education helps pay for expenses middle school financial literacy #4

Education Helps Pay For Expenses

Middle SchoolFinancial Literacy #4

Objectives • Review last week’s lesson• Identify ways education pays• Compare income and paying for necessities• Compare child care costs with annual salary• Create a news report

Review Last Week’s Lesson

1. Average annual cost of college– $15,000

2. Website tool that estimates postsecondary financial aid

– FAFSA4caster

3. Types of financial aid that students do not have to pay back

– Grants, Scholarships, Work Study

Education Pays Video • What are the five ways education pays?

Review Income by Education Level Review Income by Education Level

Source: US Department of Labor: Labor Statistics Report, 2012

Avg. Expenses: Necessities

Source: Economic Policy Institute: Briefing Paper 2010

Income vs. Expenses

Interview a Partner

• What expenses are considered necessities?• What expenses are not considered necessities?

a) House and car payments, medical insuranceb) Internet, sports activitiesc) Movie tickets, cell phonesd) Food, heating, air conditioninge) Electricity, water, child caref) Cable TV, eating at restaurantsg) Music downloads, video games

Answers

• What expenses are considered necessities?a) House and car payments, medical insuranced) Food, heating, air conditioninge) Electricity, water, child care

• What expenses are not considered necessities?b) Internet, sports activitiesc) Movie tickets, cell phonesf) Cable TV, eating at restaurantsg) Music downloads, video games

Income vs. Expenses (Family of 4)

• The average costs for necessities ($4,700 a month)– What are the annual costs? ($4,700 x 12)• $56,400

• How much education does a single parent need to cover these annual costs for necessities?– Bachelor’s Degree

Metro Area: Child Care

Source: Economic Policy Institute: Briefing Paper 2010

Child Care vs. Income • What would be the annual cost for child care if a family has an infant

and a pre-school age child?– $8,150 + $6,500 = ? – $14,650

• If a high school graduate earns $30,000 a year, how much would they pay in taxes at a 20% rate? – $30,000 * .20 = ?– $6,000

• What is the difference between the child care cost and high school graduate income after taxes?– $24,000 - $14,650 = ? – $9,350

Create a News Report

• Roles – Interviewer – Parent with a family of 4– Single person

• Decide the type of education for each person• Create two questions to ask each person– About education and paying for expenses– Example: What type of education do you have? How has

helped or not helped you pay for your expenses?

Present Your News Report

• Interviewer asks each person two questions– Parent with a family of 4– Single person

Review 1. What is the a major key to making a good

income? Get a postsecondary education

2. What is the average annual income for a high school dropout? $19,300

3. For a family of four in Minneapolis, what are the average annual costs for their necessities?$56,400