HSFPP Lesson 5-1: Checking Accounts WWW.HSFPP.ORG ©2012 National Endowment for Financial Education

HSFPP Lesson 5-1: Checking Accounts Use a checking account WWW.HSFPP.ORG Checking Accounts Use a checking account ©2012 National Endowment for Financial Education | Lesson 5-1: Checking Accounts ©2012 National Endowment for Financial Education

HSFPP Lesson 5-1: Checking Accounts WWW.HSFPP.ORG Ways to Pay? How many different ways can you shop for and pay for music? Give students a two- or three-minute time limit to brainstorm as a class the different ways they could shop and pay for a new music. Create two columns on the black/whiteboard, one for “shop” and one for “purchase.” Document the lists students create. Prompt students so brainstorming lasts the full two or three minutes. If they start running out of ideas halfway through, encourage them to think of places to buy used items. (from a friend, yard sale, discount store, library sale, online, etc.) EXTENSION: Follow-up by polling students to see how many of these different places to shop and payment methods they have used themselves. This will help give you a sense of previous experience, potential classroom “experts,” and which security/fraud topics you should cover later in the Module. ©2012 National Endowment for Financial Education | Lesson 5-1: Checking Accounts ©2012 National Endowment for Financial Education

HSFPP Lesson 5-1: Checking Accounts WWW.HSFPP.ORG Preview Today we will answer these questions: Why should I pay with a check? How do I use a checking account? How can I find out how much money I have in my checking account? Use what you learn today to demonstrate how to use a checking account. Page 3 Preview the Learning Outcomes in the Student Learning Plan. By the end of this lesson, the students should be able to demonstrate how to use a checking account. ©2012 National Endowment for Financial Education | Lesson 5-1: Checking Accounts ©2012 National Endowment for Financial Education

HSFPP Lesson 5-1: Checking Accounts WWW.HSFPP.ORG Meet Jason and Brianna Jason – Senior Has a checking account and debit card Pursuing career in law enforcement Also considering joining the Coast Guard Brianna – Grade 9 Starting a new job soon Doesn’t have a bank account Gets most of income from the “bank of mom and dad” Likes to receive gift cards for gifts Pages 3-4 Introduce Jason and Brianna as the young people featured in the Student Guide. The students will follow Jason and Brianna as they learn about using financial services to handle their payments. ©2012 National Endowment for Financial Education | Lesson 5-1: Checking Accounts ©2012 National Endowment for Financial Education

HSFPP Lesson 5-1: Checking Accounts WWW.HSFPP.ORG Demand Deposits Funds can be withdrawn on demand by a customer without advance notice to bank or credit union Bank teller (in person) ATM Online Phone Check Debit card Student Guide, pages 4-7 Use the information on pages 4-5 to discuss reasons people might choose to pay for goods and services in ways other than using cash. Use this to transition into the benefits and potential negatives of using a checking account for purchases. Explain that checking accounts are considered types of demand deposit accounts because the account funds are accessible to the customer without any advance notice to the bank or credit union. Either as a whole class or in small groups, have the students brainstorm responses to Activity 5.1: Proof of Payment. ©2012 National Endowment for Financial Education | Lesson 5-1: Checking Accounts ©2012 National Endowment for Financial Education

HSFPP Lesson 5-1: Checking Accounts WWW.HSFPP.ORG What’s on a Check? Student Guide, pages 8-10 Explain that when a person writes a check or makes an electronic payment with checking account funds, s/he is ordering the bank or credit union to immediately transfer funds to someone else. When the check is signed or debit card used, the payer (owner of the checking account) enters into a contract to agree to pay the designated amount when the payee (person receiving payment) deposits the check or accepts the electronic payment. Revisit responses from the opening activity to point out that many checking account payments are made electronically, whether online, by phone, or with a debit card. However, there will be occasions when someone may need or choose to pay with a paper check. Use the slide and information on pages 8 and 10 to point out the information that is displayed on every check. Stress that a check needs to be filled out clearly, accurately, and in permanent ink to avoid any opportunities to misinterpret data or to prevent fraud. Use Activity 5.2: Check Writing 101 for students to practice writing checks. [An example of the completed activity are shown on the next slide.] ©2012 National Endowment for Financial Education | Lesson 5-1: Checking Accounts ©2012 National Endowment for Financial Education

HSFPP Lesson 5-1: Checking Accounts WWW.HSFPP.ORG Student Guide, page 9 Use Activity 5.2: Check Writing 101 for students to practice writing checks. An example of the completed activity are shown on this slide. ALTERNATE ACTIVITY: Arrange for the students to complete the Check Writing tutorial on the Goodwill Community Foundation education website, www.gcflearnfree.org/moneybasics/6. Additional tutorials are available on this site for additional practice. ©2012 National Endowment for Financial Education | Lesson 5-1: Checking Accounts ©2012 National Endowment for Financial Education

HSFPP Lesson 5-1: Checking Accounts WWW.HSFPP.ORG Make the Deposit XX/XX/201X 1 4 7 . 5 8 Your Name 1 4 7 . 5 8 Student Guide, pages 16-18 Remind the students that they need to have sufficient funds in their checking accounts to have money available for payments. A checking account is not like a credit card account. Rather, they will need to ensure that they deposit enough money into their accounts to have money available to pay on demand, whether by check or a debit card. Use the slide to illustrate how to fill out a deposit slip. In some cases of making a deposit at an ATM, a deposit ticket might not be needed. Regardless, point out that every deposit will require the depositor to designate the account receiving the funds and the amount when making a deposit. Use Activity 5.3: Make the Deposit so students practice filling out a deposit slip. Your signature (when taking cash) - 2 5 . 0 0 0 5 1 3 5 7 9 2 4 6 8 1 2 2 . 5 8 ©2012 National Endowment for Financial Education | Lesson 5-1: Checking Accounts ©2012 National Endowment for Financial Education

HSFPP Lesson 5-1: Checking Accounts WWW.HSFPP.ORG Endorsements Blank Endorsement Restrictive Endorsement Your signature For deposit only Your signature Student Guide, pages 17-18 Show examples of endorsements that are written on the back side of a check, behind the “Pay to the Order of” phrase written on the front side of the check. Point out that the bank receiving the endorsed check will match the endorsement with the designated payee on the front of the check. ©2012 National Endowment for Financial Education | Lesson 5-1: Checking Accounts ©2012 National Endowment for Financial Education

HSFPP Lesson 5-1: Checking Accounts WWW.HSFPP.ORG Jason’s Transactions Code Date Description of Transaction Payment (—) Deposit (+) Balance Mon Balance from previous page 35.00 d/c Phone charger -19.00 16.00 Pizza -18.00 -2.00 Fee NSF fee -30.00 -32.00 Food -9.00       -41.00 -71.00 213 Thur School fee -25.00 -96.00 -126.00 Student Guide, pages 14-16, 18-19 Read about the problem Jason had keeping track of his checking account transactions. (Student Guide, pages 14-16). Stress that an account holder is responsible for keeping track of how much money is really available in the checking account. Demonstrate how to keep track of payments from and payments to a checking account as you record Jason’s transactions. Note that his ending balance is different from the bank’s ending balance because he recorded the $25 check payment which was not accepted by the bank. Arrange for the students to practice tracking checking account transactions as they complete Activity 5.4: Keeping Track. Slide 11 shows a sample answer key. ©2012 National Endowment for Financial Education | Lesson 5-1: Checking Accounts ©2012 National Endowment for Financial Education

HSFPP Lesson 5-1: Checking Accounts WWW.HSFPP.ORG Keeping Track Code Date Description of Transaction Payment (—) Deposit (+) Balance Dep Mon Cash deposit 200.00 W/D Checks -20.00 180.00 100 Wed Fine Foods – groceries -23.11 156.89 101 Wayne’s Book World -13.50 143.39 d/c Thur Cash -30.00       113.39 Auto w/d Fri Phone bill -25.50 87.89 Sat Paycheck 113.76 201.65 Student Guide, page 20 Arrange for the students to practice tracking checking account transactions as they complete Activity 5.4: Keeping Track. This slide shows a sample answer key. ©2012 National Endowment for Financial Education | Lesson 5-1: Checking Accounts ©2012 National Endowment for Financial Education

HSFPP Lesson 5-1: Checking Accounts WWW.HSFPP.ORG Balance Zoe’s Bucks Trans Date* Description of Transaction Payment (—) Deposit (+) Balance Dep Tues Deposit paycheck 280.00 d/c Gas ($3.69 x 15 gallons) -55.35 224.65 101 Wed Insurance premium -115.00 109.65 Sat Movie -12.00 97.65 Theatre food -6.50       91.15 Mon Babysitting fee ($15 x 4 hours) 60.00 151.15 102 Book -175.00 -23.85 NSF Thurs Insufficient funds fee -36.00 -59.85 Fri Paycheck ($7.50 x42 hrs-$27 tax) 288.00 228.15 For additional practice, arrange for students to work independently or in pairs to complete the Balance Zoe’s Bucks task. This slide shows a sample answer key. ©2012 National Endowment for Financial Education | Lesson 5-1: Checking Accounts ©2012 National Endowment for Financial Education

Reconcilable Differences HSFPP Lesson 5-1: Checking Accounts WWW.HSFPP.ORG Reconcilable Differences The Bank Statement Balance + Outstanding Deposits - Outstanding Payments and Withdrawals Does the result equal what you tracked in your register? Student Guide, pages 19-21 Point out the value in comparing your checking account records with the bank information. Use this slide to explain how to reconcile an account to compare the bank statement with someone’s own records. Have the students complete Activity 5.5: Does it Balance? To verify Jason’s account balance. ©2012 National Endowment for Financial Education | Lesson 5-1: Checking Accounts ©2012 National Endowment for Financial Education

Hints to Find Math Errors HSFPP Lesson 5-1: Checking Accounts WWW.HSFPP.ORG Hints to Find Math Errors Subtract to calculate the difference. Does the difference match a transaction amount? Look for a missing an entry for that same amount Search for a duplicate entry for that amount Is the difference twice a transaction amount? Check for a deposit mistakenly labeled as withdrawal or vice versa Is there a difference of 1, 10, 100, or 1,000? Recheck work for an addition or subtraction error Is the difference divisible by 9? Look for a transposed number (i.e. $125 mistakenly entered as $152) This is a good time to provide tips to find math errors when reconciled amounts don’t match. ©2012 National Endowment for Financial Education | Lesson 5-1: Checking Accounts ©2012 National Endowment for Financial Education

HSFPP Lesson 5-1: Checking Accounts WWW.HSFPP.ORG Challenge 5-A Use a Checking Account Track checking account payments and deposits for two months. Reconcile the account at the end of each month to verify your calculations. Student Guide, page 21 Assign the students to independently complete Challenge 5-A: Use a Checking Account. EXTENSION: Have students create fictitious checking accounts that track deposits and withdrawals for two weeks’ time. Tell the students to balance their own checking account records. Then instruct students to become a two-person team in a financial relationship (roommates, married, parent and teen, business partnership, etc.) and balance the joint checking account. ©2012 National Endowment for Financial Education | Lesson 5-1: Checking Accounts ©2012 National Endowment for Financial Education

HSFPP Lesson 5-1: Checking Accounts WWW.HSFPP.ORG Reflection What is your preferred method of payment? check debit card cash Why? Ask the students to reflect on their preferred method of payment and give reasons for their preference. ©2012 National Endowment for Financial Education | Lesson 5-1: Checking Accounts ©2012 National Endowment for Financial Education

HSFPP Lesson 5-1: Checking Accounts WWW.HSFPP.ORG ©2012 National Endowment for Financial Education