HSFPP LESSON 1-1 MONEY HABITS WWW.HSFPP.ORG Money Habits Today you will . . . Explore how spending, saving, and values impact your finances. Display this slide as you transition into the lesson. NEFE High School Financial Planning Program® ©2012 | Lesson 1-1 Money Habits National Endowment for Financial Education (c)2012

HSFPP LESSON 1-1 MONEY HABITS WWW.HSFPP.ORG www.Spendster.org What is the spending habit? Is this a sensible or unwise habit? Why? How much does the habit cost? What else could the money be used for? When have you ‘wasted’ money? www.Spendster.org Select a Spendster video to show an example of a spending decision that someone regrets. Click through the questions as you facilitate a discussion about the habit and the consequences. Use this example to kick off the lesson. Alternative: If you are unable to use a Spendster video, share a personal story or ask a student to volunteer a personal situation. NEFE High School Financial Planning Program® ©2012 | Lesson 1-1 Money Habits National Endowment for Financial Education (c)2012

HSFPP LESSON 1-1 MONEY HABITS WWW.HSFPP.ORG Preview Today we will answer these questions: What are your good (and bad) spending habits? What influences how you spend your money? How are your spending habits working for you? Use what you learn today to write a personal money motto to guide your spending habits. Student Guide 1: page 3 Student Learning Plan 1-1 Display this slide and distribute the Student Learning Plan as you introduce the lesson concepts. Preview what the students will be expected to do by the end of the lesson. NEFE High School Financial Planning Program® ©2012 | Lesson 1-1 Money Habits National Endowment for Financial Education (c)2012

Meet Michael and Selena HSFPP LESSON 1-1 MONEY HABITS WWW.HSFPP.ORG Meet Michael and Selena Michael – senior Lives at home Part-time job Responsible for own expenses Saving for college Selena – freshman Lives at home Occasional jobs Gets money from parents Student Guide 1: pages 3-4 Introduce the students to Michael and Selena. Point out that they will apply the same money management concepts as the students do during all of the lessons. NEFE High School Financial Planning Program® ©2012 | Lesson 1-1 Money Habits National Endowment for Financial Education (c)2012

HSFPP LESSON 1-1 MONEY HABITS WWW.HSFPP.ORG Money Habits page 5 Is the habit sensible or unwise? Stopping for fast food on the way home from school every day. Putting spare change in a jar every night. What are your money habits? Student Guide 1: pages 5-6 Guide students to complete Activity 1.1a on page 5. Respond to the two examples to prepare for the activity. Discuss possible consequences of sensible habits or unwise habits. NEFE High School Financial Planning Program® ©2012 | Lesson 1-1 Money Habits National Endowment for Financial Education (c)2012

HSFPP LESSON 1-1 MONEY HABITS WWW.HSFPP.ORG Latte Factor $15 in a week ($3 x 5 days) … about $540 in a school year ($3 x 180 days) What else could she have done with that money? If Selena spends $3 on iced coffee after school every day, how much does she spend … … in a week? $______ … in a school year? $______ Student Guide 1: page 6 Click 1: Guide students to work independently or in pairs to calculate how much Selena will spend on iced coffee. Click 2: Show the costs with calculations to verify responses. Ask students to give examples of other ways she could have used the money during the school year. NEFE High School Financial Planning Program® ©2012 | Lesson 1-1 Money Habits National Endowment for Financial Education (c)2012

HSFPP LESSON 1-1 MONEY HABITS WWW.HSFPP.ORG Consequences How might your current spending habits impact your future spending options? Student Guide 1: pages 5, 7-9; Activity 1.1a Lead a brief discussion about the possible consequences of spending money now or saving for a future purchase. Use Michael’s decision to buy a jacket (pages 8 and 10) as an example of not waiting to make a purchase as you transition into a discussion about wants and needs. NEFE High School Financial Planning Program® ©2012 | Lesson 1-1 Money Habits National Endowment for Financial Education (c)2012

HSFPP LESSON 1-1 MONEY HABITS WWW.HSFPP.ORG Is it a Want or a Need? Needs Things that are essential to your health and security. Water Basic meals Place to live Transportation to school or work What else? Wants Things that make life more interesting and fun but you can get by without. Music Snowboard Ice cream cone Air conditioning What else? Student Guide 1: page 11, Activity 1.4 Compare wants and needs as you transition into the Wants and Needs class activity. As time allows, guide students to complete Activity 1.4 on page 11. Challenge question: Is Internet service a need or a want? (For consideration: Internet service can be considered a need if required to complete work activities which relates to a person’s financial security. Ask the students if they think Internet service is a need at home if they can access Internet at the public library or school to complete school tasks.) NEFE High School Financial Planning Program® ©2012 | Lesson 1-1 Money Habits National Endowment for Financial Education (c)2012

HSFPP LESSON 1-1 MONEY HABITS Stop Drop and Think HSFPP LESSON 1-1 MONEY HABITS WWW.HSFPP.ORG Do I need this or do I want it? If I don’t need it, why do I want it? Exactly when will I use (or wear) it? Can I find it for less somewhere else? What will I have to give up or put off by buying this now? Student Guide 1: Appendix, page 40 Guide students to ask these questions as they make spending decisions. Use Michael’s jacket situation as an example or another student situation. Point out that these guiding questions appear in all Student Guide booklets. NEFE High School Financial Planning Program® ©2012 | Lesson 1-1 Money Habits National Endowment for Financial Education (c)2012

HSFPP LESSON 1-1 MONEY HABITS WWW.HSFPP.ORG Found $$$ If all of your bills were paid, and you found an extra $100, what would you spend it on? Display this slide as you transition into the Values and Spending Survey activity. NEFE High School Financial Planning Program® ©2012 | Lesson 1-1 Money Habits National Endowment for Financial Education (c)2012

HSFPP LESSON 1-1 MONEY HABITS WWW.HSFPP.ORG Valuing Your Values Experiences Family and Friends Beliefs Student Guide 1: page 12, Activity 1.5 Display this slide as you facilitate a discussion about what influences a person’s spending decisions. Use Michael’s jacket situation as an example or refer to a student example. As time allows, guide students to complete Activity 1.5 to list their own values as they relate to money. NEFE High School Financial Planning Program® ©2012 | Lesson 1-1 Money Habits National Endowment for Financial Education (c)2012

HSFPP LESSON 1-1 MONEY HABITS WWW.HSFPP.ORG Assignment In 30 words or less, write a catchy personal money motto— a rule to live by that inspires you to stick to sensible spending habits that match your values. Guide students to review their values and then create a catchy sentence or phrase that expresses a principle to guide their spending habits. (Note that this slide contains 30 words.) Note: A motto is a short sentence or phrase that expresses a principle, goal, or ideal that guides the actions of an institution or individual. Examples of mottos (or sayings) that might be familiar to students: - Think Different (Apple company) - All for one, one for all. (The Three Musketeers) - To thine ownself be true (Hamlet) - Moderation in all things. (Aristotle) - It’s not whether you win or lose; it's how you play the game. (Grantland Rice) NEFE High School Financial Planning Program® ©2012 | Lesson 1-1 Money Habits National Endowment for Financial Education (c)2012

Outcomes outside of decision-maker’s control Simple Decision Tree: Should I have knee replacement surgery? PROBABILITIES WORST TO BEST SCALE Action 1 Event Node Choice Point Outcomes outside of decision-maker’s control Consequences = Utilities = Personal Values Event Node Action 2 Hastie & Dawes, pg. 28

Simple Decision Tree: Should I have knee replacement surgery? USING MATH & DECISION TREE TO DECIDE Do Not Operate Utility = ([100 x .30] + [20 x .70]) Do Not Operate Utility = + 44 Operate Utility = ([80 x .65] + [0 x .35]) Operate Utility = + 52 CHOOSE LARGER UTILITY # = OPERATE

Create a Tree to make a Decision: Accepted by another team .30 Do Not Use Drugs Keep sport career (100) (100 x .30) + (20 x .70) = 44 ? Use Drugs & Race Tour With Lance Armstrong ? .70 Change career (20) Get ostracized from sport Win Tour de France .80 Make millions now (80) (80 x .80) + (0 x .20) = 64 Use Drugs .20 Prison/fines (0) Get caught using drugs