Required Readings from Foundations of Financial Literacy
You may want to print this document and keep it handy to make finding the
readings easier. The chapter or chapters you will need will be embedded in
each module. Please view the short video in Module One to see how to
navigate quickly in the textbook.
You may also use the linked table of contents below to navigate quickly to
your module’s assigned reading.
Module 1: Budgeting & Taxes
Module 2: Banking, Savings & Investing
Module 3: Credit
Module 4: Health & Life Insurance
Module 5: Transportation and Housing/Insurance
Module 1: Budgeting & Taxes
● Budgets: pp. 34-42
Financial planning is extremely important in helping avoid financial problems. Establishing
your financial goals, estimating your net worth, estimating your expenses (both fixed and
variable/flexible), paying yourself first (savings), along with analyzing current income and
spending are all done prior to preparing a budget. Time to time you need to review and
make changes to your budget as events change in your life.
● Filing Taxes: pp. 64-79
Explains the tax filing process
● Government: pp. 82-86
Tax revenue is required to run our government.
● Types of Taxes: pp. 86-88
The different types of taxes that are collected by the government.
● Federal Tax Code: p. 88
The federal tax code changes periodically. Three main issues considered when proposing
new tax proposals and policies.
● Social Security: pp. 89-90
This tax pays for benefits others receive. You are also entitled for these benefits once you
retire, become disabled, or die, but these benefits are paid for by current workers.
Module 2: Banking, Savings & Investing
● Banking Products and Services: pp. 105-106
Consumers look for checking, savings, investment, online, and credit services when trying
to choose a financial institution.These are considered banking products. Our economy
would not survive without the ability to borrow money.
● Banking Services: pp. 106-108
These are additional services provided by financial institutions.
● Electronic Banking Options: pp. 108-110
Alternative ways to carry out traditional banking activities.
● Personal Checking Accounts: pp. 113-123
This is usually the first financial service consumers get. This section will provide you with
the purpose, different types, endorsing and writing checks, and maintaining a checking
account. This along will help with the banking concepts assignment.
● Creating a Savings Plans: pp. 130-138
The purpose of saving and having an emergency plan. What are the different savings
products available?
● Reference Chart: Summary of Savings Choices: pp. 136-138
● Earning Interest: pp. 140-143
Learn how you can be paid to save. You will learn the difference between simple and
compound interest and see how your money can grow in a future values table by
reviewing Figure 5-4 on page 142 and Figure 5-5 on page 143.
● Types of Investments: p. 157
This section discusses the most popular types of investments:securities - stocks, bonds,
mutual funds, real estate and valuable goods (gold, silver, gems, antiques, art, rare items)
in the reading key topics/information to focus in are:
● Stocks: pp. 157-162
● Securities: p. 162
● Stock Quotes: pp. 162-164
● Bonds: pp. 164-167
● Mutual Funds: pp. 167-170
● Learn what NAV stands for and review chart, Figure 6-5: pg. 169
● Stock Market Fluctuations: p. 176
Learn the difference between a bull market and bear market.
● Types of Retirement Plans: pp. 188-194
Learn about the different ways you can earn income after you retire because Social
Security was not intended to be your sole source of income.
Module 3 Credit
● Consumer Credit: pp. 214-216
In a cash transaction, if cash is not used a consumer is using credit. Credit is a buy now,
pay later concept. Read this section to see if there are any risks associated with having
credit.
● Types of Credit: pp. 216-219
Explains closed-end and open-end credit along with finance charge and principal. Learn
what the difference is between a secured and unsecured loan, along with the
responsibility one takes by being a cosigner for a loan.
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Learn about the two parts of the finance charge: interest and fees. Be sure to review the
figure in the reading (Figure 8-2)
Creditworthiness (Three C’s of Credit): pp. 219-220
Learn how being creditworthy starts with the three C's. Learn how you can establish
credit to build your financial reputation.
Credit Bureaus, Credit Report, & Credit Scores: pp. 220-225
Find out what is listed on a credit report and how a credit score is determined. Be sure to
refer to each of the three figures in this section. (Figures 8-3, 8-4, 8-5, 8-6, and 8-7)
Cost of Credit: pp. 226-228
After reading about the advantages of credit make sure you also know the cost of
credit. Borrowing money from financial institutions or making credit purchases usually
results in paying finance charges. Learn about the two types of interest charged to the
credit card user.
Easy-Access Credit Traps: p. 229
Learn how easy-access credit differs from legitimate sources of credit. Have you heard of
a loan shark, seen a payday loan store, watched Pawn Stars? If not, you will learn what
these are and what they do for consumers. Currently there is no limit to the amount of
interest that can be charged.
Credit Cards: pp. 230-231
Many consumers have at least one credit card. Learn about the different types of credit
cards and credit accounts.
Disclosures: pp. 231-233
Did you know that by law all credit offers must include specific disclosures and credit
terms prior to you applying for one? Reading this section you will learn what these are
and you will see the "Schumer Box"* which is the universal format used by all credit card
issuers. This is shown in Figure 8-8 on page 232.
*"The Schumer Box (Links to an external site.) is an easy-to-read table or “box” that
discloses the rates, fees, terms and conditions of a credit card agreement as required
under the Federal Truth in Lending Act (TILA)."
● Managing Credit: pp. 240-242
Learn about the advantages of using credit.
● Credit Problems: pp 244-247
This reading discusses how credit can lead to major financial problems. This includes:
collection agencies, repossession of property, liens, garnishment of wages, bankruptcy
and what a credit counseling service is and what they can do for you.
● Consumer Protection: Consumer Credit Laws: pp. 249-252
Learn about the six (6) different federal laws passed to protect consumers who use credit.
Later in this module you will be completing an assignment on the Truth in Lending Act
(TILA). Refer to Figure 9-4 on page 250 for all of the credit laws, the year passed, and the
description of each.
● Credit Fraud: pp. 254-255
Most people refer to this as identity theft, but this is only one form of credit fraud. Learn
about another one. Make sure to read through Figure 9-5 on page 255 for tips to protect
yourself.
Module 4: Health & Life Insurance
● Insurance Protection: pp. 371-372
Learn the purpose of insurance and why one should look at his/her risks. This also
includes the decision-making process when evaluating risk and then buying insurance.
● Health Insurance: pp. 392-402
Learn about the different types of coverages and plans available. Learn what to look for
when shopping around for private insurance programs from services, choice, and cost.
● Medicare: p. 399
Learn whom Medicare covers and the four plans available.
● Medicaid: p. 400
Learn who qualifies for Medicaid, the Children's Health Insurance Program (CHIP) and
what is covered.
● Life Insurance: pp. 405-409
Learn the purpose for having life insurance. For the scope of this class knowing the
difference between Term Life and Whole Life is important.
Module 5: Transportation and Housing/Insurance
● Automobile Marketplace: pp. 344-345
There are many things to think about before buying a car. Why do you want a car and
how will you use the car? Where and how will you purchase this vehicle? This section will
help provide you with a prioritized list for evaluating your needs.
● Shopping for a Pre-Owned Car: pp. 345-346
Used cars can be a great bargain. If you are thinking about buying a pre-owned car this
section should be read.
● Consumer Protection for Car Buyers: pp. 346-349
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There are specific laws in place to make sure that car dealers do not use deceptive and/or
misleading practices when selling a vehicle. Learn what these are and what rights you
have as a consumer.
Financing a Car: pp. 358-360
Majority of new and used cars are financed. The difference sources of financing are
covered including the cost of financing. The Cost of Financing section is extremely
important to understand. Make sure you understand this section, if not please talk to
your teacher for further clarification.
Leasing: pp. 360-361
Did you know that over 50% of consumers choose to lease their vehicle? Learn how a
leasing agreement works, the leasing terminology, along with the actual terms of a lease
and what they would mean to you if you decide to lease a vehicle.
Auto Insurance: pp. 380 - 383
Automobile insurance is insurance that covers the owner of car against car damages and
liability costs related to an at-fault car accident.
Housing and Your First Apartment: pp. 310-314
Learn what a reasonable monthly housing expense should be in your budget. At this point
in your life you will be renting not buying. There are advantages and disadvantages to
both renting and buying. This section will cover this for you.
Rental Process and Application for Renting: pp. 314-319
Because you will be renting first there are many things to consider. Will you have a
roommate or roommates? Where and how do you start looking for an apartment? Both
of these are covered in this section. After reading this section you may change your view
on roommates.
An application is usually required when you decide on a place to rent. What do the terms
mean, what should you look for and what do you want to make sure is listed on the lease
prior to signing. Can you have a pet? Can you paint/decorate? What rights and
responsibilities do you have as a renter? These are several questions that you will want to
ask. There is also a sample lease agreement shown on page 316 (Figure 12-1) for you to
look through.
● Home/Renter’s Insurance: pp. 375-379
This coverage protects either a homeowner’s or renter's property, in addition to liability
protection.