# Tools to learn

Our program teaches middle school students the value of
worksheets, games and handouts below and your students
will be on their way to financial literacy.

## Lesson 1: Financial Wizard

A financial wizard will help impart the importance of saving money in this lesson. Through a hypothetical job-based comprehension exercise, key concepts discussed in Lesson 1 will include income, taxes, and costs.

### Objective

Students will learn about income, taxes, and costs as they relate to setting a savings goal to make a significant purchase.

### Materials

Student Worksheet 1, pen or pencil, calculator

### Directions

1. Distribute a copy of Student Worksheet 1 to each student. Ask volunteers to read Part I: The Story aloud to the class.
2. Direct students to answer the question at the end of the story and share their answers with the class. Write these ideas on the board.
3. Tell students that the best way for them to earn money for the bike is by getting a job. The financial wizard offers them three jobs to choose from: babysitter, camp counselor, and house painter. Instruct students to answer questions 1 and 2 on Student Worksheet 1 in order to decide which job they should take.
4. Ask students which job they chose and how long it would take to earn enough money to buy the bike while working at that job. Discuss as a class.
5. Tell students that, before they make their final decision on the job, the wizard appears and tells them about two important things: taxes and costs! The wizard informs them that there are two types of pay: gross pay and net pay. Gross pay is all the money that you earn from a job. Net pay is the money left over after some of your pay is given to the government for taxes and/or to your employer for work-related expenses, such as equipment. Ask students to use this new information to answer questions 3 and 4 on Student Worksheet 1.
6. Finally, ask students to summarize what they have learned by having them explain how gross pay is different from net pay and how that affects how much money people earn.
##### Answer key for Student Worksheet 1: Financial Wizard
1. Babysitter: 20 hours per week x \$10/hour = \$200/week; camp counselor: 35 hours per week x \$7.50/hour = \$262.50/week; house painter: 32 hours per week x \$8.25/hour = \$264/week.
Most students will choose house painter because it earns the most money.
2. No matter which job students choose, it would take three weeks of work to buy the bike, if students were to save everything they earned. Example: house painter, \$264 x 3 weeks = \$792.
3. Babysitter: \$200/week (no change); camp counselor: \$262.50/week x .07 = \$18.38 taxes, \$262.50 - \$18.38 = \$244.12/week; house painter: \$264/week - \$40/week costs = \$224/week.
Most students will now choose camp counselor as it earns the highest net pay of all the jobs.
4. No matter which job students choose, it would take three weeks of work to buy the bike, if students were to save everything they earned. Example: camp counselor, \$244.12 x 3 weeks = \$732.36.