NEFE® High School Financial Planning Program (HSFPP) Fahzy Abdul-Rahman Family Resource Management Extension Specialist New Mexico State University HSFPP is sponsored by National Endowment for Financial Education® (NEFE®), Copyright 2007

NMSU Extension Land-grant university mandate – teaching, research, … & extension. Provides practical, research-based knowledge and programs to improve their quality of life http://extension.nmsu.edu/ County extension offices in each county

HS Financial Literacy in NM Governor Bill Richardson has approved financial literacy as a possible subject in fulfilling math high school credit requirement in March 2010. one of the four mathematics units required for high school graduation 46 percent are functionally illiterate Financial functionally illiterate? http://newmexicoindependent.com/1436/widening-income-gap-partly-due-to-nms-high-illiteracy-rate In New Mexico, almost half of adult New Mexicans — 46 percent — are functionally illiterate, said Heather Heunermund, executive director of the New Mexico Coalition for Literacy. *In terms of literacy level 2, 46% of New Mexico’s population is at this level or below *New Mexico’s poverty rate is 47th among the 50 states and D.C.18 and individuals with low literacy ability are disproportionately represented among the unemployed17: *51% of adults with below basic prose literacy were not in the labor force in 2003 and only 35% were employed full time, according to NAAL. 38% of adults with basic prose literacy were not in the workforce and 6% were unemployed.

Why NEFE’s HSFPP? The winner of two national awards: The Institute for Financial Literacy's EIFLE (Excellence in Financial Literacy Education) Award for Institutional Book of the Year Award in the General Children Category was awarded to the HSFPP. The Association for Financial Counseling, Planning and Education also gave its Outstanding Financial Education Program of the Year award to the NEFE HSFPP.

Why NEFE’s HSFPP? Complete, money management curriculum Over 6,500,000 student guides sent out to an estimated 200,000 classrooms Tested Teacher Training Program Materials are free Online resources available: For parents For students: Games, quizzes

Program Materials Student Guide Instructor Manual Presentation Visuals Online Training Certificate of Completion Data Disk What do you get with the 2007 version? Each 128-page Student Guide comes with a certificate of completion. There are now take home materials for parents to acquaint them with the program and introduce them to other resources. A Spanish version is now available online. The Instructors Manual has been completely revamped to enhance instructional deliverables. Training is also available online. CD (or data disk) that includes all presentation visuals in PDF and Power Point formats, supplemental materials for Take It Home activities and other useful resources to teach the HSFPP like Excel spreadsheet tools. And by this fall you will be able to get order the CD. Take-Home Brochure Spanish Version

Modules/Chapters

Student Guide vs. Instructor's Manual

Overview for Instructor Instructor’s Manual is very detailed Training provided by NEFE representative In NM, Family Resource Management Extension Specialist Flexible: Focus on selected topics/chapters Supplemental materials’ suggestions

Unit 1 – Financial Plan Examine the value of having a process of planning how to use money Create personal financial SMART goals Analyze how money is received and used Use the decision-making process to create a financial plan Identify guidelines to implement a personal financial plan Monitor and modify a personal financial plan

Sample Wants and Needs Don't Buy Stuff on Hulu: Food for breakfast Clothes for school Transportation to school or work WANTS An iPOD DVD Players Cell Phone Hot Car I really need that 48” LCD Plasma! That would really make me happy! (My personal example of almost talking myself into thinking I needed a 48” LCD Plasma to watch the Super Bowl on!) As part of determining if your goals are SMART, you need you determine if they are needs or wants? Page 12 – 15 of the Instructor’s manual has activities and ideas to help students with this step. For example on Instructors Guide pg. 12 there is a great Try It! Activity: Exercise 1A: Needs and Wants: Can I tell the difference? Students can complete this by themselves or as a group. Students are instructed to write down five things you spend money on. Then think about each item and decide if it is a need or a want by checking the appropriate box. The students can then have a discussion about if they agree with others wants and needs. The needs and wants can also be taught by using the polarity activity on instructors guide pg. 13. Read one of the students list or use the one provided and have the students who think it is a need walk to one side of the room labeled need and the students who think it is a want go to the opposite side labeled want. This will also spark a good discussion. Ask your students…Do You need it or Do You want it? Needs have to come first! Don't Buy Stuff on Hulu: http://www.hulu.com/watch/1389

The Five-Step Financial Planning Process The first step to be covered with the students is Setting SMART Goals. Explain to the students that these steps are all needed in the process of financial planning in order to create a successful and useful personal financial plan. Each step builds up to the next one. This slide (1-B) will actually help your students visualize the financial planning process. Explain that it is important to begin visualizing your financial plan with the end in mind-it helps you maximize your ability to reach your goal. Ex. Runners visualize themselves crossing the finish line at a certain time. Visualizing a mental picture of your desired outcome can actually help you attain it. Instructor Guide pg. 11 has a Discussion box: Ask the following Questions: What happens if you don’t meet a goal or accomplish it on time? What would you say to someone who says goal setting is a waste of time? Discuss the following quote: “If one does not know to which port one is sailing, no wind is favorable.” (Seneca). 1-B

Step 1: Set up SMART Goals Specific…….. “Pay for lodging, transportation, meals for a 5-day trip to Washington, D.C.” Measurable… “$300 through fundraising, $50 from birthday money, save $25 a week.” Attainable….. “If I stick to my plan, I’ll have the money when I need it.” Realistic……. Group activity Exercise 1C, Are the Goals SMART?, on page 14 helps you guide students to rewrite statements and add missing SMART elements that are needed in a team-work setting. Next, Assignment 1.1: My SMART Goals pg. 15 allows students to apply this information and develop their own SMART goals. Assignment 1-2, 30 Day Countdown to Goal keeps the student thinking about his or her goal for 30 days. The instructions for this assignment can be found on page 15 of your instructor’s manual. In this assignment students establish their own short-term goal. The students are too keep a copy for themselves and give one to the you. You are then able to make a note on your calendar to check the status of the students’ goals in 30 days. Also on pg. 15 is the going further activities using the supplemental materials from the back of your instructors guide. (Have the participants flip back to the Green Supplemental Materials tab and briefly look at the following 3 activities. Point out that all 7 units have supplemental materials they can use.) SM1-1: Develop SMART goals for a school organization or event. SM1-2: Assess sample SMART goals and give advice to clarify the goals. SM1-3: Complete the Values Survey Activity to examine personal values. ANOTHER IDEA….“Visual goals” NEED POST-ITS AND INSTRUCTIONS “I still have enough money to live on while I work toward this goal.” Time-Limited.. “I need to have all the money by 6 months from now.”

Unit 2 – Budgeting Examine spending habits Benefits of having a spending plan, or budget Identify various sources of income Identify types of expenses Importance of saving (paying yourself first) Constructing a budget [e.g. here] Record keeping involved with budgeting How a budget will change throughout your life Making the most out of your money

? NEFE High School Financial Planning Program Unit Two – Budgeting: Making the Most of Your Money ? In this unit, students can actually go in and enter their own spending to get a personalized pie chart in Exercise 2A: How Do You Spend Your Money? (Found on pg. 16 SG and 40 IG) This is a great activity to help students visualize and it puts a personal spin on the lesson.

NEFE High School Financial Planning Program Unit Two – Budgeting: Making the Most of Your Money A spending plan, or budget, is a plan for managing your money during a given period of time. It’s not about depriving yourself of favorite things (remember The Step-Down Principle from Unit 1 – if not, explain it.). It’s about looking all your options and making smarter choices so you can get the stuff you really want. It also helps you in reaching your SMART Goals. Discuss Assignment 2-1: How Am I Doing? Student Guide pg. 17 (IG pg. 41) This assignment helps students to look at their financial goals set in Unit 1 and to develop a spending plan that will help them achieve these goals. In addition, there are some great supplementary activities, like the Budget Busters Activity: SM2-1, found under the “Supplementary Materials” tab of your notebook. This activity, in particular, is very interactive. You give students 10 bills of varying amounts, read the students the series of questions and each time they answer “no” to these financial goals, they pay the “cost” of their decisions by “throwing” their money in the trash bin. Very visual game. This game also leads us to values. We talked about values in Unit 1 (all of these units have ties to each other). Discuss with the students: When creating a spending plan it is very important to know what your values are. If you suddenly received $50 how would you spend it? How would your best friend spend it? How would your brother or mom spend it? Every one has different values that affects how they spend money. Having a spending plan will help you reach these goals and promote smart spending (Example of Smart Spending can be found on pg. 16 SG/pg. 40 IG).

Unit 3 – Investing Differentiate between saving and investing Assess the time value of money Compare investment options Compare the relationship between risks and returns related to saving and investments Recommend ways to integrate savings and investing strategies into financial planning

Investing Weekly at 5% Interest Amount Saved Per Week Value After 10 Years $ 7.00 $ 4,720 $ 14.00 $ 9,440 $ 21.00 $ 14,160 Time value of Money from the NEFE PowerPoint Slides –can run as an overhead. Is a dollar always worth a dollar? May seem like a silly question but as we know is not always worth a dollar. The value of a dollar changes dramatically depending on when you get it and whet you do with it. Time is a critical variable in the exact value of a dollar. Time value of money refers to the relationship among time, money and rate of interest. Here’s an example- if you save $7 a week at 5% in 10 years you’d have $4720. If you save $14 you’d have $9,440 $21--$14,160 $28--$$18,880 $35--$23,600 $ 28.00 $ 18,880 $ 35.00 $ 23,600 3-B 1

Financial Planning Pyramid Penny Stock Commo- dities Collectibles Speculative Stock / Bonds / Mutual Funds Real Estate Blue-Chip Common Growth Mutual Funds High-Grade Convertible Bonds Preferred Balanced Corporate Bonds or Mutual Funds Municipal Bonds Money Market Accounts Certificates of Deposit U.S. Savings Insured Savings / Checking Accounts Treasury Issues Financial Planning Pyramid Highest Risk Highest Earnings Lower Risk Lower Earnings Another one of the PowerPoint slide to use in teaching Figure 3-2 and page 33 of the student workbook. Another key investment principle is the relationship of risk and reward When many people hear the word stock they immediately think of the risks that go with it. But with the higher risk comes the potential to earn higher rewards on your investment. The risk-to- return relationship is another key investment principle Today when people hear the word stock market they think of 2001 3-J

Unit 4 – Good Debt, Bad Debt Explain what credit is Compare the advantages and disadvantages of using credit Outline the process of applying for credit Explain what a credit history is and why it is important Explain how to manage credit responsibly Explore the consequences of excessive debt and how to correct it Determine what to do in the event of inaccurate reporting

Unit 5 – Your Money Examine the various types of financial services providers, especially credit union Explain how a savings account works Practice using a checking account and debit card Explain how a credit card is used to make purchases Explore the features of automated financial services Respond to situations involving identity theft and deceptive practices Ask the participants the following questions and have them quickly jot down their answers. This the What Do You Think? Exercise found on page 128 of the instructors guide. Answers are: 55% 17%, 64% 13%, 55% 13% 36% Source: Teen Research Unlimited 2005 What surprised you about the statistics?

Savings Deposit Exercise 5-C, Page 62 1 2 5 9 Today’s date goes here 7 1 3 7 5 2 5 8 Print Your Name Here 2 Print Your Address Here 3 9 5 3 4 Sign Your Name Here 4 The next three slides will help you visually walk students through the Try it? Exercise 5C Make the Deposit on page 130. This exercise gives students the opportunity to fill out a sample deposit slip. It is surprising how many students have never done this before. 10 7 5 5 3 3 3 3 3 3 3 11 4 2 5 3 4 Click the numbers

Savings Deposit Exercise 5-C, Page 62 1 Today’s date Your Name Your Address Here 1 1 - 2 3 4 5 6 - 6 7 8 1 Click Here to Go to the Next Slide

Check Details January 15, 2009 Best Foods Supermarket 25.65 Click the numbers 1 2 3 4 5 6 7 8 9 10 11 On the lower line, write out the amount like this. Here is where you write the name of the party you are writing your check to (the payee). Be sure to write or print legibly! Here is the number of this Check. This is just your check number again (see above right). This is the Routing Number for your bank (used for electronic transfers of funds from your account to the payee’s account) Make sure your personal information on the check is correct. This is your Account Number. (Note that sometimes these two numbers are the reverse of what is shown here.) Put your personal signature here. Legibly print the amount of money this check is for. Enter the date you write each check. Place to add any information you want to related to this check. January 15, 2009 Best Foods Supermarket 25.65 Twenty-five and 65/100 - - - - - - - - - - - - - - - - - - - - - - - - This slide demonstrates to your students how to use a checking account. Page 132 talks about the different types of endorsements for checks. Snacks for Party

Keep a Record Click Here 1 2 3 Deposit 1/11 Deposit to Checking 200 00 200 00 200 00 200 00 Auto 1/11 Charge for Personalized Checks 20 00 20 00 WD 180 00 100 1/15 Fine Foods 23 11 23 11 Groceries 156 89 This slide demonstrates to your students how to use a checkbook register to record transactions. You use this slide to guide students to record the first three transactions or Exercise 5D, Keeping Track page 133. Students complete this exercise on their own and when they are done they check their answers with a partner to make sure they come up with $201.65. The answer key for 5D is on page 133. On page 131 in the Going Further Box: It is recommended that you invite a local credit union or financial representative to speak to the class about financial services provided by them. Or you could even schedule a tour of a credit union or other financial services provider. This is a great local resource and if you look around the room today we have several local credit unions represented and I am sure they are more than willing to help with coming to speak or giving a tour.

Does It Balance? Reconciling your checking account statements Why reconciling is important Lets you check for mistakes and checks you wrote but did not enter. Gives you a chance to subtract other charges that the financial institution may have added. Lets you add any interest that your checking account may have earned. Not all the checks you have written will always be shown, because they may not have been cleared by your bank or credit union. Uncleared checks will show up on your next statement. The next three slides are used to help students with Exercise 5E, Does It Balance?, on page 146. This exercise demonstrates how to reconcile a checking account.

Debit Cards vs. Debit Cards HOW TO USE A DEBIT CARD How to Use The Difference Enter your PIN number Enter the amount of cash back, if desired Signature This slide demonstrates to students how a debit card works. Page 134 in there is a box that says 7 Signs of Smart Debit Card Use, which gives students some good ways to protect themselves.

The Risks of Identity Theft IDENTITY THEFT VICTIMS COULD: Have any and all of their financial accounts invaded and emptied. Be asked to repay debts they did not incur. Lose job opportunities. Lose their good credit rating. Be refused loans. Be sued for things they have no part of. Even be arrested for crimes they didn’t commit. Identity Theft is real and happens to a lot of teens. Here is some examples of what could happen if their identity is stolen.

SCAMMED! What’s Going What’s Going on Here? on Here? The news of my father death, and my uncle,s involvement in an air crash in december 2002 while on a business trip to benin republic caused my mother heartfailure and other related complications of which she later died in the hospital After we have spent a lot of money on her. Before our mother died, she told us that our father deposited some money which he made from diamond sales and contracts at this bank here in Ivory Coast and that we should pray and find a trust worthy foreign business partner who would help us to transfer and invest this money in profitable business venture overseas.She told us to do this quickly so that we can leave Ivory Coast and, then settle down abroad. She gave us the bank document to prove the deposit and then told us that my father used my name as the next of kin and beneficiary to the money in the bank in the event of his death. If you are willing to assist us, please let us know immediately so that you will arrange the transfer of the money to your account with the bank. What’s Going on Here? What’s Going on Here? Has anyone received emails like this? Exercise 5H Luring you in on page 141 show students some sample messages that they might receive from potential identity thieves who are trying to steal important personal information from them. They have to decide how they think each message might be used in a deceptive way. The answers to this exercise are on the bottom of page 141. 1 2

Unit 6 – Insurance Identify ways to manage risk Describe how insurance is used to protect against financial loss Explain the features and processes related to automobile insurance Examine how insurance needs vary from person to person because of lifestyle and life situation Assess how insurance fits into your financial planning

Managing the Possibility of Loss Avoid it Reduce it Accept it Recommended options to manage a financial loss by avoiding, minimizing, accepting, and/or transferring risk. P. 176 IG “Try It! “ Exercise 6B: Manage the Risks How do you recommend reducing or avoiding the risks you listed in Exercise 6A? IG pg 176 IG pg. 176 “You Can Do It! “ Assignment 6-1: A Case for Insurance Students develop a brochure, a one-minute radio or TV commercial, or a poster to inform others of ways to reduce common risks faced by high school students. Students read pages 82-83 (IG 176-177): Insurance is used to manage financial risk. An Insurance policy is a contract between the insured and insurer to detail what the insured will pay and what the insurer will cover. This is a good place to share a sample property insurance policy for students to view as terminology and contract terms. Going Further IG pg. 177: Good opportunity to invite an insurance agent to speak to the class about the purpose of insurance and factors that determine insurance coverage. Share it 31

Factors Affecting Automobile Insurance Costs If you’re a good student How much you use the car Make of car Driver’s education Credit rating Factors Affecting Automobile Insurance Costs Where you live Gender Students read about the features and functions of automobile insurance on IG. Pg. 179 A person’s credit rating affects their insurance rates. Ties back into previous lessons of learning and implementing your personal financial plan so your credit score is good. Your credit score will truly follow you everywhere and can be your best friend or your worst enemy!!! Type of car Marital status Driving record Your age Do you take the car to work? 6-F 32

Unit 7 – Your Career The relationship between career choice and earning power How education and training affect career choices and earning potential The value and costs of career preparation How employee benefits enhance earning potential Factors that affect earning potential and financial planning Pros and cons of working for yourself versus working for others.

Relationship of Career and Earning Power I Need Years to Prepare Doing what I love to do I Want a Family I Want to Make Lots of Money Unit 7, Instructor’s slide 3 Many factors affect the choice of a career and earning power. What is a job that you think your students may desire? What do you think would be average yearly earnings for that career? Does that career allow for recreation and family time? How much education is required for that career? Does the career provide employee benefits? What are pros and cons of this career? This slide can be used to stimulate students to think about some of their goals and values and the concept that money doesn’t necessarily make you happy. Students will read about these topics on page 203 in the IG. I Want to Be Happy

Key Employee Skills Basic Skills Thinking Skills Resource Management Personal Skills Interpersonal Skills Information Management Skills Unit 7, Instructor’s slide 6 After completing Exercise 7A and reading age 98 and 99, the Instructor’s Manual p. 204-205 suggests that you show this and the next 8 slides about key employee skills. For the sake of time I’m going to flip through these slides quickly. Systems Skills Technology Skills

How Much is Class Worth? NEFE High School Financial Planning Program Some high school, no degree High school diploma, or equivalent Associate Degree Professional Degree Doctoral Degree Master’s Degree Bachelor’s Degree Some college, no degree Millions of 2006 dollars Worklife earnings estimates by highest level of educational attainment Source, US Census Bureau, current population survey, educational attainment in the US. 2005 1 1.2 1.5 1.6 2.5 2.1 3.4 4.4 Unit 7, Instructor’s slide 20 This bar chart is a duplication of the one shown earlier. It illustrates graphically the lifetime earnings shown at the top of page 208 in the IG. I like Exercise 7D on IG page 208. It reinforces basic math concepts and reinforces the value of a day’s education. Assignment 7-2 on the bottom of IG page 208 assigns students to explore costs of preparing for two careers in which they’re interested. They are also asked to list opportunity costs.

Typical Employee Benefits 1 of 2 Typical Employee Benefits Hospitalization, Medical, and Disability Insurance Dental and Vision Insurance Accidental Death Insurance Sick Leave Paid Vacation Time and Holidays Parental Leave Unit 7, Instructor’s slide 21 Employee benefits are introduced on IG page 209 of the Student Guide. This slide and the following slide are provided to introduce students to typical employee benefits. Exercise 7E on IG page 210 provides a critical thinking exercise- students are asked to compare employee benefits for two different jobs. If time is limited, I suggest you discuss those benefits that you think will be of greatest interest to teens in your school.

Typical Employee Benefits 2 of 2 Typical Employee Benefits Worker’s Compensation Insurance Life Insurance Retirement Benefits Retirement Savings Plans Employee Assistance Programs Unit 7, Instructor’s slide 22

Factors that Can Affect Your Earning Potential Promotions Being Fired Being Laid Off Additional Training Advanced Degrees A New Job Business Downturn Relocation Changing Careers Life-Changing Situations Unit 7, Instructor’s slide 23 This slide about Factors that Can Affect Your Earning Potential is the final slide that the High School Financial Planning program provides teachers. The IG on page 211 includes a brief section on how becoming a parent can affect your spending and career choices. Exercise 7G on IG page 213 asks students to consider and rank career factors that are important to them. Business Upturn What other factors can you think of?

Teachers Web Site for Teachers All instructional materials All the best from 2001 & 1995 HSFPP Online Ordering Capability Links to Curriculum Resources on the Net Knowledge Sharing Online Training Teachers On-line Video Trainings Editable Versions of Visuals (available in Excel) Educational Standards Crosswalks (National and by State)

Including Suppliments Resources Including Suppliments

Supplement Materials Banking Junior Achievement (JA) materials Practical: Fake accounts, on-line banking, debit card use, e-payment, writing check. Credit union preferred Junior Achievement (JA) materials Games Books 

Students Web Site for Students Articles on Financial Topics HSFPP Related Content and Tools Financial Calculators Games NTRBOnline.com Content Monthly Polls Links to Web resources about money Students Articles Tools Ideas Games Free Newsletter Updates No password or username necessary for student site?

Parents Web Site for Parents Tools for Parents to Help Their Kids Financial Ed Tools for Parents Themselves Links Web Resources HSFPP Curriculum Information Information on Financial Education How to get the HSFPP Parents Home Lessons Hot Money Topics Tips for Discussion No password or username necessary for parent site

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