Life_in_US_PPoint_2_Week_Course_2.0.1.G3.ppt

3.18.3.G1
© Take Charge Today – May 2011 - Life in...United States Simulation Workshop – Slide 1
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona
2.0.1.G3
Welcome to
Life in…United States
…a Family Finance Simulation
Developed by:
Take Charge Today
Take Charge America Institute - University of Arizona
Funded by a grant from Take Charge America, Inc.

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2.0.1.G3
Today’s Presentation
 Today's presentation will include:
– Reviewing the key components of the simulation and
its design
– Completing the simulation
– Discussing the facilitation options for the simulation
– Overview of Life Of…

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Objectives
 Create a spending plan
 Incorporate the decision making process into
daily life
 Demonstrate the relationship between income
and education
 Provide realistic insights into the costs of living
associated with the spending plan process

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2.0.1.G3
What is “Life In…” ?
 Family finance simulation
 Emulates the “real life” constraints households
encounter when managing their finances
 All costs are national averages
– United States Census Bureau, United States Department of Labor, Bureau
of Labor Statistics, United States Department of Agriculture, National
Coalition on Health Care, and various private businesses
 Simulation is an average community in the United
States
– 25 individuals in 18 households

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Background information
 Background Information
– Describes individual and/or family values, needs and wants
– Family dynamics and lifestyle choices are explained
 Occupational Outlook Handbook guides
– Nature of work, working conditions, training required, job
outlook and earnings
? Read your scenario and be prepared to share and
learn more about who is in your community

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Major expenditure Percentages
 Identify the recommended average
percent of net income to spend in
a specific category
 Use as a guide when making
spending decisions
– Percentages should be adjusted to
meet individual values, needs, and
wants
 Other includes items such as:
– Clothing
– Personal care
– Entertainment
– Donations

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What to complete
 Goal of “Life in…”
– Make spending plan decisions to meet the needs of
the family by balancing their income and expenses
 Assignments to complete
– Setting a Financial Goal worksheet 2.0.1.A1
– Guided Spending Plan worksheet 2.0.1.A2
– Spending Plan Statement 2.0.1.A3

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Life in…
United States

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Education vs. Income
 Job announcement envelopes
– Your level of education is represented by the color in which your name
is printed on the front of the envelopes.
– All children are printed in brown
 Who is in our community?
– Orange: less than 9th grade
– Light pink: high school drop out
– Green: high school graduate or GED
– Sky blue: some college
– Red: associate’s degree
– Navy: bachelor’s degree
– Purple: graduate degree
– Black: doctorate degree
?How does having residents with various levels of education
benefit a community?

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Setting a financial goal
 Set a financial goal
– Financial goals provide direction when creating a
spending plan
– Behind Spending Plan tab, complete each section to
set a SMART goal
• Review profile and consider the family’s values, needs,
and wants
• Set SMART financial goal
– Your financial goal will be recorded on question #2
on the Guided Spending Plan

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Understanding the paycheck
 Under the profile tab review the paycheck(s) for
your scenario
 Review all elements of a paycheck
– Gross income
– Payroll deductions
– Net income
?Why do some paychecks have additional withholding
for retirement and medical and others do not?

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Complete the following:
 Based upon your paycheck, question #3 in the
Guided Spending Plan will include the following:
– Gross income
– All paycheck deductions
– Calculated net income
 For dual-income families, add both paychecks
together

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Saving
 It is recommended a
person save a minimum
of 10% of net income
 Determine what amount
you will be saving or
investing
 Guided Spending Plan
question #4 is the savings
component

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 Housing, on average, is 30% of a
household’s net income
 The information sheet describes
basic terminology, renting vs.
buying, mortgages, how to
determine insurance costs and
various types of insurance
 Guided Spending Plan Question
#5 is where housing information
will be recorded
Housing

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Housing
Purchase
 Must include all items in
red in your spending plan:
– Mortgage
– Insurance
– Property taxes
– Repairs and maintenance
Rent
 Must include all items in red in
your spending plan
– Rent
– Laundromat (when applicable)
 If you have a pet, your rental
unit must allow for them and
applicable fees charged
 Renter’s insurance is not
required, but recommended
– $15.83/mo. for $25,000
coverage
Only choose a house available for the type of location in which you live!

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Housing Amenities
 Required amenities
– Power
– Water/sewer
– Garbage
 Some rentals include all
or some of the required
amenities
 Optional amenities
– Internet
– Cellular phone
– Home phone line
– Cable/Satellite
– Recycling

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Transportation
 Transportation, on average,
is 20% of a household’s net
income
 The information sheet
describes basic terminology,
new vs. used, automobile
financing, how to determine
insurance costs, and various
types of insurance
 Transportation information
will be recorded on question
#6 of the Guided Spending
Plan worksheet

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Transportation
Transportation options:
 Purchasing new:
– Not pre-owned, warranty, wide
selection
 Purchasing used:
– Costs less, lower insurance
rates, depreciates more slowly
 Alternative options:
– Less expensive than a vehicle
– Availability is limited in some
locations
Things to know:
 All items in red must be
included in the spending
plan
– Payment
– Insurance
– Fuel costs
– Repairs and maintenance
 If an alternative option is
chosen, it must be
appropriate for the location
Some profiles indicate transportation choices the family has made.

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Food
 Food, on average, is
15% of a household’s
net income
 Food information will
be recorded on
question #7 of the
Guided Spending Plan
worksheet

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Types of Food Plans
 Thrifty
– Generic brands
– Canned fruits and vegetables
– No junk food
– Chicken and hamburger
 Low-cost
– Generic brands
– Some fresh fruit and vegetables
– Chicken, hamburger, turkey,
ham
 Moderate-cost
– Mostly fresh fruit and
vegetables
– Both name brand and generic
– Variety of meats
 Liberal
– Organic
– Name brands
– Fresh fruit and vegetables
– Variety of meats including
steak and lobster

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Stop Watch
Complete the profile, paycheck, saving, housing,
transportation, and food section of your
spending plan.

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Insurance
 Insurance, on average, is 7%
of a household’s net income
 The information sheet
describes basic terminology,
how to determine insurance
costs and various types of
insurance
 Insurance information will be
recorded on question #8 of
the Guided Spending Plan
worksheet

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Health Insurance
1. Determine if health
insurance is provided by
employer
– If provided, ascertain
which family members
are protected
2. If not provided, decide
if it will be purchased
separately
3. If so:
– Identify the age of the oldest
individual being covered
– Review the appropriate plan
• 1 individual = single
• 2 individuals = single +
dependent
• More than 2 = family plan
– Select from the row of the
appropriate age and column
of the appropriate plan

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Disability Insurance
1. Determine if disability insurance is provided by
employer
2. If not provided, decide if it will be purchased
separately
3. If so:
– Monthly net income x .02 = monthly cost

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Life Insurance
1. Determine if life insurance
is provided by employer
2. If not provided, decide if it
will be purchased separately
 If so:
– Identify who will be insured
– Must be purchased separately
for each individual being
insured
 Select the amount of
coverage
– $100,000
– $250,000
– $350,000
 Find out if people in your
scenario use tobacco
products or not
 Determine the monthly cost

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Cost of Raising Children
 Select the appropriate table based upon single
or two parent families and income
 Record total on the Guided Spending Plan #9

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Cost of raising children
 If you have children, go to the Cost of Raising
Children tab
1. Select the appropriate table based upon single
or two-parent families and income
2. Find the row for the oldest child
3. Add together the costs of:
Clothing + Healthcare (could be reduced if insured) +
Childcare + Education + Miscellaneous = Total cost

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Cost of Raising Children
 Total cost is based on families with 2 children
 If there are not two children:
– Single parent family
• 1 child = total cost x 1.35
• 3 or more children = total cost x .72
– Two-parent family
• 1 child = total cost x 1.24
• 3 or more children = total cost x .77
 Record total on the Guided Spending Plan #9

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Stop Watch
 Complete the insurance and children sections,
as well as anything from the previous sections
 If you do not finish everything, that’s okay!

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Credit card statements
America’s Debt
 A 2007 survey of college students said that one-third of students reported
having two credit cards or more; 12% had three or more credit cards
 College students carry an average of $1,035 of credit card debt (this does not
include college loans)
 Source: Buffalo State College, Financial Literacy Key to Prevent College Student Credit Card Debt, October 2007,
http://www.newswise.com/articles/view/534061
 Congratulations!
– Your monthly credit card bill has arrived
 Guided Spending Plan Question #10
– Identify how much debt, if any, you have
– Need to include at least the minimum payment

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Personal Profile Expenses
 Review personal profile and record all expenses
printed in red
– Hobbies, activities, medical expenses, pets, charity
donations, extra bills, habits, etc.
 Expenses identified in red are valued or
necessary and cannot be eliminated
 Incorporate any expenses not already included
in the Average Expenditures section of the
Guided Spending Plan question # 11

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Average Expenditures
 Guided Spending Plan
Question # 11
 Review the average
expenditures for:
– Entertainment
– Personal Care
– Health Care
– Apparel & Services
– Contributions
– Education and Reading
 Based upon your scenario’s
income level, select expenses
 These are flexible expenses
based upon averages
– Therefore, you may choose to
allocate more or less money to
each category
 Record expenses and total
them
Remember to allocate enough money
to cover all members of the family!

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Chance cards
 Each day brings new surprises…
– Why a spending plan is a “plan” for how to allocate
your money
– Spending plans are always evaluated and adjusted
based upon life's events
 Guided Spending Plan Question # 12
– Identify what chance card was received
– Incorporate that chance card into your spending
plan

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Balancing the spending plan
 Guided Spending Plan Question #13
1. Transfer all income and expense subtotals throughout the
worksheet onto this chart
2. Subtract the total expenses from the total income
 Your balance must equal zero
– Make changes as necessary
• If there is a net gain, where will the extra money be allocated?
• If there is a net loss, identify what changes may be made
 Identify decisions made to make the spending plan
balance

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Creating the Spending Plan
Statement
 Write your revised goal on the Spending Plan
Statement
 Transfer all income and expense information to
the Spending Plan Statement
 Calculate the percentage of net income spent on
each category

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Take Time
 Finish any remaining sections of your spending
plan

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Discussion

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Reflection
?What do you feel is the
most difficult component of
creating a spending plan
which families encounter?
?Identify two things you
learned as a result of
completing this
simulation which you will
employ in your daily life
in the next five years.
? Do you feel that insurance
is an essential component
of a financial plan? Why
or why not?
? How did working with
a partner and
discussing options
influence decisions?
Was it hard, easy?

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Facilitation and Assessment

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How many Can Participate?
 Simulation is designed specifically for 25
participants, but can be used with as few as 1
person or as many as 90 people
– Less than 25
– 25-40 people
– 40-90 people

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Facilitation Methods
 Facilitator guided
 Semester course
 Workshop
 Independent study
– Information sheets are included in each section
 Career Development
 Your own creative way

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Assessment Tools
 Assessment tools within “Life In…”
– Multiple choice and short answer quizzes
– Reflection questions for group discussion or
individual short answer
– Essay
– Trivia game
 “Life In…” as an assessment tool
– Stand alone authentic assessment of skills

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Educator Tips
 Put each page into page protectors to keep participants
from writing on pages
 Be sure that the spending plan section has been printed
in black and white. This is the section where the
participants will be writing
 Use only one scenario for entire class to create a
discussion on how wants and needs and values of
different people lead to different decisions
 Use binders appropriate for the area you live in
(specific socio-economic status, jobs, race, or family
make-up). Use the profile descriptions to help make
your decision

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Educator Tips

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Educator Tips
 Determine if the participants will work individually or in
groups
– If participants are going to work individually, consider
allowing more time for completion
– If participants are going to work in pairs, two options are
available
• Allowing participants to choose their partner will help them to feel
more comfortable
• Choosing the groups for participants will force different values, needs,
and wants to be discussed
– If participants are working in pairs, the educator may assign
daily participant points to ensure all participants are assisting
with completing the scenario

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Educator Tips
 To illustrate diversity in income levels
– Seat groups with various income levels next to each
other
– Students will often share and discuss challenges of
creating a spending plan
 Assign students to specific scenarios

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How to acquire “Life In…”
Can be viewed and downloaded for no-cost at
http://takechargetoday.arizona.edu/
Can be purchased for $42500

48
Take ChargeToday
Life Of…..
Finance Simulations
“A Teenager’s Spending Plan”
Funded by a grant fromTake Charge America, Inc.
Introductory Level

49
Life Of…
Life Of… Life In…
•Individual spending plan simulation for
a teenager
•Spending plan for a family
•Applied assessment for the
Introductory Level Curriculum
•Applied assessment for the Advanced
Level Curriculum
•Consider the family elements when
creating the spending plan
•The family elements is what makes the
spending plan
•Takes approximately 3-5, 45 minute
class periods to complete
•Takes approximately 5-7, 45 minute
class periods to complete

50
Life Of…
• Each scenario consists
of one notebook
• Available simulations:
– Taylor B. Jones
– Monica Erickson
– Ben West
– Mandy Gonzales
– Carlos Chavez Scenario about a teenager
Pick the scenario your students
would relate to the most!

51
Family Information
• Emphasis on the
family’s values,
needs and wants
• Guidance about the
family’s spending
plan
• Information about
what the family
provides for the
teenager

52
Major Expenditures
• Simplified options
compared to Life
In…
• Only one option is
the correct answer
based upon the
family’s values,
needs, wants, and
spending plan

53
Spending Plan
• Students are
immediately reflecting
upon each decision
• Students also reflect
on the overall and key
points in the scenario
that influence choices
– Debt
– Extended family

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Conclusion
 Questions?
 Thank You!

Life_in_US_PPoint_2_Week_Course_2.0.1.G3.ppt

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