Lab Description
The Savings Lab is a comprehensive program designed to provide students with a deep understanding of savings and its critical role in personal finance. Through interactive activities, practical examples, and thoughtful discussions, students will explore various aspects of saving, from the basics to more advanced concepts. This lab is divided into three sections, each building on the previous one to create a well-rounded learning experience.
- Basics of Savings
- Interests Rates, Goals, Risks & Inflation
- Your Savings Behavior & Goals
The lab covers the following concepts
- A quick start activity that includes an interactive sub-activity asking students to find a savings plan to save for their dream laptop.
- The idea of short and long-term goals, introduction to savings
- Simple and compound interest
- Interactive activity to show how compound interest multiplies the money over time
- What are financial institutions and the different savings schemes offered by them?
- Compare and contrast the interest rate offered by different banks and credit unions.
- Analyze the historical change in savings interest rate over time using an interactive worksheet
- How are banks paying you interest - interactive worksheet to show that the money you deposit is given as loans to other customers.
- Taking inflation into account
- Risk associated with various schemes and how financial institutions are regulated.
- Personal attitudes toward savings
- Financial decisions & well-being
Finally the lab ends by asking students to write a letter to their friend about one of their big dreams and savings plan to achieve the dream. At the end of the lab, with the help of materials provided, teachers can conduct a comprehensive review of all sections, facilitating a classroom discussion to reinforce learning and encourage students to share their insights and experiences. This session will help students consolidate their knowledge and apply it to their personal financial planning.
Who this course is for
The course content is tailored to suit the age group and educational level of middle and high school students, ensuring that the concepts are presented in a clear, accessible, and engaging manner.
The course is designed to provide them with a solid foundation in understanding savings and personal finance.
Student Feedbacks
We asked students, what you remember the most about the lab, and here are some of the responses
Basics of Savings (59 Minutes)
This reading activity introduces the next interactive quick start activity they are going to do, in which students will make a savings plan for their dream laptop.
Sub Activities
- Planning For Your Laptop
Students will read about the importance of saving, such as emergency funds, goal achievement, financial independence, debt management, etc.
Sub Activities
- Review Questions
Students will read about interest in the context of savings and understand that there are two types of interest - simple and compound. They will read in detail about compound interest.
Sub Activities
- Simple vs Compound Interest
- Your Observation
Students will read about different financial institutions such as Commercial banks, Credit unions, Online banks, etc.
Sub Activities
- Review Questions
In this reading activity, students will read about the three types of savings options offered by banks - savings accounts, certificate deposits, and money market accounts. They will read about the features of each and when to choose what.
Sub Activities
- Review Questions
- Interest Rates
Students will read and understand how banks are able to pay interest interest for the money deposit through a process called intermediation. They will understand how banks are generating money for paying out interest and for their operational costs.
Sub Activities
- Review Questions
- Savings and Loans
Interests Rates, Goals, Risks & Inflation (76 Minutes)
Students will read about the importance of savings duration in the total interest earned and will be prepared for the next interactive worksheet.
Sub Activities
- Role of Time in Compounding
- When To Start Saving?
- Retirement - Start Early
Students will read and differentiate short-term and long-term savings goals, and how to balance them.
Sub Activities
- Categorizing goals
- Your Goals
Students will read and understand that there are other investment options which provide a lot higher interest rate compared to savings accounts or CDs but higher the interest rate, higher will be the risk associated with it.
Sub Activities
- Review Questions
- Risk-Reward Activity
Students will read and understand what inflation is and how it erodes the value of money over time.
Sub Activities
- Review Questions
- Effective Rate Calculation
Students will understand that investing in low-interest-rate savings accounts is not enough to beat inflation, they need to invest in higher-risk investment options as well. They will understand the idea of an investment period.
Sub Activities
- Review Questions
The objective of this reading activity is to help students understand the roles and functions of key government agencies in supervising and regulating financial institutions. By learning about the Federal Reserve, the FDIC, the NCUA, and their state counterparts, students will gain insight into how these agencies ensure financial solvency, legal compliance, and consumer protection, thereby safeguarding their savings and building trust in the financial system.
Sub Activities
- Review Questions
Your Savings Behavior & Goals (40 Minutes)
Students read and understand that the choices people make about saving money are often shaped by their unique preferences, life circumstances, personality types, and financial goals. Students will also be introduced different personality types based on savings such as - Risk-Taker, Cautious, Disciplined and Impulsive.
Sub Activities
- Review Questions
- Your Savings Behavior
Students read and understand that financial decisions such as Saving Regularly, Avoiding Impulse Spending, etc. affect their financial well being.
Sub Activities
- Impact of Savings Decisions
The objective of this activity is to reinforce students' understanding of saving by having them articulate their financial goals and savings plans in a persuasive letter. Students will identify a personal dream, estimate the amount of money needed to achieve it, and outline their saving strategies, including the timeline and methods for accumulating the necessary funds. This exercise aims to enhance students' financial planning skills, persuasive writing abilities, and ability to communicate the importance of saving effectively.
National Standards in Financial Education
Students will know that People save money for many different purposes, including large purchases such as cars and homes, education costs, retirement, and emergencies .. Students will use this knowledge to 8-1a . Identify the most common reasons that people save money for the future . 8-1b . Create a savings plan that will allow someone to make a large purchase in one year, 5 years, and 10 years .
Students will know that Savings decisions depend on individual preferences and circumstances, and can impact personal satisfaction and financial well-being .. Students will use this knowledge to 8-2a . Compare personal attitudes toward saving to those of a friend or relative . 8-2b . Explain how a person’s personality type might affect their willingness to save or to stick to a savings plan . 8-2c . Identify life situations that can make it difficult for a person to save or to stick to a savings plan . 8-2d . Discuss how savings decisions can affect financial well- being .
Students will know that Financial institutions pay interest to depositors and loan out the money to borrowers who pay interest on their loans .. Students will use this knowledge to 8-3a . Compare and contrast different types of financial institutions and their products and services . 8-3b . Compare the interest rate paid by a financial institution on savings accounts to the interest charged by the same institution on loans . 8-3c . Explain how financial institutions get the money to pay interest to their customers who deposit money in savings accounts .
Students will know that Interest earned on savings is the interest rate multiplied by the balance in the account, which includes the original amount saved (principal) and previously earned interest .. Students will use this knowledge to 8-4a . Differentiate between principal and interest . 8-4b . Demonstrate how earning a higher interest rate on money in a savings account will help a person to reach their savings goal sooner . 8-4c . Use the Rule of 72 to approximate how many years it will take for savings to double in value at different rates of interest .
Students will know that Compound interest is interest on both the original principal and previously earned interest, as compared to simple interest which is only interest on the original principal .. Students will use this knowledge to 8-5a . Explain the benefit of compound interest as compared with simple interest . 8-5b . Demonstrate how annual interest earned increases over time when both the original principal and earned interest are left in a savings account .