Mrstewartseconomics.files.wordpress.com



Online Reality FaireLearning Summative ProjectFall Semester 2020Joliet Township High School District 204Online Reality Fair – eLearning Summative ProjectFall Semester 2020Typically, during a “normal” semester, the Reality Fair is the capstone project for our Economics students after completing their unit on personal finance/financial literacy and consumer education. The Reality Fair is a partnership with Abri Credit Union, where Economics classes and students go through a process of finding a job, calculating their monthly income, and seeing what the typical monthly costs would be to live on their own. However, there is nothing “typical” about this semester, or the situation our teachers and students now find themselves in, BUT students still do need to learn the necessary skills to live on their own in the future. Thus, we are moving the Reality Fair experience this semester to an eLearning summative project. Teachers will be able to choose how, when, and for how many points they would like to offer in whatever way they see best for their students. Luckily, the Economics teachers have been wanting to update and make some changes to the Reality Fair project, and this might be a blessing in disguise and give us an opportunity to do just that. While we appreciate the partnership with Abri Credit Union, designing and implementing our online Reality Fair for this specific semester, and seeing and getting feedback from students, as well as allowing them to work through it at their own pace, will give us a lot of data and pivotal information for how we want to use this summative project going forward for the benefit of our teachers, students, and the district.The main change we are going to implement this semester is giving the students a sample “credit score” based on their current grades in our respective classes. Previously, the Reality Fair relied ONLY on a student’s sample job pick and their take home monthly salary, but as all of the Economics teachers know (and any adult who has used credit), a credit score is deeply influential in a consumer’s ability to secure credit and loans, especially for large purchases like cars and houses. Thus, we really wanted to implement a credit score component to the Reality Fair, and just like grades serve as one metric and measurement for student success, the credit score serves as one metric and measurement for adults in their financial responsibilities.On the following pages, you will see a combination of different budgeting and buying activities. The Reality Fair experience will include both old and new activities, combine existing tutorials designed by our teachers, and use various online resources. Grading is completely up to the teacher’s discretion. Any feedback, as well as questions, comments, and concerns are welcome. Thank you all for your time and efforts.Online Reality FairName:__________________eLearning Summative ProjectTeacher:___________Fall Semester 2020 Date:________Joliet Township High School District 204Per:________Online Reality Fair – eLearning Summative ProjectFall Semester 2020Plans After High School Questions:What community college or certificate program, four-year college or university, trade or technical school, military branch or career do you plan to pursue after you graduate high school and why? What are your long-term plans for work and where you want to live? (1 paragraph, 4-5 sentences)What do you plan on studying, how much schooling will you need, and how will that degree help you for your career or future? *For military, what branch and field do you hope to go into, and how long do you plan on staying, what skills do you hope to develop and how will that translate to a civilian job after? (1 paragraph, 4-5 sentences)What are the specific costs associated with your choice (look up the ACTUAL cost of attendance for the school you want to attend – you may use a screen shot or picture, *for military think about time commitment, or training)? Use the following website to look up the cost of your college: (1 paragraph, 4-5 sentences)How do you currently plan on paying for college or training? What are the pros and cons of each type of payment? (Use some type of chart or table for your costs/expenses, and how do you intend to pay for those)What are the expenses associated with living on your own (by yourself or with roommates)? How will you pay for these? (Either a table/chart or explanation)Online Reality Fair – eLearning Summative ProjectFall Semester 2020Activity One – Student Loans, Job, Income, and Credit Score:More and more students are relying on student loans to pay for school. There are various types of student loans for students and parents to consider. When you fill out the FAFSA, you qualify for student loans from the federal government. Specifically, you will qualify for “subsidized” and “unsubsidized” Stafford Loans. For subsidized Stafford Loans, the government pays your interest while you are in school, and when you graduate, you only have to pay back the amount you borrowed. The government also offers different payment plans and forgiveness options for people who take our federal students’ loans. ***Tip: You may also think about looking at taking out private student loans to help pay for college, but BEWARE, private student loans start accruing interest the second you click “accept”, and they will stick with you forever until you pay them off, even if you declare for bankruptcy, private student loans will NOT go away.Approximately how much in student loans do you think you will have to take out to cover the cost of your education? Use this website to calculate your monthly student loan payment: *If you don’t know approximately how much you will have to take out in student loans, we will use the following averages:Students graduating from 2-year vocational school, technical college, or community college will amass an average of $10,000-$15,000 in student loan debt. These are students who are working towards certification programs that will help them to transition directly into the workforce.Subtract $200 a month from your take home monthly pay!The current average student loan debt for graduates from a four-year college or university stands at $40,000. That figure can rise significantly for students attending a private or for-profit college or university. These are students who have received a bachelor’s?or baccalaureate degree.Subtract $400 a month from your take home monthly pay!Graduate students will be faced with an even greater amount of student debt. On average, students earning a graduate degree will leave school with an average of $50,000-$60,000 in accumulated student loans. Again, this amount will be significantly greater for students graduating from a private or for-profit university. Students studying medicine or law can easily amass a student loan debt that tops six figures. Taking into account loans for residencies and bar exams, they can easily find themselves with loans in excess of $150,000.Subtract $600 a month from your take home monthly pay!Student loan amount (total): $______________Student loan payment (monthly): $_____________Congratulations on making it through college! That’s actually a HUGE accomplishment, there are more and more students who start college, take out student loans, and then don’t graduate. ***Tip: Only about 1/3, or 33%, or college students graduate in 4 years, but about 60% graduate in 6 years, don’t be discouraged if you take longer or have a different path than everyone else!Pat yourself on the back! Now it’s time to put on your big kid pants and go find yourself a job!What career (*branch) do you currently plan on pursuing after high school? How much education (*training) will you need for this career?What are some schools that offer more advanced degree/programs if you need it?Next you will research your salary. Use the following websites based on the degree you need for the job you want. Make sure you understand your search (for instance, “Firefighter” is not a degree, you would look up “fire science”) Make sure you use the EARLY CAREER PAY FIGURE (YOU WILL NOT MAKE THE MEDIAN WHEN YOU FIRST START OUT!): For a Bachelor’s Degree:?***Use Chrome: MAKE SURE YOU USE EARLY CAREER PAYFor Associate’s Degree:?***Use Chrome: MAKE SURE YOU USE EARLY CAREER PAY***For more detailed information about your career, use the following website: your beginning career salary (EARLY CAREER PAY): $ _______________________To account for income tax, multiply your salary by .75. Salary * (.75) = Take home pay (Or the equivalent of paying 25% in taxes)My take home pay will be around $_______________________ per year,Divide your yearly salary by 12 to get your monthly take home pay: $______________Go back to the previous page! Subtract your monthly student loan payment from your monthly take home pay (last line). This is your FINAL MONTHLY TAKE HOME PAY WE WILL USE FOR THIS PROJECT: $____________________The last component of understanding your finances when looking to begin your life after high school and college and start to transition into the “real world” is understanding credit. Credit is borrowed money that you have to eventually pay back, usually with interest. While credit has been around forever, all of that information about your history and responsibility were combined and calculated in a numerical score called a “FICO Score” (short for Fair Isaac Corporation, the company that created the credit score). There are three major credit bureaus that collect and compile information into a credit report and give you a credit score, they are: Experian, Equifax, and Transunion. The three credit bureaus collect the following information in your credit report:Identifying Information – your addresses, social security number, and date of birthAccount History – open and closed accounts, credit limits and balances, payment historyPublic Records – bankruptcy, tax debt or liens, child support, divorceInquiries – who has looked into your credit report-1905083629600332606577279600From this information, you are granted a “credit score”. Credit scores range from 300-850, where 300 is low, and 850 is high. While a perfect score is nearly impossible, what you should know is what “range” of score you fall into, and the factors that affect your score. The following is a breakdown of scores and the factors affect your credit score:Your CURRENT class grade (in HAC) will translateto the following “credit score”:Exceptional: 90-100% - “A” = 800Very Good: 80-89% - “B” = 740Good: 70-79% - “C” = 670Fair: 60-69% - “D” = 580Poor: 59% and below – “F” = 500What is “YOUR” credit score:______________Online Reality Fair – eLearning Summative ProjectFall Semester 2020Activity Two – Buying a Car:Your first “adult” purchase for most people will be a car. As such, most people tend to go out and buy something that is much more expensive than they actually need. I myself, when I moved to Arizona and started teaching, decided it was somehow a good idea to buy a used Audi A6. I was 23, single, and had my first salaried job…do you really blame me? I LOVED that car, but it turned out to be a HUGE financial mistake. I was only approved for a 13% interest rate! And when the warranty ended, and I had to start paying for repairs on my own (on a German car no less) out of pocket, I realized my immaturity. Buying new versus used also has an impact on your interest rate. We will talk about the “true” cost of car ownership in this section.For some good tips on what you should think about before buying your first car, take a look at the following websites: the following websites to find “your” car that you want to purchase. Make this as real as possible. Take your time and find a car that you want, but that also fits your needs, AND your budget! Then look at the interest rate you will pay on the car that you buy based on your credit score you calculated from the previous page. ***Tip: A good rule of thumb is that it will cost about $200 a month for every $10,000 you borrowOnce you have found your car, fill out the following:Year, Make, and Model: _____________(L1)Price: ____________________________(L2)Taxes (8.75% = Price x .0875): ________(L3)*(Illinois: 6.25%, Will County: .75%, Joliet 1.75%) Title and Doc Fees: + add $600 (L4)Down Payment (10% of price): ________(L5)Total Price (Add lines L2-L4, Subtract L5):***______________________________ (L6)Interest Rate: ______________________ (L7)Monthly Loan Payment Calculator: (Total Price (L6) + (Interest Rate (L7), this is your “yearly” interest X number of years (5 is standard))/# of Months (60): Example - $20,000 total price + (.047 Interest Rate X 5 years)/ 60 months = $411 ***Monthly Car Loan Payment: $___________________________There are a variety of factors that affect your ability to finance (take out a loan) for a car. But primarily it comes down to two things: income and credit score. Also, there are certain things you can do to lower your interest, amount borrowed, and monthly payments. The best thing you can do to help get approved or lower your payments is to have a larger down payment. There is no set rule (*some dealers offer down payments as low as $500), but typically you want to put about 10% down (so $2,000 on a $20,000 car, thus you are financing/borrowing $18,000, but if you can put $5,000 down instead, you are only borrowing $15,000).***Tip: The “standard” car loan is for 5 years or 60 months. However, more and more dealers are offering longer loans such as 72 months (6 years) or even 84 months (7 years). While those WOULD HELP LOWER your monthly payments, do you REALLY want to be paying on a car for 7 years? Will you still want it? ***Tip: You can ALWAYS pay MORE than your monthly payment. It won’t “lower” your interest rate, but since you will pay the car off FASTER, you pay less interest overall.287718556642000As you can see below, having a higher credit score (grade?) would allow you to pay a much lower interest rate. How important is that? Check out the graphic to see the difference in monthly payments and total amount owed on a $20,000 car over a 6-year loan:What is the monthly payment difference between the lowest interest and the highest interest rate? ______________________________What is the difference between the “total interest paid” and the “total cost” of the car? ______________________________2901315635000Most people don’t plan for or underestimate the “true” cost of vehicle ownership. This can include the cost of gas, car insurance, maintenance and repairs, as well as fees like registration. Also, your car depreciates (loses value) over time, and you will not be able to resell it or trade it in for nearly as much as you paid for it. As you can see, the “true cost” of just driving your car is actually about $6,000 per year (depending on car type and where you live). Now that you know your car choice, interest rate, and cost of ownership, what will the total cost of your car be (after 5 years)?***_________________________Online Reality Fair – eLearning Summative ProjectFall Semester 2020Activity Three – Renting an Apartment or Buying a House:One of the most important and impactful decisions you will have in your adult life, is deciding where to live, and whether or not you want to go about renting or buying a house or apartment. There are pros and cons to both. For most people, they will start out by renting an apartment (either in college, or on their own, with friends, or with a significant other). BE CAREFUL! When you sign a lease, that is a legal document and you are bound by the terms of that lease agreement. Most leases last for one year, but some will allow you to rent month to month or sub lease another person’s apartment for a certain period of time. Most apartment companies will do a credit check when you fill out an application. They also typically require one or two MONTHS rent as a security deposit (which you will have to pay BEFORE you even move in and pay the first month’s rent). If you decide to live with someone else (friends, significant other, or strangers) know that WHOEVER signs the lease is bound by it, and if you break up, or it turns out your friend can’t pay, YOU will be responsible for paying the ENTIRE rent, or your landlord/property owner can take you to court or collections. ***Tip: Make sure you take PICTURES of EVERYTHING when you move in, some landlords prey on young adults and first time renters by basically charging you for every ding, dent, and scratch in the apartment when you leave (and take that amount out of your security deposit). There will be charges for “cleaning” or “carpet replacement”, etc. in your lease. So be smart.3511550381000See a list of pros and cons of renting and buying (right):*If you are thinking of renting first instead of buying,use the following website to look up an apartmentin a town you would like to eventually move to*after you graduate from college. If you are planningon buying right away instead, move on to the next page,but if you (like most people) will probably rent first,use the website below to find a great apartment to beginyour young adult journey: City and State: _____________________-21018536512500Monthly Rent: _____________________Many people often look to move away as soon as they turn 18, graduate high school, or during college at some point. People often tend to want to move away from their hometown, or out of state. While it is important to find a place to live and grow to call your own, and experience as much as you can while you are young, there are lots of factors that should go into your decision including: your job, how long you plan on staying, and whether or not you want to start a family. While Joliet, or Illinois in general, might not seem like the ideal place to live, especially if you’ve grown up in the area, many other popular locations are even more expensive (California, Florida, New York, and Colorado, to name a few). So, before you decide for sure where you would like to start renting and living, look at the following infographics about rent costs from various cities and states, and also HOW MUCH YOU WOULD NEED TO MAKE TO AFFORD THEM (on the next page):334010012700*According to the infographic to the right, how muchdoes a “median” (average) apartment cost per monthin the State of Illinois: $________________________*According to the infographic below, how much doesa one-bedroom apartment cost per month in the cityof Chicago: $_________________________What about New York: $________________-28003528511500Los Angeles: $________________________***Tip: While these are “averages”, remember that living in a city, like Chicago, New York or Los Angeles, will have significantly higher costs of living than the suburbs or rural areas. They might offer more to do, but there is a trade off to that in terms of higher costs of rent and living.It is also important to know whether or not your job and income will be enough to afford the rent of a typical apartment in the area you want to live. Look at the two infographics on this page below and answer the questions that follow:***Tip: You can always lesson your rent costs by taking on a roommate or roommates, but again, that comes with risks about whether or not they will keep up with their payments and whether or not you will even get along with them for the duration of your lease.left1016000(Use the infographic to the left to answer)How much would a typical two bedroomapartment cost in San Francisco? $_____How much would you need to make on average per year to be able to afford living in New York City $___________(Use the infographic below to answer)38100140589000How much would you need to makeper hour to afford an apartment in Illinois$___________What about in California? $___________Perhaps it makes more financial sense for you to buy instead of renting. Or you’re looking at something longer term or perhaps even starting a family. For most people, buying a house will be the biggest purchase of their lives. It’s important to understand the process you should go through when you begin to think about buying a house. Obviously, it is important to think about location, and amenities, but did you know most banks require two years of W2’s (taxes) and for you to show that you have consistent income at the same job for that time? Did you know that if you do something that negatively affects your credit during the process, you might not be approved and lose the house you want? Did you know that there are lots of programs that allow you to put as little as a 3% down payment instead of the typical 20% down? Or that many cities and states offer home buyer assistance programs, especially for new or first-time buyers?Most importantly, you need to know that one of the most important factors in your approval process is your Debt-To-Income ratio or DTI. Did you know that the standard for how much you should be spending on housing per month is right around 30-40%? When you begin to think about buying a home, you absolutely need to understand that if you have a car payment, and student loans already, buying a house and getting approved for a mortgage will be difficult. Here’s an example: Let’s say your take home monthly income is $3,000, that would mean you make around $36,000 per year AFTER TAXES (or around $50,000 total). How much house can you afford? Well if you already have a car payment for $300 and a student loan payment for $300, you are already using up $600, or 20% of your income towards your debt. And that’s assuming you have NO CREDIT CARD BILLS or other debt. That would mean you could only afford a mortgage payment of around $500-$600 (or a little more depending on if a bank accepts a slightly higher DTI than 30-40%). Given this, you could only afford a house that cost around $120,000 (which isn’t bad until you realize the median home price in Illinois is about $200,000).center17970500Here are some good steps to take to walk you through the process of buying your first house:Use your income you calculated earlier in this project, as well as adding up your student loan payment and car payment and use the following mortgage calculator to see how much house you can “afford”: ***How much of a house can you afford? $__________________________146685024701500To see how much you would need to make in order to afford to live in different states, check out the infographic at right:How much would youneed to make to affordto live in Illinois?$________________What about California?$________________143367631242100To give you an idea of just how much an “average” house costs in each state, check out the following:How much does anaverage house costan Illinois?$______________What about California?$______________Use the following websites to look up and find a home that you can afford (based on your earlier use of the mortgage calculator from the previous page):-279400227330 you found a nice home within your budget. It’s always nice to think about your “dream home”, but just being able to afford a starter home, and purchasing your first house is a HUGE accomplishment, and one that fewer and fewer Americans are able to achieve. This is especially important since so much of Americans overall wealth is tied to their house (since it’s typically their biggest asset).Once you have found a home you like or are interested in, use the following “mortgage loan calculator” to see your interest (based on your class credit score) and monthly payments. You can use the site to choose a home price and the state you are buying: State:_________ Price:___________ APR (Interest Rate):________ Monthly Payment:_______***Tip: You can also use this website for good information about how to “get prepared” to buy, how to “choose your loan”, how to “shop around”, and “evaluate offers” by scrolling down.So where is your house located? Why did you choose that house? What do you like most about it? Take a screenshot/picture of the house you chose and drop it in below (1 paragraph explanation, with picture of your house):You also need to think about other things that go into the cost of homeownership. This could include homeowner’s insurance, property taxes, private mortgage insurance (PMI) (if you don’t put 20% down payment) and even Homeowner’s Association Fees (HOA’s). Most people will choose to open up an ESCROW account when they buy their house. The Escrow will pay your property taxes, homeowners’ insurance, and PMI monthly, instead of all at once. Use the price of the house that you bought above to fill out the following information:Property Tax on HomeProperty Tax Amount: Retail Price x .026 (Will County 2.6% Property Tax)*Look up the property tax if not bought in Will CountyMonthly Property Tax Amount: Tax Above ÷ 12 (months) = $__________?*This would be the amount you would have to pay into EscrowHomeowners InsuranceHomeowners insurance $30 for every $100,000 of home value: = ?$__________?Private Mortgage Insurance (PMI)Private Mortgage Insurance: Retail Price x .01 (1%) = $_________?PMI Monthly Payment: Amount Above ÷ 12 (months) = $___________Online Reality Fair – eLearning Summative ProjectFall Semester 2020Activity Four – Utilities and Budgeting:A lot of people also forget about all the utilities they will have to pay regardless of if they rent or buy. If you decide to live with roommates, or perhaps a significant other, you might be able to split utilities, but make sure you get this IN WRITING! You will also need to transfer all utilities from the previous owner to yourself as soon as you move mon utilities include gas, electric, water/sewer, and garbage. Below are some of the average cost of these utilities:3479800635000***Tip: The cost of utilities can vary during the timeof year, and based on where you live, and how big your house or apartment is. How much does the “typical” US family payFor Utilities each year? (*use the graphic to the right) $__________________In Illinois, most people will use ComEd for their673100233045Electric: will also use NICOR for their gas bill: 53340048260*Water, sewer, and garbage are typically paid to thelocal town or city government.***Tip: be sure to setup your electric, gas, and utility bills as soon as you move in, and think aboutsetting up automatic payments through your bank!Lastly, it is important to understand and budget for different expenses you might encounter besides just your basics like rent/mortgage, car payment, student loans, and utilities. You probably want cable/internet or Netflix/Hulu/Disney+, and you definitely will want to have a cell phone, so you need to budget that payment as well. But most people also don’t realize just how quickly the “non-essentials” that you buy each month can add up. Take a look at the following graphic from USA Today to see what people typically spend their money on:That’s a lot of money spent on non-essentials and potentially “wasted” money each month. How much does the average adult spend on “non-essentials” every month according to the infographic above? $_________ What is one thing you could cut out on from the list? ________Use the following budget simulation to plan and calculate how much you will make each month (income from earlier) versus how much you will spend monthly to create a realistic budget for your life living on your own in the future:Total Income (Monthly AFTER taxes): $________________Monthly Student Loan Payment: $______________Monthly Car Cost (Payment, Insurance, and (Yearly Cost/12months)): $______________Rent/Mortgage Payment: $_________________Utilities: $_________________4114800-7810506223000-412496004140200-152400Other Miscellaneous Monthly Costs:5791200104140422275097790Television/Internet (*Choose One and Highlight)Starter Bundle - 80 channels, 20 mbps internet speed = $100HD Preferred Bundle – 160 Channels, 20 mbps speed = $120HD Premier Plus Bundle – 200+ Channels, 30 mbps speed = $18048641005080Internet and Netflix or other streaming service only = $60298767579375005524500177165Cell Phone Carriers (*Choose One and Highlight)Unlimited Plan (Boost, Cricket) = $65Unlimited Plan (At&t, Verizon) = $90Transportation? (Other than your car)Public Transportation/Uber = $125530507850810038544505080Variable ExpensesFood and Meals (*Choose one and Highlight)Eating at home for every meal = $300 per monthEating out once or twice a week?= $500 per monthEating out every day?= $800 per monthMiscellaneous Monthly Expenses Household Supplies (Soap, light bulbs, batteries, laundry detergent) = $200??? ??? ??? ??? Movies, Concerts, or Sporting Events (Entertainment) = $100?2444750762000Pets supplies and food = $50Clothing = $100Medicine and healthcare?Gym membership?Haircut?Other things you can think of?***Tip: Having a CHILD is expensive! It can cost nearly $250,000 to raise a child to age 18 in America! That’s almost $14,000 a year, or about $1,200 a month!!!Add up ALL of your MONTHLY costs from this page and the previous page, and then subtract them from your monthly income. How much do you still have left? _____________***Tip: The “average” American household’s monthly expenses are over $5,000! Do you make that much right now in our project? Could you look for ways to cut back on expenses?Did you go negative? What would that mean for you if you went negative (think credit and debt)? Could you find some ways to make more money? What about cutting costs? (1 paragraph, 4-5 sentences)Online Reality Fair – eLearning Summative ProjectFall Semester 2020Closing Questions:How does your budget look after everything is said and done? Were you able to afford the car you wanted? The house? Did you take into consideration all of the various costs of owning a car, or a house, or your utilities? What about non-essentials? (1 paragraph, 4-5 sentences)Were you able to SAVE any money? What is a realistic savings goal you could set for yourself based on how much you make and how much you spend? Most Americans have less than $500 in savings in case of an emergency. Does this activity help show you why it is so difficult for workers living paycheck to paycheck to be able to save anything for emergencies? If you were negative, you would go into debt or have to charge on your credit cards. If you were able to save a little, what about investing? Even fewer Americans are able to invest their money, and most financial experts will tell you that the key to financial independence and overall wealth is making your money work for you. (1 paragraph, 4-5 sentences)What have you learned from this experience? Will this help you to better plan and understand for the future? Why or why not? The whole point of this activity and project is to help you think about all of the things you might not know about in terms of planning to live on your own. What will be the most important things for you to think about going forward? Are you set on where you want to live? Are you determined to have that car? Do you want a family? How much will that “dream house” really cost? Think about your long-term plans. Where do you see yourself in 5-10 years from now? (1 paragraph, 4-5 sentences)Do you think you chose the right job? What about your college and degree? Does it help to know that on average, a college freshman will change their major 3 TIMES before they graduate (so what you think you will study now might not even end up being what you actually graduate doing)? What could you do to earn some additional income besides your job? What could you do to cut back on spending each month? (1 paragraph, 4-5 sentences) What was the most helpful part of the project for you? What was the least helpful? What would you add or take out of the project for the future? (1 paragraph, 4-5 sentences) ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download