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Hard lessons on money made easy for high schoolers

by Broderick Perkins

(2/16/2012) ERATE Exclusive - The U.S. Department of the Treasury and U.S. Department of Education are looking for high school teachers to challenge their students with a comprehensive course in financial capability.

It's real world education in personal finance designed to prepare kids for earning money, saving it, spending it, borrowing it and protecting it from risk.

Last year, the average score in the National Financial Capability Challenge was 69 percent and while that's certainly a passing grade, kids preparing for life after high school need Grade A knowledge about money.

This year the challenge runs from March 12 through April 13, 2012.

"We all make financial decisions everyday. For most of us, though, no one taught us the best way. Students today face a fast-paced, dynamic economy and need a good financial education to succeed. That's why we are excited to announce the "National Financial Capability Challenge," said Paul Richard, president and executive director of the Institute of Consumer Financial Education (ICFE).

Any high school educator, not just math and personal finance teachers, from any high school-level place of learning -- public, private, parochial and home schools, as well as youth group leaders who educate -- are invited to sign up and turn their students on to the challenge.

The challenge is free, voluntary and online, offering a series of financial questions for high school students to use to check their knowledge about the world of money.

A toolkit for teachers created by federal reserve banks, Junior Achievement, the Council for Economic Education, National Endowment for Financial Education and others offers a menu of five or more lessons in each category for a total of 30 different lessons. Teachers can use the toolkit's curriculum to create comprehensive lesson plans and obtain sample questions to prepare students for the test.

Here's some sample curriculum for each category.

Earning - "W is for Wages, W-4 and W-2"

Participants compute the gross pay for a "John Dough," based on his hourly wage and hours worked. They compare gross pay to net pay. They learn the difference between Federal Insurance Contributions Act (FICA) taxes and federal income taxes. They learn how to complete a W-4 form and discover the W-2 form.

Spending - "Gen Revolution - Mission 4"

In this interactive, web-based computer game of missions, students learn the basics of personal finance and investments. In Mission 4, "the O'Neil's" save $300 a month for a down payment on a home. They set financial goals, develop a family budget, identify the categories in which they can reduce spending and identify the best way to put the money they save out of sight.

Saving - "Building Wealth Over The Long Term"

Students study the case of "Charlayne," a woman who accidentally becomes a millionaire. Charlayne's success was unexpected, but not a miracle. It is explained wit three widely understood rules for building wealth over the long term: saving early, buying and holding and diversifying. The lesson uses Charlayne's decisions to illustrate each of these rules and identifies the risks and rewards associated with different forms of saving and investing

Borrowing - "The Car Deal Package"

Kids analyze the price of consumer credit and identify the factors that affect the total price for a car including the interest rate, the length of a contract and the size of a down payment. They learn to evaluate the costs and benefits of car purchase options, and to analyze a car purchase contract.

Protecting Against Risk - "Types of Insurance"

Students examine the basic features of five types of insurance: automobile, health, life, disability, and homeowner's/renter's. Learning is reinforced when students play a game to identify which insurance is necessary to cover different types of risks.

Once kids have worked through the lesson plan they can take a test that takes only 30 minutes to administer online.

Educators and top-scoring students in each school will earn personalized award certificates and states with the highest participation will also be recognized.

Last year 84,372 students and 2,517 educators nationwide participated, 563 kids got perfect scores of 100 percent, 18,192 scored in the top 20 percentile.

Idaho's students were at the top of the heap, scoring an average 80.82 percent, followed by Vermont, 79.88 percent; South Dakota, 76.28 percent; Oregon, 75.60 percent and Maine, 74.14 percent.

Participation was highest in Pennsylvania, where 7,047 kids participated, followed by Virginia, 6,849; New Jersey, 4,717; Florida, 4,298; and Wisconsin, 4,287.

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