Laura Ewing President/CEO 1801 Allen Parkway, Houston, TX 77019 P: 713.655.1650

1. Helping young people learn to think, choose, and make better • economic and financial choices in a global economy Cindy Manzano Director of Smarter Texas 1801 Allen Parkway, Houston, TX 77019 C: 713.503.5338 F: 713.655.1655 cindy@economicstexas.org Laura Ewing President/CEO 1801 Allen Parkway, Houston, TX 77019 P: 713.655.1650 F: 713.655.1655 laura@economicstexas.org • www.economicstexas.org • www.smartertexas.org

2. Financial Fitness For Life • Spiraled Curriculum • Kindergarten – Grade 2 • Grades 3 – 5 • Grades 6 – 8 • Grades 9 – 12

4. Free lessons for grades 4-8 • Full 5E lesson for each PFL TEKS • Lessons for grades 4-6 funded by • Lessons for grades 7-8 funded by • www.smartertexas.org under Resource tab

5. The TCEE programs are made possible by the following TCEE partners. EnviroChem Services, Inc. John Anderson Trout Foundation Less B. Fox RBC Wealth Management copyDR.

6. Student Loan Debt • Average student loan debt • 2010 – $24,000 • 2011 – $25,250 • 2012 –$33,000 • Total student loan debt: • 2010 – 850 billion dollars • 2012 – over 1 trillion dollars

7. What is Personal Financial Literacy? Why do we need it?

8. TCEE Grade 6 Lesson 1 Best Payment Option: Debit or Credit

9. The student is expected to: • Math 6.14B distinguish between debit cards and credit cards

11. TCEE Grade 6 Lesson 2 Checks and Balances

12. The student is expected to: • Math 6.14A compare the features and costs of a checking account and a debit card offered by different local financial institutions • Math 6.14C balance a check register that includes deposits, withdrawals, and transfers

13. Deposit or Withdrawal Deposit Withdrawal

14. Deposit or Withdrawal in out Deposit Withdrawal - +

15. Identify the Bank Transaction • Debbie paid her rent by writing a $400 check to her landlord.  • Money is automatically transferred into Debbie’s checking account for earnings from her job. • Debbie went shopping for some treats for her dog, Bruno, and a new leash at Pet City. When she checked out, she entered her personal identification number (PIN) at the register and paid with the debit card. • Debbie wanted cash to pay for the cost of a movie ticket and popcorn. She stopped at an ATM machine, entered a code and took cash out of the machine. • Debbie received two checks for her birthday. She went to her bank, filled out a slip and gave the check to the bank teller.

16. Vocabulary Transaction: Any activity with money such as a deposit, a withdrawal, or a transfer. ATM Surcharge: An Automatic Teller Machine (ATM) fee financial institutions charge for withdrawing money. Insufficient Funds: This term describes the circumstance of not having enough money in a checking account to make a payment or to withdraw money. Overdraft fee: This is a fee charged by the financial institution for making a purchase against your checking account in which there is not enough money in the account to cover the payment.

18. Overdraft protection example: • Debbie had $395 in her checking account when the $400 rent check was processed. • $395 - $400 = -$5 • -$5 - $25 = -$30 Why is this feature called overdraft protection?

20. What is the best option?

21. Activity 6.2-1

24. My Credit Union Game Rules Shuffle game cards and place them face down in one stack. Each player should have a check register to record his or her transactions. The person with the birthdate latest in the year goes first and the turn to play passes to the next player. Choose the top card in the stack. Document the transaction on your check register. For each transaction, write today’s date. For each check withdrawal write a 2-digit check number beginning with 01. Then calculate your balance. Place this card in the discard pile. The game ends after all the cards have been drawn or when a player has filled the check register. The person with the greatest balance is the winner.

25. SPECIAL RULES: • If you draw a card that is a check withdrawal and you do not have enough money for the transaction, you must subtract the payment as well as an overdraft fee of $20. Use an additional line to record this overdraft fee if applicable. • If you use your debit card to purchase a good or service or to withdraw money and you have insufficient funds, the credit union will decline the card. Put the card in in the discard pile. You lose your turn. • If you withdraw cash using your debit card at a bank or credit union that is not My Credit Union, subtract an additional $2.00 for ATM surcharge. Use an additional line to record this surcharge if applicable.

26. CHECK FOR UNDERSTANDING • What happens when your checking account balance is low? • Why is it so important to keep a record of your transactions and balance?

27. ACTIVITY 6.2-3 • Compare the features and costs of a checking account and a debit card offered by different local financial institutions.

28. FFFLGrade 6 Lesson 16 Establishing Credit

29. The student is expected to: • 6.14D: explain why it is important to establish a positive credit history • 6.14E: describe the information in a credit report and how long it is retained • 6.14F: describe the value of credit reports to borrowers and to lenders • 6.3G: generate equivalent forms of fractions, decimals, and percents using real-world problems, including problems that involve money;

31. Vocabulary • Collateral: Property or other valuables used as security to guarantee the repayment of a loan. The lender can claim collateral if the borrower fails to repay. • Credit bureau: A firm that collects borrowers’ credit histories. • Credit report: A history of a borrower’s use of credit. You should get a copy of your credit report once a year to ensure there are no mistakes. • Credit score: A score used to evaluate a borrower’s credit worthiness and likelihood to repay a loan. Credit scores are based primarily on a borrower’s payment history and the amount owed. Other factors used in determining credit scores include how long you have had each account, the mix of types of credit used (credit cards and loans) and factors related to any new credit account that has recently been opened.

32. Vocabulary • Debt to income ratio: A measurement of how much of your income is being spent on debt. Many financial advisors suggest that you keep debt levels below 15 percent of your net income and that debt levels of 20 percent of your net income are dangerously high. This limit does not include mortgage payments.

33. Debt to income ratio example: • Monthly net income: $1600 • Monthly loan payment on $12,000 loan is $200 • Credit card balance of $3000 . Pays $160 per month.

34. Debt to income ratio example: • Monthly net income: $1600 • Monthly loan payment on $12,000 loan is $200 • Credit card balance of $3000 . Pays $160 per month.

35. Debt to income ratio example: • Monthly net income: $1600 • Monthly loan payment on $12,000 loan is $200 • Credit card balance of $3000 . Pays $160 per month.

36. Debt to income ratio example: • Monthly net income: $1600 • Monthly loan payment on $12,000 loan is $200 • Credit card balance of $3000 . Pays $160 per month. What if borrow wants to borrow $5,000 with monthly payments of $100?

37. Lenders • Those who provide credit are called “lenders.” Lenders must use caution when granting credit, for an obvious reason; they do not want to lose money by making a bad loan.

38. Lenders look for the 3 Cs of credit. • “character” • “capacity” • “collateral” Reading 16.1 (pages 138-139)

39. Borrowers have rights • The total finance charges for a loan in question • Eligibility for credit without discrimination based on gender, religion, race, nationality, or marital status. • The right to contest charges on your credit card statement if you think they are wrong. • Protection from abuse by credit collection agencies if you are late making payments.

40. Borrowers • Borrowers have what responsibilities? • Would it be easy or difficult for you to get approved for a loan today? • How can young people begin to establish credit?

41. Closure • When a lender is considering your “character”, what does he or she examine? • When a lender is considering your “capacity,” what characteristics does he or she examine? • What types of things might serve as collateral for a loan? • If you have no credit history, what might you do to establish credit?

42. TCEE Grade 6 Lesson 4 Which Job is Best for Me?

43. The student is expected to: • 6.14Hcompare the annual salary of several occupations requiring various levels of postsecondary education or vocational training and calculate the effects of different annual salaries on lifetime income

44. Engage: T-P-S • What type of job do you want to have as an adult? • What types of skills will you need for this job? • How will you gain those skills? (college, trade school, on the job training) • How much do you think this job pays per year?

49. Activity 6.4-1 • Each student will draw a card. • Each card has a job title, an annual salary, and the amount of education required for that job • Student lists the job s/he drew and the annual salary, hourly wage, and education required in the top left box. • Demonstrate how to calculate the hourly rate. • Complete the remaining eight boxes by circulating around the room and finding classmates who have jobs that match the criteria either by salary range or education level.

50. Use their data from Activity 6.4-1a to answer the questions on Activity 6.4-1b.