Boot camp overview and activities felker award workshop-neafcs-09-11

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Boot camp overview and activities felker award workshop-neafcs-09-11

  1. 1. Dean Don Felker Award Presentation Financial Education Boot Camp: Overview and Learning Activities Barbara O’Neill, Ph.D., CFP® Rutgers Cooperative Extension oneill@aesop.rutgers.edu
  2. 2. Background Data: Council for Economic Education Survey of the States (2009)• 13 states require a personal finance course as a graduation requirement (7 states in 2007)• 34 states require implementation of personal finance content standards (28 in 2007)• 2008-2009 financial crisis called attention to consequences of personal finance knowledge and skills – NJ “perfect storm” for financial education
  3. 3. Jump$tart Financial Literacy Surveys Performance Trends100 % % % % %80 57 .4 .3 .9 .2 52 52 51 50 97 06 04 00 19 02 20 20 20 20604020 0 2008 average score: 48.3%!!!
  4. 4. Background Data: Way & Holden Study of Teachers’ Capacity to Teach Personal Finance• Published in JFCP (2009, Volume 20, Issue 2): http://www.afcpe.org/publications/journal- articles.php?volume=384&article=369• Online survey of K-12 teachers in 8 states (N = 504)• Little formal education in personal finance• YET…formal education is significant predictor of teachers’ perceived competence to teach personal finance• Limited perceived preparedness in both subject matter and pedagogy (i.e., content and methods)• Greatest hesitancy: insurance and saving/investing
  5. 5. Way & Holden Study Conclusion“One of the main implications of thisstudy is that there is a great need toexpand personal finance educationalopportunities for pre-service and in-service teachers in order to meet boththeir personal and professional needs.”
  6. 6. Enter Financial Education Boot Camp• Funded through NJ Coalition For Financial Education in cooperation with Rutgers Cooperative Extension• Funders to date: Citi, NJ Credit Union Foundation, and Council For Economic Education• Seeking funding for online Boot Camp in 2012• Methods and impacts will be discussed in second workshop• This workshop will describe four subject matter content learning activities from BC I and BC II
  7. 7. Financial Education Boot Camp• Boot Camp Definition (Webster’s): “A short concentrated period of intensive training prior to assuming new roles, responsibilities, and/or challenges.”• Includes both content and methods
  8. 8. Boot Camp Goals1. Review personal finance content to improve subject matter knowledge Increased knowledge and skills = better teaching!2. Share activities, strategies, and resources to teach personal finance/financial literacy3. Provide helpful information for personal use4. Increase confidence to teach personal finance
  9. 9. Key Point: Teachers Don’t “Sit” Well• Keep Boot Camp content lectures short (75 minutes max)• 75% of Boot Camp is discussion or small group activities• Provide opportunities for teachers to seek information (from free curricula, books, etc.) and teach each other
  10. 10. Intensive Small Group Learning Activities After Content PresentationBoot Camp I (BASIC) Boot Camp II (Advanced)• Day 1- PowerPoint • Day 1- Time Value of Jeopardy!-Style Game Money Problems• Day 2- PowerPoint • Day 2- Financial Case “Millionaire”-Style game Study Analysis Teachers together work in “cabins”
  11. 11. Game Developed by Boot Camp ParticipantsTax Forms and Returns Tax Deductions and Credits Insurance The Time Value of Money Saving and Investing 100 100 100 100 100 100 100 100 100 200 200 200 200 200 300 300 300 300 300 400 400 400 400 400 500 500 500 500 500
  12. 12. The Answer is:Date that most U.S. individualincome tax filings are due.
  13. 13. The Question is:What is April 15?
  14. 14. The Answer is:The person with more money: Barack whohas $1 million and George W. who has 1cent(i.e., a penny) at the start of the month anddoubles this amount for 30 straight days.
  15. 15. The Question is:Who is George W. ?
  16. 16. 50:50 15 $1 Million 14 $500,000 13 $250,000The Personal 12 11 $125,000 $64,000 10 $32,000 Finance 9 8 $16,000 $8,000 7 $4,000 Millionaire 6 5 $2,000 $1,000 4 Game 3 $500 $300 2 $200 1 $100
  17. 17. 15 $1 Million14 $500,00013 $250,00012 $125,00011 $64,00010 $32,0009 $16,0008 $8,0007 $4,0006 $2,0005 $1,0004 $5003 $3002 $2001 $100
  18. 18. 15 $1 Million 14 $500,000 13 $250,000 12 $125,000Which of the following 11 $64,000 10 $32,000is a fixed expense? 9 $16,000 8 $8,000 7 $4,000 6 $2,000 5 $1,000 4 $500 3 $30050:50 2 $200 1 $100 A: Food B: Car payment C: Clothing D: Gas
  19. 19. 15 $1 Million14 $500,00013 $250,00012 $125,00011 $64,00010 $32,0009 $16,0008 $8,0007 $4,0006 $2,0005 $1,0004 $5003 $3002 $2001 $100
  20. 20. 15 $1 Million 14 $500,000Which of the 13 12 $250,000 $125,000following is NOT a 11 10 $64,000 $32,000term related to 9 8 $16,000 $8,000credit? 7 6 $4,000 $2,000 5 $1,000 4 $500 3 $30050:50 2 $200 1 $100 A: Origination fee B: FICO C: APY D: APR
  21. 21. YOU WIN $1MILLION DOLLARS!
  22. 22. BasicPersonalFinancePowerPointMillionaireGame
  23. 23. Question 1 for $100 Which of the following is a fixed expense in a family budget? 50:50A. Car payment B. FoodC. Clothing D. Gasoline
  24. 24. Ask the AudienceRaise your hand for the letter of your choicewhen your teacher asks you to.
  25. 25. Phone a Friend! Which student in classwould you like to ask for help?
  26. 26. I’m Sorry!That is not thecorrect answer!
  27. 27. The Time Value of Money• Changes in an amount of money as a result of interest earned. • Saving today means more money tomorrow.• 4 types of time value calculations – Future value of a single amount (lump sum) – Future value of a series of deposits (annuity) – Present value of a single amount (lump sum) – Present value of a series of deposits (annuity)
  28. 28. Key Variables in TV of Money Problems• N- Number of compounding periods• % i- Interest rate (for compounding FV or discounting PV)• PV• FV• For annuity calculations, periodic deposits or withdrawals – Enter 3 known variables; solve for the 4th (unknown) variable
  29. 29. Future Value of a Lump Sum ExampleFuture Value (FV)–Value of an asset at the end of aparticular time period. Example: Value of $1,000 in 4 years at 8% interest ? FVF (8%, 4 years) = 1.360 1,000 x 1.3605 = $1,360
  30. 30. Future Value of an Annuity ExampleFV of an Annuity (FVOA)- What principal will growto over time if a series of regular deposits are made. Example: $2,000 annual deposits to Roth IRA at 8% interest for 40 years from age 22 to 62 = $518,120 ? FVOA (8%, 40 years) = 259.060 $2,000 x 259.060
  31. 31. Present Value of a Lump Sum ExamplePresent/Discounted Value (PV)–Currentvalue of an asset that will be received in thefuture. Example: Today’s value of a $25,000 inheritance to be received in 10 years, assuming the principal earns an 8% average annual return. PV (8%, 10 years) = 0.463 $25,000 x 0.463 = $11,575
  32. 32. Present Value of an Annuity ExamplePV of an Annuity (PVOA)- Present value of astream of payments to be received in the future. Example: The amount to have invested at retirement to provide $30,000 of income per year for 20 years with a 7% return = $317,820 PVOA (7%, 20 years) = 10.594 $30,000 x 10.594
  33. 33. Problem #1Your first “real” job pays $32,000 a year to start. Howmuch will you need to be earning in 20 years tomaintain the same purchasing power if inflationaverages3%?4%?5%?
  34. 34. Problem #10Your grandparents, both age 62, have a retirement fundof $100,000 saved to supplement their pension and SocialSecurity. Assuming an average annual interest rate of7%, how long will the fund last if they withdraw $750 permonth? What would you advise them to do?NOW create and solve your ownPERSONAL time value of moneyproblem and share it with your cabin.
  35. 35. Group Case Study Analysis• Choice of 10 case studies• Small group review andanalysis of cases• Presentation to total group• Application of content
  36. 36. Wrap Up• Learn more about Boot Camp methodology and impact in Workshop #2 (Thursday, 2 pm)• Used pre- and post-tests to measure knowledge gains• CDs for four learning activities are available

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