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The Path to Financial Literacy.

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by

Trey Patton

on 7 July 2016

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Transcript of The Path to Financial Literacy.

The Path to Financial Literacy.
The Basics
-Balancing a Check Book
-Small expenses add up (that $1.25 soda 4 days a week $260 annually )
-Learning value of money at a young age
-Saving Earlier in life
-Banks are not your friends. (Watch bank charges)
-First car pay cash
-3 Months of salary saved
- 10/ 10/ 10 rule (towards debt, saving, give away.)
-Statistics show that people spend nearly one-third more
when they use credit cards rather than cash.

Usefull Apps
-Mint
-Manilla (Bills & Reminders )
-Expensify
-PayPal
-Check
-Homebudget w/ Sync
How to save $____ a year
How much do you pay to have your taxes done?
Personal Finance
Financial Literacy in Schools
Parents Responsibility
Curriculum ideas to help
http://ecedweb.unomaha.edu/lessons/lessons.cfm
“Prepare students for every day life... in the real world..”

Horrace Mann
Parents spend time and money on tutors, music lessons, and organized sports; provide computers and the latest electronic games but they are not providing their children with one of the most important things their children will need to survive in the real world.
Children need to know how to spend money independently. Which means they need their own money. This can be accomplished through establishing an allowance. Most experts agree that first grade is a good time to start and they are unanimous in telling parents to adopt a hands-off attitude.
Traditionally, teachers, particularly elementary teachers, take few, if any, economics courses as part of their undergraduate education. Walstad and Watts found at the elementary level that over half of the teachers had no courses in economics and 25 percent had only one course.
Young children learn early that they cannot have everything they want. Unfortunately, they do not always understand why this is the case or why each choice involves a cost.
High school students are studying up on calculus, advanced chemistry, and world history, but most aren't learning fundamental money lessons to help them financially navigate the real world.
Parents have also expressed concerns over their children's lack of financial knowledge. According to an August survey by MasterCard, 64 percent of parents with college-bound children are worried about their children's ability to manage money.
http://www.wikihow.com/Balance-a-Checkbook
2011 survey by investment bank Charles Schwab.
84 percent of high school students desire more financial education.
16- to 18-year-olds, 86 percent said they would rather learn about money management in the classroom than make financial mistakes in the real world


Nonprofit Council for Economic Education (CEE)
Only 13 states require high school students to take a personal-finance class
22 states require economics to graduate, according a survey released in March.

64 percent of Wisconsin teachers felt unqualified to address the state's financial literacy standards. Few felt "very competent" lecturing a class on topics such as risk management and debt. But more than 70 percent of teachers polled in a nationwide NEFE survey said they are willing to receive formal financial-education training to teach a financial literacy class.


Sticking to Budget
Teaching Entrepreneurship
Lead by example.
As kids get older help them start Lemonade Stands, Lawn Maintenance (cutting in summer raking in fall)
find gaming finance running "pizza store" apps
Teachers and Their Financial Literacy
Molding a Financially Literate Student
Base the amount on what you expect the allowance to cover - school lunches, candy and video games, friends' birthday gifts, extra money etc.
Whatever the amount, it has to be enough so that your child can actually learn to manage it.
Extremely important
This is essential because:
- Students will have to make flyers.
- Manage expenses like gas for lawn mower.
- Create schedules
Find restaurants that have specials certain days of the week
http://www.eatdrinkdeals.com/
If you can save $12 a week by eating at restaurants that have specials certain days of the week. you will save $624
Hair cut costing $15 every two weeks = $360
Car Pooling, at beginning of the school year find out who lives near you.


http://creativewealthintl.org/articles/makingfinancialliteracyfun.php
http://www.fool.com/investing/ira/2004/01/06/5-reasons-you-need-an-ira.aspx
If you make your child's allowance contingent on the completion of chores, you send the wrong message.
Housework is a family responsibility and children should not be paid for pitching in.
Pay them more to do book reports than extra chores to show that mental work pays off more than physical work




Read more: http://www.bankrate.com/finance/personal-finance/4-fiscal-lessons-you-need-to-teach-your-kids-1.aspx#ixzz2qgoCas3V
Follow us: @Bankrate on Twitter | Bankrate on Facebook
http://creativewealthintl.org/articles.php
Questions to ask kids
http://www.extension.umn.edu/family/youth-and-money/docs/money-conversation.pdf
http://www.extension.umn.edu/family/youth-and-money/using-childrens-literature-to-teach-financial-literacy/

Solution
How can we incorporate personal finance in the education system?
At the end of the year if they save a certain amount match what they save like business do when you contribute to your IRA, rewarding them for saving.
Starting Budget in Excel
Write Down all Fixed Expenses
Find your States Individual Income Tax Rates (GA 6%)
Find Tax Bracket (GA 25% $36,000-89,350)
Social Security 12.4% (Your company pays half, you pay 6.2%
Medicare 2.9%
In Excel you will have 4 columns, Title of Expense, Percent of Income towards the expense, Monthly Break Down of expense, and Yearly Break Down of expense
Insurance
Insurance is extremely important
Life Insurance allows you not to leave your debts to your family members.
How much should I get?
Personal Finance and Education
Personal Finance and Parents Responsibility
How to Make Budget in Excel
How and Why You Should Balance Check Book
How to stick to Budget
Insurance
Taxes
Saving
Investing
Start off by giving your kids an allowance, keep chores separate from allowance.
First, incorporate children into the spending process by showing them exactly how much it costs to run a household. "Pay yourself in cash for the month, then say 'OK, this is the money,'" says Godfrey. "'It looks like a lot, but here's the tax bracket we're in, so count out money for the tax man. Then there's gas, utilities, mortgage, car, etc.' It goes quickly."

Once your children understand the money that goes into running a household, incorporate them into the savings process by encouraging them to help reduce household spending. Godfrey says she shows her children the household electric bill, then brainstorms with them on ways to reduce electrical use. If the next month's bill is lower, Godfrey gives her children a portion of the difference in cash.
Allowance and Chores
Once you know all your monthly fixed expenses get envelopes for each one that is not automatically taken out of your account. Put the amount of cash that is expected for that expense for the month.
Cash Envelope System
Go through the month without swiping your card
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