I am teaching an 18 week class to high schoolers on financial literacy, what are some major topics to include?

Question

I already have topics, reading your pay stub, buying a car, impulse purchasing, saving for a big ticket item, paying for college, IRA's, savings accounts, money markets, mutual funds, stocks, credit cards, insurance. I need more topics to fill in 18 weeks of material. Any suggestions would be appreciated.

Answer 1

1. How to fill out an irs form - people pay money every year for someone else to fill out a simple form
2. How to read a label - most food companies make a name brand and a generic brand - read the label to find out who.
3. Since these are high school students - renting an apt and the costs associated with it ie renters insurance, utilities. Why it is a really bad idea to get evicted and the problems that follow. Problems associated with a roommate
4. How to identify want vs need
5. How to identify a product that you want and how to identify the best item for you
6 How to balance a check book
7. How to make a budget
8. Understanding the difference between manufacturer's cost and retail cost
9. Understand why going into a place that says rent to own or payday advance is really a bad idea.
10. Show the difference in what someone with a high school diploma earns vs trade school vs college degree.
11. Why buying a new car is generally not a good idea - value lost as soon as you sign the contract
12. Sales and tactics use to get you to buy

Answer 2

Teach them about risk aversion and about the time value of money.

Risk aversion can be fun. I liked to use concepts from Game Shows to show my point. I usually used the point in Who Wants To Be A Millionaire where the contestant is going from $64,000 to $125,000. Assume he has no clue what the right answer is -- but has his 50-50 help left. He can turn this into a 50-50 chance of going up to $125K or going down to $32K -- or he can walk away with $64K. Many contestants walk away -- even though the payoff is better than 2-1 (not including that winning also gives you the option to continue on to the next question). Deal or No Deal gives an even better illustration of the problem. People often accept a number well below the average payoff.

For the time value of money, you can ask them if they would rather have $1000 now or $1500 in a year. You can play around with the numbers until you find the point where they are indifferent (I usually single out one student for this). Then go into the present value formulas.

Another concept you should teach them about is diversification. You don't have to go into a full-blown Mean-Variance discussion -- but can give a few simple examples. Choose four stocks. Show the a graph of the four together with a graph of the portfolio containing equal amounts.

Another thing that I did when I taught portfolio theory is this: On the first class, I told them to pick a stock that they thought would do well over the course of the class. In my case, I gave a booby prize to the student with the worst performing stock & took the best performer from each section out to dinner with my TAs at the end of the class (this was for a college class at Wharton). I then created a portfolio with equal parts of each stock. I also created a portfolio that was formed completely by random. I made sure that the students saw that it was picked randomly. Then, throughout the course, I showed them graphs of their portfolios, the random portfolio (which outperformed all of their picks) and the various stock indices. It really drove home the idea of having a well diversified portfolio.

Answer 3

I feel it is very important to teach our "soon to be adults" about their Credit Report. If they dont understand how it works, how can they ever buy a car or a home or even get credit cards at decent interest rates! And if they cant fiqure it out at a young age they'll destroy there score before they even know what it is. The stress of adult hood is based around money. The first step to understanding it all is understanding how everything affects your credit report.

Answer 4

Brief history of money;
The future of money;
Other ways to be paid or pay without using money like LETS;
The financial world, who is in front of the train;
Does money makes the world goes around?
Do a quick survey in the class and see what students would like to save for? and then give them a realistic plan in how to achieve this.
Down to earth topics and inspiring the students to have a better financial life also the downs of not having one.
Happy teaching.

Answer 5

Interest rates aka "Why borrowing a lot of money can get you into a lot of trouble".

Which is better? Going on vacation...or spending that money on buying shares in the tour operator?

"Is there anything worth buying from television advertisers at 3:00 in the morning?"

"How much of my income should I allocate to charity?"

"What are productive ways I can contribute to my community outside of work?"

Answer 6

What about strategies for "cutting back" spending?
Owning a house vs. renting?
Strategies for desiphering "wants" vs. "needs"?
Auto Insurance...
Choosing a retirement strategy EARLY by age 21?
Planning for unexpected events?
Dealing with contracts/ cell phones etc.
HOpe this helps.

Answer 7

I assume you'll be teaching them how to draw up a budget (daily, weekly, monthly) and then, how to follow it.