Transcript ECON 593: Workshop on Economic Education

FINANCIAL LITERACY FOR
THE ELEMENTARY
CLASSROOM
In Class Day One.
Sponsored by:
Maryland Council on Economic Education and
Towson University College of Business and Economics.
Questions?
Online material on Decision Making, Scarcity,
Wants, Opportunity Cost.
Review
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So, there are many instances where attitudes and
assumptions about money influence our financial
decisions, causing us to behave in unpredictable or
irrational ways.
For example:
Buying more expensive name brand product over generic
 Philanthropy, volunteering, charity
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So lets take a look at these a little more…
Philanthropy
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A personal or corporate interest in helping others,
especially through gifts to charities, or endowments
to institutions.
Does not always involve money.
Volunteer service – working to help others in the
community without being paid (read-a-thon).
Charity – The voluntary provision of money,
materials, or help to people in need (trick or treat
with UNICEF, canned foods drive).
Morning Session
Standard One
Make Informed, Financially Responsible Decisions
Financial Goals – what are they?
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Financial goals are the things you want to
accomplish that cost or involve money.
 Debt
reduction
 Wealth accumulation for retirement
 Buy a house
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Goals can be short term (one year), medium
term (3-5 years) and long term (5+ years).
Some things to keep in mind when teaching
about financial goals…
Developing Financial Goals
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Goals based on personal values
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Age appropriate financial goals
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What do you want to accomplish (helping others, self, community,
church, family).
Allow them to define – do not tell what “should” be goal.
Time preference and children (saving for college at 5?).
Budget size.
Ways to earn (job opportunities) and save for future (three
jars)

What do people need? May include child or pet care (dog walking),
or perhaps chores or errands for family or neighbor.
Final Decision - Where to Buy?
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Market – where goods, services and resources are
bought and sold. Where consumers and producers
meet to exchange goods/services for money.
Markets exist in many places:
 Face
to face (school lunch, grocery store, babysitter)
 Phone, mail or online (eBay, craig’s list, store websites
or catalogs)
 How do you choose?
Markets 1
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Requires both a buyer and seller.
 Producer
(seller)
 Consumer (buyer)
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Do you remember this one?
Simple Simon met a pie-man going to the fair
Said Simple Simon to the pie-man, “Let me taste your ware”
Said the pie man to Simple Simon, “Show me first your penny”
Said Simple Simon to the pie-man, “Sir, I haven’t any”
Markets 2
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Supply (producer) – quantity that a producer will
provide for sale at various prices.
 Goal:
to maximize profits by providing goods or
services that consumers desire.
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Demand (consumer) – quantity that consumers are
able and willing to buy at various prices.
 Goal:
Maximizing satisfaction (utility) with limited
resources
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Market interaction determines price.
Markets 3

Price can be changed if anything about supply or
demand changes:
 Consumers
preferences for the good increase/decrease
(advertising – more next class).
 Consumer income changes.
 Firms find cheaper ways to produce the good
(outsourcing, new materials or methods)
 Prices of related goods change (substitutes or
complements)
Market Types
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Just like there are many sources of income, there are
many types of legal markets:
 Output
market – consumers and producers efficiently
determine price and quantity of output available. Output
is a good or service and can be a physical or virtual
market.
 Labor (input) market – employers and workers efficiently
determine wages and quantity of labor hired.
 Financial market – consumers and producers efficiently
determine the price and quantity of the item (stocks,
bonds, commodities) available.
Afternoon Session 1
Standard Two:
Relate Careers, Education and Income
Why do we work?
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Financial decisions may include lifestyle changes or
other purchases which require money.
Where do we get the money to make these
purchases? (hint: it does not grow on trees).
What is Income?
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Most people get money by earning it (income) in the
labor market.
Brainstorm – where could you get money for a
purchase if credit was not available?
What special skills and talents do I have?
 How do I enjoy spending my time:
 Do my friends, neighbors or family need help with something?
 Are there things I have at home or could borrow – like
computers, tools or art supplies – I could use to earn money?
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Sources of Income
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Income from employment:
 Determined
by education, training, interests,
location, personal characteristics and luck.
 Largest source for most.
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Investment income:
 financial
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skills, personal characteristics
Inheritance or gifts:
 intergenerational
impact
Job vs. Career
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A job can lead to a career.
A career is a pattern of activities and positions
involved in an individuals lifetime of work to which
the person has made a long term commitment.
 How
many jobs/careers in a lifetime?
 What impacts career choices?
 Education,
personal characteristics, wealth, opportunities,
interests, income potential, time preference…
Why care about jobs?
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Jobs provide income  income allows for
consumption  consumption creates job growth.
How does income impact spending?
 Cash
for consumption or saving (marginal propensity to
consume)
 Determines access to credit (more tomorrow)
Afternoon Session 2
Standard Three (supplemental)
Plan and Manage Money
Taxation
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Taxes are a compulsory payment by individuals or
organizations to the government; fees placed on
income, property, or goods to support government
programs.
What do taxes support?
How do taxes affect individuals, families, and
communities.
Reasons for paying taxes. Why do we do it?