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Module 4:Basic investments Edit

Math standards covered in this module include: Edit

Understand various meanings of multiplication and division • Understand the effects of multiply in and dividing whole numbers • Compute fluently and make reasonable estimates • Select appropriate methods and tools for computing with whole numbers from among mental computation, estimation, calculators, and paper and pencil according to the context and nature of the computation and use the selected method or tools.

Social studies standards covered in this module include: Edit

Ia. explore and describe similarities and differences in the ways groups, societies, and cultures address similar human needs and concerns;IIIc. use appropriate resources, data sources, and geographic tools such as atlases, data bases, grid systems, charts, graphs, and maps to generate, manipulate, and interpret information; IIIk. consider existing uses and propose and evaluate alternative policies for the use of resources and land in home, school, community, the region, and beyond; IVe. identify and describe ways family, groups, and community influence the individual’s daily life and personal choices; IVh. work independently and cooperatively to accomplish goals; Vc. identify examples of institutions and describe the interactions of people with institutions; Vf. give examples of the role of institutions in furthering both continuity and change; VIa. examine the rights and responsibilities of the individual in relation to his or her social group, such as family, peer group, and school class; VIg. explore the role of technology in communications, transportation, information-processing, weapons development, or other areas as it contributes to or helps resolve conflicts; VIIb. distinguish between needs and wants; VIId. give examples of the various institutions that make up economic systems such as households, business firms, banks, government agencies, labor unions, and corporations; VIIf. describe the influence of incentives, values, traditions, and habits on economic decisions; VIIg. explain and demonstrate the role of money in everyday life; X. identify and practice selected forms of civic discussion and participation consistent with the ideals of citizens in a democratic republic.

Vocabulary words: Edit

Budget
When one takes the money they’ve earned or received and subtracts their expenses and comes up with a plan that allows them to determine their ability to pay bill and purchase things they need and want.
Fixed expense
An item on your budget that remains the same every month,such as the cost of rent or a house payment.

Income
Salary or money that is received by an individual as payment for the completion of a job or money that is received as a gift.
Variable expenseAn item on your budget that changes every month, such as something you want like a movie or candy or a last minute emergency, like a repair to your vehicle.

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Props/supplies:

• Worksheets

Lesson: budgeting & shopping Edit

Begin lesson by asking students what they know about the word “budget.” Write words or phrases on the board that helps to clarify their ideas about what a budget is.

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.
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 budget?After this short introductory discussion, go immediately into playing the game.

HOPE Corps volunteer tip: If students offer an answer that isn’t quite right, try to lead them in the rightdirection through prompts.

Game: budgeting & shoppingEdit

Objective: Edit

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
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 ways they could improve it. 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 (i.e.: 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:Edit

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 betweenthings that they want and things that they need. This lesson is extremely important as a real life example

Make your budget #1 Edit

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 monthMiscellaneous  $50.00 per month

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Make your budget #2 Edit

You are a 70-year-old retired person who makes about $10,000.00 dollars per year on social security benefits and the money that you have saved in a bank account. 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:
Food bill  $200.00 per month
Bills  (heat, electricity, water) $200.00 per month
Home telephone  $40.00 per month
Cable  $40.00 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 monthMiscellaneous  $50.00 per month


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Make your budget #3Edit

You are a 35-year-old college graduate who makes about 50,000 dollars per year working for a bank as a loan officer. You have a husband and 2 young children. 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.

............................................................................................Figure out what your expenses total is per month.

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Expenses:
Mortgage payment $2,500.00 per month
Food bill $500.00 per month
Bills (heat, electricity, water) $300.00 per month
Insurance $250.00 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 monthMiscellaneous $50.00 per month


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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%

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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 upto $145.00, how much money will he get off of his bill?$14.50

......................................................................................................................................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 were that they learned about money.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 wrap up the 4 sessions, review any information, and thank students for being great learners.

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