Personal finance course

[jIMOh]

I have an interview/ meeting with a recruiter at a local vocational school about teaching a personal finance course. Here are my ideas for what to teach, feel free to add anything to this list.


Please list your ideas for topics to cover.


Here is my list (for starters):

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

Thx for any and all input

 

[avengerki]

The evils of pay day loans?

 

[jIMOh]

The evils of pay day loans?

Or the politician in me changes this topic to

12) calculating rates of return and interest rates

and in the problems section I add in

If you get a payday loan for $400 and they charge you $100 for the loan, what is the interest rate? or something like that.

 

[brewer12345]

Start really simple. I would explain interest, APR, how compound interest works. I would also sepnd some time on what different banking/lending products really cost (payday loans, credit cards, overdraft fees, etc.). Make sure you explain how to balance a checkbook. Show how expensive a tax refund anticipation loan is. Think basic and aim it at a non-wealthy audience.

 

[REWahoo]

Start really simple. I would explain interest, APR, how compound interest works. I would also sepnd some time on what different banking/lending products really cost (payday loans, credit cards, overdraft fees, etc.). Make sure you explain how to balance a checkbook. Show how expensive a tax refund anticipation loan is. Think basic and aim it at a non-wealthy audience.

Agreed.

I'd stick to the basics using real life examples (buying a car based on "how much is the payment" vs. the bottom line price and interest rate, how long it takes to pay off a typical credit card balance making minimum payments, etc.) and not spend very much time on investing - probably not on the radar for many of your students.

 

[MasterBlaster]

1) Consider asset allocation models per time frame needed. Risk reduction using de-correlated assets. Rebalancing reasoning and periodic undertaking.

2) The start saving early lecture, how much percentage of income needed to save if you wait N years versus starting now.

3) How much do you need to retire. Consider How much stash needed to generate cashflow of X.

 

[SunsetSail]

I would start with simple goals/reasons for understanding personal finance and frequently link all the detailed items you've noted to those goals. I find that many laypersons find it difficult to understand how the parts fit together. Depending on the sophistication of your students, I would also start with basics like definitions of securities, how primary and secondary markets work for these securities, etc before talking about details of actually investing.

 

[Sarah in SC]

+1 to what Brewer said. Basic budgeting and planning for expenses that are irregular, as well as irregular income. Comparison shopping, warranties, payday loans, etc all good stuff.

 

[avengerki]

Maybe add in something for the possible frauds they may get suckered into. I have this investment that will triple your investment in 6 months guaranteed.

 

[jayc]

Buying/financing a car. Avoid the "I can put you in this car for 235/Month."

Opening a 401K at work Rollovers because everyone switches jobs.

Renting an apartment. Basic Ohio Tenant/Landlord laws, deposits, leases.

How to open an account at a discount broker. Maybe do one in class and trade in a play account.

Banks vs Credit Unions. "Free" Checking, comparing CDs, other services.

Flex Health accounts at work. How they work

Basic Car Insurance. Liability, Collision, Comp

These are all things young folks will encounter when they leave the nest.

 

[jIMOh]

Buying/financing a car. Avoid the "I can put you in this car for 235/Month."

Opening a 401K at work Rollovers because everyone switches jobs.

Renting an apartment. Basic Ohio Tenant/Landlord laws, deposits, leases.

How to open an account at a discount broker. Maybe do one in class and trade in a play account.

Banks vs Credit Unions. "Free" Checking, comparing CDs, other services.

Flex Health accounts at work. How they work

Basic Car Insurance. Liability, Collision, Comp

These are all things young folks will encounter when they leave the nest.

good post

Opening a 401K at work Rollovers because everyone switches jobs.
Renting an apartment. Basic Ohio Tenant/Landlord laws, deposits, leases.
Flex Health accounts at work. How they work
Basic Car Insurance. Liability, Collision, Comp

all things I can work into original post above

 

[jIMOh]

I would start with simple goals/reasons for understanding personal finance and frequently link all the detailed items you've noted to those goals. I find that many laypersons find it difficult to understand how the parts fit together. Depending on the sophistication of your students, I would also start with basics like definitions of securities, how primary and secondary markets work for these securities, etc before talking about details of actually investing.

I agree seeing how all the parts fit together is the challenge of personal finance.

good input, thx

 

[jIMOh]

1) Consider asset allocation models per time frame needed. Risk reduction using de-correlated assets. Rebalancing reasoning and periodic undertaking.

2) The start saving early lecture, how much percentage of income needed to save if you wait N years versus starting now.

3) How much do you need to retire. Consider How much stash needed to generate cashflow of X.

good post, all of above was inside my investing and retirement bullets LOL

 

[jIMOh]

Start really simple. I would explain interest, APR, how compound interest works. I would also sepnd some time on what different banking/lending products really cost (payday loans, credit cards, overdraft fees, etc.). Make sure you explain how to balance a checkbook. Show how expensive a tax refund anticipation loan is. Think basic and aim it at a non-wealthy audience.

Having never done a payday loan, I might need to do some research on the fees involved.

The counter argument I have heard is the payday loan is cheaper than bouncing a check.

I am also a novice at how some places calculate interest rates, so some research of my own on that might be needed.

good post, thx

 

[RunningBum]

Fraud is a good one, and related to that is identity theft. I agree about sticking to the basics like Brewer and others suggest, but I took a personal finance course in college, seems like it was able to get deeper than the basics. Maybe I don't remember clearly though.

Other possible topics:

Discussion about credit ratings, so people understand the ramifications of skipping payments.

Retirement (not ER) is a great topic. My dad worked with some seniors and many just had no clue as to how much SS they'd be getting and simple weren't prepared for reality. You can get a crash lesson from a friend or the web on financing a home or car when needed, but when you need retirement income it's way too late to learn about how.

Insurance, both liability and life.

 

[travelover]

I think it would be worthwhile to spend a little time on how compounding works and why it is so important to start saving and investing early. You can make some simple examples with EXCEL charts or borrow some from the net.

 

[LOL!]

I seem to recall that there are at least 2 personal finance curriculums posted on the internet somewhere. Did you try to find anything like that?

... just checked, there are several.

 

[MichaelB]

+1 to what brewer said. After basic banking, the math of shopping. How to compare prices. If there is time, insurance. What it is, what it isn't.

Hope this course works out. It's a real public service.

 

[NosmoKing]

Mutual funds pros/ cons as well as explaining the fees involved
Types of life insurance
Annuities (they are becoming trendy again) types and fees

 

[LOL!]

If you look at the most hated companies, you find banks, cell phone/telephone providers, and car dealers. So a personal finance course should teach how to deal with each of them and not get taken advantage of.

 

[traineeinvestor]

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.

 

[friar1610]

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.)

 

[jIMOh]

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

 

[walkinwood]

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.

 

[Livin Large in MT]

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!