1. Financial Fitness
A Lifetime Pursuit

2. Financial Health and Wellness
Financial health and wellness are almost as important as physical, mental, and emotional health.

3. Financial Health and Wellness
In fact, they are related: People with financial worries are frequently stressed out and this can cause:
High blood pressure
Anxiety
Depression
Substance abuse
Other health and/or relationship problems

4. Financial Health and Wellness
Debt can destroy marriages and even lead to suicide.
As teachers it is important:
that we integrate financial fitness into the
curriculum often and in creative and
compelling ways.

5. Personal Finance
Personal finance should not begin with making a budget and itemizing spending.
It should begin with information about careers, education, and maximizing a young adult’s potential for earning a respectable income during their lifetime.

6. Education Education pays off. More education = higher earnings and
more job security.

7. Adult Average Earnings Source: U.S. Census Bureau Facts, 2004
High School Dropout
$9.05/hr = $18,826/year
High School Graduate
$13.12/hr = $27,280/year
Associate Degree
$14.93/hr = $31,046/year

8. Adult Average Earnings Source: U.S. Census Bureau Facts, 2004
Bachelor’s Degree
$24.61/hr = $51,594/year
Advanced Degree
$35.01/hr = $72,824/year

9. Adult Average Earnings Source: U.S. Census Bureau Facts, 2004
Charting Adult Average Earnings

10. Adult Average Earnings
Once they earn it:
Young adults need reliable information on how to manage their money to ensure they will have financial security and adequate funds to meet short and long term goals.

11. Strategies
Financial fitness strategies can be entertaining as well as educational.

12. Strategies
Challenge young adults to begin to think and act now in ways which will enhance their chances of becoming a millionaire over time.

13. Strategies The Millionaire Game
This game provides opportunities for discussion about a variety of myths and misconceptions about realistic strategies for them to become a millionaire.

14. The Millionaire Game Most Millionaires are College Graduates. T F
Most millionaires work fewer than 40 hours a week.
More than half of all millionaires never received any sizeable amount of money from a trust fund or estate.
More millionaires have American Express Gold Cards than Sears cards.
T F

15. The Millionaire Game More millionaires drive Fords than Cadillacs.
Most millionaires work in glamorous jobs such as sports, entertainment or high tech.
7. Most millionaires work for big Fortune 500 companies.
8. Many poor people become millionaires by winning the lottery.
T F

16. The Millionaire Game
9. College graduates earn about 65% more than high school graduates.
If an 18 year old high school graduate spends the same amount as a high school dropout but the high school graduate invests the difference in his or her earnings at 8% interest, the high school graduate would have over $5 million saved when he/she retires at the age of 67.
T F

17. The Millionaire Game
11. Day traders usually outperform the stock market and many of them become millionaires.
If you want to be a millionaire, avoid the stock market. It is too risky.
At age 18 you decided not to eat snacks and save $1.50 a day. Invest this at 8% until you are 67. At age 67 your savings from not snacking are almost $300,000.
T F

18. The Millionaire Game
14. If you save $2000 a year from age 22 to age 65 at 8% annual interest, your savings will be over $700,000 at age 65.
15. Single people are more often millionaires than married people.
T F

19. Tips for Becoming a Millionaire
Tips for becoming a millionaire over time:
Get a good education.
Work long, hard, and smart.
Learn money management skills.
Live below your means.

20. Tips for Becoming a Millionaire
Buy a home.
Save early and often.
Invest in common stocks for the long term.
Gather information before making decisions.
Get married and stay married to the same person.

21. Financial Reality
The reality is that Americans of all ages are not doing a very good job of financial planning.
Financial fitness is not taught often or well in the public schools.
Young people and families of all ages spend more than they earn.
Credit card debt is rampant.

22. Financial Reality More specifically:
People are not saving for the future or for retirement.
More specifically:
Americans bought over $2 trillion worth of “stuff” on credit last year.
Current outstanding debt on credit cards – that’s the “revolving” part that we don’t pay off every month – totals nearly $700 billion, up from just $50 billion in 1980.

23. Financial Reality
Three of five American families can’t pay off their credit cards each month. Their running balance averages about $12,000 which is one-fourth of the median household income.
By the mid-1990s, credit card debt held by Americans living below the poverty level more than doubled.

24. Financial Reality
Senior citizens, once noted for their frugality, are sinking deeper in debt: Their average credit card balance increased by 89% between 1992 and 2001.
Total consumer debt in the U.S. comes to over $7,100 per person – and that doesn’t include mortgages.

25. Measure Success Measure success by net worth – not possessions.
The appearance of wealth or prosperity can be false. Many people buy expensive houses, cars, clothes, vacations, boats, etc. on credit. The equity they have is minimal. Their net worth is not much and they are in serious debt.

26. Measure Success
The difference between what you own and what you owe is equity or overall net worth.
Financial Planning can help an individual or family increase their net worth and financial security.

27. Realistic Guidelines Five Realistic Guidelines for Financial Fitness
Live below your means and save the difference.
Start saving now and save as much as you can on a regular basis.
Save for the long term – compound interest is free money.
Manage the risk. Be prudent, but the stock market and a balanced portfolio has provided a better return than most other investments over the long term.

28. Important Wisdom
Improving basic financial education at the elementary and secondary school level is essential to providing a foundation for financial literacy that can help prevent young people from making poor financial decisions that can take years to overcome.
Alan Greenspan, Federal Reserve Chairman, April 6, 2001.

29. Economic Way of Thinking
Develop and Practice an Economic Way of Thinking
The Economic way of Thinking is a powerful method for making decisions. It uses Opportunity Cost, Choice, Incentives, and Consequences as information tools in decision making.
Using the Economic Way of Thinking can prevent hurried, poorly made choices.
A cost-benefit analysis is a look at the pluses and minuses of alternatives.

30. Economic Way of Thinking
Talk to kids about the importance of their investment in themselves and how that will help them in the future.
People with more education earn more money. Education can increase lifelong income dramatically. This improves one’s standard of living and options.
Go to school, attend class every day. Be on time, pay attention, stay focused, do the assignments, read the book, do the homework, and practice retaining and applying what you have learned.

31. Economic Way of Thinking
Talk about careers which match kids interests, aptitudes, and abilities.
Share with them what you like or do not like about your job or career.
If you had to do it all over again would you make the same or similar choices? Tell them why or why not?

32. Economic Way of Thinking
Explore the major Career Clusters
Arts and Communication
Business and Technology
Engineering and Industrial
Environmental
Health, Education, Human Services

33. Economic Way of Thinking
Talk About Saving to Reach Long-Term Goals – Include:
Inflation
Function of Banks
Compound Interest
The Rule of 72 (a formula used to find out how long it will take money to double).
Stocks and Bonds
Risk
Liquidity

34. Economic Way of Thinking
Talk About Credit
Advantages & disadvantages
Finance Charges and Interest
Credit Record – Tell them that a bad credit rating can hurt their chances of getting a good job.
Many employers check the credit rating of potential employees. They figure if a person is not responsible financially they may not be a responsible employee.

35. Economic Way of Thinking
Collateral, Character, Capacity to Repay
The average American household has 10 credit cards.
The average balance is $7,000 per family.
The average interest rate is 18.9%.
Americans pay $64 million in credit card interest each year. That is $256 for every man, woman, and child in the US..
Typical payments are 90% interest and 10% principal (1999).

36. Economic Way of Thinking
Get Informed – Stay Informed
Sound money management includes an examination of earnings, a plan for saving, and a thoughtful spending strategy.
Pay yourself first: Direct deposit savings.
Make a Budget
Use a debit card instead of a credit card.
Do not bounce checks or make late payments.

37. Economic Way of Thinking
Know and understand deductions and taxes
Income Taxes
Social Security Taxes
Sales Taxes
Property Taxes

38. Money Smart How can you help kids become Money Smart? WE CAN HELP!
The Idaho Council on Economic Education & the
UI, BSU, ISU center’s can help you do this.

39. Financial Fitness For Life
A Personal Finance Curriculum developed by:
The National Council on Economic Education
Funded by:
The Bank of America Foundation.
Distributed by:
Idaho Centers on Economic Education.

40. Financial Fitness For Life
A recent National Council on Economic Education survey found that two-thirds of high school students are financially illiterate.
They don’t know much about the American economy or about personal finances because they have not been taught much, if anything, about it in school.
The Financial Fitness for Life Curriculum can help but it must be used.

41. The FFFL Curriculum is Designed to Reverse Financial Illiteracy
The comprehensive curriculum:
Written by experts and field tested in classrooms;
Includes interactive computer resources.
Geared to student interest and sound learning theory.
Includes parents as educational partners.
Includes teacher training by NCEE Network.

42. The FFFL Curriculum is Designed to Reverse Financial Illiteracy
The following themes are addressed throughout the Financial Fitness for Life Series.
Theme 1 – There is no such thing as a free lunch.
Theme 2 – Education pays off: Stay in school and learn as much as you can.
Theme 3 – Tomorrow’s money: Getting to the end of the rainbow (saving).
Theme 4 – Spending & using credit are serious business.
Theme 5 – Plan, budget, save, conserve.
(Money Management)

43. Parental Involvement
FFFL incorporates a powerful learning tool – parental involvement and reinforcement at home using real information and situations.
The Activity-Based Guide for Parents can help.
A good place to start is talking about Net Worth.
The appearance of wealth may be false.

44. FINANCIALLY FIT FOR LIFE
Workshop Information
For more information about the Financial Fitness for Life Teacher Workshops in your area contact?
Marty Yopp
University of Idaho
322 E. Front Street, Suite 440
Boise, ID 83702
We can get you the training and materials you need to help your students and yourself become
FINANCIALLY FIT FOR LIFE

45. Fun Discussion Would YOU Loan Them the Money? Client One 17 years old
Good grades in high school
Admitted to a good state university
Wants to attend school full-time for 4 years
Major in chemical engineering
Parents cannot help
Wants to borrow $25,000 for college

46. Fun Discussion Client Two 18 Years Old
Attending local vocational technical school.
Tuition is low and the program is 9 months.
Plans to get an apartment after school is completed.
Avid sports fan.
Wants to borrow to buy a 38-inch TV for $3,000.

47. Fun Discussion Client Three Client Four
21, senior in college, English Major
Never had a vacation except with parents
Wants to borrow $1,500 to bust out for Spring Break in Florida.
Client Four
22 years old
Completed a dental hygienist program

48. Fun Discussion Has first job which pays $25,000 per year
The job is 20 miles from home
Has $2,000 for down payment
Wants to borrow $12,500 for a new car.
Is the loan being used to obtain a valuable asset?
Will the client be able to repay the loan?
Yes No
Maybe