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Old 08-30-2010, 07:54 PM   #21
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Something on the impact of inflation.

The pros and cons of buying a home. It will be the biggest "investment" most people will make in their lives so it is worth getting an early understanding of the basics.

Presumably the course materials will also include a recommended reading list and a list of useful websites? If so, I suggest including some forums like her and bogleheads where people can ask questions and get conflicting helpful answers.
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Old 08-30-2010, 07:55 PM   #22
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I tried to start a financial literacy course at an adult literacy center where I used to volunteer. (There was very little interest.)

But I just want to make sure you know that you might be able to save yourself a lot of work by going to the FDIC and NCUA web sites. They both have a prepackaged, pretty basic course with Power Points, handouts, etc. that might help you. My info is dated but when I did this, the NCUA material was identical to the FDIC's except that they mentioned credit unions. (The FDIC program only mentioned banks.)

Good luck in your efforts. I agree with what other posters have said - KISS (keep it simple, stupid.)
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Old 08-30-2010, 08:07 PM   #23
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I tried to start a financial literacy course at an adult literacy center where I used to volunteer. (There was very little interest.)

But I just want to make sure you know that you might be able to save yourself a lot of work by going to the FDIC and NCUA web sites. They both have a prepackaged, pretty basic course with Power Points, handouts, etc. that might help you. My info is dated but when I did this, the NCUA material was identical to the FDIC's except that they mentioned credit unions. (The FDIC program only mentioned banks.)

Good luck in your efforts. I agree with what other posters have said - KISS (keep it simple, stupid.)
This was a helpful post- thx
FDIC: Money Smart - A Financial Education Program
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Old 08-30-2010, 08:15 PM   #24
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another vote for the ones who suggested an approach based on everyday activities - car loans etc.
They'll cover all the points in your original list, and keep it relevant & interesting.
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Old 08-30-2010, 08:41 PM   #25
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When I taught personal finance classes, I also passed out credit card statements (some with no interest and some with interest) and asked them to read them...tell me how much was owed, what the interest rate is, what the minimum payment means: the idea is to help them understand how purposefully confusing credit card statements are...
Also some basics on how to select a bank...CD's are good to cover, also savings bonds...what you want to do is cover how risk and tying up your principal is related to return. The least risk and easist to liquidate is a bank savings account, then you have savings bonds (low or no risk, but you have to tie up your money for a fixed period of time), then CD's, then bonds...at the upper end are corporate bonds, then mutual funds, individual stocks and so forth...you will have a lot of fun. People who take these courses are usually very motivated and you can get them excited about saving money and then being able to make good decisions around it.
HAVE FUN!
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Old 08-30-2010, 10:44 PM   #26
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How to do a personal balance sheet: net worth = assets - liabilities.
Appreciation / depreciation.
Risk vs. reward (either in the context of education, career choice, or investments, or all three).

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Old 08-31-2010, 12:21 AM   #27
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I think there's one thing missing from the curriculum, and that's identifying goals. What do I want to accomplish financially? The ten Money Smart modules and most if not all of the suggestions in the thread so far deal with the "how" of personal finance—but if the students have a "why", I think they will be more likely to act on what they learn.

Ideally, IMO, each student would, after finishing the course, be able to write down "this is what I want to accomplish, this is what I need to do to make it happen, and this is how each action contributes to getting the results I want."
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Old 08-31-2010, 02:57 AM   #28
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You may find some help how to frame your lessons in this blog:
Why personal-finance “experts” continue giving worthless advice | I Will Teach You To Be Rich
At the end of it there are some "good / bad" examples how to teach finance in a meaningful way.
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Old 08-31-2010, 03:27 AM   #29
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Unless the course is explicitly aimed at people whose heads are above water, I would not plan to include anything about investments, beyond perhaps "once you've paid off your CCs and built an emergency fund, put money into your 401K". For a large number of people, the idea of having $3,000 in cash at the bank and no loans beyond their car is already a huge step forward.
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Old 08-31-2010, 07:50 AM   #30
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Emphasize the cost of credit, especially the evils of credit card companies. That the only "product" they sell, for a very high price, is immediate gratification.

The importance of having a substantial savings for emergencies and that "Everyone else is going on a cruise and I wanna go too" is not an emergency. A leaky roof or having your car transmission fixed so you can get to work is.

Disability insurance. You break your leg and will be out of work for two months - what is your plan to pay the rent/mortgage/utilities/food? (Not to mention the medical costs...)

I suppose it could mushroom into a full college curriculum but since the audience is vocational school students I'd stick with the most basic items.
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Old 08-31-2010, 08:16 AM   #31
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Time Value of Money!
I would include how to use a business calculator, like HP-12c. For me, all investing and savings resolves around TVM. What is money worth today, and what will it be worth tomorrow. What will inflation do to your savings? How much is that car, house, dress. etc. really costing you? Those credit cards, you know the interest rate, payment, but how much extra in cash is it costing.

I did not learn about the business calculator until after I left the Air Force and started in the field of real estate appraising. The power of the HP-12c opened my eyes. Besides, it can take multiple class's to get all this down, and it makes for wonderful testing. In fact, the Appraisal Institute, has a complete book on TVM, I think a complete course.
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Old 08-31-2010, 08:57 AM   #32
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Unless the course is explicitly aimed at people whose heads are above water, I would not plan to include anything about investments, beyond perhaps "once you've paid off your CCs and built an emergency fund, put money into your 401K". For a large number of people, the idea of having $3,000 in cash at the bank and no loans beyond their car is already a huge step forward.
I think identifying target audience is #1.

The school does both continuing education for the community as well as vocational school for high school aged kids.
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Old 08-31-2010, 10:06 AM   #33
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Start out simply and connect with the students experiences. Ask the students about what they feel they need to know and then fill in the gaps.

Pay checks are a great start as they introduce the concepts of taxation, insurance and saving. Maybe use shopping for cell phone plans and the bills as a way to introduce them to the perils of choice, pressure to buy and cost over time.

Budgeting is really important so drill into them LBYM and the dangers of credit cards. I feel this is the single most important financial lesson/skill. If you can't do that then all the asset allocation and tax loss harvesting etc in the world is "worthless".
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Old 08-31-2010, 10:17 AM   #34
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Explain saving for an emergency or toward a purchase vs. Investing.

Many people don't keep a check register anymore and they don't reconcile to a monthly statement. Instead we check our accounts online. People need to know that they may have outstanding transactions that do not show up yet in the bank balance that they see online. Don't spend the money twice.
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Old 08-31-2010, 11:37 AM   #35
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Explain saving for an emergency or toward a purchase vs. Investing.
Yes, and unless I missed it I don't think that anybody else so far has mentioned an Emergency Fund - - how large it should be, for example. Suze Orman would be appalled were this omitted, as would I.
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Old 08-31-2010, 11:46 AM   #36
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Yes, and unless I missed it I don't think that anybody else so far has mentioned an Emergency Fund - - how large it should be, for example. Suze Orman would be appalled were this omitted, as would I.
this is part of budgeting on the original outline, but I agree it needs to be covered
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Old 08-31-2010, 12:19 PM   #37
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this is part of budgeting on the original outline, but I agree it needs to be covered
Oops!! I missed it. Oh well. Anyway, I'm very glad you included it (and I'm sure Suze would be too, if she knew about it).
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Old 08-31-2010, 12:47 PM   #38
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1) Income- sources like W-2 vs 1099 and the pros and cons of each
2) Budgeting
3) debt management
4) financing things vs paying cash
5) investing (buy something which goes up in value)
6) knowing risks
7) investing in the stock market and bond market
8) retirement and financial independance
9) Income taxes (personal income taxes)
10) the impact of investing on taxes (IRAs and similar)
11) small business (s corps, LLC and similar and how they impact all of the above)

In addition, please list any PROBLEMS which are common and people need to solve

Like
a) pay down mortgage or invest
b) which debt to pay off first
c) how much money will I have after X amount of time
d) How do I open an account
I didn't read the responses - so I may be duplicating some suggestions:

- Cash Flow
- Net worth
- Opportunity cost
- Excel modeling and projections
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Old 08-31-2010, 01:20 PM   #39
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I urge anyone with about 30-45 minutes of spare time to go thru one module of this and review it. I went thru 2 over my lunch hour (first one on banking and one on saving/investing).

They make for good discussion because there is some "mis information", but overall I thought they would supplement the course material I create quite good.

I will be taking lots of the posts here and making a detailed course outline shortly. I won't do that until I find out how long course is (5 week, 10 week, 1 hour per session or 2 hours per session etc...)
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Old 08-31-2010, 01:57 PM   #40
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Did anyone read the comments at the end of the "iwillteachyoutoberich" blog post? Some excellent points here....

"Couldn’t agree more. I’ve often thought that until the Personal Finance industry gets better at Marketing, they’ll always be on a losing streak. The likes of Apple, Nike et al are light years ahead of the PF industry and will always have instant gratification on their side. Delayed gratification is never going to be sexy.

But wait….how do people in the PF industry make their money, is it actually on the number of people who become better at managing their finances or the number of products they sell to them that promises to deliver this? Let’s not forget that a world full of financially literate people would soon stop borrowing, getting into debt and buying all of the cr@p that they don’t really need. The Govts of the West are very worried about this as it will halt economic growth in its tracks….hence very low interest rates to encourage borrowing, Quantitative Easing (printing money), etc.. The fact remains that the Govts of the West (and the big banks that fund them) want most people to be financially illiterate to encourage our mismanagement of money and keep borrowing and spending recklessly to keep the economy buoyant.

Unfortunately it will all end in tears sooner or later as even a child can tell you that you can’t solve a debt problem by spending more money!

Ramit – I wish you luck in your continued quest to open people’s eyes about the proper management of their finances (albeit wrapped up in a nicely Marketed IWTYTBR package). I do feel however that bigger powers are working against you….not that this is any reason to stop."
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