Welcome to the second issue of Making Cents - a financial literacy and economics education resource for teachers from kindergarten through 12th grade!   In this publication you'll find information that will expand your content knowledge, resources you can put to use in your classroom, and links to other useful tools.

Schools that are looking for web-based programs for financial education, may wish to investigate the EverFi and Vault platforms.  EverFi's Financial Literacy Platform for high schools covers topics such as savings and budgeting, understanding a credit score, and consumer fraud and protection. The modules can be teacher-directed or student-directed with great flexibility to meet district curriculum guides. Vault, the platform for students in grades 4 - 6, is a 2.5-hour program that covers saving, budgeting, careers and more.  

Students who complete the EverFi program can become EverFi Certified.

How would you describe your saving and investing profile? Many would say I can do better, others will say I want to learn more and some may say they have not started doing either yet. Saving and investing are cornerstones of a financially stable household. If not knowing where or how to begin makes you do nothing at all, perhaps this article will jolt you into action.    

Saving money is a precursor to investing money. It is also a habit parents should strive to instill in their children and model for the next generation. If parents could establish the savings habit early, like the habit of brushing teeth daily, future families and the country would be positioned well for a stronger economic foundation.

Saved money is for short-term goals or uses that may take five years or less. Savings, the money saved, is kept in accounts that are easy to access (liquid) when money is needed.   Typically, these accounts earn low interest, but the value of the initial deposit (principal) is safe and does not decrease. Below are common examples of accounts used for savings.

• Bank savings accounts or credit union share accounts
• Money market deposit accounts (found in banks or credit unions)
• Money market mutual funds (found at mutual fund companies, e.g. Fidelity, Vanguard)
• Club accounts (Christmas clubs-found at banks or credit unions)
• Certificates of deposit (check liquidity restrictions)
• U. S. Savings Bonds (check liquidity restrictions)
• U. S. Treasury Bills (check liquidity restrictions)

The above savings vehicles are a good place to park the emergency money financial educators suggest be kept for rainy days, that is, unexpected life events. Ideally, emergency savings equal 3-5 months of your living needs. For example, if your monthly bills/expenses total $3,000, your emergency fund should range from $9,000 to $15,000. Do not panic! If your calculated "ideal" emergency fund seems out of reach, do not worry, something is better than nothing. A $1,000 or $3,000 emergency fund could get you started and the fund amount could be increased gradually.   

Investing is for long-term needs such as retirement, education, or a second home or other expensive items that are 10 years or more in the future. Invested money is not insured and the initial deposit (the principal) can increase in value OR decrease in value over a long period of time (10 years or more). Historically, when money is invested for long periods, it increases in value. However, the potential for invested money to lose value exists and investors should understand all the risks associated with an investment before they invest money.  

Investment options include:

• Stocks
• Bonds
• Mutual funds (can include a mixture of stocks, bonds, and cash such as money market mutual funds)
• Real Estate

So, what's the bottom line of action for time stressed consumers? If you don't take control of your financial future, who will? Assess your income and expenses. Determine an amount you can save regularly to build your emergency fund to the desired level. Have that amount automatically drafted from your checking account each month into the savings vehicle/account. Once a year review your accounts and increase the amount that is automatically drafted as necessary. Learn about investment options and take steps to invest money for your retirement or another goal. One thing is for sure, each day you delay saving and investing, equates to a lost opportunity to make the money you are earning work for you.

Places to learn more about investing

Securities and Exchange Commission: http://www.sec.gov/investor.shtml

Mutual Fund Education Alliance:  http://www.mfea.com/

Investopedia: http://www.investopedia.com

Have you heard of Khan Academy yet? With 3,100 videos and counting, the site is an excellent tool for teachers, students and parents. Under the Finance and Economics area, you'll find instructive videos on everything from  what it means to buy a company's stock to term and whole life insurance policies to hedge funds.  Consider using the site to brush up on unfamiliar or complex topics, provide an alternate explanation to a topic your students are discovering or provide enrichment for accelerated students.  There is even a new teacher toolkit that allows teachers to get class profiles and track student progress. 

In this issue, Greg Kaylor from Blairsville High School shares some thoughts on integrating personal finance and math. Mr. Kaylor graduated from Indiana University of Pennsylvania with a degree in Business Administration, a finance major and accounting minor before acquiring a grades 7-12 mathematics certification. He has taught mathematics for 17 years and currently serve as department chair at Blairsville High School while teaching Algebra I, Trigonometry/Algebra III and University of Pittsburgh College in High School statistics classes. In addition, he created and advises the "Money Club." He is a past-participant and teacher mentor with the Governor's Institute on Financial Education.

Q:  Why do you think it is important to integrate personal finance and math?
A:  Historically, students have attempted to stump their teachers with the old adage, "When are we ever going to use this stuff?" Integrating personal finance into mathematics classes not only answers that question, but it potentially increases students' interest in mathematics and provides examples that may be relevant in their families' lives as well.
 
Q:  What are a few examples of ways you integrate math and personal finance instruction?
A:   Making connections between traditional examples of exponential and logarithmic growth and decay, compound interest and the Rule of 72 (or 70) generates discussion and provides realistic mental mathematics practice. Constructing hypothesis-testing problems in statistics and algebraic scenario problems that reference ways to reduce the probability of identity theft, the financial impact of credit scores and predatory lending practice has resulted in lessons high in rigor and relevance. Another effective unit involves gathering financial data such as students' weekly earnings, cost of auto insurance, cumulative totals of car purchases under various down payment/interest rate scenarios and using that information to construct box plots, stem plots, histograms, and scatter plots as well as apply regression analysis.  
 
Q:  What advice do you have for a math teacher that wants to incorporate personal finance in their curriculum?
A:  Use your creativity to tweak a few topics from existing curricula to introduce financial topics, utilize the free resources that exist and network with those who have been doing it for years. Among the resources Mr. Kaylor has used are materials from National Endowment for Financial Education, Family Economics and Financial Education, Hands-on-Banking, Bankrate, and Your Money's Best Friend.

Apply today for a Pathway to Financial Success Grant from Discover. All public high schools are invited to apply for a grant to bring financial education into the classroom or to expand an existing curriculum. The sooner you apply, the sooner you can get started. Visit their website for additional details: http://www.pathwaytofinancialsuccess.org/get-a-grant 

Family Economics and Financial Education Summer Programs 

Making Cents is published jointly by the Pennsylvania Department of Education and the Pennsylvania State University. If you find the content useful, please consider forwarding it to your colleagues. Through this publication and other avenues, the Pennsylvania Department of Education seeks to continue efforts made previously by the Pennsylvania Office of Financial Education and the Governor's Institutes on Financial Education.

Newsletter Team:

Sally Flaherty, PDE

Cathy F. Bowen, PSU

Hilary Hunt, Consultant