Personal Finance – Knowledge, Understanding
and Skill Development
FEET Center
Financial Wisdom Game®
Presented by
David L. McConico, CFP®
FWG®
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What: A Team Competition, a financial planning game,
with financial incentives awarded to the teams who build
the highest positive account value.
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Why: To educate youth for more informed financial
decisions
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Financial Wisdom Game Philosophy is 3tt = FUNt
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Event Based: Personal Finance Game Identifying Concepts,
Words, Terms, Exhibits and Diagrams.
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Introduced in 2011: Education through Engagement
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Event Play: Playing time 60 - 90 minutes.
Time Frame:
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Six Rounds - 5 minutes
Two halves- 30 minutes
Break Between halves - 5 minutes
End of Half and Final Question with Investment
opportunity - 3 minutes each
Teams:
 4 Teams – four to six members
 Must be member of Finance Club to play
 All members must play in event competition
Rules
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Eligible member of Finance Club
Team Name
Team order determined by coin toss
There are six rounds of four questions (for player)
and there is one question (for team) at the end of
rounds three and six.
Value of Questions per round:
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Round
Round
Round
Round
Round
Round
1
2
3
4
5
6
-
100 points
200 points
300* points
400 points
500 points
600* points
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*Point values can be double in rounds three
and six (Must be indicated by player on
wisdom seat before the question is asked).
Point values are half if player seeks wisdom
while on the wisdom seat.
Team can indicate value invested (up to
current account value) for questions at the
end of rounds 3 and 6.
Player
 Player order must be determined by team before game starts.
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Player on the wisdom seat has 30 seconds to respond with
answer, seek wisdom, or pass. If player does not provide
indicated respond within 30 seconds point value is subtracted
from account value. Only player on the wisdom seat can ask for
the question to be repeated or asked differently (10 seconds is
added to the response time). Facilitator has discretion as to
whether question can be asked beyond twice.
No player can be on the wisdom seat for more than two
opportunities to answer questions (except in seeking wisdom
situation) during the six rounds of competition. Player has
unlimited opportunity to respond in seek wisdom option.
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If the player answers, team is awarded full point value to account
if correct and subtracted if incorrect.
If player seeks wisdom, player must select from team member to
answer within initial 30 second time frame. If selected team
member answers team is awarded half point value to account if
correct and subtracted if incorrect. Player on the wisdom seat
still has option to answer after seeking wisdom, within the 30
second time limit (half point value).
If player passes, other teams in order of turn (and player) have
the option to answer question that was passed. Teams point
value is not affected if player passes. The next player on the
next ordered team has 15 seconds to answer, seek wisdom or
pass. Team is awarded full or half point value if correct and
subtracted if incorrect.
Team Question
 Teams will answer questions at half end (Round 3) and game end
(Round 6) with the possibility to increase point value.
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Team must indicate desire to respond to question. Then team
must indicate the amount of points they are investing in their
response. The response to the question must be in writing and it
must be provided within 3 minutes after the question is asked.
Points invested in response will be added or subtracted from
account value if written response is correct or incorrect.
Team question:
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Ask Question
Respond (Y/N)
Determine Investment
Provide timely written response
Financial Incentives:
 Financial Incentives are awarded to the teams
with positive account point values at game end,
allocated proportionally relative to total point
value of teams with positive account values.
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Total Incentives available: $$$$$$
“Financial Wisdom is obtained in the Finance Club
through attendance, financial education and
asset development activities.”
Round One
100 Points
Round One – 100 Points
The Process of setting spending priorities,
defining goals and developing a plan to
achieve them, and then putting the plan into
action.
The long-term process of wisely managing
your finances so you can achieve your goals
and dreams, while at the same time
negotiating the financial barriers that
inevitably arise in every stage of life.
Financial Planning
Things we must have to survive; for example,
food, clothing, water, shelter.
Needs
Things that make life more interesting and
fun but that people can live without if they
have to.
Wants
The beliefs, qualities, or standards that you
consider important or desirable.
Values
A statement of something a person
wants or needs to do.
Goal
A goal to be achieved within the next three
months.
Short-Term Goal
A goal that is set for three months to a year.
Intermediate-Term Goal
A goal that will take more than a year to
achieve.
Long-Term Goal
The willingness to give up something you
want now in order to get something better in
the future.
Delayed Gratification
Movement of the money you receive and the
money you spend.
Cash Flow
The value of what is given up when you
choose one option over another.
Opportunity Cost
Smaller Decisions that can result from a
major decision.
Satellite Decisions
SMART Goal.
What does SMART
stand for?
Specific
Measurable
Attainable
Realistic
Time-bound
Five Step to financial Planning.
1. Set Smart Goals
2. Analyze Information
3. Create A Plan
4. Implement The Plan
5. Monitor and Modify The Plan
1. Identify your goal
2. Establish your criteria
3. Examine your options
4. Weighs the pros and cons
5. Make your decision
6. Evaluate results
Making Decisions
Financial Planning requires making many
decisions, and making decisions about money
can be particularly challenging because so
many things come into play. For one the
facts of the situation and many other things—
your mood, values, culture, habits, and
opinions of your friends and parents.
Step 1 Identify the problem or issue.
Step 2: Gather and evaluate information.
Step 3: Consider the costs and benefits of various
alternatives.
Step 4: Make a decision and take action.
Step 5: Modify the decision and action as
conditions change.
Decision-Making
Process
A branch of psychology concerned with mental
processes (perception, thinking, learning, and
memory) that are connected to sensory
stimulation and the overt expression of
behavior.
Cognitive Behavioral Therapy
A spending plan. A record of projected and
actual income and expenses over a period .
Budget
An assertion, claim or expectation about reality
that is false. Unbalanced and based solely on
our judgments and opinion.
Irrational Belief
An assertion, claim or expectation about reality
that is accurate and true.
Rational Belief
Step 1: Create financial goals
Step 2: Create a current income and expense record
Step 3: Create an insurance plan
Step 4: Create a savings and investing plan
Step 5: Create a budget
5-steps involved in creating
your financial plan
Theory that an increasing consumption of
goods is economically beneficial.
Consumerism
The cost of goods and services, including those
that are fixed (such as rent, and auto loan
payments) and those that are variable (such
as food, clothing, and entertainment).
Expenses
Money earned from investments and
employment.
A risk management tool that protects an
individual from specific financial losses under
specific terms and premium payments, as
described in a written policy document.
Major types include: Auto, Health,
Homeowner, Life.
Insurance
The act of purchasing securities such as
stocks, bonds, and mutual funds with the
goal of increasing wealth over time, but with
the risk of loss.
Investing
A measure of the likelihood of loss or the
uncertainty of an investment’s rate of return.
Risk
The process of calculating risk and developing
methods to minimize or manage loss, for
example, by buying insurance or diversifying
investments.
Risk Management
The process of setting income aside for future
spending. Saving provides ready cash for
emergencies and short-term goals, and funds
for investing.
Saving
When people compare their personal attributes
and abilities with those of others who are
deemed to be socially better off.
Social Comparison
Round Two – 200 points
A reciprocal relation between two or more
things.
Correlation
Earnings from corporate stock or credit union
share accounts.
Dividends
Earnings from employment, including
commissions and tips.
Earned Income
Wages or salary before deductions for taxes
and other purposes.
Gross Pay
The amount of income after all deductions and
taxes are paid. Often known as “take-home
pay”
Net Pay
Earnings from sources other than employment,
including investment returns and royalties.
Unearned Income
A form of insurance that provides
compensation medical care for employees
who are injured in the course of employment.
Workers Compensation
Insurance
The pleasurable emotional reaction of
happiness in response to a fulfillment of a
desire or the fulfillment of a goal.
Gratification
1.
A source of supply, support, or aid,
especially one that can be readily drawn
upon when needed.
2.
Available source of money; a new or
reserve supply that can be drawn upon
when needed.
Resources
Insufficient to meet a demand or requirement;
in short supply.
Scarce
Another name for a budget.
Spending Plan
Translation of a consumer product price into
the cost per standard size or weight.
Unit price helps the consumer to make
price/value comparisons between brands.
Unit prices are usually displayed on
supermarket shelf tags along with the
package price.
Unit Price
The four most common tax deductions on a
pay stub.
1. Federal Income tax
2. State Income tax
3. Medicare tax
4. Social Security tax
A tax that a person who owns a business
typically also pay.
Self-Employment Tax
The federal government calculates your tax
deductions from the information on this form
you fill out when you start your job.
Form W- 4
5 Methods available for making sure you stay
on track with your budget.
1.
Envelope System
2.
Tally System
3.
Track with Checking Account Register
4.
Budget Spreadsheet
5.
Personal Finance Software
Round Three – 300 Points
The idea that money today is worth more than
the same amount of money in the future due
to its potential earning capacity.
Refers to the relationship among time, money
and rate of interest.
Time Value of Money
A rise in the cost of goods and services.
An overall rise in the price of goods and
services; the opposite of the less common
deflation.
Inflation
The payment your receive for allowing a
financial institution or corporation to use
your money.
Earned Income
The idea of earning interest on interest.
Interest credited daily, monthly, quarterly,
semi-annually, or annually on both principal
and previously credited interest.
One of the most powerful principles in
personal finance.
Compounding
or
Compound Interest
You earn $200 in financial incentives from the
finance club and want to start saving for your
own car, if you put you money in an account
that earns six percent interest per year, how
long will it take to grow to $400.
72 ÷ 6 % = 12 Years
Rule of 72 says that you can see how long it will take
you to double your money simply by dividing 72 by
the interest rate.
72 ÷ 4 years = 18%
The Rule of 72 can also tell you the interest rate you
need to earn to double your money in a certain
amount of time.
The place where stocks are bought and sold.
Stock Market
The difference between the purchase price and
the selling price when an investor buys a
stock and sells it later at higher price.
Capital Gain
The difference between the purchase price and
the selling price when the investor sells a
stock at a lower price than the purchase
price.
Capital Loss
The amount of earned on an investment,
expressed as a percentage of the total
investment.
The percentage of gain or loss on an
investment over a period of time.
Return
or
Rate of Return
The amount of the likelihood of loss or the
uncertainty of an investment’s rate of return.
The probability that injury, damage, or loss will
occur.
Risk
The degree of uncertainty an investor can
handle in regard to a negative change in the
value of his or her portfolio.
Risk Tolerance
Generally, people chose to invest for one of
two reasons: Income or Growth
Income means they get paid –in cash- for
owning the account or investment.
Growth means they buy and hold an
investment with the hope that it will increase
in price, over time.
Income Investments:
Savings account
Bonds (U.S. Savings, Corporate, and Government),
Certificates of Deposits
Money Market Deposit Accounts
Money Market Mutual Funds.
Growth Investments:
Stocks
Real Estate
Mutual Funds
Collectibles.
A strategy for reducing investment risk by
selecting a wide variety of investments.
(putting money in several different types of
investments).
By spreading your money around, you’re
reducing the impact that a drop in any one
investment value can have on your overall
investment portfolio.
Diversification
The practice of investing a fixed amount in the
same investment at regular intervals,
regardless of what the market is doing.
It another key investment principle to know
because it eliminates having to worry about
investing at the “right” or “wrong” time.
Dollar Cost Averaging
A person who provides financial information
and advice.
Example include employee benefit staff, bank
and credit union employees, credit
counselors, brokers, financial planners,
accountants, insurance agents, and attorneys.
Financial Professional
The quality of an asset that permits it to be
converted quickly into cash without loss of
value.
For example, a mutual fund is more liquid than
real estate.
Liquidity
An amount of money originally invested,
excluding any interest or dividends.
An amount borrowed, or an outstanding loan
balance.
Principal
When it comes to taking care of your basic
financial needs, the first step is finding a
financial institution.
Name two of types of financial institutions that
take care of basic financial services.
A bank is a for-profit company, owned by investors
in its stock.
or
Credit union is a non-profit company, are owned by
their customers, who are also called members.
Both provide a variety of basic financial services ,
including savings and checking accounts, issuing
credit and debit cards, and providing loans for
cars, homes, and other purposes.
A financial institution deposit account that
pays interest and allows withdrawals.
And
A financial institution deposit account that
allows withdrawals by writing checks
Savings or Share Account
and
Checking or Share Draft Account
A savings which is a certificate representing a
debt. A U.S. Savings Bond is a loan to the
government. The government agrees to
repay the amount borrowed, with interest, to
the bondholder.
Series EE Savings Bond
Interest calculated periodically on loan
principal or investment principal only, not on
previously earned interest.
Simple Interest
Certificates representing the purchaser’s
agreement to lend a business or government
money on the promise that the debt will be
paid – with interest- at a specific time.
Bonds
Mutual funds that sell shares of ownership and
uses the proceeds to purchase short-term,
high-quality securities such as Treasury bills,
negotiable certificates of deposit, and
commercial paper.
Money Market Funds
I
investment companies that pool money from
shareholders and invest in a variety of
securities, including stocks, bonds, and
short-term assets.
Mutual Funds
An investment that represents shares of
ownership of the assets and earnings of a
corporation.
An investment that makes the investor a part
owner of a company.
Stocks