Foundations in Personal Finance | Student eText

RAMSEY EDUCATION SOLUTIONSTM

SPONSORED BY:

SPONSORED BY

DAVE RAMSEY

LICENSED FOR 2014 ?2015 SCHOOL YEAR ONLY

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first edition

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ISBN 978-1-936948-1222--32

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Acknowledgements

The Ramsey Education Solutions team would like to give special thanks to the following people for their contributions to this product. Their input was essential for creating a financial literacy curriculum that empowers high school students

to make sound financial decisions for life.

Educators

Len McKnatt

ACCOUNTING/ECONOMICS TEACHER Battle Ground Academy Franklin, Tennessee

Leah Zimmer

FINANCIAL LITERACY TEACHER Bremerton High School Bremerton, Washington

Brittany Sampson

TEACHER Lakeland High School Lakeland, Florida

Ramona Harper

BUSINESS TEACHER Lake Highlands High School Richardson, Texas

Kathy Jarman

TEACHER Helias Catholic High School Jefferson City, Missouri

LeAnn Dinsdale

CTE TEACHER/ACTE V P Brackenridge High School San Antonio, Texas

Lynn Isaacks

SOCIAL STUDIES TEACHER Academy of Creative Education San Antonio, Texas

Eric Lambert

TEACHER North Bullitt High School Shepherdsville, Kentucky

Linda Brown

CTE TEACHER Sanderson High School Raleigh, North Carolina

Terri Winkle

TEACHER Western Heights High School Oklahoma City, Oklahoma

Credits

Executive Vice President Jack Galloway

Chief Marketing Officer Jennifer Sievertsen

Vice President of Education Solutions Jim King

Curriculum Design Michelle Scott

Product Management Brett Kozimor

Sales/Marketing/PR Herb Jenkins Beth Tallent Jacqueline Garneau Jamie Moorer Christy Richardson Christy Wright

Project Management Josh Campbell Kassidy Slamer Lisa Mays

Content Editing/Proofing Allen Harris Darcie Clemen Stephanie Thomas Brandon Brison Jennifer Gingerich Danielle Britt Jennifer Norton Molly Pinkley

Creative Design Brian Williams Marcus Meazzo Jason Miller Steve Rupp

Video/Audio Production Jon Melton Diana Key Megan Hill Josh Fulton Dave Oglesby Dave DiCicco Megan Ledford Sara Zellner Chris Wright Ian Collins Colin Fatke Bobby Robertson David Wilkinson Josh Hancock Chris Blaylock

Interactive/Web Development/UI Ash Harris Jon Wolski Andrew Kallemeyn

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Foundations in Personal Finance High School Edition LICENSED FOR 2014 ?2015 SCHOOL YEAR ONLY

Meet the Experts

Dave Ramsey

Dave Ramsey is America's trusted voice on money and business. He's authored four New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover and EntreLeadership. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations. By age twenty-six he had established a four-million-dollar real estate portfolio, only to lose it by age thirty. Using the wisdom he gained, Ramsey rebuilt his financial life and now teaches others how to be responsible with their money, so they can acquire enough wealth to take care of loved ones, retire with dignity, and give generously to others.

Rachel Cruze

Rachel Cruze is a seasoned communicator and presenter, who has been speaking to groups as large as 10,000 for more than a decade. The daughter of Dave Ramsey, today she uses the knowledge and experiences from growing up in the Ramsey household to educate America's students and young adults on the proper ways to handle money and stay out of debt.

Chris Hogan

A popular and dynamic speaker on the topics of financial education and leadership, Chris Hogan also works with businesses and highprofile clients across the country, helping them develop strategies to increase revenues, protect wealth and secure their financial futures. Chris is also the host of the popular EntreLeadership podcast, one of the leading podcasts on business and leadership.

Introduction SPONSORED BY:

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A Letter from Dave

Dear Student,

Welcome to Foundations in Personal Finance! The information you are about to learn will change your financial future--if you apply what we teach.

I talk to people every day who tell me, "I wish I had learned this stuff in high school! I could have avoided so many problems!" I know how they feel. I built a multi-million-dollar business in my twenties, only to have it wiped out because I didn't know how to manage my money--and I even had a college finance degree!

You don't want to learn about money the hard way like I did. Thanks in part to our friends at Fifth Third Bank you will not have to. If you take what you learn from this class and apply it to your life, you'll never have to experience the pain and stress money problems can bring.

Enjoy the class! Use what you learn! Change your life!

Sincerely,

A Letter from Our Sponsor

Dear Student,

It is a privilege for Fifth Third Bank to sponsor Foundations in Personal Finance in your school. We are big fans of Dave Ramsey and what he teaches young people about money. We made this investment in you so that you'd gain the knowledge that will pay you healthy dividends in the future.

We care about your financial literacy--how much you know about how money works and how to use it properly--because, as a bank, we have a front-row seat to what can happen when you don't understand it. We want to be your partner on your journey to financial independence.

All of us at Fifth Third Bank wish you the very best as you move ahead toward graduation and into your adult life. Thanks for the opportunity to be a part of your education.

Good luck!

Kevin Kabat

VICE CHAIRMAN & CHIEF EXECUTIVE OFFICER FIFTH THIRD BANCORP

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Foundations in Personal Finance High School Edition LICENSED FOR 2014 ?2015 SCHOOL YEAR ONLY

Contents

UNIT 1: SAVING AND BUDGETING

Chapter 1: Introduction to Personal Finance

8

Chapter 2: Saving

28

Chapter 3: Budgeting

48

UNIT 2: CREDIT AND DEBT

Chapter 4: Debt

72

Chapter 5: Life After High School

100

Chapter 6: Consumer Awareness

126

UNIT 3: FINANCIAL PLANNING AND INSURANCE

Chapter 7: Bargain Shopping

142

Chapter 8: Investing and Retirement

160

Chapter 9: Insurance

184

UNIT 4: INCOME, TA XES AND GIVING

Chapter 10: Money and Relationships

208

Chapter 11: Careers and Taxes

222

Chapter 12: Giving

250

G L O S S A R Y 2 7 0

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CHAPTER

1What do other high school students know about spending? We asked other high school students if they or someone they know has ever bought something they could not afford.

"I haven't, but my younger sister always seems to need the latest and greatest technology, and she spends her college money on it!" Sophomore, Louisiana

"No. But I have a family member who once bought a house that they ended up not being able to afford." Junior, New Jersey

"My dad bought a car that he could not afford, and he ended up getting it repossessed." Junior, Wyoming

"Yes. My parents buy things they can't afford all the time. That's why we're in debt. That's why I need this course." Senior, Utah

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