Transcript money - Montville.net

Introduction to
Financial Literacy
1.1
Objectives
By the end of this lesson, you will be able to:
• Define “Financial Literacy”
• Relate financial literacy to your own life situation
• Define “Money, Medium of Exchange, Barter System,
and Economy”
• Discuss the current economic state
“Financial…Literacy?!?”
• 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 works”
If 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 around
• 2.) Divisibility – Has to be easy to break into smaller amounts
• 3.) Durability – Has to be physically strong and hold its value
• 4.) Recognazability – Has to be easily identified by its users
• 5.) Hard to Forge – Must be difficult to copy illegally
What Was the First Thing Used As
Money?
• Take a guess….
Other, Fun Money Facts
• Gold 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 Categories
• Commodity 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
money
• US Dollars
Why the Barter System Stinks?
• Barter System – trading g/s for other g/s?
• Remember the Barter Activity?
• Problems Include
• Relative value of g/s
• Availability of g/s
• Transport of g/s
• Double Coincidence of Wants
The Economy
• What do I mean by “the economy”?
• Goods and services?
• Cash flow?
• GDP, or Gross Domestic Product?
• What are people who study the economy called?
You Be An Economist
Do 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 Log
• Keep 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)