Financial Fitness for Life
Training Conference
Becoming a Smart Money Manager
University of Illinois at Urbana-Champaign College of Agricultural, Consumer and Environmental Sciences
United States Department of Agriculture Local Extension Councils Cooperating
University of Illinois Extension provides equal opportunities in programs and employment.
Funding for this workshop
is provided by:
National Council on Economic Education
US Dept of Education
University of Illinois Extension
Instructors

Dr. Angela Lyons, Assistant Professor,
University of Illinois Urbana-Champaign
(217) 244-2612; anglyons@uiuc.edu

Debra Bartman, Extension Educator,
Quad Cities Center
(309) 792-2500 (x217); dbartman@uiuc.edu

Patricia Hildebrand, Extension Educator,
Effingham Extension Center
(217) 347-5126; phildebr@uiuc.edu
Anecdotal Stories
from Real Students
Objectives

Introduce:
(1) Financial Fitness for Life
(2) Saving and Investing
(3) Budgeting
(4) Credit Reports and Credit Scores
(5) NEFE HSFPP

Experience activities to use in the classroom

Answer questions about curriculum and other
resources
You will receive…

Curricula with lessons and activities to use in
the classroom

6 CPDU’s

Network of colleagues to share experiences

Resources available at U of I Extension
Financial Fitness for Life
Overview:

Teacher Guide
 Student Workouts
 Parents’ Guide
 CD-Rom and web links
http://fffl.ncee.net
5 Themes and 22 Lessons:





The Economic Way of Thinking
Earning Income
Saving
Spending and Using Credit
Money Management
Each lesson includes:





Fitness Focus (lesson description and objectives)
Workout (warm-up, exercise, cool down)
Visuals
Student Exercises
Family Activities
Meets national and most state content
standards in 4 critical areas:
Economics
 Language Arts
 Mathematics
 Personal Finance

FFFL Part 1
(Lessons 1, 3, 8, 10, and 14)
How to Really Be a Millionaire
The Millionaire Game
The Rules:

For each statement, answer “TRUE” or “FALSE.”

For each correct answer, give yourself 5 points.

For each incorrect answer, take away 5 points.

For any 5 statements, you may use your
“Millionaire” card. If you answer correctly, you
receive 10 points. If not, you lose 10 points.
Let’s Get Started….
Question 1:
Most millionaires are
college graduates.
Answer 1:
TRUE
Question 2:
Most millionaires work
fewer than 40 hours a
week.
Answer 2:
FALSE
Question 3:
More than half of all
millionaires never
received money from a
trust fund or estate.
Answer 3:
TRUE
Question 4:
More millionaires have
American Express Gold
Cards than Sears
cards.
Answer 4:
FALSE
Question 5:
More millionaires drive
Fords than Cadillacs.
Answer 5:
TRUE
Question 6:
Most millionaires work in
glamorous jobs, such as
sports, entertainment, or
high tech.
Answer 6:
FALSE
Question 7:
Most millionaires work
for big Fortune 500
companies.
Answer 7:
FALSE
Question 8:
Many poor people
become millionaires by
winning the lottery.
Answer 8:
FALSE
Question 9:
College graduates earn
about 65% more than
high school graduates
earn.
Answer 9:
TRUE
Question 10:
If an average 18-year-old high school
graduate spends as much as an average
high school dropout until both are 67
years old, but the high school graduate
invests the difference in his or her
earnings at 8% annual interest, the high
school graduate would have $5,500,000.
Answer 10:
TRUE
Question 11:
Day traders usually
beat the stock market
and many of them
become millionaires.
Answer 11:
FALSE
Question 12:
If you want to be a
millionaire, avoid the
risky stock market.
Answer 12:
FALSE
Question 13:
At age 18, you decide not
to smoke and save $1.50 a
day. You invest this $1.50
a day at 8% annual interest
until you are 67. At age 67,
your savings from not
smoking are almost
$300,000.
Answer 13:
TRUE
Question 14:
If you save $2,000 a year
from age 22 to age 65 at
8% annual interest, your
savings will be over
$700,000 at age 65.
Answer 14:
TRUE
Question 15:
Single people are more
often millionaires than
married people.
Answer 15:
FALSE
Lesson 8: Spending vs. Saving
The road to wealth….
begins with saving,
then investing.
Managing money well
means taking things
one step at a time.
The factors that affect how
much savings grow are:
 Time
The earlier or longer you save,
the more savings you will have.
 Investment Size
The more you save each year from your
income, the more savings you will have.
 Rate of Return
The higher the interest rate or rate of
return, the more savings you will have.
Exercise 8.2
A Tale of Two Savers
Time Value
of Money
The earlier you save,
the more $$’s you
will have.
Cool Million calculator:
www.myfico.com/CreditEducation/
Calculators/Millionaire.aspx
Other Calculators:
Mortgage
Auto
Loan
Debit and Credit Cards
Saving
Personal Finance
Investment
Retirement
Exercise 8.3
Why It Pays to Save Early and Often
Rule of 72:
Or, how long it takes for savings to grow
to double your money
Divide 72 by the interest rate.
Example:
72  6%  12 years
Activity (Exercise 10.1):
Investment Bingo
Free
Lunch
FFFL Lessons
Grades 9-12:
Lesson 1, How to Really Be a Millionaire
Lesson 3, Decision Making
Lesson 8, What’s the Cost of Spending and Saving?
Lesson 10, Investment Bingo
Lesson 14, All About Interest
Grades 6-8:
Lesson 7, p. 61-64, Types of Savings
Lesson 8, p. 65-81, Simple and Compound Interest
FFFL Part 2
(Lesson 20)
Budgets are Beautiful!
Creating a Spending Plan
(“Your Financial Plan”)

Identify your financial goals.

Determine the time frame for your budget: annual, by
academic term, monthly.

Take stock of where you’re currently at.

Estimate your available financial resources.

Calculate your expenses.

Do the math.

Subtract expenses from resources.

Decide how much to borrow.

Borrow only what you can afford to pay back.

Note that your loans will be repaid with your
FUTURE income.
Set Your Financial Goals

Types of goals



Short-term (1 year or less)
Medium term (1-5 years)
Long-term (5 years or more)

Identify goals and write them down.

Prioritize your goals.

Develop strategies to achieve your goals.

Reassess your goals periodically.
ACTIVITY: Financial Goal Worksheets
Identify and Prioritize Your Goals

What do you want to buy after you graduate?

How soon do you hope to pay off any student loan or other
education-related debt you have incurred?

What kind of lifestyle do you want?

Where do you want to live?

What are your hopes for a family?

Where do you want to work?

Where do you want to retire?

What kind of lifestyle do you want in retirement?
When creating a spending plan….

Set limits and prioritize.

Know your limits.

Learn by doing!

Get some practical experience.
When estimating your resources….
REMEMBER:
Borrowed funds are NOT your resources!!!
When calculating expenses….

Be honest and realistic.

Distinguish between “needs” and “wants.”

Consider fixed and variable (flexible)
expenses.

Pay yourself first (PYF)
Can you cut expenses?

Find one or more roommates to share living expenses.

Eat at cheaper places when dining out; cook at home.

Have only one phone.

Dress for less.

Clip and use coupons.

Don’t buy a new car.

Beware of buying for convenience.

Avoid credit card debt.
Saving Dollars When
You Don’t Have a Dime to Spare
Item
How Often
Eating Out
5 days/week
Magazine
Price of Each
Savings/Year
$ 6.50
$ 1690.00
1/week
4.00
208.00
Soft drink/candy bar/chips
1/day
1.00
365.00
Tank of gas
1/week
24.00
1248.00
Lottery ticket
2/week
2.00
208.00
Cigarettes
1 pack/day
4.00
1460.00
Alcoholic Beverage
1/day
2.00
730.00
Cable
1/month
45.00
540.00
Phone extras (call waiting, caller ID, voice mail, etc.)
1/month
11.00
132.00
Gifts (charity/family/friends)
2/month
20.00
480.00
Total
Break a habit! Do without! Don’t buy!
$7061.00
Budgeting Really Does Work
A successful budget should:


Help increase savings
Inhibit impulsive spending
Determine what you can afford
Identify expenses that can be reduced

Repay debt


EVIDENCE: BYU Financial Path to Graduation
It’s not all about finances….
Emotions and decision making
 Family communication
 Purpose and value of money
 Financial habits and financial
socialization

Methods for Tracking Spending

Personal financial software programs
(Quicken or Microsoft Money have built-in budgetmaking tools that can create your budget for you.)

PowerPay (Utah State University)

Worksheets / spreadsheets

Online budget planning calculators

Envelope method
www.powerpay.org
PowerPay
Spending Plan
PowerSave
Calculators
Education Center
Basic Spending Plan
Extended Spending Plan
PowerSave
Calculators
Education Center
Access Group, Inc.
http://www.accessgroup.org/Student-Loans/learn-about-loans/wise-borrower-tutorial.htm
Calculators
Interest Rate Comparison Calculator
In-School Budget Calculator
Loan Repayment Calculator
Out-of-School Budget Calculator
Money 101: Making a Budget
http://cgi.money.cnn.com/tools/instantbudget/instantbudget_101.jsp
www.finaid.org/calculators
College Cost Projector
Savings Plan Designer
Expected Family Contribution and Financial Aid Calculator
Loan Calculators
Budgeting Calculators
FFFL Lessons
Grades 9-12:
Lesson 20, p. 98-101, Managing Your Money
Grades 6-8:
Lesson 15, p. 128-134, Managing Cash
An Activity
The Bean Game!
A simulation game where
you learn how to prioritize
and make spending choices
based on what’s important
to you.
Iowa State University Extension
http://www.extension.iastate.edu/finances/personal/childrenmoney/Youth.htm
Spending Game
Allowance Game
http://www.extension.iastate.edu/Publications/PM1103.pdf
http://www.extension.iastate.edu/Publications/PM1776.pdf
FFFL Part 3
(Lessons 11, 12, 13)
Credit Reports and Credit Scores
How credit can affect your everyday life…

Getting a job

Renting an apartment

Getting a loan

Buying a car

Paying insurance

Getting married!!!
Take the Credit Challenge!
Myths and Realities of Credit
The Rules:

For each statement, answer “TRUE” or “FALSE.”

For each correct answer, give yourself 5 points.

For each incorrect answer, take away 5 points.

For any 5 statements, you may use your
“CREDIT” card. If you answer correctly, you
receive 10 points. If not, you lose 10 points.
Let’s Get Started….
Question 1:
Credit card companies
only approve credit
limits that an individual
is able to afford.
Answer 1:
FALSE
Question 2:
After you take out a loan, a
lender is not required to
provide information to
credit reporting agencies
about the loan and your
history of paying it back.
Answer 2:
TRUE
Question 3:
Approximately 10% of
an individual’s credit
score is determined by
their payment history.
Answer 3:
FALSE
Question 4:
Individuals are eligible
to receive a free credit
report once a year from
each of the three credit
reporting agencies.
Answer 4:
TRUE
Question 5:
Credit reports contain
information on where
an individual has lived,
past employers, and
annual income.
Answer 5:
FALSE
Question 6:
A potential employer is
permitted to see an
individual’s credit report
without his/her consent.
Answer 6:
FALSE
Question 7:
Requesting a copy of
your own credit report
can negatively affect
your credit score.
Answer 7:
FALSE
Question 8:
Negative information,
such as filing for
bankruptcy, can remain
on a credit report for up
to 10 years.
Answer 8:
TRUE
Question 9:
By law, if an individual
is unable to resolve a
disputed item with a
credit reporting agency,
they have the right to
delete the information
from their credit report.
Answer 9:
FALSE
Question 10:
If an individual resolves an
error on their credit report
with one credit reporting
agency, the same error
will automatically be
corrected by the other
credit reporting agencies.
Answer 10:
FALSE
What is a credit report?
 An evaluation of your credit experience.
 Similar to a report card.
 Your credit record includes:
• Personal information
• Open lines of credit
• Payment history
• Inquiries
• Public record and collection items
(bankruptcies, foreclosures, financial
judgements)
What info is not in your credit report?

Race

Religion

Medical history

Political affiliation

Criminal records

Annual income

Checking or savings accounts
Who has access to your credit report?

Creditors

Employers

Insurance companies

Certain professional organizations

Courts

IRS

Collection agencies (i.e., CCCS)
What is a credit score?

A number that summarizes your level of
creditworthiness.

Your score depends on the credit scoring model used.

FICO scores are the most common.

Scores range from 300-850.

Averages are between 690 and 740.
Visit www.myfico.com for more information.
FICO Score Ranges

20% are above 780

20% are between 740-780

20% are between 690-740

20% are between 620-690

20% are below 619
FICO Credit Score Estimator:
www.myfico.com/ficocreditscoreestimator

Your credit score is used to set the “price” of your loan.

Based on:
FICO Score Simulator:
Pay Bills on Time
Pay Down Balances on Credit Cards
Pay Down Delinquent Balances First
Seek New Credit
Transfer Credit Card Balances
Miss Payments
Max Out Credit Cards
Other Calculators:
Mortgage
Auto
Loan
Debit and Credit Cards
Saving
Personal Finance
Investment
Retirement
Understanding Your Credit Score
www.myfico.com
Checking Your Credit Report
3 major credit bureaus:
Equifax (Beacon score)
(www.equifax.com, 1-800-685-1111)
Experian (PLUS score)
(www.experian.com, 1-888-397-3742)
TransUnion (Empirica score)
(www.transunion.com, 1-800-888-4213)
Obtaining a *FREE* Credit Report
www.annualcreditreport.com
Annual Credit Report
Frequently Asked Questions
Contact Us
About Us
Fraud Alert
An Activity
Reading a Credit Report
Sample Credit Report:
http://experian.com/credit_report_basics/pdf/
samplecreditreport1.pdf
FFFL: Evaluating Credit Reports
Grades 9-12:
Ex. 13.1, p. 76
Ex. 13.2, p. 79
Illustration 13.1, p. 80-83
Grades 6-8:
Lesson 13, p. 115-118
Ex. 13.1A - 13.1E, p. 123-131
FFFL: Evaluating Credit Applications
Grades 9-12:
Ex. 13.3, p. 84-85
Ex. 12.1, p. 74-75
Grades 6-8:
Lesson 13, p. 115-118
Ex. 13.1A - 13.1E, p. 123-131
Helpful Resources
University of Illinois Extension
Consumer and Family Economics
www.ace.uiuc.edu/cfe
National Council on Economic Education
www.ncee.net
Illinois Council on Economic Education
www.econed-il.org
University of Illinois Extension
Consumer and Family Economics
www.ace.uiuc.edu/cfe
NCEE
www.ncee.net
Contact Information

Dr. Angela Lyons, Assistant Professor,
University of Illinois Urbana-Champaign
(217) 244-2612; anglyons@uiuc.edu

Debra Bartman, Extension Educator,
Quad Cities Center
(309) 792-2500 (x217); dbartman@uiuc.edu

Patricia Hildebrand, Extension Educator,
Effingham Extension Center
(217) 347-5126; phildebr@uiuc.edu
Questions