Andrew and Jessica have had an epic time at the FBLA National Conference in Chicago. We’ve loved the enthusiasm shown by both the student competitors and their advisors. For those who attended our Tuesday or Wednesday workshop, “How to Invest Like LeBron James,” we promised you the slides, and we’re delivering here. The live polling is closed, but you could set up your own poll for free (like we did), using Poll Everywhere (not an official endorsement — just the service we used).
I have been working on a case study to help students understand credit scores. Let me know what you think about my draft. Contact me at firstname.lastname@example.org if you have any comments or just want the answer key:
A Tale of Two Credit Scores: A Case Study
Staring at the two student files on your desk, you know that you only have a few minutes to review them before your afternoon meetings. Your role as peer financial advisor provides you not only with the opportunity to help others but also has deepened your understanding of so many personal finance topics. Both students have come to you with one simple request: teach me how to increase my credit score. As more financial institutions have freely shared credit scores with their customers, you have seen interest in this topic grow.
Opening the first file for your 2:00pm appointment, you immediately notice that Samantha Snedeker has what is referred to in industry parlance as “a thin file.” As these words suggest, a consumer with a “thin file” has little borrowing history which often makes it difficult for them to receive a credit score…and without a credit score makes it difficult for them to
I often hear my high school students remark “why would anyone ever allow themselves to be in debt?” when they see the costs and consequences of being saddled with debt. Unfortunately, most people don’t plan to be in that situation…life just happens.
I stumbled upon this website, the Debt Project, that I thought would help to put a human face on debt but also help students to understand the life events and decisions that help lead to indebtedness. The Debt Project has portraits and 47 first person stories that are handwritten and describe the amount of debt and the story behind the debt.
So, what’s the activity idea?
A great assignment would be to have students pick out 10-15 of the stories (they are quite brief) and see if they can find any common patterns or events that might explain why people find themselves in a financial hole.
Here’s a six minute audio interview with Adonal Foyle from NPR’s All Things Considered. Here is an excerpt:
I got my master’s in sports psychology, and my thesis was on retirement experiences of NBA players. I went out and spoke to about 10 to 12 different players, and I talked to them about their transition. And one of the things we talked about was: If you were to do it again, what are some of the things that you would do differently? And almost all of them talk about financial literacy and financial education.
One guy said that, you know, “I saw my parents. They didn’t have any money. I grew up poor and then I was given all this money, and then I had no idea what to do with it. And I was so silly I didn’t ask questions because I was afraid that people would think that I wasn’t smart.”
And here’s Antoine Walker (you might recall that he lost $110 million) who has been barnstorming colleges to discuss the painful lessons that he learned with his financial missteps (click to see 2 minute NewsChannel 5 video).
Ask students what lessons they can take from these
A new exciting paper in the forthcoming Journal of Consumer Psychology makes the case that money should buy us happiness, but most people aren’t spending it right. On the edge of psychology and economics, Profs. Daniel Gilbert, Elizabeth Dunn and Timothy Wilson lay out eight principles of spending efficiently, including:
1) Buy more experiences and fewer material objects
2) Buy many small things rather than a few large things
3) Avoid extended warranties and outsized insurance plans
How about asking your students to agree or disagree with the research findings and cite specific examples.
Answer: If you are a customer of a Philadelphia-based bank, you might be able to…
A local bank unveiled ATMs this week that no longer require a debit or ATM card or PINs for access.
The product comes from WSFS Bank, subsidiary of WSFS Financial Corp., the $4.9 billion-asset bank based in Wilmington, Del. WSFS Mobile Cash is a new feature on the bank’s mobile banking app that lets you get cash from any of its branch ATMs with a smart phone QR code.
Here’s how it works. When visiting a branch’s ATM, the customer presses a button that says “Mobile Cash” and a QR code is presented on the ATM’s screen. After signing in with a passcode or touch identification, the customer taps “Mobile Cash” within the app, scans the QR code, selects the desired amount of money and submits it before the cash dispenses.
What about security?
1. Customers don’t have to provide personal information such as a card or PIN number, which is stored in the app or on the smart phone.
2. It can only be used on a smart phone the customer
NGPF was recently featured in MoneyWatch article:
“When my daughter graduated elementary school and got her first phone, I took the chance to dive into the phone bill,” says Tim Ranzetta, founder of NextGenPersonalFinance.org, which offers personal-finance educational materials for high-school and college students.
With his daughter, now age 12, Ranzetta emphasized that data usage drives the total monthly cellphone bill, which is why it is worth using Wi-Fi networks whenever they are available.
The article lists nine everyday situations that are “learning opportunities:” I have listed NGPF activities that can help in the learning process:
- cell phone bills
- credit card bills
- credit reports
- bank accounts
- grocery shopping
- auto policy
- Coming soon!
- dinner-time conversations
This might be a fun classroom experiment to demonstrate behavioral aspects to finance that prove how irrational we can be. From PBS NewsHour:
Let’s play the ultimatum game. Here’s how it works: I give your friend $20. He has to share a portion of his $20 with you and can give you as much as he wants. If you accept the offer, you get that amount, and he keeps the rest. If you turn down his offer, both of you get nothing.
Let’s say he offers you $2. Would you take it?
Economics correspondent Paul Solman sat down with Richard Thaler, who’s been called the inventor of behavioral economics, to learn about the ultimatum game. And in the process, he learned quite a bit about behavioral economics. Economic theory assumes that people make rational, selfish, and mathematical economic decisions. Behavioral economics, however, acknowledges that humans aren’t always rational. Enter the ultimatum game.
Here’s an 8 minute video that you may want to show AFTER playing the game in your classroom (you might reduce the stakes to $5 and bring two students to the front of the class so everyone can see the