Tips and Tools for Teaching Personal FinanceDr. Vesta Whisler and Dr. Cindy PraterACED Gulf South ConferenceApril 19, 2013

OPENING HUMOR

Tim Clue on Debt

How did we get here?

Most adults received their personal financial education from the school of hard knocks – they suffered financial setbacks and learned expensive lessons along the way. Teaching our future generations about money will give them an advantage that could last a lifetime.NFEC Best Practices in Financial Education. Retrieved February 25, 2012, from http://www.financialeducatorscouncil.org/personal-financial-education.html

How did we get here?Why do so many college students get deep in debt, max out their credit cards and miss payments regularly? It comes down to the fact that they never received a personal financial education. They never had the opportunity to learn in a safe environment like their home or school; consequently, they often mess up their first few financial decisions. These little mistakes early on sometimes spiral into bigger problems later.

NFEC Best Practices in Financial Education. Retrieved February 25, 2012, from http://www.financialeducatorscouncil.org/personal-financial-education.html

WHAT CAN WE DO ABOUT IT?

• Bernanke (2011), appearing before a U.S. senate subcommittee, commented that “financial education must be a life-long pursuit that enables consumers of all ages and economic positions to stay attuned to changes in their financial needs and circumstances” (para. 4).

• Rollins (2011) states that “Acknowledging the clear need for a financially literate populace, business teachers must find creative ways to teach fundamental financial concepts” (p. 31).

Bernanke, B. S. (2011, April 20). Statement by Chairman Bernanke on financial literacy. Board of the Governors of the Federal Reserve System.

Rollins, W. (2011, December). Realistic Personal Finance for Today’s Students. Business Education Forum.,66(2), 30-32.

RESULTS OF INFORMAL SURVEY• 19 respondents• 7 had a credit card in their own name• 1 owed more than $3,000 on their credit card• 13 had a student loan• 7 owe more than $10,000 on their student loan• 1 had a family member file bankruptcy

RESULTS OF INFORMAL SURVEY• 16 had a savings account• 10 had more than $2,000 in their savings

account• 9 said parents pay all or most of their bills• 9 stated their financial situation caused them

stress• 8 stated they have identified ways to improve

their financial situation

RESULTS OF INFORMAL SURVEY• 9 said they currently use a budget• 10 said they use coupons• 11 eat out more than three times a week• 5 had gotten a copy of their credit report before

taking this class• 4 knew their credit score• 9 knew what types of auto insurance is required

in Georgia• 3 have renter’s insurance or homeowner’s

insurance

• Developed by Jump$tart Coalition for Personal Financial Literacy. Third revision in 2007.• Widely recognized as the national standard.• Realizes that not all the standards may apply to all courses.

PERSONAL FINANCE STANDARDS OF INSTRUCTION

Georgia’s Requirements

Money Management

Take the Money Management Quiz!• http://

learn.bankofamerica.com/quizzes/money-management/get-to-know-your-money-personality.html

• OR• Search for Bank of America Money Management Quiz

Retrieved February 25, 2012, from http://learn.bankofamerica.com/quizzes/money-management/get-to-know-your-money-personality.html

Resources• AFSA Education Foundation• Council on Economic Education (http://www.econedlink.org)• Federal Reserve• Georgia Council on Economic Education• Jump$tart• NEFE High School Financial Planning Program• Practical Money Skills for Life• The Mint• Dave Ramsey

A Further Look• MoneySkill• A Penny Saved• The Stock Market Game• Core Concept Cards• The Spending Challenge

CREDIT REPORT• Commercials• WWW.ANNUALCREDITREPORT.COM

FICO SCORES

• FICO Scores are calculated from a lot of different credit data in your credit report. This data can be grouped into five categories as outlined below. The percentages in the chart reflect how important each of the categories is in determining your FICO score.

Retrieved February 25, 2012, http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx

FICO SCORES

Fair IsaacRange 300-850

Below 650 Poor650-700 Fair to good700 – 750 Good750+ Excellent

FICO SCORES• 2011 MAZDA3 4-Door• MotorWeek Drivers' Choice - Best Small Car 2010 - MotorWeek • Up to 33 mpg† • Seating for 5 • Purchase Offers• 0.0% APR for up to 60 MONTHS PLUS $750 Customer Cash More

Details

• 0.0% APR AND $750 CUSTOMER CASH ONLY FOR WELL QUALIFIED BUYERS WHEN FINANCED THROUGH PARTICIPATING LENDER; NOT ALL BUYERS WILL QUALIFY. AMOUNT OF DOWN PAYMENT AND OTHER FACTORS MAY AFFECT QUALIFICATION.

CREDIT REPORTFor more than two years Robyn Mueller has been battling credit reporting giant Equifax, which mixed her twin brother’s data into her file, then failed to correct the errors, records show.

Mueller sent Equifax repeated dispute letters beginning in 2006 — and even copies of each sibling’s driver’s licenses, pay stubs and other records — to prove they are different people. But the problem wasn’t fixed until last summer when she sued the Atlanta-based credit bureau.

“You don’t understand how much torture I went through,” said Mueller, 39, who lives in Sugar Hill. “All the credit bureaus, they control your life. It’s not fair for them to steal your identity.”Young, A. (2009) Credit report fix turns fiasco . The Atlanta Journal & Constitution.

Checking• Free Simulation available• MoneyInstructor• The Mint

Insurance• Guest speakers – local insurance agents• Web searches • MoneyInstructor.com

YouTube

• Freecreditreport.com• Secret Millionaire• Learning to Spend Within Your Means• Dave Ramsey on Budgeting• I want to be a billionaire• Or noncool I want to be a billionaire

CONCLUSION

The topics are many and the resources are endless. With the proper resources, the problem is surmountable.