Embedded Files
5.3 Lesson Plan
DISCUSSION:
Discuss these questions with your classmates or with a partner
What are some things your family does regularly to save money? How often does your family do these things?
Which practices have you found to be the most effective in saving money? Why do you think they are effective?
1 5 min
In this activity, students will be able to:
Discuss the ways in which our households save money.
ARTICLE:
New to Budgeting? Why You Should Try the 50-20-30 Rule
New to Budgeting? Why You Should Try the 50-20-30 Rule
The 50-20-30 budgeting rule is a well-known rule of thumb among financial experts. Read the article to learn more about it, and then answer the following questions.
Why is the 50-20-30 rule easy for people to follow, especially those who are new to budgeting and saving?
This article recommends that 20% of your income is meant for your savings, investments, and payments to reduce debt. What are the potential risks of having all three of these buckets belong in the same category?
2 10 min
In this activity, students will be able to:
Understand the 50-30-20 Savings Rule
VIDEO:
Pay Yourself First
Automating your savings can make it even easier for you to save! Watch this video to learn more about the benefits of making your savings automatic. Then, answer the questions.
Which strategy will help you save the most money?
What is the benefit of automating your savings account contributions?
What does it mean to "pay yourself first"?
Why might some people still prefer manually saving their money (e.g. manually transferring or deposit money into their savings account)?
3 8 min
In this activity, students will be able to:
Understand the concept of 'Pay Yourself First'
VIDEO:
How to Save Money Every Day
In the past activity, you were asked to brainstorm additional saving strategies that were not mentioned in any resources. Watch this video to see if there are any you hadn’t thought of and list them in the space to the right.
4 8 min
In this activity, students will be able to:
Analyze a daily saving strategy
VIDEO:
Compound Interest Explained
What is compound interest? How can you use it to increase your savings? Watch this video and then answer the following questions.
How does the age a person starts saving at impact the amount they can earn in compound interest?
Today’s savings accounts do not offer interest rates much higher than 1%. How does this impact the power of compounding?
5 5 min
In this activity, students will be able to:
Understand how compound interest works to increase savings
DATA CRUNCH:
The Rule of 72
One math trick that’s particularly helpful in saving & investing is called The Rule of 72. If you have an investment that is growing at X% – let’s say 7% – then you take and divide it by 7 and you will get about 10.3, or about 10 years for your money to double at a growth rate of 7%. The actual number is 10.24, so it’s a very good rule of thumb that will get you in the ballpark.
Below I present the table with the actual calculations and the difference between the estimate derived from The Rule of 72 and the actual number:
6 5 min
In this activity, students will be able to:
Understand the Rule of 72
VIDEO:
How to Counter the Effects of Inflation
While it’s important to put away money into your savings account each month, it shouldn’t be the only place you put it. Why? The answer is: INFLATION! Watch this video to find out how inflation impacts the money in your savings account. Then, answer the following questions.
What causes inflation to occur in the first place?
Why would your savings account “lose value” if the rate of return you receive is lower than the rate of inflation?
An alternative to saving would be investing your money for a higher rate of return. How would this work to reduce the impact of inflation on your savings?
7 5 min
In this activity, students will be able to:
Understand beat inflation when saving
RESEARCH:
Online Tools and Apps
Follow the directions on the worksheet to complete this activity.
8 45 min
In this activity, students will be able to:
Research various online tools and apps pertaining to payments, saving, budgeting, and robo-advising to discover and compare their features
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