Teacher guide · Unit 3 of 13
Budgeting & Personal Finance
Plans for spending on what you actually care about, plus the buffer that keeps a bad day from becoming a crisis.
- Lessons
- 7
- Reading
- 54 minutes
- Unit quiz
- 5 questions
- Class time
- 2 periods
Class time is a guide: 45-minute periods, with the lessons, the unit quiz and a discussion. Students can read lessons at home and take the quiz in class, or the other way round.
Before you teach it: Lesson 3.6 covers giving across faiths and cultures, and Lesson 3.7 touches on illness and death. Both are written plainly and gently; give students room to sit out a personal discussion.
By the end of the unit, students can
- compare the 50/30/20, zero-based and envelope budgets, and choose one they would actually keep
- size an emergency fund, decide where to keep it, and say what counts as an emergency
- read a pay stub, and explain why a raise can’t lower take-home pay through tax brackets
- explain premiums and deductibles, and the main kinds of insurance a young adult needs
- compare the two main ways to pay down debt, and use a debt-to-income ratio
- research a charity before giving, and explain what a will, a power of attorney and a health care proxy do
The lessons
Each ends with a one-question check, and students who pass the unit quiz can go on to three optional stages of harder lessons, for bronze, silver and gold medals.
- 3.1Budgeting systems7 min
There is no correct system. There is the one you will still be doing in three months.
- 3.2Emergency funds7 min
It is not an investment. It is insurance you pay yourself.
- 3.3Taxes8 min
A raise cannot lower your take-home pay through brackets. It is mathematically impossible.
- 3.4Insurance8 min
Insurance is a bet you make hoping to lose.
- 3.5Debt management8 min
The dividing line is not the loan type, it is the rate versus what the money does for you.
- 3.6Giving well8 min
Generosity is easy. Making it count takes ten minutes of homework.
- 3.7The documents that speak for you8 min
Four papers decide who handles your money and your care when you can’t.
New Jersey Standard 9.1
The grade 12 expectations this unit teaches, quoted from the state’s standard. See the full alignment for every unit.
- 9.1.12.PB.1Covered
Explain the difference between saving and investing.
In this unit: Emergency funds
- 9.1.12.PB.3Covered
Design a personal budget that will help you reach your long-term and short-term financial goals.
In this unit: Budgeting systems, Sinking funds and irregular expenses (Bronze stage)
- 9.1.12.PB.4Partly covered
Explain how you would revise your budget to accommodate changing circumstances.
In this unit: Budgeting systems, Emergency funds
- 9.1.12.PB.5Covered
Analyze how changes in taxes, inflation, and personal circumstances can affect a personal budget.
In this unit: Taxes
- 9.1.12.CDM.1Covered
Identify the purposes, advantages, and disadvantages of debt.
In this unit: Debt management
- 9.1.12.CDM.3Covered
Determine ways to leverage debt beneficially.
In this unit: Debt management
- 9.1.12.CDM.5Covered
Identify the types of characteristics of predatory lending practices and the importance of collateral (e.g., payday loans, car title loans, high-risk mortgages).
In this unit: Debt management
- 9.1.12.CDM.6Covered
Compute and assess the accumulating effect of interest paid over time when using a variety of sources of credit (e.g., student loans, credit cards, auto loans, mortgages, etc.).
In this unit: The real cost of a longer loan (Silver stage)
- 9.1.12.CDM.10Partly covered
Determine when credit counselling is necessary and evaluate the resources available to assist consumers who wish to use it.
In this unit: Debt management
Names nonprofit credit counseling; does not go deeper.
- 9.1.12.EG.1Covered
Review the tax rates on different sources of income and on different types of products and services purchased.
In this unit: Taxes, How investment gains get taxed (Gold stage)
- 9.1.12.EG.2Covered
Explain why various forms of income are taxed differently.
In this unit: How investment gains get taxed (Gold stage), Roth vs. traditional, with math (Silver stage)
- 9.1.12.FI.3Covered
Develop a plan that uses the services of various financial institutions to prepare for long term personal and family goals (e.g., college, retirement).
In this unit: The Roth IRA, for anyone with a job (Bronze stage), The employer match and pre-tax pay (Bronze stage)
- 9.1.12.FI.4Partly covered
Research benefits and drawbacks of products offered by financial and non-financial companies (e.g., banks, credit unions, check-cashing stores, product warranty insurance).
In this unit: Insurance
Check-cashing stores are not covered.
- 9.1.12.FP.1Partly covered
Create a clear long-term financial plan to ensure its alignment with your values.
In this unit: Budgeting systems, The savings rate decides the finish line (Gold stage)
Ownly’s 13-week plan on the student’s Profile is built from their own numbers.
- 9.1.12.RM.1Partly covered
Describe the importance of various sources of income in retirement, including Social Security, employer-sponsored retirement savings plans, and personal investments.
In this unit: The employer match and pre-tax pay (Bronze stage), The Roth IRA, for anyone with a job (Bronze stage), The savings rate decides the finish line (Gold stage)
Social Security as retirement income is not covered.
- 9.1.12.RM.2Covered
Identify types of investments appropriate for different objectives such as liquidity, income, and growth.
In this unit: Emergency funds
- 9.1.12.RM.3Partly covered
Compare the cost of various types of insurance (e.g., life, homeowners, motor vehicle) for the same product or service, strategies to lower costs, and the process for filing an insurance claim.
In this unit: Insurance, Choosing a deductible with numbers (Silver stage)
Filing a claim is not covered.
- 9.1.12.RM.5Covered
Explain what self-insuring is and determine when it is appropriate.
In this unit: Insurance, Emergency funds
- 9.1.12.RM.6Partly covered
Differentiate the costs, benefits and features (e.g., riders, deductibles, umbrella policies) of renter’s and homeowner’s insurance.
In this unit: Insurance, Choosing a deductible with numbers (Silver stage)
Riders and umbrella policies are not covered.
- 9.1.12.RM.7Covered
Evaluate individual and family needs for insurance protection using opportunity-cost analysis to determine if the amount of protection is adequate or over-insured.
In this unit: Insurance, Choosing a deductible with numbers (Silver stage)
- 9.1.12.CFR.1Covered
Compare and contrast the role of philanthropy, volunteer service, and charities in community development and quality of life in a variety of cultures.
In this unit: Giving well
- 9.1.12.CFR.2Covered
Summarize causes important to you and compare organizations you seek to support to other organizations with similar missions.
In this unit: Giving well
- 9.1.12.CFR.5Covered
Summarize the purpose and importance of estate planning documents (e.g., will, durable power of attorney, living will, health care proxy, etc.).
In this unit: The documents that speak for you
Questions for discussion
- Someone says, “I turned down a raise because it would put me in a higher tax bracket.” What would you tell them actually happens?
- Your car needs a $600 repair in the same week tickets go on sale for a show you’ve waited a year to see. Which one is an emergency, and where should the money for each come from?
- Why might an 18-year-old with almost nothing to leave anyone still want a health care proxy and a power of attorney?