Personal Finance Banking & Credit Unit Farmington Public Schools Grade 11 & 12 Business Education Pete Chrzanowski DRAFT: 6/30/06 Farmington Public Schools 1
Table of Contents Unit Summary....page 3 Stage One: Standards Stage One identifies the desired results of the unit including the broad understandings, the unit outcome statement and essential questions that focus the unit, and the necessary knowledge and skills. The Understanding by Design Handbook, 1999... pages 4-7 Stage Two: Assessment Package Stage Two determines the acceptable evidence that students have acquired the understandings, knowledge and skills identified in Stage One. pages 8-9 Stage Three: Curriculum and Instruction Stage Three helps teachers plan learning experiences and instruction that aligns with Stage One and enables students to be successful in Stage two. Planning and lesson options are given, however teachers are encouraged to customize this stage to their own students, maintaining alignment with Stages One and Two... pages 10-13 Appendices.... page 14 Pete Chrzanowski DRAFT: 6/30/06 Farmington Public Schools 2
Unit Summary Students in Personal Finance will be introduced to topics such budgeting, investing, savings, taxes and insurance to help them meet personal goals and become financially literate. This four to five week unit on Banking and Credit will be taught at the beginning of the semester, establishing a framework for setting up a personal budget and providing a solid introduction to the next unit of Savings & Investments. All Personal Finance classes are multi-level and comprised of grade 11 and 12 students. Pete Chrzanowski DRAFT: 6/30/06 Farmington Public Schools 3
Stage One: Standards State and National Standards for Business Education 1. Personal Decision Making - Rational decision-making is essential as it applies to the roles of citizens, workers, and consumers. (National Standard (NS) 63, I, State Standard (SS) http://www.crec.org/cte/bsed/bsedstandards.xls, F 43-44) Students will: a. Apply opportunity costs and trade-offs to personal decision-making. b. Recognize and assume responsibility for the consequences of economic choices. c. Apply the decision-making process to various types of decisions at different stages of the life cycle. 2. Banking - Financial deposit institutions provide a variety of services to consumers in order to aid in the transfer of funds. (NS 65, VI, SS F 46) Students will: a. Identify various types of financial deposit institutions. b. Identify the basic services provided by financial deposit institutions. c. Describe why there are various means of transferring funds. 3. Using Credit There are a variety of factors that affect the choice of credit, the cost of credit, and the legal aspects of using credit. Various choices are available to consumers for protection against risk and financial loss. (NS 66, VII, VIII, SS F 47, 48) Students will: a. Describe the risks and responsibilities of using credit. b. Identify the opportunity cost of credit. c. Determine advantages and disadvantages of credit. d. Identify the various types of credit including the various types of credit cards. 4. The Role of Consumers/Citizens There are limited personal financial resources and more of the wants and needs of members of a society can be satisfied if wise consumer decisions are made. Consumers have to be knowledgeable of their rights and responsibilities Students will: Pete Chrzanowski DRAFT: 6/30/06 Farmington Public Schools 4
a. Understand the economic/consumer laws, which affect them as residents of the state of Connecticut. b. Explain the importance of the individual citizen consumer/producer in the American economic system. c. Learn that there is an orderly process for changing laws and that there is a legitimate process for seeking redress when their rights have been violated. Essential Understandings and Content Standards Technology Essential Understanding #2: Communication Technology can be used to create written, visual, and multimedia products to communicate ideas, information, or conclusions to others. Content Standard: a. Students will use video, audio, and multimedia tools to create clear and meaningful presentation of ideas. Technology Essential Understanding #3: Data Analysis Technology can assist with the statistical analysis of data as a powerful means for explaining, understanding, and predicting issues of the human condition or physical world. Content Standard: a. Students will present complex data in appropriate charts and graphs in a meaningful way. b. Students will build statistical models and use them to make realworld predictions. Pete Chrzanowski DRAFT: 6/30/06 Farmington Public Schools 5
Unit Outcome Statement As a result of this unit, the students will understand the role that banks play in the American economic system and the various services they provide. By examining these services and the various aspects of credit and its benefits, the students will begin to develop their own financial portfolio and build financial literacy. Essential Questions What is the role of banks and how do we use them? What does your credit score mean? How does borrowing shape the world we live in? How do you setup a personal financial management system? Knowledge and Skills I. Knowledge Role of banks in the lives of U.S. consumers Various services offered by banks and how to choose the ones to fit our individual needs Purpose of various bank forms and materials Describe the various ways a bank can help to manage your money Costs and benefits of consumer credit Five C s of credit: Character, Capacity and Capital, Collateral and Credit History Function and purpose of credit cards Ways to establish and maintain good credit Consumer rights and responsibilities as they relate to financial institutions and privacy II. Performance Skills Maintain a checkbook and accompanying check register Balance a bank statement Use and understand various types of check and endorsements Calculate bank fees and identify alternatives to these services Compare and list the features of a commercial bank and a credit union Fill out credit and bank account applications Chart the financial cost of borrowing money Calculate financial charges including annual percentage rate (APR) III. Thinking Skills Analyze and evaluate outcomes when consumers decide to bank or not Review and analyze the questions they should ask before selecting a bank Examine how banking needs change over a lifetime Compare and analyze the cost of credit vs. opportunity cost Pete Chrzanowski DRAFT: 6/30/06 Farmington Public Schools 6
Contrast the differences between various credit cards and make informed decisions based on calculation of costs Explain how credit worthiness is measured and interpret various credit forms Identify potential pitfalls of credit card use for college students Look for ways to alleviate the financial stress that could lead to bankruptcy Evaluate the impact of bankruptcy on one s credit and financial goals Summarize consumer rights under the Fair Credit Reporting Act (FCRA) Compare/contrast the various types of bankruptcies (Ch. 7, 13, 11) and identify financial options IV. Technology Skills Creative effective and organized presentations Demonstrate ability to chart, graph and analyze financial data Use the internet effectively to sort through relevant financial data Utilize technology to fill out forms and obtain personal financial information Pete Chrzanowski DRAFT: 6/30/06 Farmington Public Schools 7
Stage Two: Assessment Package Authentic Performance Task Goal: Your task is to demonstrate basic financial literacy with regards to your bank accounts and maintain/improve/establish your credit rating. Role: You are a college student beginning your sophomore year trying to convince your parents/guardians that you are fiscally responsible and can manage your own finances. Audience: Your parents/guardians and potential lending companies. Situation: You are about to begin school and you ask your parents/guardians for a car. They have some misgiving about your financial responsibility but agree to help you out if you can demonstrate over the next year that you are serious about this by establishing credit, opening up your own bank accounts and maintaining accurate records, budgeting your money (to be discussed later) and researching insurance companies (to be discussed later). Performance: You will perform the following tasks: Research various banks, their services and fees and compare them in a table Print out and complete application for a checking account Write out checks and deposit slips for the given transactions Maintain an accurate checkbook register Reconcile your bank statement to your checkbook Research various credit card companies, their services and fees and summarize relevant information in PowerPoint slide(s). Print out and complete application for a credit card Obtain your credit score Write a two-page persuasion paper outlining the things you considered in your research and choices as well as ways to improve your credit score and increase your bank account balance (could be given to your parents or used as a timeline to show improvement for a credit analyst when obtaining a car loan) Standards & Criteria for Success: Your paper reflects a thorough understanding of the decision-making process, clearly summarizes your argument and demonstrates forward thinking. All of your forms, applications and record keeping should be free of errors, legible and organized. A rubric will be used to grade your paper, bank table, checkbook records and reconciliation, applications and credit card charts on a 4-3-2-1 scale in various categories. 1-a, 1-b, 1-c 2b 3-a, 3-c T.E.U. 2-a, 3-a Tests, Quizzes, and Other Quick Assessments Pete Chrzanowski DRAFT: 6/30/06 Farmington Public Schools 8
Essay on the various services offered by banks and what factors should be considered in electing the various services 1-a, 1-b, 1-c Essay explaining importance of credit and how it is necessary in our economy 3-b, 3-d 4-a, 4-b Question responses regarding the various forms of bankruptcy and how society s perception of this has changed 4-a, 4-b, 4-c Calculate and chart various credit charges and estimate time to pay off balances 3-a T.E.U. 3-b Quiz on components of a check and endorsements 2-c Quiz on evolution of banks and credit unions 2-a Test on various types of credit, fee calculations, APR and components of credit score 4-a, 4-b, 4-c, 4-d T.E.U 3-b Checks for Understanding List the various types of financial institutions Explain bank fees and other charges Describe the need for banks and checks List components of a check Know the 5 C s of Credit Define opportunity cost Define and Calculate APR? Compare/contrast forms of bankruptcy Stage Three: Learning Experiences and Instruction Learning Experiences and Instruction Pete Chrzanowski DRAFT: 6/30/06 Farmington Public Schools 9
Guiding Questions Instructional Strategies Checking for Understanding Lesson 1: The Role of Banks in the economy (2 Days) What is a bank? What roles do banks play? Does everyone need banking services and what happens to those that don t? What did people do before banks? Have students work in pairs to list what they already know about banks and dispel myths through class discussion. In same pairs, have students come up with the various roles that banks play in our lives, in businesses and society. Discuss as a class. In groups of 4, have students complete worksheet on To Bank or Not to Bank (10 each) and explain their choices. Individually, have students come up with options for those that choose not to bank. Lesson 2: Financial Institutions and Services (3 Days) What are the different types of financial institutions? Who runs banks? Which services are offered? What should we consider when choosing a bank? Students to read book on differences among financial institutions and fill out chart. Have student go online and search for types of financial institutions and the services they offer. Complete worksheet and discuss. Each group will go over their list of options for those nonbankers and come up with a consensus. In addition, they will discuss what people did before there were banks and report back to class. How do we select the services that best fit our needs? Classroom discussion on things to consider when choosing a bank. In pairs, discuss the types of services they found on line and discuss how important they are to each of them In pairs, have students go online and have students find two different bank ads and print out. Share their findings. Classroom discussion on who runs banks, how banks get customers and make money. Lesson 3: Savings vs. Checking Accounts (3 Days) What is the difference Have students work in pairs between savings and checking to list what they already Quiz -Similarities/differences of banks, credit unions and other financial institutions. Individual essay on the various services offered by banks, people that use them and things to consider when choosing among alternatives. Pete Chrzanowski DRAFT: 6/30/06 Farmington Public Schools 10
accounts? What are other methods of transferring funds? Are checking and saving accounts free? Is it necessary to have a checking account? know about various bank accounts and discuss with class. Have students go online and research various methods of transferring funds and fees associated with different accounts. Complete worksheet individually. In groups of four, have students come up with laundry list of uses of check writing and report their findings. Discuss alternatives. Exit questions: - Does trust have anything to do with checks? - What is the best type of account payment method? Guest Speaker on Banking Lesson 4: Opening and Maintaining an Account (4 Days) How do I open an account? What are the important parts of a check? How might filling out a check incorrectly be a problem? Reflect on previous exit questions. Have students work in pairs and come up with things necessary to open an account and restrictions. Discuss. Is it necessary to keep an accurate check register? How do I balance my checkbook? Distribute handout on parts of a check and go over using visual aides and text. Demonstrate how to record information in check register Class discussion on importance of balancing checkbook and potential errors of people and banks. Go on computers and create spreadsheet with formulas to mimic checkbook. Use visual aids to demonstrate in pairs how to reconcile checkbook and bank statement. Quiz Check components and endorsements In groups of 3-4, have students come up with potential pitfalls of writing false or inaccurate check and who is affected. Hand-in. Individually, students to perform basic checkbook reconciliation on computers. Lesson 5: Pros and Cons of Various forms of Credit (2 Days) What does credit mean? Pair share: Have students Pete Chrzanowski DRAFT: 6/30/06 Farmington Public Schools 11
speculate on the various meanings of credit.good and bad perceptions. Discuss Is all credit the same? When is credit good? Ask students to recall any personal experiences and discuss. Students to read book on differences among types of credit and fill out chart. When is credit bad? Have students rate themselves on scale of 1 to 10 on how often they use credit and have them complete worksheet on when is it best to use credit for various scenarios. Students to work in pairs and go online to seek out rates on different types of loans and discuss variances. Lesson 6: Credit Cards and the Consumer (3 Days) How do credit cards work for Reflect on previous exit consumers for creditors? question. Essay explaining importance of credit and how it is necessary in our economy Exit question: Reflect on the statement. All credit and loans are not equal. What are the potential pitfalls of credit cards? What are some key differences among various credit cards? What does opportunity cost mean? What does APR mean? Am I using credit wisely by paying the minimum balance? In groups of 3-4, have students come up with timeline of events from point of purchase using a credit card to when they get the bill and discuss. In same groups, have students list potential pitfalls of credit card use and who is most likely to be affected. List on board. Have students go online and fill out table on fees, rates and advertisements. Discuss opportunity cost question and have students read book on APR show calculation on board. Exit question: Reflect on the statement. Opportunity cost is Have students chart various credit card charges and calculate payoff figures Exit question: Why is the minimum balance a dangerous way to pay? Lesson 7: Maintaining Good Credit (3 Days) How do I establish credit? Who calculates my credit score? Suggest and discuss ways someone can establish credit. Pete Chrzanowski DRAFT: 6/30/06 Farmington Public Schools 12
What are the components of my credit score? Why is maintaining good credit important? Who looks at my credit score? How do I fix my score? What are your credit rights? Have students work in pairs and research online the various credit agencies, components of a score and services available and fill out worksheet with results. Discuss. Have students read book on the 5 C s of credit and components of a score and answer questions. Pair share: Come up with ways that a bad score can hurt you and privacy rights of credit applicants. Discuss. Suggest ways to fix your score, discuss alternatives with class. Lesson 8: Bankruptcy: Repair or Despair (3 Days) Is bankruptcy the answer to financial stress? Who is affected by bankruptcy? Is all bankruptcy equal.do it fix all your problems permanently? Have students work in pairs to list what they already know about bankruptcy and discuss with class. Have students read book and go online to research various forms of bankruptcy (Ch. 7, 11, 13) and complete chart. Complete worksheet on rights of consumer rights and Fair Credit Reporting Act. Test Various types of credit, fee calculations, APR and credit scores. What are warning signs of debt? In pairs, students to research various websites on financial counseling and list warning signs of debt. Discuss. Lesson 8: Banking and Credit..Putting it all together (3 Days) What are my responsibilities Review response questions on as a consumer/citizen? bankruptcy. Response questions on the various forms of bankruptcy and society s perception. How do I demonstrate good financial sense as a borrowing and payer? Guest speaker on financial counseling. Authentic Performance Task (2 Days) Pete Chrzanowski DRAFT: 6/30/06 Farmington Public Schools 13
Appendices Worksheets, Rubrics, Handouts and Test/Quizzes to be attached later. Pete Chrzanowski DRAFT: 6/30/06 Farmington Public Schools 14