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3-5 Social Studies Week Four

Financial Literacy Basics

In Social Studies you will work on three financial literacy basics lessons each week. Each week will have different goals. This week you will focus on payment options. This is the final week of social studies material. 
  • Lesson 1: You will explain the concepts of credit and debit as well as compare and contrast various payment methods. 
  • Lesson 2: You will apply knowledge of payment options to real-world scenarios.
  • Lesson 3: You will discuss identity theft and types of personal information that should not be shared. 

 

Lessons

Learning Goals and Activities

Lesson 1

Below are the learning goals for this week: 

  • I can explain the concepts of credit and debit and compare and contrast various payment methods. 
  • I can apply knowledge of payment options to real-world scenarios. 
  • I can discuss identity theft and types of personal information that should not be shared. 

 

Step 1: Think/Talk Write About:

  • Writing cueWhat do you use to pay for things?
  • What do your household members use to pay for things? 
  • What do you know about the following four payment options?
    • cash
    • credit cards
    • debit cards
    • checks

 

Step 2: Predict

Directions: How much do you know about different payment options? Read each statement in the table below and decide if it is true or false. If you are unsure, take your best guess. 

1. Cash, credit, and debit are payment options.  True  False
2. Some businesses only accept cash payments.  True False
3. Credit cards and debit cards are made of paper.  True False
4. When you pay with credit, you are borrowing money.  True False
5. If you use a credit card, you receive a yearly bill.  True False
6. Credit cards set no limits to how much you can spend.  True False
7. A debit card is linked to a person's checking account.  True False
8. A debit is money added to an account.  True False
9. Checks come in a small book called a checkbook.  True False
10. A check is a piece of paper used for making a payment.  True False

Step 3: Read and Review

Directions: Using the reading below, how would you revise your answers to the True and False statements from Step 2 above? 

A credit card is not just an endless supply of money. It is linked to a person’s account and
must be paid back by a certain date every month. If it is not paid back in full by that date, that person has to pay interest (the cost of borrowing money; also the money earned from lending it). If someone has a credit card, that person also has a limit to how much “credit” he or she has available to use. The limit is based on how creditworthy that person is (how likely someone will be able to pay back a loan).  Creditworthy is similar to trustworthy. 

What is Credit?

Credit is a loan. When you pay using credit, you are borrowing money. 

A credit card is a plastic card that lets you pay using credit. The card has a limit on how much you can charge (spend).

Each month, you receive a credit card statement. It is record of your purchases and how much you owe. If you don’t pay all the money back on time, you have to pay it back with interest.

For example, let’s say your October credit card statement shows you owe $250. The money is due by November 5. If you can, you should pay back the $250 on time. If you can only pay back $100, then you would owe $150 plus interest.

Integrated Credit Card Processing - ProcentiveMoney experts give this advice: Only use a credit card for things you can afford. Then pay all of the money back on time. Otherwise, you might have to pay a lot of money in interest. Money you owe is called debt. If you don’t pay it back in time, that debt can grow and grow. Why use credit cards? They are a quick and convenient way to pay. They can also help in an emergency. For example:

  • Let’s say you have no cash left and you need to buy lunch. You can pay using a credit card.
  • You might need to have your bicycle repaired. When you go to pick it up, you find out that you owe $100. If you only have $45 cash, you can pay with a credit card.
  • Soccer practice is in 30 minutes and you are at the mall shopping for a new pair of cleats. They cost $40 and you have $50 cash (all in $1 and $5 bills!). You are in a hurry to get to practice, so instead of counting out your money, you pay with a credit card. That way, you can pay faster.

Many credit cards also give people points each time they make a purchase using the card. After people have enough points, they can trade the points in for cash, discounts, or other rewards.

DISCUSS: In your own words describe what credit is. Discuss this with someone in your household or write your response on your own paper. 

What is Debit?

A debit is money removed from an account.

A debit card is a plastic card that takes money out of your checking account.

When you use a debit card, the money is deducted (subtracted) immediately from your account.

Credit Card vs Debit Card: Which One Is Better? - Dan LokIf you don’t have enough money in your account to make a purchase, you
can’t pay with your debit card. For example:

  • Let’s say you have $350 in your checking account. You want to buy a
    new pair of jeans. The jeans cost $30 and you pay with your debit card.
    That $30 is then deducted from your account. You now have $350
    minus $30 in your account, or $320 left.
  • If you only have $25 in your checking account, can you use your debit
    card to pay for $30 jeans? No, because you don’t have enough money
    in your checking account.

Checks are another form of debit. They are paper forms that a person fills
out to make a payment. Checks come in a small book called a checkbook.

How to Write a Check in 5 Easy Steps + Examples - Intuit Turbo BlogWhen you pay by check, the money is also deducted from your checking
account. If you want to buy those $30 jeans and you have $350 in your
checking account, you can also pay with a check. When the store deposits
the check you wrote, the money is deducted from your account. You now
have $350 minus $30 in your account, or $320 left.

If you write a check for more money than you have in your account, you
may have to pay a lot of extra fees. To keep from owing extra fees, make
sure you have enough money in your checking account before you write a
check. For example:

  • You need to write a check next week to give to your piano teacher. You
    owe him $125, but you only have $100 in your checking account. What
    can you do? Go to the bank to deposit more money into your checking
    account ahead of time. If you deposit another $100, you will have $200
    in your account. Can you write a check for your piano teacher now?
    Yes! And you will still have money left over in your checking account.
    How much will you have left?

DISCUSS: In your own words describe what DEBIT is. Discuss this with someone in your household or write your response on your own paper. 

Step 4:Reflect

Directions: Discuss the questions below with someone in your household, a friend, or send your teacher an email. 

  1. Explain the concept of credit
  2. Explain the concept of debit
  3. Describe how credit and debit are similar and different.
  4. Describe different payment methods. 

Lesson 2

Today you will work on: Payment Scenarios

 

Which of the learning goals below do you think you know?

  • I can explain the concepts of credit and debit and compare and contrast various payment methods. 
  • I can apply knowledge of payment options to real-world scenarios. 
  • I can discuss identity theft and types of personal information that should not be shared. 

 

Step 1: Think/Talk Write About:

Directions: Reflect on the question: 

Why might someone choose to pay with cash? Credit? or Debit? 

STORY PROBLEMS: PAYMENT DECISIONS People can make purchases using different payment options. Directions: Read each scenario and answer the questions to make payment decisions. 1) Violet has $20 cash and her checkbook. She is in a hurry and needs to pay for a birthday card that costs $3. How should she pay for the card? Why? 2) Sierra and her grandmother go out for lunch. Her grandmother needs to pay $32 and has $35 in her wallet, along with and a credit card. She wants to make sure she has at least $5 left for the rest of the day. How should Sierra’s grandmother pay for the meal? Why? 3) Max has to pay his credit card bill. It is due in two weeks. Max wants to mail in a check for the total amount of $135. He has $100 in his checking account. Does Max have enough money to write the check? If not, how can he still pay by check?

Step 2: Problem Solve

Directions: Read the scenarios below and answer the questions. 

1. Ryan and his father are buying food at the grocery store. The total is $65. Ryan's dad has a credit card and $40 cash in his wallet. How should he pay for the food? Why? 

2. Jose is buying a $3 slice of pizza. The sign in the store says "cash only." Jose has a credit card and $5 cash. Which payment option should he use? Why? 

3. Sera is in college. She has a debit card and $24 cash in her wallet. She has $120 in her checking account. Sera needs a new pair of sneakers and finds a pair she likes for $55. Which payment option should she use? Why?

4. Layla needs to pay for an expensive car repair. The total is $2,300. Layla has a credit card and a debit card in her wallet. She has $2,800 in her check account. Her credit card limit is $3,000 and she has already charged $800. Which payment option should she use? Why? 

Step 3: Reflect

Directions: Discuss the question below with someone in your household, a friend, or send your teacher an email. 

  1. How can you make the best payment option decision when buying something?

 

Lesson 3

Today you will work on: Private Information

 

Which of the learning goals below do you think you know?

  • I can explain the concepts of credit and debit and compare and contrast various payment methods. 
  • I can apply knowledge of payment options to real-world scenarios. 
  • I can discuss identity theft and types of personal information that should not be shared. 

 

Step 1: Think/Talk Write About:

Directions:Type , write, or discuss your answers to the questions below.

    1. What do you already know about identity theft?

Identity Theft: What is is and How to Prevent it

Step 2: ReadSome information should be kept personal. It should not be shared with anyone without a parent’s permission, especially when you are online. Here is some personal information you should keep private: • Birth date • Phone number • Home address • Bank account number • A parent’s credit card number • Passwords • School name and address

Following this rule can help keep you safe. It can also help prevent identity theft. An identity is who someone is. Identity theft is a crime. It is when someone pretends to be another person by taking that person’s personal information to steal his or her money. For example:

  • Cartoon Lizard Clipart - Clip Art BayA thief might steal someone else’s credit card number to buy things online. Then the bill is sent to the owner of the credit card, not the thief. Let’s say your parent’s credit card number was stolen. On the next statement, your parent notices a charge for 50 pounds of lizard food. Wait a minute — you don’t have a pet lizard! Now your parent has to call the credit card company and report a theft.

 

  • Let’s say you are using the computer and you get a pop-up ad. It says you can win a prize if you click on the ad. (Don’t click on the ad!) But if you did click on the ad, it might ask you to enter personal information so you can collect your prize. NEVER enter personal information without a parent’s permission. If you do, someone may use the information you entered to steal your identity. 

DISCUSS: In your own words describe what IDENTITY THEFT is. Discuss this with someone in your household or write your response on your own paper.

Step 3: Test Your Knowledge

How much did you learn about payment options and identity theft? Select the best answer to each statement or question below. 

1) You need to buy new shoes. Which two ways can you pay if you want the money to come out of your checking account? a) checks and debit cards b) debit and credit cards c) credit cards and checks 2) Since you have a credit card, you receive a statement every _______. The statement is a record of what you bought and the payment due. a) day b) week c) month 3) People say you are trustworthy. You always pay back the money you borrow. Which payment option is the same as borrowing money? a) paying by check b) using a debit card c) using a credit card 4) Sometimes, you choose to fill out a paper form to make a payment. That paper form is called a ______. a) debt b) check c) credit 5) You just learned about identity theft. What advice would you give to someone who asks how to prevent it? a) Only pay for things with cash or checks. b) Keep your personal information private. c) Never borrow money from a close friend.