building decision-making skill for personal finance.ppt
DESCRIPTION
TRANSCRIPT
![Page 1: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/1.jpg)
2009 OATFACS Conference2009 OATFACS Conference
Douglas HaskellAssociate Professor of Economics
Director of Professional DevelopmentEconomics Center Education & Research
University of Cincinnati
513-556-2951
![Page 2: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/2.jpg)
2009 OATFACS Conference2009 OATFACS Conference
Building
Decision-Making Skills
for
Personal Finance
![Page 3: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/3.jpg)
2009 OATFACS Conference2009 OATFACS Conference
If you would like the notes
from this presentation, with links,
email:
Subject Line: OATFACS Notes
![Page 4: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/4.jpg)
2009 OATFACS Conference2009 OATFACS Conference
A warm-up activity…
You are the Valedictorian of your senior class. A movie company
offers you $1,500 to mention the name of their new movie in your graduation speech.
![Page 5: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/5.jpg)
2009 OATFACS Conference2009 OATFACS Conference
Will you take the money?
![Page 6: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/6.jpg)
2009 OATFACS Conference2009 OATFACS Conference
How many times in your life as a producer or as a consumer do you
face ethical dilemmas about earning income or spending?
![Page 7: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/7.jpg)
2009 OATFACS Conference2009 OATFACS Conference
What role does ethics play in economic-consumer-financial
education?
![Page 8: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/8.jpg)
2009 OATFACS Conference2009 OATFACS Conference
So …
Who needs economics, consumer
and financial education?
![Page 9: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/9.jpg)
2009 OATFACS Conference2009 OATFACS Conference
July 29, 2009…
U.S. unemployment rate in June: - 9.5%
Real GDP growth (Q1 2009): -5.5%
Fed Funds Rate range: 0 to .25%
Continuing sclerotic credit markets
Continuing low housing and resource values
Consumer confidence near an all-time low.
CPI in June 2009: +0.7% - Personal income: -1.2%
Not to mention health care…so I won’t.
![Page 10: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/10.jpg)
2009 OATFACS Conference2009 OATFACS Conference
Good news: stock prices are up!
Why?
Stock prices are based on future
expectations.
Things must not be that bad (?)
![Page 11: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/11.jpg)
2009 OATFACS Conference2009 OATFACS Conference
Understanding the U.S. economy and planning your financial future in 2009:
What is a TARP? (temporary asset relief program)
What is a credit crunch?What is a fiscal stimulus?What is the fed funds rate?What is inflation? Deflation?What is a “toxic asset”?
![Page 12: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/12.jpg)
2009 OATFACS Conference2009 OATFACS Conference
Uncertainty about the future can have unintended negative consequences.
Even those with jobs, income and positive futures have stopped spending. Less spending results in fewer jobs and income.
Dependence on fragile credit markets results in more uncertainty
![Page 13: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/13.jpg)
2009 OATFACS Conference2009 OATFACS Conference
How do we help students (anyone) understand and cope with these
economic and financial conditions in
an ever-changing world economy?
Could more economic and financial education have prevented
these problems?
![Page 14: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/14.jpg)
2009 OATFACS Conference2009 OATFACS Conference
One of the most important concepts in economics for today’s students…
Derived demand
![Page 15: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/15.jpg)
2009 OATFACS Conference2009 OATFACS Conference
Derived demand
The demand for a productive resource, such as labor, is derived from the demand for the good or service the resource produces.
![Page 16: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/16.jpg)
2009 OATFACS Conference2009 OATFACS Conference
How did the Ohio legislature respond to the very early signs that there were problems in
financial markets and that Ohio households
had potential problems?
![Page 17: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/17.jpg)
2009 OATFACS Conference2009 OATFACS Conference
Ohio Senate Bill 311
![Page 18: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/18.jpg)
2009 OATFACS Conference2009 OATFACS Conference
• Ohio Senate Bill 311…
– required for HS graduates in grade 9 in 2010– embed the instruction in a required course– standards in economics and personal finance– using available business and community
resources– using resources from the Ohio Centers for
Economic Education
![Page 19: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/19.jpg)
2009 OATFACS Conference2009 OATFACS Conference
What does SB 311 really require?
What is the required content?
Who teaches it?
When is it taught?
How is it assessed?
Who is making sure it gets done?
![Page 20: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/20.jpg)
2009 OATFACS Conference2009 OATFACS Conference
What does it look like in a
high school or school district
implementation plan?
![Page 21: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/21.jpg)
2009 OATFACS Conference2009 OATFACS Conference
What a good question!
![Page 22: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/22.jpg)
2009 OATFACS Conference2009 OATFACS Conference
High School Implementation Options …
- Semester of economic principles
- Semester of personal finance
- Integrated economics and personal finance
- Integrated economics/personal finance/gov’t
- Family and consumer sciences
- Business and entrepreneurship
![Page 23: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/23.jpg)
2009 OATFACS Conference2009 OATFACS Conference
Personal Finance/Economics:
- Thinking and decision-making skills
- Basic economic principles
- Personal financial decisions
- Economic systems
- Business and careers
![Page 24: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/24.jpg)
2009 OATFACS Conference2009 OATFACS Conference
Integrated Economics and Personal Finance
Most of the basic economics content can be taught within the context of personal financial decisions.
Why not teach about he supply and demand for labor instead of the supply an demand for widgets.
![Page 25: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/25.jpg)
2009 OATFACS Conference2009 OATFACS Conference
What is the best “tool” for teaching
economic thinking, decision-making
and problem solving?
![Page 26: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/26.jpg)
2009 OATFACS Conference2009 OATFACS Conference
The
“Handy Dandy Guide”
to Economic Thinking
![Page 27: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/27.jpg)
2009 OATFACS Conference2009 OATFACS Conference
The “Handy Dandy” Guide to Economic Thinking
– People choose
![Page 28: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/28.jpg)
2009 OATFACS Conference2009 OATFACS Conference
The “Handy Dandy” Guide to Economic Thinking
– People choose– All choices have costs
![Page 29: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/29.jpg)
2009 OATFACS Conference2009 OATFACS Conference
The “Handy Dandy” Guide to Economic Thinking
– People choose– All choices have costs– People respond to incentives
![Page 30: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/30.jpg)
2009 OATFACS Conference2009 OATFACS Conference
The “Handy Dandy” Guide to Economic Thinking
– People choose– All choices have costs– People respond to incentives– People create systems that allocate costs
and incentives (benefits)
![Page 31: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/31.jpg)
2009 OATFACS Conference2009 OATFACS Conference
The “Handy Dandy” Guide to Economic Thinking
– People choose– All choices have costs (TANSTAAFL)– People respond to incentives– People create systems to allocate costs
and incentives (benefits)– Only future costs really matter
![Page 32: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/32.jpg)
2009 OATFACS Conference2009 OATFACS Conference
The “Handy Dandy” Guide to Economic Thinking
– People choose– All choices have costs– People respond to incentives– People create systems to allocate costs
and incentives (benefits)– Only future costs matter– Free trade creates wealth
![Page 33: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/33.jpg)
• http://www.youtube.com/watch?v=VVp8UGjECt4
![Page 34: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/34.jpg)
The key problems facing consumers…
• Current income
• Surplus income
• Deficit income
![Page 35: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/35.jpg)
2009 OATFACS Conference2009 OATFACS Conference
Teaching financial topics with
economic reasoning…
“You are the Financial Advisor”(CEE, Learning, Earning and Investing, Grades 9-12)
![Page 36: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/36.jpg)
2009 OATFACS Conference2009 OATFACS Conference
You are a financial advisor. Clients come to you to ask for your recommendation about what to do with their surplus income (savings).
You take time to clarify the criteria they can use to make their investment choices.
![Page 37: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/37.jpg)
2009 OATFACS Conference2009 OATFACS Conference
Liquidity (transaction demand)
Growth potential (principal/interest)
Tax liabilities
Potential for loss (risk tolerance)
Your personal temperament
![Page 38: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/38.jpg)
What are your options?
Passbook savings accountCertificates of depositGrowth stocksIncome stocksBalanced mutual fundGoldReal estate
![Page 39: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/39.jpg)
2009 OATFACS Conference2009 OATFACS Conference
Around the room are posted signs of several investment options.
I will read a brief description of your client.
Stand by the sign of the investment option you would recommend.
![Page 40: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/40.jpg)
2009 OATFACS Conference2009 OATFACS Conference
Discussion topics:
Personal financial goals Trade-offs Personal temperament Risk tolerance The value of good information Trust
![Page 41: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/41.jpg)
2009 OATFACS Conference2009 OATFACS Conference
The best single resource for classroom instructional activities…
The Virtual Economics CD RomCouncil for Economic Education (NCEE)80 publicationsOver 1200 grade K-12 lessonsLinks to hundreds of online lessonsCorrelated to the Ohio Academic Content
Standards• www.ncee.net
![Page 42: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/42.jpg)
2009 OATFACS Conference2009 OATFACS Conference
Raise your hand if you would
like a free copy of the
“Virtual Economics” CD Rom
![Page 43: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/43.jpg)
2009 OATFACS Conference2009 OATFACS Conference
EconEdLink
www.econedlink.orgProduced by the Council for Economic Education
100s of lessons developed by educators
Includes “Focus on Economic Data” lessons
![Page 44: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/44.jpg)
2009 OATFACS Conference2009 OATFACS Conference
Federal Reserve Bank Resources
- data sources
- instructional activities
- research
- classroom materials
http://www.federalreserveeducation.org
![Page 45: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/45.jpg)
2009 OATFACS Conference2009 OATFACS Conference
Jump$tart Coalition for Personal
Financial Literacy
www.jumpstart.org
www.ohjumpstart.org
![Page 46: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/46.jpg)
2009 OATFACS Conference2009 OATFACS Conference
Teaching about risk and insurance?
Go directly to the Ohio Insurance
Institute. They have everything you need to teach about property-
casualty insurance.
![Page 47: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/47.jpg)
2009 OATFACS Conference2009 OATFACS Conference
What can your Economics Center
do for you?
www.ocee.org
![Page 48: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/48.jpg)
Defining a Problem or Opportunity
Describe a problem or opportunity.
2009 OATFACS Conference2009 OATFACS Conference
![Page 49: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/49.jpg)
Restate the problem or opportunity in five different ways.
1.
2.
3.
4.
5.
2009 OATFACS Conference2009 OATFACS Conference
![Page 50: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/50.jpg)
2009 OATFACS Conference2009 OATFACS Conference
• Restate the problem as a metaphor (a figure of speech in which two different universes of thought are linked by some point of similarity, ie. liquid assets, barking an order) or a simile (a figure of speech in which the subject is compared to another subject. Frequently, similes are marked by use of the words like or as or so.
•
![Page 51: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/51.jpg)
2009 OATFACS Conference2009 OATFACS Conference
The Decision Making Process
– Alternatives– Criteria – benefits and costs– Basis for the assessment of alternatives– Measurement / Judgment– Analysis - comparison– Decision
![Page 52: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/52.jpg)
2009 OATFACS Conference2009 OATFACS Conference
Clarify the alternatives
Eliminate any that are not possible
Clarify the criteria
Compare with similar criteria
Weight the criteria
![Page 53: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/53.jpg)
2009 OATFACS Conference2009 OATFACS Conference
![Page 54: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/54.jpg)
2009 OATFACS Conference2009 OATFACS Conference
![Page 55: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/55.jpg)
2009 OATFACS Conference2009 OATFACS Conference
Questions?
![Page 56: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/56.jpg)
2009 OATFACS Conference2009 OATFACS Conference
Remember…
If you would like the notes
from this presentation, with links,
email:
Subject Line: OATFACS Notes
![Page 57: Building Decision-Making Skill for Personal Finance.ppt](https://reader033.vdocuments.us/reader033/viewer/2022061113/545b4db9af795994188b61d5/html5/thumbnails/57.jpg)
2009 OATFACS Conference2009 OATFACS Conference