1. Making the Finance Personal: Project-Based Learning for the Personal Finance Classroom
By Julie Kornegay
Senior Economic and Financial Education Specialist
Federal Reserve Bank of Atlanta – Birmingham Branch

2. Personal Finance in the Classroom
What are the challenges?
Students don’t find it relevant.
It’s boring.
Students already know everything.
Parents don’t want to talk about it.
OMG, math?
Financial concepts are constantly changing.
IT IS BEHAVIORAL.
How many of you have taught a personal finance course?
What do I mean when I suggest that there is a behavioral challenge?

3. Which statement best describes your attitude?
I sometimes make impulsive purchases that I know I shouldn’t. (Ex: eating out, new flip flops, cute outfit, etc.)
I always think rationally about my purchases.

4. Which statement best describes your attitude?
I wish I would have started saving a little earlier for retirement.
I have always saved at least 10% of my income for retirement no matter my age or salary.

5. Which statement best describes your attitude?
I wish I could afford to save.
I always pay myself first.

6. Which statement best describes your attitude?
I have trouble trying to figure out how to invest my retirement account.
I know exactly how my retirement account is invested, including which companies make up any index funds.

7. Which statement best describes your attitude?
I am busy and don’t have time to think deeply about everything.
I am good at translating problems into solutions that are solved logically. I think all things through thoroughly before acting.
Make a handout

8. Thank you for participating.
Do you more closely identify with “A” or “B”?
You may be seated.
Was there anything striking to you introspectively throughout this process?
Did you learn anything about yourself that you didn’t already know?

9. Are you a “Human” or an “Econ”?B
Homo Economicus A
Human
Good at translating problems into terms that are solved logically
Utility determines choice
You can never be worse off by having more choices
Are susceptible to temptation
Do things “automatically” or without thinking
So, as you may have guessed by now, if you found yourself leaning toward “A” as a response, you’re human. 
If B was your primary response, you lean toward the logical or “Homo Economicus”.
Example of automatically – grab another handful of snacks at a party knowing that you will ruin your dinner. We are often faced with so many choices per day that to logically think about all of them is unrealistic.
Are these assumptions realistic? – Behavioral Economists say NO!

10. Choices Aren’t Always Logical
Homer Simpson
Dr. Spock
Extreme examples of the decision-making process could include characteristics of Homer Simpson or Dr. Spock.
I imagine most of us are somewhere in the middle. I can only speak from personal experience, but it seems that many decisions we make daily that are less significant receive a lower allocation of time or may seem reflexive. For the more complex decisions, we may think about this for several days or solicit help from one that has more experience in the area.

11. Passive Decision Making
People tend to be passive decision makers.
This can be described as what requires the least amount of effort.
An example of this is saving for retirement.
When you start a job, typically you have to fill out a bunch of forms including payroll deductions for 401k. Some people will delay this decision making for years. Ultimately, missing out on a tremendous opportunity to prepare for retirement.
This is one area that is explored in behavioral economics. It has also been examined by the National Bureau of Economic Research; they suggest that if a company switches the option from having to opt-in to the retirement plan to having to opt-out of the plan, participation rates increase sharply.
What if there were a mechanism to help you make the decisions that were in your best interest?

12. Choice Architecture
Framing – the idea that choices depend, in part, on the way in which problems are stated.
Choice architecture can successfully nudge people toward the best decision without restricting their freedom of choice.
Choice architecture or framing a choices in a way that it is easiest for people to make the choices that are best for them. In this example, Apu’s cunning choice architecture has Homer eating fruit instead of donuts.
The book mentions another example of Speeders on Lakeshore Drive in Chicago. People continued to speed even though the posted signs indicated a dangerous curve ahead.
They moved the lines in the center of the road closer together and it made the drivers feel they were going faster. The drivers were Nudged to slow down.

13. Components of Project-Based Learning
Intended to teach significant content
Requires critical thinking, problem solving, collaboration, and various forms of communication
Requires inquiry as part of the process of learning and creating something new
Is organized around an open-ended Driving Question
is intended to teach significant content. Goals for student learning are explicitly derived from content standards and key concepts at the heart of academic disciplines.
requires critical thinking, problem solving, collaboration, and various forms of communication. To answer a Driving Question and create high-quality work, students need to do much more than remember information. They need to use higher-order thinking skills and learn to work as a team. They must listen to others and make their own ideas clear when speaking, be able to read a variety of material, write or otherwise express themselves in various modes, and make effective presentations. These skills, competencies and habits of mind are often known as “21st century skills,” because they are prerequisite for success in the 21st century workplace.
requires inquiry as part of the process of learning and creating something new. Students ask questions, search for answers, and arrive at conclusions, leading them to construct something new: an idea, an interpretation, or a product.
is organized around an open-ended Driving Question. This focuses students’ work and deepens their learning by framing important issues, debates, challenges or problems.
creates a need to know essential content and skills. Project Based Learning reverses the order in which information and concepts are traditionally presented. A typical unit with a “project” add-on begins by presenting students with knowledge and concepts and then, once gained, giving students the opportunity to apply them. Project Based Learning begins with the vision of an end product or presentation. This creates a context and reason to learn and understand the information and concepts.

14. How do we get the students engaged in personal finance and affect behavior?
Project-Based Learning
An instructional approach built upon authentic learning activities
Engages student interest and motivation
Designed to answer a question or solve a problem
Reflects the types of learning and work people do in the everyday world

15. Overview of the Project
Start with the driving question.
What is your strategy for a successful financial future?

16. Components of the Project
Expense Tracking
Setting Financial Goals
Cash Flow and Balance Sheets
Income Taxes
Creating a Budget
Credit Report
Purchasing a Vehicle
Saving and Investing for the Long Term
Important Financial Documents
Retirement Planning
Insurance Inventory
Many of these projects contain a reflective writing component.

17. Project 1 - Expense Tracking
How do I spend my money?
Students will:
Identify expenses incurred over the course of 30 days
Determine how they will categorize each expense
Sort and compile tracked expenses into those groups

18. Project 2 - Setting Financial Goals
What do I want to accomplish financially?
Students will:
Identify the purpose of financial goals
Explore the criteria of a well-written goal
Formulate four financial goals
Prioritize their goals
Setting goals helps you visualize the gap between where you are and where you want to be.
Goals should be measurable, attainable, relevant, and time related.
Once goals are clearly defined, they should be prioritized.
Goals can be categorized into short, intermediate, and long term.

19. Project 3 – Cash Flow and Balance Sheets
How do I determine my wealth?
Students will:
Define terms associated with financial statements
Incorporate data into financial statements
Determine if an item is an asset, liability, or both
Compare and contrast the benefits of financial statements

20. Project 4 – Income Taxes What can I do to keep more of my income?
Students will:
Define taxes as compulsory charges imposed by the government on its citizens and their property to pay for expenses
Identify the most common IRS forms
Explain the nature of progressive income taxes and the marginal tax rate
Identify appropriate strategies to avoid overpayment of income taxes

21. Project 5 - Creating a Budget
What is my plan for sensible spending?
Students will:
Distinguish between fixed and variable expenses, as well as planned and unplanned expenses
Analyze their expenses
Develop a budget
Evaluate how well a budget is kept based on expenses and income for a one-month period

22. Project 6 - Credit Report
What does my credit report say about me?
Students will:
Identify the three credit-reporting agencies
Request a copy of their Experian credit report at
Identify features on a credit report
Review their credit report and identify questions or concerns

23. Project 7 – Purchasing a Vehicle
What is my best option for purchasing a vehicle?
Students will:
Define the terms associated with buying a car (including leasing, buying new, and buying used)
Research used car values
Identify the factors that affect the total price for a car (including the interest rate, the length of a contract, and the size of a down payment)
Evaluate the costs and benefits of car purchase options

24. Project 8 - Saving/Investing for the Long Term
Building wealth over the long term requires an understanding of investment strategies to reach your goals. 
Students will:
Learn the importance of beginning to invest at an early age and continuing throughout their careers
Understand various strategies for investing
Understand the tools available for evaluating stocks as potential investments
Weigh risks and rewards associated with equity investing
Discuss the difference between saving and investing
There are several investing simulations designed for the classroom.

25. Project 9 - Important Financial Documents
Am I prepared financially for an emergency?
Students will:
Evaluate their personal needs
Identify resources to develop a plan
Identify and locate personal documents
Include important documents in their binder

26. Project 10 – Retirement Planning
How much will I need to retire?
Students will:
Examine the need to start saving early
Calculate how much money they will need for retirement
Identify the sources of retirement income
Create a strategy for meeting retirement goals

27. Project 11 – Insurance Inventory
Do I have enough insurance?
Students will:
List personal possessions in a household inventory log
Calculate the value of their possessions
Determine if they have enough insurance to cover a total loss
Examine policy limits

28. What Works? Projects Reflective writing Binder/Portfolio assessment
Students are more engaged
Helps students understand why, when, and how facts and skills are relevant
Allows students who have test anxiety a way to feel good about what they have learned
Reflective writing
Holds students accountable for their learning
Sharpens critical thinking skills
How they will apply the concepts learned with their personal financial strategy
Binder/Portfolio assessment
All projects are organized into one binder
Creates a greater awareness of the process
Students become more engaged in learning when they have a chance to dig into complex, challenging, and sometimes even messy problems that closely resemble real life.
Students' abilities to acquire new understanding are enhanced when they are "connected to meaningful problem-solving activities, and when students are helped to understand why, when, and how those facts and skills are relevant.

29. Questions?