Basics of banking[]
Module objectives:[]
In this module, students are introduced to the concept that money
is earned and used to buy things. Students are also introduced tothe basic concept of banks and banking and how to keep a budget.
At the end of this module, your students will be able to:
->Explain the basics of banking and money
->Explain the differences between credit unions and banks
->Distinguish between earned and gifted money
->Distinguish between needs and wants
->Explain what a budget is
->Explain how to use a budget
->Explain the difference between a fixed expense and
a variable expense->Explain how to be a smart shopper
Concepts to cover:
This module will teach basic concepts about money, including where it comes from and how it’s used, and how banks work;
the module will also cover the importance of budgeting andsmart shopping.
Math standards covered in this module include:[]
Work flexibly with fractions, decimals, and percents to solve problems • understand the meaning and effects of arithmetic operations with fractions, decimals and integers • select appropriate methods and tools for computing with fractions and decimals from among mental calculation, estimation, calculators or computers, and paper and pencil, depending on the
situation, and apply the selected methods
Social studies standards covered in this module include:
IIf. use knowledge of facts and concepts drawn from history, along with methods of historical inquiry, to inform decision-making about and action-taking on public issues; IIIg. describe how people create places that reflect ideas, personality, culture, and wants and needs as they design homes, playgrounds, classrooms, and the like; IIIj. analyze and evaluate social and economic effects of environmental changes and crises resulting from phenomena such as floods, storms, and drought; IVh. Work independently and cooperatively to accomplish goals; Vc. describe the various forms institutions take, and explain how they develop and change over time; Vg. apply knowledge of how groups and institutions work to meet individual needs and promote the common good; VIa. examine persistent issues involving the rights, roles, and status of the individual in relation to the general welfare; VIId. describe a range of examples of the various institutions that make up economic systems such as households, business firms, banks, govern-ment agencies, labor unions, and corporations; VIIf. explain and illustrate how values and beliefs influence different economic decisions; VIIg. differentiate among various forms of exchange and money; X. identifies and practice selected forms of civic discussion and participation consistent with the ideals of citizens in a democratic republic.
Vocabulary words:[]
Bank
A place where you can deposit money to keep it safe, borrow money, and invest money.
Budget
The person takes his gains, like his salary and subtracts his expenses, coming up with a plan that allows them to determine his ability to purchase things.
Credit union
Similar to a bank, a credit union is a non-profit organization that serves a specific group of people.
Fixed expense
An item on your budget that remains the same every month, such as the cost of rent or a house payment.
Money
A specific currency issued by each country that people exchange for goods or services.
Barter
A way to trade a good for another good without using money (such as trading corn for a cow).
Income
Salary or money that is received by an individual as payment for the completion of job.
Need Something that you need to buy or have in order to survive, such as food, housing, and transportation.
Variable expenseAn item on your budget that changes every month, such as expenses for movies or entertainment.
Want Something that you want to buy or own, but you don’t need for your survival.
Lesson: basics of banking[]
Begin by asking students what they think about money. This should be a discussion that you lead.
Draw a brain map on the board to illustrate how the conversation progresses. Start with a central bubble in the middle (what is money?) with lines and bubbles leading out from it including other concepts and ideas we will cover in the discussion.
You can ask prompts such as:
->What is money?
->What did people use before money?
->Explain bartering Where does money come from?
->Explain that the government prints money through the treasury Why do we need it?
->How do you feel about it?
->What was the last thing you bought?
->What was the last thing your mom or dad bought?
->Why did you buy it?
->How did you get the money to buy it?
->Was the item you purchased a want or a need?
Notes:
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HOPE Corps volunteer tip: If students offer an answer that isn’t quite right, try to lead them in the right
From here, distinguish between a want and a need. Give them examples of each—for instance, a bus pass is a need because people need it to go to school or work, while a new video game is a want because students don’t need it to survive. Have students brainstorm about the two words, and write their concepts on the board.
You can approach this in a number of ways, including:
->Write down each student’s purchase on the board and, after you’ve discussed it, decide whether it is a want or aneed. Label W or N next to each item.
->Have students break up into groups of 3 or 4 to decide whether each item is a want or need. Visit each group to discuss and make sure that they’re on the right track.
->Have students add up whether the majority of things that they’ve bought have been wants or needs. Talk about how their needs are provided for. Make a list of all the items that are needs in their lives (these should include things like house or apartment/somewhere to live; food; water; transportation; safety (such as through having insurance or having an emergency preparedness kit). When talking about the emergency preparedness kit, mention BOOF’s the Emergency Financial First Aid Kit (EFFAK), which help to organize and file key financial records, legal documents, and household files in case there’s an emergency.
->You can also talk about how some needs—such as being loved or having friends and family—cannot be bought, and other needs—such as food and shelter—can.
->Have students break up into small groups. Provide them with old magazines or newspapers. Have them cut out different pictures or words and glue/tape these words or images onto separate pieces of papers. One paper should be labeled want and one should be labeled need.
After this, discuss how we get money. Distinguish between money that you earn and money that you are given, such as from a gift. You can also discuss money that students’ parents get through credit cards or a loan to purchase big-ticket items, such as cars and homes.
Want: mp3 player Need: health insurance
HOPE Corps volunteer worksheet:[]
Answer key:[]
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1. Circle all of the money that Gabe was given as a gift. What is the total amount of money that was a gift?
Circle: Birthday check from Grandma Kay $20.00; Birthday check from Auntie Ella $15.00. Total gifted money: $35.0
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2. Underline all of the money that Gabe earned. What was the total amount of money that Gabe earned from working?
Underline: Money for cleaning the garage $10.00; Money for walking my little sister
to soccer practice for 1 week $5.50; Money for washing my dad’s car $5.00; Money for planting my grandma’s flower garden $7.00. Total earned money: $27.50
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3. How much is the total of gifted and earned money? $62.50
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4. What does it mean to earn money? Earned money is money that you make by completing a job or a task for someone.
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5. Have you ever earned money? What did you do to get this money? Answers will vary….
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6. Gabe wants to buy a new video game with the money he earned and was given for his birthday. It costs $31.29, including tax. Gabe wants to put the rest of the money in the bank. After he buys the video game, how much money will he have left?
$31.21
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7. Can you think of other ways that you can earn money? Write these ways down.
Answers will vary. May include: babysitting; doing chores for mom or dad, weeding
garden, running errands, cleaning house, walking dog, washing car, helping parents,
mowing lawn, etc.
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HOPE Corps volunteer tip: You can’t be everywhere at once—encourage your students to discuss a problem
as a group to see if they can determine the answer themselves.
1. Circle all of the money that Gabe was given as a gift.
What is the total amount of money that was a gift?
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2. Underline all of the money that Gabe earned. What was the total amount of money that Gabe earned from working?
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3. How much is the total of gifted and earned money?
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4. What does it mean to earn money?
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5. Have you ever earned money? What did you do to get this money?
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6. Gabe wants to buy a new video game. It costs $31.29, including tax. Gabe wants to put the rest of the money in the bank. After he buys the video game, how much money will he have left?
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7. Can you think of other ways that you can earn money? Write these ways down.
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Game: learn it and earn it![]
Have students split up into groups of 4 to 5. Explain that by answering a question correctly, each team will get to draw an Earn it! Card from the pile that you’re holding. The questions are drawn from material that they’ve learned in the lesson that day
Questions:
1. What is a bank?A place where you can deposit money to keep it safe, borrow money, and invest money.
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2. What type of institution is similar to a bank but is a non-profit that serves a specific group of people?Credit union
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3. What does bartering mean?Exchanging one good for another
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4. Where does money come from?The government prints and regulates it.
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5. You got a check from your dad for your birthday. Is this money a gift or money that you earned?Gift
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6. Say that you mowed four lawns in your neighborhood. Each
person paid you $5 for each lawn. How much did you earn?
$20.00
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7. Uh-oh! Your dog dug a hole in your neighbor’s yard. You have to pay him ten dollars from the money that you earned for mowing those lawns. If you earned $20, how much money do you have left after paying him?$10.00
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8. Say that you really want to see a new summer superhero movie. Is this a want or a need?
Want
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9. Your sister has to get eyeglasses. Is this a want or a need?
Need
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10. Your father said that if you earned fifty dollars, he would contribute an equal amount of money towards buying a bike. How much money is your dad going to contribute?
$50.00
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11. The bike costs $300.00. How much more money do you need to earn, after the $50 you earned and the money that your dad contributed?
$200.00
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12. You agree to help your little sister with her homework to earn the rest of the money for the bike. You need $200.00 more. Your mom will give you $5.00 for every hour that you help your sister. How many hours will you need to work to make the $200.00?40 hours
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13. Your friend has to go to the doctor because he has an ear infection. Is this a want or a need?Need
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14. You will use your bicycle to get back and forth to school. Is the bike a want or a need? Explain.Need. You need your bike for transportation to school, just like people need a bus pass or a car to get to work.
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15. Your big sister doesn’t want to open a bank account. She says she’ll save her money in a bag under her bed instead. Explain why this isn’t a good idea.
Her money could be lost or stolen, or the dog might eat it. You can also explain that it is also harder to save your money when it’s under your bed, because you’ll be tempted to spend it.
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Learn it and earn it! game cards[]
Cards should be cut out so there are 15 separate cards to match the 15 questions. You can stack them on a chair beside you or hand one to a student when he or she comes up to get one after answering a question correctly.
After all of the cards have been picked, have students tally the amount of money that they’ve earned
Lesson: budgeting & shopping[]
From here, transition into budget portion of the lesson by asking students what they know about the word “budget.”
Draw a brain map on the board to illustrate how the conversation progresses. Start with a central bubble in the middle (what is a budget?) with lines and bubbles leading out from it including other concepts and ideas we will cover in the discussion.
Write words or phrases on the board that help to clarify their ideas about what a budget is.
Make sure to include the following points:
->Why is it smart to keep a budget?
->What kind of things do you put on a budget?
->What is a fixed expense?
->What is a variable expense?
->How can you tighten up your budget?
After this short introductory discussion, go immediately into playing the game
Game: budgeting & shopping[]
Objective:
To have the students identify cost of living, expenses, income and other necessary items to compile a budget. Once they have done this exercise as a class, have them figure out budgets for different age groups. Split them into teams of a few individuals to identify costs of living at age 15, 25, 40, 65, and 80. Add children into the picture, apartment rentals, mortgage payments, car, heat, lights, water, etc…
Materials:
Chalk board or white board, paper, pens/pencils, worksheets (provided).
Steps to game:
As a class, have the students brainstorm what it takes to run their households. Although their parent/guardian takes care of these bills and expenses, the students should know what it costs and how important it is to keep a budget.
Write down each of these pieces of information to compile a budget:
1. Income (either take home income or before taxes, be sure to specify)
2. Expenses?
a. Rent/mortgage g. Telephone
b. Car h. Clothing
c. Heat i. Cable
d. Lights j. Insurance if not provided
e. Food within paycheckf. Cell phone k. Miscellaneous
->Approximate cost per month of each of the expenses that they have brainstormed
->How much money they have left How they can save money (get rid of car and take public transportation, lower minutes on cell phone, etc…)
->Differentiate between a want and a need. Have the students put an N next to needs and a W next to wants.For those that they are unsure of- put both letters.
->Discuss the budget and how they can improve upon their findings. Make sure that the students understand the importance of keeping a budget
Once this exercise is finished, have the students make budgets for an individual at different stages in life. Split the classroom into teams, and give each team an age specific individual and a small background of the individual (ie: 25 year old college graduate working as a car salesman, 85 year old retired man). This will allow them to get creative in determining income and expenses. Each team would need to determine the budget for the individual that they are assigned. The most accurate budget will win the competition. Have each team present their budget to the class and vote on accuracy.
Lesson learned:
The students should have learned the importance of keeping a budget and the amount of money that it costs to run a simple household. They should also know how to determine the difference between things that they want and things that they need. This lesson is extremely important as a real life example.
Make your budget[]
You are an 18-year-old high school graduate who makes about $15,000.00 dollars per year working as a cashier at Stop & Shop. Make your money work for you below. Figure out which bills you need to pay and which bills can be eliminated. You must find ways to save money in order to make your budget work for you. If you eliminate any of the expenses below, you have to give an alternative for it.Figure out how much money you make per month.
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Figure out what your expenses total is per month.
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Expenses:
Rent $1000.00 per month
Food bill $200.00 per month
Bills (heat, electricity, water) $200.00 per month
Cell Phone $50.00 per month
Car payment $150.00 per month
Car insurance $75.00 per month
Entertainment $150.00 per month
(out to dinner, movies)
Clothes $200.00 per month
Gym Membership $50.00 per month
Miscellaneous $50.00 per month
After finishing this game, ask students if they like to go shopping. Let students take turns for a minute or so, talking about what they like to go shopping for.
Then ask them the following questions:
->Do you buy the first thing you see? If not, why not?
->Do you ever compare prices?
->Do you ever buy things on sale?Do your parents buy things on sale? Why do you buy things on sale?
->What are other ways to be a smart shopper?
->What hidden cost is added onto most items?
Sales tax—in California the sales tax is 7.25%
As the last activity with your students, tell them that you’re going to divide the class into two teams. Have each team raise their hands when they know the answer to a question. Each team gets 50 points for each correct answer.
Questions:1. What’s one way to save money when you’re shopping? Answers could be any of the following: compare prices; buy items when they’re on sale; buy things in bulk; only buy what you need; use coupons
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2. What’s another way to save money when you’re shopping?Answers could be any of the following: compare prices; buy items when they’re on sale; buy things in bulk; only buy what you need; use coupons
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3. Is buying the cheapest item always the best idea?No. Sometimes cheap items will fall apart more quickly or not be of good quality—which would make you lose money in the long run.
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4. A CD player is on sale for 20% off its regular price. If the regular price is $100.00, how much will it be when it’s on sale?$80.00
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5. You decide to buy a new CD. It costs $17.00. The sales tax is 7.25%. How much will the CD cost with tax?
$18.23
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6. Your mom uses a coupon that gives her $25.00 off of her groceries. If her groceries rang up to be $147.20, how much will they be after she uses her coupon?$122.20
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7. Your dad gets a coupon for the hardware store that gives him 10% off his purchase. If his purchase added up
to $145.00, how much money will he get off of his bill?$14.50
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8. How much will the purchase be after he subtracts the 10% savings from the $145.00 bill?
$130.50
9. You often buy a certain magazine. If you buy the magazine in the store it costs $3.00. How much will it cost if you buy it in the store 11 times a year?$33.00
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10. If you buy the magazine in the store it costs $33.00 to get it. If you subscribe to the magazine for 1 year it costs only $14.99. How much money would you save if you subscribed to the magazine?$18.01
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After the game is finished and the scores are tallied, ask students to tell you what the most important lessons they learned about money were.
Ask them to describe anything that they learned that surprised them, or that they were confused by at first. This is a great time to review any information and thank students for being great learners.