Net Worth Analysis: A 7th Grade Lesson on Assets, Liabilities, and Net Worth Calculation | Lecture notes Art

GradeLevel:7KnowYourWorthLesson:4

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LessonDescription

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Studentswillanalyzefamilies’financestoidentifyassetsandliabilities.Theywill

usethisinformationtocalculatethefamilies’networthandlearnthebenefitsof

havingapositivenetworth.Studentswillworkwithotherstudentstodevisea

plantoincreasethefamilies’networth.

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TexasEssential

Knowledgeand

Skills(Target

standards)

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 PFLMath7.13C:createandorganizeafinancialassetsandliabilitiesrecord

andconstructanetworthstatement

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TexasEssential

Knowledgeand

Skills(Prerequisite

standards)

 Math7.1:MathematicalProcessStandards

 Math7.3A:add,subtract,multiply,anddividerationalnumbersfluently

 Math7.3B:applyandextendpreviousunderstandingsofoperationstosolve

problemsusingaddition,subtraction,multiplication,anddivisionofrational

numbers

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NationalStandards

(Supportingstandards)

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CEE‐CouncilforEconomic

Education

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CCSS‐CommonCoreState

Standards

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 CEEUsingCredit8.5:Variousfinancialinstitutionsandbusinessesmake

consumerloansandmaychargedifferentratesofinterest.

 CCSSMath:StandardsforMathematicalPractices

 CCSSMath7.NS:Applypropertiesofoperationsasstrategiestoaddand

subtractrationalnumbers

 CCSSMath7.NS:Solvereal‐worldandmathematicalproblemsinvolvingthe

fouroperationswithrationalnumbers

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PFLTerms

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 Assets

 Liability

 Networth

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TimeRequired

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Two45‐minuteclassperiods

MaterialsRequired

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 AcopyofVisual7.4‐1aand7.4‐1b

 AcopyofActivity7.4‐1aforeachstudent

 AcopyofActivity7.4‐1bforeachgroup,printonbluepaperandcutcardsin

advance

 AcopyofActivity7.4‐1cforeachgroup,printonyellowpaperandcutcardsin

advance

 AcopyofActivity7.4‐2aforeachstudent

 AcopyofActivity7.4‐2bforhalfofthestudents

 AcopyofActivity7.4‐2cforhalfofthestudents

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Partial preview of the text

Download Net Worth Analysis: A 7th Grade Lesson on Assets, Liabilities, and Net Worth Calculation and more Lecture notes Art in PDF only on Docsity!

Lesson Description Students^ will^ analyze^ families’^ finances^ to^ identify^ assets^ and^ liabilities.^ They^ will

use this information to calculate the families’ net worth and learn the benefits of having a positive net worth. Students will work with other students to devise a plan to increase the families’ net worth.

Texas Essential

Knowledge and

Skills (Target

standards)

 PFL Math 7.13C: create and organize a financial assets and liabilities record and construct a net worth statement

Texas Essential

Knowledge and

Skills (Prerequisite

standards)

 Math 7.1: Mathematical Process Standards  Math 7.3A: add, subtract, multiply, and divide rational numbers fluently  Math 7.3B: apply and extend previous understandings of operations to solve problems using addition, subtraction, multiplication, and division of rational numbers

National Standards

(Supporting standards)

CEE ‐ Council for Economic Education CCSS ‐ Common Core State Standards  CEE Using Credit 8.5: Various financial institutions and businesses make consumer loans and may charge different rates of interest.  CCSS Math: Standards for Mathematical Practices  CCSS Math 7.NS: Apply properties of operations as strategies to add and subtract rational numbers  CCSS Math 7.NS: Solve real‐world and mathematical problems involving the four operations with rational numbers

PFL Terms ^ Assets

 Liability  Net worth

Time Required Two^45 ‐minute^ class^ periods

Materials Required ^ A^ copy^ of^ Visual^ 7.4‐1a^ and^ 7.4‐1b

 A copy of Activity 7.4‐1a for each student  A copy of Activity 7.4‐1b for each group, print on blue paper and cut cards in advance  A copy of Activity 7.4‐1c for each group, print on yellow paper and cut cards in advance  A copy of Activity 7.4‐2a for each student  A copy of Activity 7.4‐2b for half of the students  A copy of Activity 7.4‐2c for half of the students

Procedure

Engage Explore Explain Explore

Brainstorm with students about what it means for a family to be wealthy. (Samples: large savings balance, expensive house, expensive cars, large investments balances, expensive vacations, owning expensive items)
Display Visual 7.4‐1a. Tell students that this visual shows what family A and family B own. Then read the family descriptions below.  Family A owns a 3 bedroom house valued at $100,000 and one car. The home is furnished with modest furniture. The only valuable jewelry they own are wedding bands valued just under $800. They have an emergency savings account, a college savings account and a retirement savings. They also have two credit cards.  Family B owns a 5 bedroom house valued at $400,000, a car, and a SUV. The house is furnished with luxurious furniture. They also own a valuable piece of art and expensive jewelry. The family has a retirement savings and 6 credit cards.
Have the students vote on which family they believe to be worth more (wealthier). Post the results on the board.
Lead a class discussion about net worth. Tell students that net worth is similar to wealth. It represents the value of what you own minus what you owe. Use the questions below to lead the discussion. a. Does it make you rich or wealthy to have a lot of things that cost a large amount? Why or why not? (Accept all responses.) b. How do most people purchase expensive goods such as a house or car? (Most people will pay a small part in cash and get a loan for the remaining balance. A few people may be able to buy with cash.) c. What does it mean to have debt? (Debt is the money you owe. If you borrow $1000, your debt is $1000. To get a loan is to borrow money.) d. Is there something missing from Visual 7.3.1a? If we want to determine how much these families are worth, what are some other things we need to consider? Allow students to brainstorm with a partner before accepting any answers. ( We don’t know how much each family owes on each item they own. We don’t know how much money they have in their savings. We don’t know how much they owe on their credit card (credit card debt). We don’t know the value of the cars or how much they owe.)
Place students in groups of 3 – 4. Distribute a set of blue cards and yellow cards to each group. Distribute Activity 7.4‐1a to each student.
Display Visual 7.4‐1b. Explain that assets are the things you own. Ask students to give an example of something Family A owns. (house, car, savings account, furniture) Liabilities are things you owe. Ask students to give an example of what Family A might owe. (They

Elaborate Evaluate/End f) Many people try to reach the American Dream by purchasing everything they want. What are the consequences for buying everything you want? (You may not have emergency funds, savings for retirement, or college savings. If you lose your job, you won’t have the means to pay back the loan(s).)

Prepare students to do a Chalkboard Splash. For a Chalkboard Splash, the teacher poses a question to the class. The students write ideas on the board randomly. Students will then categorize the responses. Pose this question to class: What could Family B do to increase their net worth? ( Sample responses include: sell the car and purchase a lower cost model, pay down/off their credit card debt or other liabilities, sell the house and purchase a less expense home, spend less on monthly expenses, get a second job or change to a higher paying job, sell artwork to a collector) Once students have contributed to the Chalkboard Splash, ask students to analyze the ideas on the board and identify two possible categories for the ideas (increase income and decrease debt). Go through each item and have students identify if the item is increasing income (II) or decreasing debt (DD). To close, explain to students that it is important for families or individuals to regularly check their net worth. This will help them determine if they are spending too much and/or if there is enough savings for the future or emergencies.
Distribute Activity 7.4‐2a to each student. Group students into pairs. Give each pair either Activity 7.4‐2b or Activity 7.4‐2c. Instruct pairs to complete the net worth worksheet for their assigned family.
When students have completed the net worth worksheet for their family, direct them to find another pair with the same family. Tell them to discuss and compare their results with the other pair. If they have any discrepancies, they should each present their case to the teacher. The teacher should clarify any misunderstandings.
To close this activity, pose the questions below to the students. a. How many of you had a family that had a positive net worth? (Half of the students should raise their hand.) What caused your family to have a positive net worth? (The assets were greater than the liabilities.) b. How many of you had a family that had a negative net worth? (Half of the students should raise their hand.) What caused your family to have a negative net worth? (The liabilities were greater than the assets.) c. Did your family report an item that was not an asset or liability? (cost of child care, tuition, cost of utilities) Why did these items not classify as an asset or liability? (The payment does not go to a financial institution. You cannot own these services.)
Assign the students to write a letter explaining how assets and liabilities are used to create a net worth statement. Include the reason why a family should know their net worth and steps a family could take to change their net worth value. Extension
1. Students may create a video for a Public Service Announcement to explain to adults how to determine their net worth Statement and its importance.

Family A – 2 adults and 2 children Family B – 2 adults and 2 children

Visual 7.4‐ 1

Name _______________________ Class Period _

Net Worth Worksheet

Family A Family B

Assets Liabilities Assets Liabilities

House $100,000^ $18,000^ $400,000^ $350,

Autos $22,000^ $0^ $79,000^ $37,

Furniture $25,000^ $450^ $100,000^ $43,

Credit cards $59^ $18,

Bank accounts $20,000^ $1,

Retirement accounts $47,000^ $47,

Cash $50^ $

Value of jewelry and art $775^ $0^ $10,000^ $

TOTAL

Family A: $214,825  $18,509 = $196,

Total Assets Total Liabilities Net Worth

Family B: $637,800  $448,575 = $189,

Total Assets Total Liabilities Net Worth

1. Which items did not count as an asset or a liability? Why? Gym membership and

child care. These are not payments to financial institutions. You cannot own a

service.

2. Which family has the greatest net worth? Family A

3. Imagine that you worked for a bank. If both of the families requested a $10,

loan, which family do you think best qualifies for the loan? Explain. Since Family

A has a greater net worth, they would best qualify for the loan. Family B has a

large debt and may struggle paying for the loan.

Key 7.4‐1a

Blue cards

Family A

 Own a $100,000 house

 Owe $18,000 on

mortgage

Family A

 Own a car valued at

 Car is paid off.

Family A

 Own $25,000 worth of

furniture

 Owe $450 on furniture

loan

Family A

 Own jewelry valued at

 Jewelry is paid off

Family A

 $15,000 in emergency

savings account at bank

Family A

 $4,500 in college savings

account at bank

Family A

 $47,000 in retirement

account

Family A

 Owe $59 on credit card 1

Family A

 Owe $0 on credit card 2

Family A

 $500 in checking account at

bank

Family A

 $50 cash

Family A

 Pays $500 a month for

child care

Activity 7.4‐1b

Vocabulary

Liabilities

the things you owe:

mortgage, car loan,

credit card balances

Assets

the things you own:

cash, bank accounts,

investments, house

Net Worth

The value of your assets minus your liabilities

Net Worth = Assets ‐ Liabilities

Visual 7.4‐1b

Name _______________________ Class Period _

Finding the Net Worth

Directions: Your teacher will assign you a family. Use the information provided to you on this family

to determine the assets, liabilities and calculate the net worth.

Net Worth Worksheet for _________________________

Assets (Own) Liabilities (Owe)

Balance of all bank accounts Home mortgage

Balance of all retirement accounts Auto loan(s)

Cash Credit card(s)

Value of home Student loan(s)

Value of auto(s) Other loan(s)

Value of furniture and household items Total Liabilities

Value of jewelry, art, antiques, etc.

Total Assets

Net Worth = ________

1. Which items did not count as an asset or a liability? _____________________

2. Does this family have a positive or negative net worth? __________________

3. Determine three suggestions for this family to increase their net worth?

________________________________________________________________

Activity 7.4‐2a

Name _______________________ Class Period _

Family 2

Net Worth Analysis: A 7th Grade Lesson on Assets, Liabilities, and Net Worth Calculation, Lecture notes of Art

Related documents

Partial preview of the text

Download Net Worth Analysis: A 7th Grade Lesson on Assets, Liabilities, and Net Worth Calculation and more Lecture notes Art in PDF only on Docsity!

Lesson Description Students^ will^ analyze^ families’^ finances^ to^ identify^ assets^ and^ liabilities.^ They^ will

Texas Essential

Knowledge and

Skills (Target

standards)

Texas Essential

Knowledge and

Skills (Prerequisite

standards)

National Standards

(Supporting standards)

PFL Terms ^ Assets

Time Required Two^45 ‐minute^ class^ periods

Materials Required ^ A^ copy^ of^ Visual^ 7.4‐1a^ and^ 7.4‐1b

Procedure

Family A – 2 adults and 2 children Family B – 2 adults and 2 children

Visual 7.4‐ 1

Name _______________________________ Class Period _________

Net Worth Worksheet

Family A Family B

Assets Liabilities Assets Liabilities

House $100,000^ $18,000^ $400,000^ $350,

Autos $22,000^ $0^ $79,000^ $37,

Furniture $25,000^ $450^ $100,000^ $43,

Credit cards $59^ $18,

Bank accounts $20,000^ $1,

Retirement accounts $47,000^ $47,

Cash $50^ $

Value of jewelry and art $775^ $0^ $10,000^ $

TOTAL

Total Assets Total Liabilities Net Worth

Total Assets Total Liabilities Net Worth

1. Which items did not count as an asset or a liability? Why? Gym membership and

child care. These are not payments to financial institutions. You cannot own a

service.

2. Which family has the greatest net worth? Family A

3. Imagine that you worked for a bank. If both of the families requested a $10,

loan, which family do you think best qualifies for the loan? Explain. Since Family

A has a greater net worth, they would best qualify for the loan. Family B has a

large debt and may struggle paying for the loan.

Key 7.4‐1a

Family A

 Own a $100,000 house

 Owe $18,000 on

mortgage

Family A

 Own a car valued at

 Car is paid off.

Family A

 Own $25,000 worth of

furniture

 Owe $450 on furniture

loan

Family A

 Own jewelry valued at

 Jewelry is paid off

Family A

 $15,000 in emergency

savings account at bank

Family A

 $4,500 in college savings

account at bank

Family A

 $47,000 in retirement

account

Family A

Family A

 Owe $0 on credit card 2

Family A

 $500 in checking account at

Family A

 $50 cash

Family A

 Pays $500 a month for

child care

Activity 7.4‐1b

Name _______________________ Class Period _

Name _______________________ Class Period _

Name _______________________ Class Period _

Name _______________________ Class Period _