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Using Deliberative Techniques to Teach Financial Literacy This page intentionally left blank Using Deliberative Techniques to Teach Financial Literacy Nancy Claxton, Ed.D. International Debate Education Association New York*Amsterdam*Brussels Published by International Debate Education Association 400 West 59th Street New York, NY 10019 © 2008 International Debate Education Association All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, or any information storage and retrieval system, without permission from the publisher. The Publisher Grants Permission For The Reproduction Of The Activity Sheets In This Work For Non-Profit Educational Use. The Activity Sheets May Not Be Used In A Profit-Making Venture Without The Written Permission Of The Publisher. Activity sheets may be downloaded from wwww.idebate.org/handouts.htm. Library of Congress Cataloging-in-Publication Data Claxton, Nancy. Using deliberative techniques to teach financial literacy / Nancy Claxton. p. cm. ISBN 978-1-932716-35-1 1. Financial literacy--Study and teaching. I. Title. HG179.C635 2008 332.024--dc22 2008023185 Design by Gustavo Stecher, Juan Pablo Tredicce | imagenHB.com Printed in the USA Contents Introduction How to Use This Manual 1 5 Chapter 1: Deliberative Education 7 Chapter 2: Basic Principles of Money Management 1. Components of a Financial Plan 2. Goals, Decision Making, and Planning 3. Budgeting 4. Payroll Taxes and Deductions 5. Checking and Savings Account Basics 6. Maintaining a Checking Account 13 15 21 29 37 45 55 Chapter 3: Credit and Debt Management 7. Five Types of Credit 8. Credit Costs 9. Student Loans 10. Loan Officer Simulation 11. Credit Cards 101 12. Reading a Credit Card Statement 13. Choices, Choices 14. Terms and Conditions May Apply 15. Identity Theft 67 69 75 81 89 101 107 113 121 131 Chapter 4: Risk Management, Savings, and Investing 16. Managing Risk 17. Savings, Investing, and the Time Value of Money 18. Types of Assets 19. Risk, Return, and Diversification 20. Putting It All Together 135 137 151 159 165 171 Glossary 178 Resources 183 This page intentionally left blank Introduction International Debate Education Association (IDEA) believes that free and open discussion is essential to the establishment and preservation of open, democratic societies, and its work supports initiatives promoting excellence and innovation in formal and informal education. IDEA cooperates and maintains contact with educational institutions in over 40 countries. It has extensive experience in conducting teacher training at all levels as well as organizing public speaking and debate events for secondary school students through workshops, competitions, and educational institutes. To complement these activities, IDEA has consistently produced quality curricula and educational resources. Responding to the needs of secondary school teachers in many countries, IDEA has developed deliberative methodology (or deliberative education), which uses interactive teaching and learning approaches—role plays, simulations, debates, speeches, presentations, and so forth—to facilitate learning and create a new form of relationship between you and your class. Deliberative education methodologies assist teachers in achieving a number of educational goals: • Fostering interactive instruction, democratic dialogue, student-teacher partnerships, and cooperative learning • Promoting student ownership of learning and application of knowledge • Developing students’ listening and communication skills • Developing students’ critical thinking and argumentation skills • Developing students’