Financial Literacy

FINANCIAL LITERACY
Financial Literacy Vocabulary

Assignment
 Directions: Using the vocabulary we just went over, you are to pick
two words.
 After picking your 2 words you are to create a “poster” for each word
on a separate pieces of computer paper. Your poster needs to include
the following:
• The word
• The definition
• A picture or symbol clearly showing what the word means
• A sentence clearly showing an understanding of the word's meaning
with the vocab word included in the sentence.
• Color and creativity
Where does
money come
from?
One things for

sure, it doesn’t
grow on trees!
Even though we
wish it did.
How money is pr
inted
INTRODUCTION
Complete the
questionnaire on your
notes. We will discus your
Reponses in a few
minutes.
Survey
 What would you do to
 Do you currently have a
finance your house?
savings account?
 What is a down payment?
 Can you purchase a house
checking account?
without a down payment?
 Do you plan on owning or
currently own a car?
credit card or loan?
 What is a good interest rate
 What is a co-signer?
for a car loan?
 What happens if you have a
 Do you plan on owning a
house one day? co-signer on a loan and you
neglect your payments?
Basic Vocabulary
Revenue—what you earn

Expenses—what you spend
Net Profit—total revenues minus total expenses
Net Income—same as net profit
Depreciation—reduction in value over time
Appreciation—increase in value over time
Equity—ownership in a company
More Vocabulary
Vesting—earning equity over time instead of all at

once
Asset—something you own that has value
Liability—something you owe for
Balance—the difference between credits and debits
in an account
Bond—debt instrument through which
companies and governments can raise
money
Why study financial literacy?
The state says we need to!
The number of foreclosures and
bankruptcies are increasing.
Unemployment continues to be unstable.
Credit card use has gotten out of control.
You have the chance to be smart with your finances

from the very beginning!
Vocabulary Assignment
Using the definitions just given
to you, you need to create a
sentence (that includes the vocab
word!) and picture that
represents the vocabulary word.
This is your LAST vocab
assignment for the year!!!
SPENDING MONEY & DEBT
Do you never have enough money?
Housing/Utilities Household Supplies

Food Savings
Transportation Entertainment
Retirement Personal Care Products
Education Charitable Donations
Health Care Taxes
Insurance Miscellaneous
What do I do? Insurance: $175 a month
Household Supplies:
Mortgage: $900 varies--$200 a month
Utilities: $175-$225 Savings: $400 a month
Groceries: $500 Entertainment: $150
Transportation: $200 for Donations: $500
gas a month Other - $1,500

Car Payment: $180 Internet
Credit Cards
Retirement: $400
Shopping
Education: $200 for my
Gifts
student loan
Health Care: $200
What do others do?
Food is a huge expense for people!

81% of consumers are spending more or the
same on groceries as they were 2 years ago
How can people save money on food?
How can you cut back on other expenses?
PAYING TAXES
How We’re Taxed
We are taxed when we work, and often taxed when
we make a purchase
On April 15th each year, we mail in forms showing

what we’ve paid in local, state, and federal taxes.
Sometimes we get a refund (because we’ve overpaid)
Sometimes we owe more (because we didn’t pay
enough)
Why We’re Taxed
What kinds of goods and services does the
government provide?
Education Consumer Rights
Defense Disability
Welfare Environment
And now Health
Insurance
Where does it get the money to do this?

From Taxes!
The U.S. History of Taxation
Remember the
Colonists were not
thrilled to be taxed—
hence the Boston Tea
Party
The Revolutionists No taxation

were upset! without
representation!
Why They Can Tax
After the Revolutionary War, we were
in debt! We needed taxes to pay that
debt off
Article I, section 8 of the U.S.
Constitution gave Congress the right
to tax
The 16th Amendment added an
income tax
Can We Skip Taxes?
Failure to pay your taxes legally due is called Tax
Evasion.
Some don’t report all income
Some don’t file at all
The penalty can be financial or even jail
We can legally try to decrease our taxes through
Tax Avoidance.
We claim as many deductions as
possible to lower the amount
we owe
Filing Taxes
All the forms you’ll need can be found at the IRS
website.
You need the forms
You need your W-2 and proof of income
You need any investment and banking papers
Any education expenses or charity donations
If you haven’t received your W-2s by February 15th,
you can report your employer to the IRS
You CAN file your taxes on your own!
CREDIT CARDS
Credit
The definition of credit is the borrowing capacity

of an individual or company
You cannot borrow money without a credit
history; sometimes a lender will require a co-signer
You build your credit history by
borrowing money and paying it off
paying bills on time
Credit Scores
Most lenders use the FICO method
The numbers range from 300 to 850
The higher the score, the better your credit
Your score is based on
Your payment history (35%)—higher if you pay on time
Outstanding debt (30%)—an if you owe more than you
earn
Length of credit history (15%)—how long you’ve been
borrowing money
New credit (10%)—getting a new card or loan
Types of credit (10%)—are you diverse?
Warning: Careful How You Spend
Keeping your credit score healthy allows you to take out
loans with a lower interest rate
Lower Interest Rate = Lower Payment!
Your credit limit = The amount you are approved for on a
credit card
You cannot go over your limit!
Make sure to only use 30% of your credit limit, to keep your
score healthy and high
i.e. $100 Credit Limit = Spending no more than $30 a month
i.e. $7,000 Credit Limit = Spending no more than $2,100 a month
Credit Card Use
You can buy something Easier to spend money

when you don’t have you don’t have
the cash for it Need to pay interest—
Safer than carrying cash and rates vary
Easier to use than a Can charge an annual
check fee
Helps establish credit Penalties for late or
missed payments
How do I Get a Credit Report
Free Credit Reports—don’t trust the commercials!
Online: Visit AnnualCreditReport.com
(This is the ONLY site that's truly free! Don't be
fooled by ads saying otherwise.)
Due to the passage of the 2003 Fair and Accurate
Credit Transaction Act (FACTA), all Americans are
entitled to one free credit report from each of the
three major credit reporting agencies—Equifax,
Experian and TransUnion—upon request every 12
months.
INSURANCE
Purpose
To protect yourself or your family against the
financial impact of a tragedy
Different Types
Health: can cover everything or just
hospitalization
Life: to help your family after you die; should help
with the lost income of the insured
Auto: required by law; helps when a car is severely
damaged
Home Owners: protects against natural disasters,
fires, or someone who is injured at your home
Renters: protects the items inside the house
Product: on a specific purchase
Important Tips
Carry a high deductible to keep premiums

low—hopefully you won’t ever need the
insurance
Don’t over-insure old cars—you won’t get
enough money for a brand new car
Keep careful records so replacement isn’t
an issue
Insurance Vocabulary
Complete the crossword puzzle using
the following words:
Actuary Adjuster Agent Annuity
Arson Burglary Carrier Catastrophe
Claim Conditions Coverage Deductible
Depreciation Exclusion Fraud Hurricane
Insured Limit Loss Maturity
Peril Policy Policyholder Premium
Rate Schedule Term Write

BANKING & SAVINGS
ACCOUNTS
There are five different types of
accounts that are available at most
banks.
Checking Account
Uses a check as the primary manner of

withdrawing money
Can also use a check to make purchases
Most have ATM/Debit cards attached to them
Writing a Check
1. Date
2. Who you’re paying
3. Dollar amount in
numbers
4. Dollar amount in words
5. Optional memo
6. Signature
7. Name/Address/Phone
8. Check Number
10. Codes for the branch
9. Codes for the bank
11. Routing number
Savings Account
Keeping your money “in the bank”
Often limits the number of deposits
and withdraws per month
Need to keep a minimum amount
Earns interest
Insured by the federal government
Money Market Account
Money is deposited, just like in a savings
account
Instead of just sitting in the bank, the
money is invested
Also insured by the government
A very safe investment, but
lower returns
Time Deposits
Also known as Certificates of
Deposit (CDs)
Money is held in an account for a
fixed period of time
There’s an agreed upon rate of
return prior to the deposit
Advanced notice must be given to
withdraw the money
No-Frills Bank Account
An account with no

bells or whistles
Will not require a lot
of fees
In other words, it’s a
cheap alternative (like
shopping at Aldi’s
instead of Heinen’s)
Deposit Slips
1 5
2
1. Date
3 6
2. Name on the Account
3. Account Number
4. Bank Information 4 7
8
5. Cash you are putting 9
into the account
6. Amount of money you
are putting into the account via checks
7. Subtotal: The total amount on the slip, of both money and checks
8. Less Cash: If you want to keep money out of the subtotal. i.e. If you put
$1,000 on the deposit slip but want $50.00 cash back you would only be
putting $950 in the account.

9. Total: The total amount you are putting into the account. Subtotal, minus
less cash.
INVESTING
Definition
Investing is the act of committing money or
capital to an endeavor with the expectation of
obtaining an additional income or profit.
In other words, making money off the money you
already have!
Stocks
A portion of an
ownership in a
corporation
If you own stock, you
own a share in the
company
Buy and sell through a
broker who trades on
the Stock Exchange
Bonds
Issued by some large
entity—a bank, the
government, or a
company
Pay out a specific
amount at a specified
time
Pays out less prior to
that specified date
Mutual Funds
Operated by an
investment company
Takes money from
investors and buys a
number of stocks,
bonds, etc.
Have a portfolio of
accounts, not a lot of
one type
Let Me Introduce…
Mint
What is it: A personal finance, budgeting money
management website and app
Writing a check 101
5/13/15
Ford Auto 592.89
Five Hundred Ninety-Two & 89/100
Acct #: Shayla Greer

321876004
Bill for: Ford Auto

Price: $592.89
Account Number: 321876004

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FINANCIAL LITERACY

Financial Literacy Vocabulary

One things for

Revenue—what you earn

Vesting—earning equity over time instead of all at

You have the chance to be smart with your finances

Housing/Utilities Household Supplies

gas a month Other - $1,500

Food is a huge expense for people!

On April 15th each year, we mail in forms showing

Where does it get the money to do this?

The Revolutionists No taxation

The definition of credit is the borrowing capacity

You can buy something Easier to spend money

Carry a high deductible to keep premiums

Arson Burglary Carrier Catastrophe

Claim Conditions Coverage Deductible

Depreciation Exclusion Fraud Hurricane

Insured Limit Loss Maturity

Peril Policy Policyholder Premium

Rate Schedule Term Write

Uses a check as the primary manner of

An account with no

putting $950 in the account.

Ford Auto 592.89

Five Hundred Ninety-Two & 89/100

Acct #: Shayla Greer

Bill for: Ford Auto

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