This guide is intended to help teachers gain a clear understanding of the General Financial Literacy standards and objectives.

Background Knowledge     Quizzes     Terms       Attention Getters

Background Knowledge: 

Strand two is about identifying and understanding various sources of income and the major factors that affect that income.

For many students, a steady income is a far off dream, while other students have earned their own income for years.  This standard helps students with any level of experience explore and learn of the many different sources of income beyond a paycheck. It is important to understand the importance and monetary value of employee benefits such as insurance, leave, retirement, etc.   Draw from your own experiences as an educator to give examples of the value of benefits.

If you were expected to live in Las Vegas or New York City on the same earning you make as a teacher in Utah, what concerns would you have?  Students need to understand the relationship between income and the cost-of-living in various geographical areas throughout the country. They should be introduced to the concept of the average cost-of-living and then be able to research and compare the cost-of-living for different locations.

Students must also be introduced to and learn to analyze how different economic conditions affect one's income and lifestyle.   Have you ever cancelled a family trip or tried a "stay-cation" because of the cost of gas?  The current economic trends and conditions should be discussed with the students and also how those trends and conditions will potentially affect their future.

In objective two, students will learn about paychecks and the required income withholdings from those paychecks. Receiving a paycheck can be the highlight of a person's day. If the paycheck is smaller than expected, it can also be a concern. By learning about paychecks, paycheck deductions, and required employment forms, a student will be able to understand the amount received on their paycheck and ensure they have been paid the correct amount from the employer.

Today, there are three ways an employer may handle paying his/her employees: 1) paycheck with the paycheck stub, 2) direct deposit, and 3) payroll card. Students should understand the benefits and detriments of each type.

Regardless of which method of payment employees receive, it is important for the employee to understand paycheck deductions taken out of a paycheck and what they are used for. The first step to understanding a paycheck is to understand the vocabulary associated with paychecks and the paycheck process. This vocabulary should include: W-4, I-9, pay period, gross pay, net pay, deductions, Federal withholding tax, State withholding tax, FICA, retirement plan, medical, year-to-date, dependent, etc.

In objective two, students analyze criteria for selecting a career and the probable impact their career choice will have on their future income and financial stability.  Why do people work?  Individuals work to earn money to support their personal or family's style of living. The manner in which money is gained, a person's career choice, and how money is spent affects the overall well-being of a family.

There are many factors that influence a person's career choice. Those choices are different for everyone and are based upon personal values, goals, needs, and wants. The type of work a person performs affects his or her income level, work environment, leisure time, and personal satisfaction. Each choice an individual makes, based upon his or her needs and wants, has risks and opportunity costs. For example, some individuals choose personal satisfaction over high pay; some choose part time work to have more time for family, and some refuse a promotion because it would require moving. The risks and opportunity costs to all career decisions is why thorough research of career choices and assessment of personal values is important.

Perhaps one of the most important decisions a person can make when determining his/her career path is to invest, personally and financially, in their human capital. Human capital is defined as skills (education and on the job training) acquired through a process of self-investment. An investment in human capital lasts a lifetime. The more an individual invests into their human capital early in life, the greater range of opportunities they will have and the greater the opportunity for career success later in life.

Investment in human capital can occur in many ways. A person can increase his/her human capital by attending trade and vocational schools, participating in conferences, receiving on-the-job training, volunteering, and joining extra-curricular activities. However, the most common way to increase human capital is through formal education. Individuals with more educational training have higher estimated lifetime earnings. The more education one has, the higher the average income they will receive.

Entrepreneurship/self-employment is another important concept with which students should be introduced. Entrepreneurs are regarded as people with drive and ambition to succeed. The advantages of entrepreneurship include: job security, being your own boss, opportunity for greater financial success, opportunity to have control over your life and job, and a great sense of personal satisfaction.

Terms: 

• Benefits

• Income

• Insurance

• Wages

• Investment

• Retirement Planning

Attention Getters/Hooks: 

• "Investment in Yourself" FEFE activity. As students enter the classroom, have them select a piece of colored paper. Have students all stand, students will sit depending on the color of their paper as related to education and earning power. Last student standing has the most education and earning power. Give the student a 100 Grand candy bar to illustrate the relationship to education and earning potential.

• Have definitions to terms typed on posters and placed around the room. As students enter the classroom, give them a card with a term. Have students find the definition for their term.

• Use a "web organizer" for students to brainstorm the many different sources of income.

• Have Mr. Holland's Opus music playing as students enter the classroom. Show various clips from the movie to represent the concept of a job vs. a career.

• Have the following quote from Dave Ramsey posted at the front of your room, "Your life is not a snapshot, it's a filmstrip. This is only one frame of the movie." Have them write down what the statement means to them.

Standard 1: Identify sources of income and specific employability skills.

• Identify sources of income such as wages, commissions, investments, benefits, inheritance, and gifts.
• Evaluate and compare career opportunities based on individual interests, skills, and educational requirements; the value of work to society; income potential; and the supply and demand of the workforce, including unemployment.
• Compare the risks and rewards of entrepreneurship/self-employment.
• Compare income to the cost-of-living in various geographical areas and the impact it has on purchasing power.
• Understand the effects of state, local, and federal taxes and voluntary deductions on wages and income, the difference between gross and net income, and the similarities and differences between wages and income.

TEACHING SUGGESTIONS: (Note: The following are simply suggestions or ideas to help you in teaching the General Financial Literacy class.  You WILL need to supplement these suggestions with additional resources based on your teaching style and your students’ learning styles).

ENGAGE	Identify sources of income by using a "spider map (pdf)" for organization.
	Assess student prior knowledge by having them complete the Income Matching Terms Worksheet (pdf). Use it as a guide by first addressing items that students are unfamiliar with.
	Display or distribute a sample pay stub for students to examine. Ask students to identify the types of deductions listed on the stub. Guide them to verify that the net income is accurate. Recommend to students that they verify stubs for accuracy and retain stubs to verify the accuracy of the W-2 form received every January.
	Have students bring in receipts from family purchases that reflect the use of coupons and/or discounts. Use these receipts to illustrate that tax is calculated after the discount is applied.
	Provide a large bowl of M&Ms at the front of the room. Invite each student to take a handful but not to eat them until further instructions. Divide the students into groups of four to five each. Then display the following information using the M&Ms chart. Ask students to share one fact about themselves for each M&M they have, according to the color chart. Students are free to eat an M&M each time they share a fact with their group.
EXPLAIN	Show Influences on Income PPT.
	Read Factors that Affect Your Income (pdf).
	Show Understanding Taxes IRS PPT.
	Review 10 Common Questions about Social Security.
EXPLORE	Maneuver through the “How Much Will My Lifestyle Cost?” calculator.  Have students write down any unseen costs of the career of their choice.  Encourage them to categorize their lists into wants and needs to narrow down what is really necessary for their career.
	Explore Trish & Scott’s Big Adventure Lesson Plan to calculate differences in regional housing costs, determine the percentage of gross income spent on housing, assess the impact of housing costs on a relocation decision and recognize wages and housing costs vary. Trish & Scott Worksheet (pdf).
	Assign Completing Tax Forms Simulation (pdf). If needed, guide students through a simulation to explain the process.
	Guide students through the assignment Analyze a Pay Stub (pdf). Discuss as a class what deductions are and how they influence a paycheck.
EXPAND	Identify several specific factors that affect wage rates.  Explain that supply and demand are the primary factors in determining wages.  Explore wage rates in their potential careers.  Analyze why wage rates in their states may differ from the national average wage for their career.  Wages and Me Lesson Plan
	Allow students to explore the cost of living in various geographical areas by completing the Cost of Living Worksheet (pdf). Upon completion, have students identify their ideal career and where they would like to live, including salary rates and distance from “home.”  Have them write a letter to their family/friends explaining their career choice, where they will be living, salary comparisons, and the reasons for their decisions.
	Pretend you have a pen pal in Australia who is asking about our tax system.  Write him/her a letter explaining the things you have learned.
	Look around you.  Think of your day.  Write a paragraph describing the resources you have used today that were provided by taxes.
	Read current articles relevant to career selections and income.
	Complete the Compare Employee Benefits worksheet (pdf).  As a class, discuss the offers and the decisions made by the students.
EVALUATE	Define what benefits beyond salary are or will be important a future job/career search.
	Challenge students to figure net income from an employee payroll record.  Paycheck Math worksheet (pdf) may be helpful.
	GFL Passport Performance Test – See page 10 and Tax Forms pages 7-8

Standard 2: Understand and begin preparation for career and post-high school training.

• Recognize and explore the correlation between education, training, and potential lifetime income.
• Calculate the costs of post-high school training options and analyze the return on investment (ROI) based on career choices, including understanding the cost differences between public and private, and between nonprofit and for-profit education and training.
• Identify sources of funding to assist in post-high school education opportunities and the cost of repayment.
• Understand the use and advantages of 529 plans and the benefit of planning early for paying for the cost of post-secondary education and training.
• Understand the process for and benefits of FAFSA completion.
• Utilize the FAFSA4caster to explore the FAFSA process. Seek guidance from school counselors.
• Identify components to be included on a resume and/or electronic professional profile, such as appropriate contact information; educational, work, and volunteer experience; skills; certificates obtained; accomplishments; interests; and references.
• Identify sources and strategies for and benefits of networking for finding employment, whether for summer jobs or full-time career placement.
• Understand basic employment forms and processes, including W-2, W-4, and I-9.

TEACHING SUGGESTIONS: (Note:  The following are simply suggestions or ideas to help you in teaching the General Financial Literacy class.  You WILL need to supplement these suggestions with additional resources based on your teaching style and your students’ learning styles).

ENGAGE	Play music from Mr. Holland's Opus as students enter the classroom.  Show various clips from the movie to represent the concept of a job vs. a career.
	Invite students to respond, written or orally, to a quote on careers (pdf), such as those below.  “The difference between a job and a career is the difference between forty and sixty hours a week.” ~Robert Frost “Every day I get up and look through the Forbes list of the richest people in America. If I'm not there, I go to work.” ~Robert Orben “A lot of fellows nowadays have a B.A., M.D., or Ph.D. Unfortunately, they don't have a J.O.B.” ~"Fats" Domino
	Pass out samples of the I-9 (pdf), W-2 (pdf), W-4 (pdf).  Assess prior knowledge by asking students if they know what they are or how they are used.
	Present Which Way Do I Go (pdf) for students to analyze. Read them the explanation on the second page.  Make a connection between the exercise and deciding on a career path.
EXPLAIN	Show Career Impact on Income PPT.
	Show Entrepreneurism PPT.
	Show Practice Interview Questions PPT. Assign students partners to role play answering the questions on the worksheet (pdf).
	Show Tax Forms & Deductions PPT. I-9 (pdf), W-2 (pdf), W-4 (pdf), Analyze a Pay Stub (pdf)
	Show Value of Education PPT.
EXPLORE	View Will Smith’s Wisdom: Success Secrets for Young Entrepreneurs video (9:57). Discuss video clip in a class discussion.  Have them apply this to entrepreneurs and thinking outside of the box.
	Use the Which Careers Earn the Highest Income (pdf) to play a game.  Assign one career to each student.  Have them line up in order from lowest to highest income.
	Explore career options by completing the Career Plan Worksheet (pdf)
	Learn more about career preferences with Career Cluster Interest Survey (pdf)
EXPAND	Imagine for a while that the world has to start all over.  Nothing exists but water, land, trees, animals, and fifty people whose ages range from 10 to 50.  Trying to restart the world, your group of 50 people has to put you in charge of selecting the seven most necessary occupations to get the world going again.  No training for any of these occupations is necessary.  List the seven occupations and the reasons why you would select each one.
	Assume that you are about to begin a search for a job for next summer. Make a list of the steps/actions you could take that would help you find a job. Note such things as who you would approach, what offices you would visit, what businesses you would contact, whose advice you would seek, for what information you would write, and so forth.
	Identify a “trend” you believe is just getting started. What types of jobs do you think would be helped if this trend really developed?  Can you identify two or three trends that have been big over the last two years that led to career and employment opportunities for many people?
	List your top three career choices. Research these positions to see how much education is needed and the salary for each.  Does either of these things (salary or schooling) deter you from the career?
	Walk or drive through your neighborhood and make a small list of some of the small businesses, particularly the ones that have just opened or ones that have been around for a long time.  Think about the successful businesses—what factors do you think contributed to their success?
	Employers expect employees to have basic skills such as the ability to communicate with others and the ability to read.  Describe three other work skills that employers value in employees.
	List the different jobs that have affected your life in the past 24 hours, including teachers, bus drivers, cafeteria workers, the cable maintenance person, etc.
	Prepare and deliver a presentation, with a small group, about the value of lifelong learning and its relationship to earning potential and financial planning.
EVALUATE	GFL Passport Performance Test (Career Research) See page 6
	Ask students to fold a blank piece of paper in thirds (landscape).  Hold up samples of the I-9 (pdf), W-2 (pdf), W-4 (pdf).  As each document is held up (or shown on the projector) ask students to include the following for each column:  Name of the tax form, when it is used, and why it is used.
	Write a one page paper describing the correlation between income and a worker's skills, education, the value of the work to society, condition of the economy, and the supply and demand for workers.