SESSION TWO: GET TO KNOW YOUR FINANCES

Aim: To help students assess their current financial situation Contains: Lesson plan Tutors notes Reality Check Form case study Get organised! game The Money Secret Course assignment

www.themoneysecret.info 2006

The Money Secret Adult Education Course

2:1

Lesson Plan
Session Two: Get to Know Your Finances
Length of session: 90mins Aim: To help students assess their current financial situation By the end of the session, students will be able to 1. Assess their financial situation 2. Identify difficulties faced 3. List their income and outgoings 4. Organise their paperwork 5. Produce a financial action plan
Objectives Time Content (mins) 10 Welcome Aims and objectives of session Review homework Freds situation case study (workbook p.4) Methods Teacher led Resources Assessment Flipchart and pens Students participation

1, 2

10

Teacher led Case study Discussion and feedback Teacher led Activity

Flipchart Students and pens participation Paper and Group work pens Flipchart Students and pens participation Paper and Group work pens Case Students study participation activity Group work sheets Paper and pens TMS

Barriers to managing finances effectively

1, 2, 3

30

Reality check form case study

Teacher led Discussion and feedback

10 15

BREAK Get organised! Agree together a way of being organised. Teacher led Discussion and feedback Flipchart Students and pens participation Paper and Group work pens Flipchart Students and pens participation Paper and Group work pens

10

Planning Work out action plan based on objectives Detail income, discuss with partner (if applicable) Work through bills and paperwork Set homework and assignment

Teacher led Individual work

Total (mins)

90

www.themoneysecret.info 2006

The Money Secret Adult Education Course

2:2

Tutors Notes
Welcome/Introduction
This session should be a lot quicker to get going than the last. You will not need to explain where the fire exits are etc., and everyone should be clear about why they are here. Begin by explaining the aims and objectives of this session, so that students know what will be covered. Discuss the homework set - get some feedback from students about the sections of The Money Secret book and workbook they have read.
4

Case study: Freds story

Refer to page four of the workbook and the case study on Fred. Split up the group into pairs, and then ask everyone to read through the study and discuss it with a partner, before feeding back to the rest of the group. Prepare some of your own thoughts and comments in advance to help with the discussion. Answers could include: Talk to a debt counsellor Get head out of the sand Talk to the credit card companies and see if they can come to a repayment agreement Find out how much he owes

Barriers to managing finances effectively

As a whole group, ask students to think about what can make good financial management difficult. Use the flipchart to jot down suggestions. Some examples might include: Lack of time Fear of reality of debt (i.e. I would rather not know my financial situation) Not very good with maths Love shopping too much Spending is so easy Dont know how to do finances

Hot spot: Be aware that some students may begin to refer to personal

situations at this point. Allow the students to do this if they are comfortable, but keep the exercise on track time-wise. Moreover, the exercise should focus on general points where possible. Again, this is a useful way of getting a good overview of the group as a whole. Talk through each issue raised and see if you can get a discussion going as you write down suggestions. You should be able to explain that most of these barriers will be tackled at some point in the course.

www.themoneysecret.info 2006

The Money Secret Adult Education Course

2:3

Case study: Reality check

Get students into small groups and ask them to look at the months bank statement for the fictional character, Paul Jamieson. Stress that he is a high earner, or as The Money Secret calls him, a Wealthy Pauper. Not many people earn as much as Paul does, but this fictional example shows that even high earners can find themselves in debt. Using the statement, students should then try and complete the income and spending forms. For some items, like housekeeping, a bit of imagination may be required as it is not explicit on the statement. Also, dont forget to factor in a figure for other annual expenses, such as car tax, or TV licence. It is important for students to do this, as it is often these annual (and therefore unexpected) expenses that cause problems for people. Compare the results with the estimated amounts (already completed by the fictional character). Note the difference and discuss the implications with the wider group. Then, ask the students to identify what this person must do to ensure he doesnt fall further into debt (i.e. what can this person cancel / change in order to reduce spending?). Refer to Pages 15-20 of The Money Secret for further guidance from Lydia.

Get organised!

This is a fun item - do not take it too seriously! Play the Get organised! game (see separate sheet Get organised!). Emphasise that this is one of the key factors in ensuring good financial management. Being organised helps with planning which in turn is the only way of having a good overall understanding of your money.

Close

Use this last section of the lesson to encourage the students to devise an action plan of how they are going to begin to take control. You may find these headings useful: What do I want to achieve? (e.g. A better understanding of my financial situation) How am I going to achieve it? (e.g. Sit down with my paperwork and create an effective system) When will I achieve it? (e.g. In two weeks) Set the homework for next week - students should read chapters three and four of The Money Secret and the workbook. Give each student a copy of the Post-session Reflections for them to make their own notes on the session. This can then be used as a memory jogger in future sessions. Finally, hand out the Assignment sheet - to give students a chance to read it through and begin to think about what they want to do.

www.themoneysecret.info 2006

The Money Secret Adult Education Course

2:4

GE ST PA

ENT UD

www.themoneysecret.info 2006

GE ST PA

Case Study: Reality Check Form

Get into small groups of three to five people and complete this activity in those groups. You will need to feed back your answers to the group as a whole for discussion afterwards.

ENT UD

Scenario

Paul Jamieson works in sales and is a high earner. He thinks that his usual salary is around 3,000 per calendar month. He gets a basic salary of around 2,000 and the rest is commission on his work. Commission has not been high lately, but Pauls spending habits have not changed. The Peoples Bank has been sending him letters regarding charges on his overdraft as he has been over the limit a number of times. This has finally made Paul sit back and take note of his income and expenditure.

Task one

He sits down with the reality check forms to calculate his income and expenditure. His first task is to estimate these figures, which he does relatively quickly. Then he picks up his latest statement and tries to put in the actual figures. (NB The statement figures are purely fictional to help illustrate the reality check form activity.) Your task is to use his statement and help him fill in the actual figures. Dont forget to factor in payments that can be made once a year such as car tax, MOT, TV licence, water, car maintenance, etc.

Task two

Once you have done that, what could Paul do to try and reduce his expenditure from his account? He must do this to avoid going over his overdraft limit, and therefore further into debt, each month. Write down some ideas, and then discuss them with the rest of the group.

The Money Secret Adult Education Course

GE ST PA

ENT UD

1 Jan to 31 Jan
Account Name Paul Jamieson Date 02-Jan Type DD Switch Switch Switch ATM DD Switch Switch ATM CHQ CHQ Switch ATM CHQ DD CR DD SO ATM Switch Switch SO ATM SO Switch CHQ Switch Switch DD ATM Switch CR Switch ATM DD DD ATM DR DR DR ATM Switch DD Account Number 19437501 Description Council Tax The Restaurant The Clothes Shop The Electrical Shop Cash Satellite TV The Supermarket The Supermarket Petrol Cash Cheque no. 100178 Cheque no. 100176 The Local Shop Cash Cheque no. 200042 Electricity Paid in Gas Car Loan Cash The Supermarket The Local Shop Rent Cash Personal Loan The Local Shop Cheque no. 200039 The Supermarket The Supermarket Petrol The Telephone Co. Cash The Local Shop Salary The Chinese Cash Makesafe Insurance Mobile Phone Cash Overdraft Review Fee Overdraft Charge Debit Interest Cash The Supermarket Petrol Car Insurance Sort Code 12-34-56 Paid Out 95.00 45.97 131.85 89.99 50.00 65.97 112.02 29.02 20.00 165.00 24.00 14.97 100.00 98.00 35.00 9.36 25.00 349.00 30.00 32.45 5.26 560.00 100.00 419.87 16.12 19.87 29.96 35.01 34.00 100.00 5.13 2387.42 24.87 50.00 26.87 64.00 100.00 25.00 13.00 8.83 30.00 34.52 108.63 Paid In Balance 556.37 510.40 378.55 288.56 238.56 172.59 60.57 31.55 11.55 -153.45 -177.45 -192.42 -292.42 -390.42 -425.42 -416.06 -441.06 -790.06 -820.06 -852.51 -857.77 -1417.77 -1517.77 -1937.64 -1953.76 -1973.63 -2003.59 -2038.60 -2072.60 -2172.60 -2177.73 209.69 184.82 134.82 107.95 43.95 -56.05 -81.05 -94.05 -102.88 -132.88 -167.40 -276.03 Notes Monthly

03-Jan

04-Jan

07 -Jan 08-Jan

09-Jan 10-Jan 11-Jan 14-Jan 15-Jan 16-Jan 17-Jan 18-Jan 21-Jan 22-Jan

23-Jan 24-Jan 25-Jan 28-Jan

29-Jan 30-Jan 31-Jan

www.themoneysecret.info 2006

GE ST PA

The Peoples Bank

Your Statement

ENT UD

Monthly

Credit card, min payment Store card, min payment

2nd store card, min payment Monthly Monthly Monthly

Monthly Monthly payment Pizza

Monthly Payment

Contents insurance, monthly payment Monthly payment

Monthly payment

The Money Secret Adult Education Course

GE ST PA

ENT UD

www.themoneysecret.info 2006

GE ST PA

Reality Check Form

Income
Type of income Salary Other TOTAL Estimated
Monthly

ENT UD

Actual
Monthly

3000.00 0.00 3000.00

Spending
Type of spending Mortgage/rent Building insurance Contents insurance Council tax Water rates Gas Electricity Telephone/mobile phone TV licence and TV subscription TV rental Fines Petrol Car tax Car insurance Car servicing/repairs Car loan House repairs/decoration Charitable giving Regular savings Housekeeping (food and cleaning supplies) Clothes Entertainment Meals out/takeaways Emergencies Pocket money (cash withdrawals) Personal loan Credit/store cards TOTAL Estimated
Monthly

Actual
Monthly

560.00 0.00 25.00 85.00 0.00 25.00 25.00 60.00 45.00 0.00 0.00 90.00 0.00 100.00 0.00 349.00 0.00 0.00 0.00 100.00 50.00 50.00 50.00 50.00 250.00 420.00 200.00 2534.00

The Money Secret Adult Education Course

Reality Check Form (Tutors Copy)

Income
Type of income Salary Other TOTAL Estimated
Monthly

Actual
Monthly

3000.00 0.00 3000.00

2387.42 9.36 2396.78

Spending
Type of spending Mortgage/rent Building insurance Contents insurance Council tax Water rates Gas Electricity Telephone/mobile phone TV licence and TV subscription TV rental Fines Petrol Car tax Car insurance Car servicing/repairs Car loan House repairs/decoration Charitable giving Regular savings Housekeeping (food and cleaning supplies) Clothes Entertainment Meals out/takeaways Emergencies Pocket money (cash withdrawals) Personal loan Credit/store cards TOTAL Estimated
Monthly

Actual
Monthly

560.00 0.00 25.00 85.00 0.00 25.00 25.00 60.00 45.00 0.00 0.00 90.00 0.00 100.00 0.00 349.00 0.00 0.00 0.00 100.00 50.00 50.00 50.00 50.00 250.00 420.00 200.00 2534.00

560.00 0.00 26.87 95.00 23.00 25.00 35.00 98.00 75.97 0.00 46.38 98.55 10.00 108.63 25.00 349.00 0.00 0.00 0.00 215.91 131.85 89.99 90.71 0.00 580.00 419.87 287.00 3392.18

www.themoneysecret.info 2006

The Money Secret Adult Education Course

2:8

Get Organised!
Aim To illustrate the benefits of being organised Players 4 (2 teams of 2) Effort Fairly high (running involved!) Equipment One cardboard box containing several ring binders clearly marked as if they were someones financial records. On plain paper write the words bank statement, loan agreements, gas bills, electricity bills, car tax, etc to create the impression of financial statements. An identical set of financial statements but these should be littered around the room beforehand. Make sure they are well hidden - under chairs, behind pictures, in the bin, under piles of newspapers or magazines. You could even scrunch them up beforehand. One table A whistle How to play Ask the teams to form at one end of the room (team A and team B), while you place the cardboard box on a table at the opposite end of the room. Explain that you will ask one member from each team to retrieve a particular document (e.g. last months bank statement), but only team A can look in the box. Team B must look around the room for their document. When you blow the whistle they must retrieve this document as fast as they can. The first person to give it to you wins a point for their team. Continue this until time is up. Message Team A, who only had to look in ring binders in the box (one location), should win easily. Obviously, the point of this game is that if you dont organise anything how can you find that crucial piece of paper? A filing system that mixes your waste paper with a final notice bill could be the reason a hefty fine drops through the door. Many people who are in serious debt are in the situation where their important financial documents are impossible to locate. True story After his father died, a son undertook the task of sorting out the will and finances. To his surprise, he found vital documents in seventeen separate locations about the house.

www.themoneysecret.info 2006

The Money Secret Adult Education Course

2:9

GE ST PA

ENT UD

www.themoneysecret.info 2006

GE ST PA

Assignment
Aim To produce a 5-10 minute presentation on one aspect of The Money Secret. Size of groups 2-3 persons Materials You may use whatever materials are at your own personal disposal - paper and pens, word processing, digital media, PowerPoint, props, etc. Task In your groups, select a principle/topic that features in The Money Secret, making use of a range of different elements e.g. drama, quiz, graphics/artwork, puzzles, audience participation. Try and be as creative as possible - your presentation should be highly memorable, helping to reinforce the valuable message contained within the book. Feel free to try unusual and interesting methods for this. Here are some suggested titles for inspiration: How to avoid the credit card trap Moving banks is easier than you think Five top money-saving tips The persistent loan company - what you really end up paying! Red bills - dont bury your head in the sand Cash for a Month Saving for what you need When you have decided what theme you wish to cover, liaise with other groups and the tutor to ensure that, as much as possible, no two groups will cover the same subject. Assessment Your tutor will assess your presentation according to the task set, while your peers will also be encouraged to give feedback.

ENT UD

The Money Secret Adult Education Course

2:10