The recent government shutdown brought to light how many Americans don't have emergency savings. According to a recent report from the Federal Reserve 40% of adults say they couldn’t produce $400 in an emergency without sliding into debt or selling something. In addition, according to a 2017 report by employment website CareerBuilder, almost 80 percent of Americans say they are living paycheck-to-paycheck. Consider the worker in this video below who said she had $1.06 cents left in her bank account.
Now, check out the article that appeared in the Tampa Bay Times on January 2, 2019. Why are so many people living paycheck-to-paycheck? Start a discussion in the classroom about saving. Before your students go out on their own, have them consider some ways they can plan to save for the future. For example, on college campuses the Starbucks line is always long. Have students calculate how much money students spend in a year on fancy beverages if they spend an average of three dollars a day. Have students brainstorm other ideas they could save money. You might also want to share some of the interactive financial literacy interactive, including budget generators, like PlaySpent.org that are highlighted on Next Gen Personal Finance.
Financial Literacy Standards
SS.8.FL.3.7.Discuss the different reasons that people save money, including large purchases (such as higher education, autos, and homes), retirement, and unexpected events. Discuss how peoples tastes and preferences influence their choice of how much to save and for what to save.
SS.912.FL.3.1Discuss the reasons why some people have a tendency to be impatient and choose immediate spending over saving for the future.
When people buy stock, they are purchasing ownership shares in the business. If the business reflects a profit, stockholders expect to receive an increase in their investment. If the business is not profitable, stockholders can lose their money. In addition, buyers and sellers determine the prices in the financial market. Prices of stocks rise and fall based on supply and demand. If more people want to sell a stock than buy a stock, the supply goes up and the price falls. If more people want to buy a stock than sell, the demand is up so the price goes up.
If you have been paying attention to financial news, you might have heard about stocks going up and down. Check out the Tampa Bay Times article below. Based on the information in the text, how do financial markets adjust to new financial news? How are financial markets affected by changes in domestic and international economic conditions and policies?
Financial Literacy Standards
SS.8.FL.5.4 Explain that the price of a financial asset is determined by the interaction of buyers and sellers in a financial market.
SS.8.FL.5.3 Discuss that when people buy corporate stock, they are purchasing ownership shares in a business that if the business is profitable, they will expect to receive income in the form of dividends and/or from the increase in the stocks value, that the increase in the value of an asset (like a stock) is called a capital gain, and if the business is not profitable, investors could lose the money they have invested.
SS.912.FL.5.3 Discuss that buyers and sellers in financial markets determine prices of financial assets and therefore influence the rates of return on those assets.
SS.912.FL.5.7 Describe how financial markets adjust to new financial news and that prices in those markets reflect what is known about those financial assets.
SS.912.FL.5.8 Discuss ways that the prices of financial assets are affected by interest rates and explain that the prices of financial assets are also affected by changes in domestic and international economic conditions, monetary policy, and fiscal policy.
An employee pulls a pallet jack carrying plastic crates containing online orders at the Amazon.com fulfillment center in Robbinsville, N.J., on June 7, 2018. [Bloomberg photo by Bess Adler]
Recently, the Tampa Bay Times featured an article on how online shopping is on the rise among young children. According to the article (available below) children are searching for ideas on social media, which translate into goods they want to buy. How are the brands "courting" the kids who are shopping online. Influencers are using social media platforms to sell goods. How has social media influenced you to buy a good? Conduct some research on social media influencers. What do you think?
Financial Literacy Standards
SS.8.FL.2.2 Analyze a sources incentives in providing information about a good or service, and how a consumer can better assess the quality and usefulness of the information.
SS.912.FL.2.1 Compare consumer decisions as they are influenced by the price of a good or service, the price of alternatives, and the consumers income as well as his or her preferences.
You may have heard of bitcoin, which is a form of cryptocurrency. What is cryptocurrency? It is a form of peer to peer digital or virtual money (currency) that is hard to trace and can be used anonymously (crypto) because it does not have to go through the central banking system or a financial institution. You may have also heard about ways in which bitcoin or other cryptocurrency has been used. Did you know that some people have bought homes with cryptocurrency? Check out the article from the Tampa Bay Times below. What do you think?
Then, consider the following questions. What are some payment methods people might use to buy a house? Now conduct some online research about bitcoin and other cryptocurrencies. As a buyer, what are the costs and benefits of trying to use bitcoin to buy a house? As a seller, what are the costs and benefits of accepting bitcoin as a method of payment?
SS.8.FL.2.3 Describe the variety of payment methods people can use in order to buy goods and services.
SS.8.FL.2.4 Examine choosing a payment method, by weighing the costs and benefits of the different payment options.
SS.912.FL.2.5 Discuss ways people incur costs and realize benefits when searching for information related to their purchases of goods and services and describe how the amount of information people should gather depends on the benefits and costs of the information.
Deborah Kozdras, Ph.D.