classroom activity would be to play the Jeopacardy game available on the CARE Program website The game is similar to the game show, Jeopardy ® The interactive game requires Microsoft Powerpoint to operate For the Powerpoint game template, go to: http://careprogram.squarespace.com/free-care-downloads/quizzes-and-games/jeopacardygame/CARE Jeopacardy%20Show.pps Instructions for the game are available online at: http://careprogram.squarespace.com/free-care-downloads/quizzes-and-games/jeopacardygame/CARE_Jeopacardy_Instructions.pdf Assessment Teacher observation of classroom participation Rubric for Exercise 6.1 Rubric for Exercise 6.2 Additional Resources 10 Tips for Money Mojo Hon John Ninfo, The Next Step Magazine, September/October 2006 (http://www.nextstepmagazine.com/nextstep/articlepage1.aspx?artId=2773&categoryId=2) The Benefits of Investing Early, a lesson by the National Council on Economic Education (http://www.econedlink.org/lessons/index.cfm?lesson=MM603&page=teacher) http://www.careprogram.us http://careprogram.squarespace.com/free-care-downloads/handouts/ http://www.citi.com/us/cards/cm/student/ http://creditcardnation.com Credit Card Nation Robert Manning Basic Books, 2000 Developing an Financial Investment Portfolio, a lesson by the National Council on Economic Education (http://www.e-connections.org/lesson3/Tlesson3.htm) http://www.federalreserve.gove/pubs/shop/default.htm Financial Fitness for Life National Council on Economic Education, 2005 Financing Your Future National Council on Economic Education, 2007 http://www.italladdsup.org/ Learning, Earning and Investing National Council on Economic Education, 2004 http://www.themint.org/ http://www.themint.org/teachers/index.html http://hsfpp.nefe.org/students/index2.cfm?deptid=15 Teacher’s Guide: How Interest Can Work For You and How Interest Can Work Against You! Harlan Day, Indiana Council for Economic Education, 2008 Sample Budget INCOME PER MONTH Job Earnings (After Taxes) $ Parental Support $ Scholarships or grants $ Loans $ Other Income $ TOTAL INCOME $ EXPENSES PER MONTH School Expenses Tuition $ School room and board $ Books $ Other Supplies $ TOTAL SCHOOL SUPPLIES $ Fixed Expenses Rent or mortgage payment $ Vehicle Payment $ Vehicle insurance payment $ Health insurance payment $ Other insurance payments $ Loan payments $ Other fixed expenses $ TOTAL FIXED EXPENSES $ Variable Expenses Transportation (including maintenance) $ Gasoline $ Groceries $ Eating out $ Clothing $ Healthcare (excluding insurance coverage) $ Entertainment (music, hobbies, movies, etc.) $ Travel $ Other variable expenses $ TOTAL VARIABLE EXPENSES $ TOTAL EXPENSES (school expenses +fixed expenses + variable expenses) $ UNUSED INCOME NET INCOME (total income — total expenses) PER MONTH $ SAVING Planned Savings PER MONTH $ Exercise 6.1 Building a Budget Going to college takes more than just graduating from high school You need to be financially prepared too In this exercise, you will create a personalized budget, as well as a saving plan, to help you reach a financial goal, like buying a new car or computer for college Instructions: To help you make your budget and plan, you will use an online budget builder To open the budget builder, go to: https://www.citicards.com/cards/wv/html/cm/student/flash/bb.htm Follow the directions and answer the questions as directed You will walk through five steps to create your budget: a Step b Step c Step d Step e Step — Planning your goal; — Entering your income; — Listing your expenses; — Saving towards your goal; — Reviewing your goals and budget When you are finished, print out a copy of your budget and saving plan This page must be turned in with the rest of your assignment After reviewing your budget, write a brief summary analyzing how well prepared financially you think you are to start college and meet your financial goal Consider your income, fixed and variable expenses, credit use, and savings Make suggestions on how you could improve your financial situation to better meet your goal Exercise 6.1b Building a Balanced Budget Creating a balanced budget can be harder than it seems but is important for smart financial decision making In this exercise, you will create a personalized budget for the hypothetical individual described in your selected scenario Your objective is to create a balanced budget based on the information provided about that individual Instructions: You will be assigned a scenario describing specific conditions faced by a hypothetical individual Your objective is to create and balance a budget for this hypothetical individual To create your budget, you will use the budget spreadsheet available online at: http://careprogram.squarespace.com/free-care-downloads/quizzes-and-games/budget-exercise/budget.xls a Enter the appropriate data using the information provided in your scenario b For information not explicitly described in your scenario, such as grocery or recreation/entertainment expenses, determine realistic and appropriate amounts that will allow you to balance your budget; enter these amounts to complete the budget spreadsheet As you develop your budget, check the cell labeled “Difference (+ or -)” to determine if your budget is balanced or not This cell calculates the difference between your total monthly income and expenses When you are finished, print out a copy of your budget This page must be turned in with the rest of your assignment After reviewing your budget, write a brief summary describing your ability to balance your budget based on your selected scenario Credit Card Tips* Decide whether what you want to buy is a need or a want; Before you buy something, know how you’ll pay for it; Don’t forget to save for the future; Don’t buy anything you can’t afford to pay off quickly; Use cash, a debit card, or a check whenever possible; Remember that using a credit card is like getting a loan; Pay off your credit card balance as much as possible every month; a Pay it off in full every month; b Pay more than the minimum payment if you can’t pay it completely off; Don’t use a credit card for small purchases under $10; Don’t use a credit card if you can eat or drink it; 10 Understand and shop around for the best credit card terms, like the interest rate, fees, grace period, credit limit, and method of calculating the finance charge; 11 Have only one credit card; 12 Beware of fees, like annual fees, late fees, set-up fees, over-the-limit fees, or cash advance fees; 13 Avoid identity theft by keeping credit card information safe; 14 Remember that using a credit card affects your credit history *Based on The Real Cost of Credit, CARE Program (http://careprogram.squarespace.com/free-care-downloads/handouts/Real%20Cost%20of%20Credit%20Hand out%20new%20logo.pdf) Sample Credit Card Account Information Annual percentage rate (APR) for purchases 3.1% until 12/30/2008; 16.2% thereafter Other APRs Cash advances: 18% Balance transfers: 18% Late payment: 24.9%* Variable Rate Information APR for purchases may vary The rate is determined monthly by adding 4.2% to the Prime Rate reported in the Wall Street Journal on the 10th day of the prior month Grace period for repayment of balance for purchases 25 days Method of calculating the finance charge Average daily balance, excluding new purchases Annual fee $15 Minimum finance charge $1 Cash advance fee 4% of the amount advanced Balance transfer fee 4% of the amount transferred Late payment fee $20 Over-the-credit-limit fee $20 *If payment is received ten days after the due date, the late-payment APR applies Exercise 6.2 The Spending Game Being a smart consumer is the foundation of creating a sound financial future and good credit rating Learning how to make good consumer decisions makes all the difference In this exercise, you will play an online game in which you have to make decisions to use your income as wisely as possible over a simulated four-month period, deciding whether to spend or save, what to spend it on, whether to use cash or credit, and how to be prepared for emergencies Instructions: To play the online game, go to: http://www.themint.org/kids/take-the-spending-challenge.html and click on the “Take the Challenge” button Follow the directions and answer the questions as directed You will walk through a set of questions for each week of the simulated four-month period When you are finished, print out a copy of the last page titled “So, how did you do?” that shows your results This page must be turned in with the rest of your assignment The results show the amount of cash you accumulated, the amount of credit available to you, the amount of credit card debt you owe, the amount of income you earned, the amount you spent on necessary items, and the amount of disposable income that you either spent or saved To help you analyze your spending behavior, write answers to the six questions listed on the “So, how did you do?” page: a How much credit card debt you have? b How much money did you have on hand when you got into the accident in week 16? c What did you learn about having “cushion money” (savings) for unexpected expenses? d How wise were your spending choices? e If you played the game again, would you play differently? How? f How much did you save? Your written answers must be turned in with the rest of the assignment Ten Tips for Financial Success* Create a budget and use it Open a savings account and pay yourself first Regularly look for ways to save money Use cash, a debit card, or a check instead of a credit card Avoid credit card debt Always pay your bills on time Pay off any debt as quickly as possible Minimize debt from college student loans Avoid unwise consumer choices, such as impulse shopping, gambling, having multiple credit accounts or long loans, or using pawn shops, rent-to-own, and payday loans 10 Remember the consequences of abusing credit cards and other consumer debt Source: The Top 10 Financial Tips for High School and College Students, CARE Program (http://careprogram.squarespace.com/free-care-downloads/handouts/Top%2010%20with%20CARE%20new% 20logo.pdf) Rubric for Exercise 6.1 Name Performance Indicator Student demonstrated understanding of sources of income, fixed expenses and variable expenses Student demonstrated ability to develop a personal budget Student demonstrated ability to develop a saving plan to meet a future goal Student effectively used critical thinking skills to analyze a budget for meeting a financial goal Student appropriately used technical terminology Student used clear and concise writing skills Point Total Point Total from above: (24 Possible Points) Grade: Grading Scale: A = 22 – 24 points B = 19 – 21 points C = 16 – 18 points D = 13 – 15 points F = – 12 points Rubric for Exercise 6.1b Name Performance Indicator Student demonstrated understanding of sources of income, fixed expenses and variable expenses Student demonstrated ability to develop a personal budget Student demonstrated ability to develop a saving plan to meet a future goal Student effectively used critical thinking skills to analyze a budget for meeting a financial goal Student appropriately used technical terminology Student used clear and concise writing skills Point Total Point Total from above: (24 Possible Points) Grade: Grading Scale: A = 22 – 24 points B = 19 – 21 points C = 16 – 18 points D = 13 – 15 points F = – 12 points Rubric for Exercise 6.2 Name Performance Indicator Student demonstrated effective use of the online simulation game Student demonstrated ability to make spending decisions, including the use of cash versus credit cards Student effectively used critical thinking skills to analyze spending and saving behavior Student used clear and concise writing skills Point Total Point Total from above: (16 Possible Points) Grade: Grading Scale: A = 15 – 16 points B = 13 – 14 points C = 11 – 12 points D = – 10 points F = – points About the Author Grant Black is an assistant professor of economics in the School of Business and Economics at Indiana University — South Bend He serves as director of the university’s Bureau of Business and Economic Research and the Center for Economic Education Prior to joining Indiana University, Dr Black worked at Georgia State University, the University of Missouri-St Louis, and the University of Pretoria in South Africa His research broadly focuses on the economics of science and innovation He has contributed to research funded by the Alfred P Sloan Foundation, the Andrew W Mellon Foundation, the National Science Foundation, the South African Revenue Service, and the United States Agency for International Development He is the author of The Geography of Small Firm Innovation, and his research has been the focus of articles in diverse publications, including Research Policy, Economic Development Quarterly, Science and Public Policy, and Growth and Change Black serves as a consultant to the Board on Science, Technology and Economic Policy at the National Academy of Sciences and participates in the Scientific Workforce Project sponsored by the National Bureau of Economic Research In addition, he serves on the board of directors of the Michiana Economics Club, a regional chapter of the National Association of Business 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the Taking Control of Your Credit Video Field... the pretest can also guide the teaching strategies and concepts to emphasize based on the lessons included in this Teacher’s Guide Prior to watching the Taking Control of Your Credit Video Field... students’ understanding of the main concepts After watching the Taking Control of Your Credit Video Field Trip DVD and completing the accompanying lessons in this Teacher’s Guide, have students