Lesson HS.D.1:

Financial Health & Reputation

Do Now:

How “financially healthy” do you think you are? Why would you characterize yourself that way?

Financial Health Questionnaire

Total Your Results!

• 10- 15 points - Your financial choices could be better.
• 16- 20 points -You are doing a fair job of managing your finances.
• 21-25 points -You are doing a good job and managing your finances.
• 26-40 points -You are in excellent shape managing your finances. Keep up the good work!

Components of Financial Well Being

What do these mean?

Rank these in order of importance �in your own financial life:

• Budget to save money
• Consistent source(s) of income
• Regularly invest
• Make all payments on time
• Plan for retirement
• Insure yourself against loss
• Minimize Debt

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Creating a Financial Code of Conduct

A code of conduct is a set of rules that govern your actions. Based on what you know about financial health or responsibility, draft your own financial code of conduct to govern your financial life. Today, create a draft that you will build on throughout this unit.

Example:

• I will always pay my bills on time.�I know that repaying my debts is a sign of my trustworthiness, and affects how banks, lenders and others see me. In order to maintain my reputation, I will pay bills back on or before the date they are due.
• I will save at least 10% of every paycheck.�I believe it is important to save for emergencies, large purchases and for future costs like college or retirement. I want to be sure I am saving, at minimum, ten percent of every dollar I earn.

Wrap Up:

What elements of your code of conduct will be most challenging to stick to? What can you do to help yourself stick to your code of conduct?

Lesson HS.D.2:

Credit Cards

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Do Now: Are credit cards good or bad? Why?

Credit vs. Debit

• Where does the money for each card come from?
• What are some advantages of each type of card?
• What are some risks of each type of card?
• What did you find surprising?
• What questions do you still have?

Credit vs. Debit Scenarios (click to reveal!)

Scenario 1�You’re paying a bill online in a secure system and there is a 3% credit card surcharge.�

Scenario 2�You are checking into a hotel and they let you know they will be putting a $100 hold on your card for “incidentals”.

Scenario 3�You can’t wait for a new pair of sneakers to be released, but they are on presale in a different country. You decide to buy them online!

Scenario 4�Because of some bad financial decisions you made before you knew better, you are now trying to pay off debt and only spend what you can afford right now.

Using a Credit Card Responsibly

THE DEAL A bank opens up on College Ave and three roommates go to the opening where the bank is offering a great deal!

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• Enjoy a low APR of 15% for the first 3 months on purchases from date of account opening; after that the variable APR will be between 10% - 26.99%
• Earn 2,500 bonus points after spending $1,000 in purchases within the first month of account opening
• 2,500 ThankYou® Points are redeemable for $25 in gift cards, electronics and other great rewards
• Earn 2X Points on Dining Out & Entertainment and 1X Points on All Other Purchases
• Automatically get a credit limit of $1,500 each month
• Your Minimum Payment Percent is 2% of your statement balance or your Minimum Payment is $10, whichever is higher.

Wrap Up: Do you think a credit card is right for you, at this moment? Why or why not? Do you have anything to add to or revise in your financial code of conduct?

Lesson HS.D.3:

Borrowing

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Do Now:

When is it a good idea to borrow money? When is it a bad idea?

Watch & Discuss: LOANS

• How do the principal, interest rate and term affect the overall cost of a loan?

Station Rotation: Types of Loans

• Student Loans: Read this article on student loans and list reasons to take loans and reasons NOT to take loans on your Types of Loans handout
• Mortgages: Watch the What is a Mortgage? Video and answer handout questions.
• Car Loans: Use the BankRate Auto calculator to calculate the costs of an auto loan on the handout.
• Payday Loans: Read What is a Payday Loan? and then watch Payday Loans Explained video and answer the questions below.

• Principal: the amount of money you borrowed and have to pay back
• Interest: An additional fee calculated as a percentage of the principal you have left to pay back.

Shady Sam

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Learn the “tricks of the loan trade” as you play the role of a loan shark and try to maximize profits. As you play - don’t calculate - use any patterns that you find to determine which loan will give you the most profits.

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Note in your handout what kind of loan you are giving out and which one you as the “loan shark” want to give. As a challenge, also mark down the best loan for the customer.

ShadySam.com

Wrap Up:

What types of loans do you hope to be able to take out in the future? Which types of loans do you plan to avoid? Do you have anything to add to or revise in your financial code of conduct?

Lesson HS.D.4:

Credit Scores

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Do Now: What’s a credit score? Take your best guess, based on what you’ve learned (or maybe seen in advertising!)

Case Study and Credit Impact Chart

• What is a FICO score? How does your FICO score impact you?
• Explain in your own words how a FICO score is determined.

Sample Credit Report

Your credit report is a snapshot of your financial life. Anyone from potential employers to lenders could review it—and the information it contains determines your credit score.

• Better Money Habits

Your credit report contains 3 important sections:

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Credit History Credit Inquiries Personal Information

Potentially Negative Items “Hard” Credit Checks Names, Addresses, Phone

Accounts in Good Standing “Soft Credit Checks Social Security Number

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CREDIT

HISTORY:

Potentially

Negative

Items

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What should I be looking for?

• Anything you don’t remember or recognize. This may be a sign that someone is using your identity to open credit in your name.
• Anything you recognize, that should not be a negative item, like an account in good standing.

This section lists items that may negatively impact your credit score and may make you appear risky to other creditors:

• Credit accounts where you have money past due, or went over the limit.
• Financial public records like liens or bankruptcy are listed.

CREDIT

HISTORY:

Accounts in Good

Standing

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This section lists items that may positively impact your credit score and may make you appear reliable to other creditors:

• Credit accounts where you owe or owed money, how much you owe, for how long and how much you pay on a regular basis.

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What should I be looking for?

• Anything you don’t remember or recognize. This may be a sign that someone is using your identity to open credit in your name.
• Any accounts in good standing that are not listed here. When trying to build credit, you may need to ask companies or people like your landlord to report your on time payments so they appear on your credit report.

CREDIT INQUIRIES:

Requests for your credit history

This section lists companies that have asked to see your credit report and is divided into two sections.

• Hard Inquiries

Companies that requested your credit history because you submitted an application for credit. This includes:

• Credit card applications
• Insurance applications
• Mortgage or loan applications
• Soft Inquiries

Companies or individuals are legally allowed to request your credit history without your permission. These are:

• Companies sending you credit/loan offers
• Potential employers
• Existing creditors
• You

What should I be looking for?

• Any unfamiliar companies or banks in hard inquiries may mean someone has put in an application in your name at that institution requesting credit.
• Too many hard inquiries may make you look risky to creditors and may lower your credit score.

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PERSONAL

INFO

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This section lists your personal information that you or your creditors have provided.

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• What is here:
• Names including any abbreviations or aliases.
• Current and past addresses and phone numbers
• Social Security Number
• Spouse
• Employer

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• What is NOT here:
• Gender
• Race
• Ethnicity
• Religion
• Medical conditions

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What should I be looking for?

Any incorrect information, like addresses that you have not lived at or alias that you do not go by. This may mean that someone is using your identity illegally.

Credit Report Questions

What is a credit report?

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1. A score that you get reporting your likelihood of paying back a lender
2. A report of your credit history that determines your credit score
3. A list of public financial information that you need in order to apply for a job
4. An application that allows you to ask for credit

Who is NOT allowed to see your credit report?

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1. Potential employer
2. Your current bank or credit card company
3. You
4. Lenders who want to send you a promotion
5. Your doctor or therapist

Credit Report Questions

Which of the following is a possible sign of identity theft on your credit report?

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1. More than one name listed in your personal information.
2. Names of credit card companies that you do not have an account with under soft inquiries.
3. Your credit card company’s name listed under the “potentially negative items” list.
4. An account that you do not recognize under your credit history section.

Which TWO factors may negatively impact your credit score or make you appear risky to potential lenders?

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1. Many items under accounts in good standing for different types of credit accounts
2. Many items under hard credit checks for many credit applications
3. Many addresses under personal information.
4. Many items under potentially negative items for late payments or over limit spending

Wrap Up:

How can your credit score affect your life?

Lesson HS.D.5:

Identity Theft & Financial Safety

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Do Now:

What does identity theft mean? What are the consequences?

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“Identity theft is using someone else’s personal information without their consent, usually for financial gain.” - Nerdwallet

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Identity Theft in the News

Video: Is My Identity Safe from Hackers?

Common Scams and Schemes

What is the scam/scheme?�How do you report it? �How do you protect yourself?

Wrap Up:

What can you do to prevent becoming a victim of identity theft and financial scams?

Lesson HS.D.EXT:

Purchasing a Car & Loans

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Do Now: What are the most important qualities in a car?

New or Used: Responsible Purchasing

All About Car Loans

Click here to view as an EdPuzzle from NGPF (note: the fourth question is graded incorrectly)

Current State of Car Loans

Year

Wrap Up:

What did you learn about car loans?

If you were going to buy a car, what steps would you take?

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