1. Education Helps Pay For Expenses Middle School Financial Literacy #4

2. Objectives Review last week’s lesson Identify ways education pays Compare income and paying for necessities Compare child care costs with annual salary Create a news report

3. Review Last Week’s Lesson 1.Average annual cost of college – $15,000 2.Website tool that estimates postsecondary financial aid – FAFSA4caster 3.Types of financial aid that students do not have to pay back – Grants, Scholarships, Work Study

4. Education Pays Video What are the five ways education pays?

5. Review Income by Education Level Source: US Department of Labor: Labor Statistics Report, 2012

6. Avg. Expenses: Necessities Source: Economic Policy Institute: Briefing Paper 2010

7. Income vs. Expenses

8. Interview a Partner What expenses are considered necessities? What expenses are not considered necessities? a)House and car payments, medical insurance b)Internet, sports activities c)Movie tickets, cell phones d)Food, heating, air conditioning e)Electricity, water, child care f)Cable TV, eating at restaurants g)Music downloads, video games

9. Answers What expenses are considered necessities? a)House and car payments, medical insurance d)Food, heating, air conditioning e)Electricity, water, child care What expenses are not considered necessities? b)Internet, sports activities c)Movie tickets, cell phones f)Cable TV, eating at restaurants g)Music downloads, video games

10. Income vs. Expenses (Family of 4) The average costs for necessities ($4,700 a month) – What are the annual costs? ($4,700 x 12) $56,400 How much education does a single parent need to cover these annual costs for necessities? – Bachelor’s Degree

11. Metro Area: Child Care Source: Economic Policy Institute: Briefing Paper 2010

12. Child Care vs. Income What would be the annual cost for child care if a family has an infant and a pre-school age child? – $8,150 + $6,500 = ? – $14,650 If a high school graduate earns $30,000 a year, how much would they pay in taxes at a 20% rate? – $30,000 *.20 = ? – $6,000 What is the difference between the child care cost and high school graduate income after taxes? – $24,000 - $14,650 = ? – $9,350

13. Create a News Report Roles – Interviewer – Parent with a family of 4 – Single person Decide the type of education for each person Create two questions to ask each person – About education and paying for expenses – Example: What type of education do you have? How has helped or not helped you pay for your expenses?

14. Present Your News Report Interviewer asks each person two questions – Parent with a family of 4 – Single person

15. Review 1.What is the a major key to making a good income?  Get a postsecondary education 2.What is the average annual income for a high school dropout?  $19,300 3.For a family of four in Minneapolis, what are the average annual costs for their necessities?  $56,400