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  1. 1. Activity Set: Economics & Personal Finance These are the best NIE activities and lessons from past USA WEEKEND Teacher's Guides. They have been compiled in an easy-to-access format for you to use at anytime.
  2. 2. Economics & Personal Finance Economic Choices Learning standard: analyzing economic choices Elizabeth Hasselback of television’s The View is considered an expert at budget shopping. To test her skills, USA WEEKEND Magazine gave her $150 to spend on an outfit for each of her TV co-stars. Give yourself a similar challenge. Using ads from the newspaper, spend $150 as wisely as you can on certain items. You can look for a specific target item — clothes, food, etc. — or just decide the best way to spend the money on any item advertised in the newspaper. Then write an essay explaining the choices you made. Economics Learning standard: understanding the meaning of economics Economics is the study of how individuals, groups or nations allocate their limited resources to satisfy their unlimited wants and needs. Put simply, economics means figuring out how to give people what they want when there are not enough resources to go around. You should understand economics affects everything we do. Anything you have, want, buy, wear, live in, drive, play with, eat or interact with is somehow connected to economics. Thus, understanding economics improves the quality of life. Since you can’t have everything you want, choosing wisely is vital. Choose five items advertised in today’s newspaper you want. Then, after you have identified five, you should narrow your choice down to one. Write an essay telling how and why you chose the first five items and how you were able to narrow your choices down. Consumers I Learning standard: examining consumer preferences to develop economic skills In a nostalgic look back at 20 years, USA WEEKEND Magazine examines Cinnabon, the ubiquitous pastry shop. This enterprise is a huge success, partially because of its marketing strategy, which focuses on the sense of smell and the strong ties between scent and memory. The scent of cinnamon evokes fond feelings of home and comfort. Experts believe Cinnabon’s plan is brilliant. What product advertised in today’s newspaper do you feel has the best advertising? Why? What do you see as smart marketing techniques? What other products do you think are marketed using their aroma?
  3. 3. Consumers II Learning standard: identifying economic incentives Businesses will often offer consumers incentives to buy their product or services. These incentives are rewards for doing business with that company. Incentives may include a decrease in sale prices or special bonus items. Carefully read the display ads in the newspaper and list the various incentives companies offer. Which do you find the most appealing? Then, choose one product or service advertised. Redo the ad making it more appealing to your generation using marketing incentives. Consumer Reports Learning standard: personal finance, research, decision making According to an article in USA WEEKEND, some online companies are fleecing consumers by selling bogus tickets to big sporting events. The best way to prevent this kind of theft is to do a little research. To determine whether or not a company is legitimate, visit the Better Business Bureau site (www.bbb.org). Or, if you want to find out whether a product is worth the money, consult Consumer Reports or sites like epinions.com. Finally, remember to use your common sense. If an offer sounds too good to be true, then most likely, it is. Questions for discussion: • What signs indicate that a Web site or offer might be bogus? Why do you think some people fall for these scams? • Why is it important to research products like cars, TVs and computers before purchasing them? • How do informed financial decisions help people live within their means? Student lesson: Look through the newspaper, and find two advertisements for the same product (e.g., two different brands of computers). Next, imagine that you are going to purchase the product. Write down the features you would look for (e.g., reliability, cost, ease of use, design, etc.), and rank them from most to least important. Then, research both brands, and decide which one you would buy. Explain your decision in writing, and cite your sources. Click on it: Consumer Reports offers some free product information online at www.consumerreports.org. You can also visit your local library for complete issues of the magazine.
  4. 4. Creating a Budget I Learning standard: analyzing economic choices A teen reader wrote in a few years ago to USA WEEKEND asking whether it’s appropriate for him to have control over his money or whether it’s better if, as his mom suggests, the money he earns stays in the bank until he is 21. Who do you think should control your money? Your money management may be greatly improved once you learn how to budget your funds. Calculate your income and figure out how much you spend. Then, look through the newspaper to find smart ways to save some money. Creating a Budget II Learning standard: budgeting, developing consumer skills Explain to students that people who are in their twenties often live on small paychecks. Money expert Suze Orman wrote a new book to give those folks some advice. It’s titled The Money Book for the Young, Fabulous & Broke, and it outlines four critical steps to help them survive and thrive. Find out what it is like to live within a budget. Use the newspaper to “get a life.” First, you need to search the Help Wanted ads to find a job, and learn how much it pays. Then, you should use the Classified section to find a place to live you can afford on the salary from that job. Next, you’ll have to shop the Classified ads to buy furniture for your new home. Will there be any money left each month for food? What about entertainment? You might enjoy another point of view on money management. Check out All Your Worth: The Ultimate Lifetime Money Plan by Elizabeth Warren and Amelia Warren Tyagi. Creating a Budget III Learning standard: research, careers, decision making All workers earn wages. The ability to purchase products or services, such as a home, car, clothes or vacation is determined by the amount of money an individual makes. While this concept may seem obvious, many people spend more than they earn and wind up in debt. Making and following a budget helps workers live according to their means. Questions for discussion: • What careers are you interested in pursuing? What is the average salary for each of these? (Visit salary.com for a quick estimate.) What education is required for each profession? • Why do you think many people have difficulty following a budget? Who or what encourages consumers to spend money? Student lesson: Look through the employment section of the newspaper, and find an ad that lists a salary. Now, imagine that you have landed this job. Next, list the following headings on a piece of paper: Rent, car payment, car insurance, gas/transportation, electricity, phone,
  5. 5. water/sewer, food. Then, using the newspaper and other sources (e.g., your parents), determine how much each of the above services or products would cost you each month. Finally, consider that the government (federal and state) will take approximately 25% of your paycheck for taxes and Social Security. Calculate how much money you will have left each month after paying all of your expenses. Will your disposable income be enough to pay for a cell phone, cable and Internet service? If not, how could you increase your earnings? Click on it: For additional information on budgeting, visit www.goodpayer.com/index.asp. Scroll to the bottom of the page, and select “Learn Now or Pay Later.” Investing Learning standard: role playing, information, summarizing Individuals build wealth when they live by a budget, save a portion of their earnings, make informed investments and pay off debt. Although this action plan seems straightforward, it can be difficult to implement. Questions for discussion: • How is education related to earning potential? • Are workers in low-paying jobs able to save and invest money? • What happens when a person accumulates so much credit-card debt that she or he is unable to pay it off? How does overwhelming debt affect a family’s economic, emotional and physical well-being? • What inexpensive sources can workers consult for investment advice? Student lesson: Newspapers are a rich source of information for those who want to learn more about personal finance. Not only do many papers have columns on money management, consumers can also glean tips from articles about the federal budget and ads touting the benefits of a particular credit card (always read the fine print). Adopt the role of a financial planner, and scour the paper for information that will help you better serve your clients. Find at least two tips on budgeting, saving, investing or debt, and summarize each in writing. Click on it: To learn more about building wealth, go to: www.dallasfed.org/ca/wealth/index.html Opportunity Cost Learning standard: economics, personal finance, decision making Originally, khakis were made to help soldiers blend in with their surroundings. They have also become part of the uniform of boy scouts and laborers. Now, according to an article in USA WEEKEND, khakis are the new fashion statement and can cost as much as $895.
  6. 6. Questions for discussion: • How is the cost of a product determined? • How much would you be willing to spend on a pair of khakis? What factors did you consider when determining this price? • Why are designer clothes so expensive when many of them are constructed out of basic fabrics such as cotton and denim? • In your opinion, is it conscionable to buy expensive clothes and other luxuries when over 1 billion people in the world survive on less than $1 a day? Explain. Student lesson: When a consumer chooses to purchase something, such as a $185 pair of khakis, she or he is giving up other possible opportunities, such as buying other products or services, saving or investing the money, giving it to a charity, etc. The “opportunity cost” of a decision is the value of the best alternative that you are giving up. Look through the paper for three examples of policies or actions that require funds (e.g., the war in Iraq). Explain the opportunity cost of each. Click on it: For additional lessons on opportunity cost, go to: www.econedlink.org/lessons, and choose keyword, “opportunity cost.”

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