1. FINANCIAL LITERACY FOR THE ELEMENTARY CLASSROOM Day One. Sponsored by: Maryland Council on Economic Education and Towson University College of Business and Economics.

2. Questions? Online material on Decision Making, Scarcity, Wants, Opportunity Cost.

3. Standard One (continued) Make Informed, Financially Responsible Decisions Day One Session 1

4. Where have we been?  Economic wants  Opportunity cost  Scarcity  Decision making  So now lets link all of these economic concepts to financial literacy material.

5. Personal Finance Goals  Goal: statement about what a person wants to be, to do, or to have accomplished by taking certain steps; provides direction to a plan of action.  Financial Goals are things you want to accomplish that cost or involve money. For example,  Debt reduction  Get through holidays without debt  Pay for college for my two children  Retire at 70 and live comfortably  Attitudes about money, saving and investing impact goals.  Will talk about developing financial goals next class.

6. What Impacts PF Decisions or Actions?  Age, sex, race  Family size and structure  Confidence or trust (banks, investing, medical)  Personality (future oriented)  Income sources and level  Religion  Health  Expectations (earnings, lifestyle, health, …)

7. Final Decision - Where to Buy?  Market – where goods, services and resources are bought and sold.  Good – things that are made/grown that satisfy an economic want.  Services – actions that people do for one another to satisfy economic wants.  Requires both a buyer (demand / consumer) and seller (supply / producer).  Markets exist in many places:  Face to face (school lunch, grocery store, babysitter)  Phone, mail or online (eBay, craigs list, website or catalog)  How do you choose market type? Personality and preferences.

8. Types of Markets  Just like many sources of income, there are many types of markets:  Output market – consumers and producers efficiently determine price and quantity of output available. Output is a good or service.  Labor (input) market – employers and workers efficiently determine wages and quantity of labor hired.  Financial market – consumers and producers efficiently determine the price and quantity of the item (stocks, bonds, commodities) available.

9. Philanthropy  A personal or corporate interest in helping others, especially through gifts to charities, or endowments to institutions.  Does NOT have to involve money:  Volunteer service – working to help others in the community without being paid (read-a-thon)  Charity – The voluntary provision of money, materials, or help to people in need (trick or treat for UNICEF, canned food drive)

10. Standard Two: Relate Careers, Education and Income Day One Session 2

11. Why do we work?  To make purchases (money does not grow on trees).  Most people get money by earning it (income) in the labor market.  Brainstorm (as a child) – where could you get money?  What special skills and talents do I have?  How do I enjoy spending my time:  Do my friends, neighbors or family need help with something?  Are there things I have at home or could borrow – like computers, tools or art supplies – I could use to earn money?

12. Sources of Income  Income from employment:  Determined by education, training, interests, location, personal characteristics and luck.  Largest source for most.  Investment income:  financial skills, personal characteristics  Inheritance or gifts:  intergenerational impact

13. Jobs and Careers  A job can lead to a career (pattern of activities and positions involved in an individuals lifetime of work to which the person has made a long term commitment).  What impacts career choices?  Education, personal characteristics, wealth, opportunities, interests, income potential (from education, training), time preference…

14. Why care about jobs?  Larger macroeconomic benefit of jobs and encouraging employment:  Jobs provide income  income allows for consumption  consumption creates job growth.  How does income impact spending?  Cash for consumption or saving (marginal propensity to consume)  Determines access to credit (more next class)