April 14, 2010
High school students are learning some of the critical thinking and mathematics skills they need to make sensible financial decisions.
Most teenagers don’t think twice about spending 99 cents to download their new favorite song as a ringtone. Few of them realize, however, how small financial decisions like that can add up over time and derail plans to save for a car or attend college.
Calculating Your Future: Personal Finance, EDC’s new module for the innovative Ford Partnership for Advanced Studies (Ford PAS) program, provides high school students with the critical thinking and mathematics skills needed to make sensible short- and long-term financial decisions.
“Students are learning by using real-world scenarios,” says EDC’s Jen Clarke. “For instance, they need to decide whether to apply for a credit card to pay for a prom dress they can’t afford, and if they do and only pay the minimum, how long would it take to pay off and how much interest would be incurred.”
Calculating Your Future is designed for 11th and 12th graders and can be taught in either math or business classes. The module meets the standards of the National Council of Teachers of Mathematics in areas including algebra, problem-solving, and probability.
The skills and knowledge gained through the module will also help prepare students to face whatever economic climate they will meet as high school graduates. As Federal Reserve Chairman Ben Bernanke recently observed, “The financial preparedness of our nation’s youth is essential to their well-being and of vital importance to our economic future.”
Throughout the module, students use mathematical functions and data analysis to explore such topics as saving, spending, and investing, as well as insurance, credit, and taxes. For instance, in one activity, they create Excel spreadsheets to examine the growth difference of a savings account with compounded interest versus one with simple interest.
“What distinguishes this module from other curricula is the math that is embedded in the program,” explains EDC’s Anne Shure. “For example, instead of just plugging numbers into online calculators, students construct and explore functions that express relationships among the variables of principal, interest, and time. This understanding will allow them to maximize their investments and minimize debts.”
Calculating Your Future also goes beyond numbers and looks at how personal values and other non-financial factors affect economic decisions. Students reflect upon their own spending habits and goals through journal writing assignments.
In the module’s “Financial Living” activity, teams of students use fictional characters to explore the types of financial decisions they will have to make in the future. Students must help their characters make decisions, including choosing an apartment, getting insurance, and dealing with unexpected situations—both positive and negative—such as becoming ill or getting a bonus.
“They play the role of financial advisor to the character,” explains Shure. “Given the job and income assigned to the character, teams set financial goals and develop a financial plan to meet those goals.”
Ford PAS is an academically rigorous, interdisciplinary curriculum that links classroom learning to the real world. It was developed by EDC in collaboration with, and with funding from, Ford Motor Company Fund and the Ford Motor Credit Company.
Calculating Your Future is available from the Ford PAS website: http://www.fordpas.org/
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