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Introduction to Financial Literacy1.1ObjectivesBy the end of this lesson, you will be able to:Define Financial LiteracyRelate financial literacy to your own life situationDefine Money, Medium of Exchange, Barter System, and EconomyDiscuss the current economic state

FinancialLiteracy?!?Who has a job?

Who will have a job at some point?

What do you need money for?

Is your money supply unlimited?Why Study Financial Literacy?Do people ever run out of money?What happens then?

What is a recession?How does it affect you?

How do recessions start?

What Do You Mean Financial Literacy?Well, what does it mean to be literate?

So, financial literacy, is simply

having the understanding of how money worksIf I Gave You All One of These.What would you do with it?

$$$ Money $$$What is money?

What do I mean when I say money is medium of exchange?

What do I mean when I say money is a store of value?

Money is something used as a medium of exchange.The BEST money fulfills 5 characteristics.

1.) Portability Has to be easy to move around2.) Divisibility Has to be easy to break into smaller amounts3.) Durability Has to be physically strong and hold its value4.) Recognazability Has to be easily identified by its users5.) Hard to Forge Must be difficult to copy illegally

What Was the First Thing Used As Money?Take a guess.

Other, Fun Money FactsGold coins were used dating back to 600 BCE

China invented the first paper money in 806 CE

Other items have been used as money:

Money as 2 CategoriesCommodity Money something that has inherent value.

Gold, Silver, Jewelry, Food, Bullets, Tobacco, Currency backed by Gold

Fiat Money Something that has no other value then being moneyUS Dollars

Why the Barter System Stinks?Barter System trading g/s for other g/s?Remember the Barter Activity?

Problems IncludeRelative value of g/sAvailability of g/sTransport of g/s Double Coincidence of Wants

The EconomyWhat do I mean by the economy?

Goods and services?

Cash flow?

GDP, or Gross Domestic Product?

What are people who study the economy called?ECONOMY means all the activities related to making and distributing goods and services in an area13You Be An EconomistDo research. Open up your computer and find articles, facts, and numbers to answer these four questions in a Google Doc.

What can you tell me about the economy right now?

Why were we in a recession from 2008-2011?

How does a recession end?

Was this the only recession in history? When was the last one? Is there a pattern?Homework: Spending LogKeep track of your spending and income every day for two weeks.Log everything you make (or take), and everything you buy (or otherwise lose).Organize this list by day.At the end of the week, total up your net spending (either positive, or negative)