Student Learning Objectives - missouriffa.org Financial Planning/AP4... · Web viewMissouri Personal Finance SI.4 Compare the risk, return, liquidity, manageability and tax aspects

AP4

Agriculture Management, Economics, & SalesFinancial Planning

Unit: Agribusiness Planning & Analysis

Lesson Title: Financial Planning

Standards

ABS.04.01.01.a. Budget resources as applied to the AFNR business, including capital, human, financial, and time.CS.02.04.01.c. Demonstrate critical and creative thinking skills while completing a task.

Missouri Personal Finance SI.1 Compare consumer choices for saving and investing.Missouri Personal Finance SI.2 Explain the relationship between saving and investing.Missouri Personal Finance SI.4 Compare the risk, return, liquidity, manageability and tax aspects of investment alternatives.Missouri Personal Finance SI.5 Demonstrate how to buy and sell investments.Missouri Personal Finance SI.7 Evaluate sources of investment information.Missouri Personal Finance MM.7Design a financial plan (budget) for earning, spending, saving, and investing.

CCSS.ELA-Literacy.CCRA.R.9 Analyze how two or more texts address similar themes or topics in order to build knowledge or to compare the approaches the authors take.CCSS.ELA-Literacy.W.11-12.1 Write arguments to support claims in an analysis of substantive topics or texts, using valid reasoning and relevant and sufficient evidence.CCSS.ELA-Literacy.W.11-12.2 Write informative/explanatory texts to examine and convey complex ideas, concepts, and information clearly and accurately through the effective selection, organization, and analysis of content.CCSS.ELA-Literacy.SL.11-12.3 Evaluate a speaker’s point of view, reasoning, and use of evidence and rhetoric, assessing the stance, premises, links among ideas, word choice, points of emphasis, and tone used.

Student Learning Objectives

Slide 2 in AP4 Financial Planning

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Lesson ObjectiveAfter completing the lesson on financial planning, students will demonstrate their ability to apply the concept in real-world situations by obtaining a minimum score of 80% on Financial Planning Blog.

Enabling ObjectivesAs a result of this lesson, the student will…

1. Identify three reasons for financial planning and develop a personal financial plan.2. Create a personal savings and investment plan, identifying specific ways to save and

invest money.3. Identify four reasons for maintaining a regular budget, determine breakeven price, and

modify a budget using a given scenario.

Time: Approximately 240 minutes

List of ResourcesFranker, K. (2012, January 17). A Rubric for Evaluating Student Blogs. Retrieved from

http://www2.uwstout.edu/content/profdev/rubrics/blogrubric.html.

Instructional Materials Laboratory. (1997). Agribusiness Sales, Marketing, and Management Instructor Guide. Columbia, MO: University of Missouri.

Missouri Center for Career Education. (2006). Missouri Personal Finance Curriculum. Retrieved from http://www.missouricareereducation.org/doc/persfin/persfin.pdf.

MSN Money. (n.d.). Saving and Budgeting. Retrieved from http://money.msn.com/budgeting-savings/.

Schneiderheinze R., Wood C. (1997). Agribusiness Sales, Marketing, and Management Student Reference. Columbia, MO: Instructional Materials.

List of Tools, Equipment, and SuppliesAP4 PowerPoint PresentationAP4 Activity Sheet and Evaluation PacketNote cards or small sheets of paper for review activityCurrent figures for CDs, savings accounts, bonds, etc. from the local bank for AP4.4

Key TermsSlide 3 in AP4 Financial Planning

The following terms are presented in this lesson (shown in bold italics):Insured Savings AccountCertificates of DepositAnnuityUS Savings BondsTreasury Bonds

Agribusiness Planning & Analysis AP4 Financial Planning

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BondsMutual FundsFutures Contracts StocksBudget


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Interest Approach: Use an interest approach that will prepare the students for the lesson. Teachers often develop approaches for their unique class and student situations. A possible approach is included here.

Slide 4-5 in AP4 Financial PlanningGuess What I Am – Copy AP4.1 for each student. Listed are definitions of types of savings and investments. Have students read all definitions and rank them 1-9 in the order they would use these techniques without knowing the names or specific types of techniques. This judgment will primarily be based upon the description given, level of interest described, and level of risk described. When all students are finished, take a poll of everyone’s top three choices and bottom two choices. Place these results on the white board.

Next, show students the PowerPoint slide with the 9 titles of savings and investments. Give students a few minutes to see if they can match the title with the definition. When complete, give students the answers. Facilitate a discussion about their reactions to the savings and investment options they chose simply based upon the information given and then how their rankings would change once they knew what the actual type of investment. For instance, a student may have listed a savings account as their 9th option for investing, but after the name of the savings account is revealed, they may be surprised to know that is the option for saving and investing they are currently using. Further this discussion by asking them if they would be willing to take all of their money out of savings and invest it in their #1 choice, which may be a higher risk option.


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Conclude discussion with students realizing the need for some sort of savings and investment plan. In order to participate in a plan, we need to be able to set aside money each month and financially plan ahead. This is the case in our personal lives, but it is also very important in our

SAE programs and future business endeavors. Summary of Content and Teaching Strategies

Objective 1: Identify three reasons for financial planning and develop a personal financial plan.

Teaching Strategies Related Content1. Facilitate a discussion on why students

feel it is important to plan financially for the future.



2. Facilitate a discussion on what steps students think need to be taken in financial planning.


3. Ask students, “How might managing

Importance of personal and business financial planning

Provides a guide for the overall operation of a business or personal financial decisions

Provides structure to the way finances are handled

Provides disciplined approach to savings for the future

Goals and objectives and financial planning Serve as a means to evaluate financial

performance Aids in determining cash or capital

requirements of the business or for personal needs

Provides disciplined approach to control future activities

Provides method of communicating financial expectations to employees, managers, and investors in business, or to family members in personal finance

Steps to financial planning1. Complete a Current Financial

Assessment; Balance sheet(s), budget or cash flow projection(s), capital needs, breakeven analysis, finance needs, etc.

2. Develop financial goals3. Identify alternative courses of action4. Evaluate alternatives5. Create and implement the financial plan

of action


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company resources affect financial planning?”


4. Using this knowledge of financial planning, have students complete AP4.2, identifying how they would begin creating a personal financial plan.

5. When finished have students pair share their ideas and get feedback from each other.

6. Monitor, re-evaluate, and revise the plan on an ongoing basis

Managing company resources Has direct relationship on profitability,

efficiency, reputation, and customer satisfaction

Company resources include: Money and cash flow People Capital Inventory

Objective 2: Create a personal savings and investment plan, identifying specific ways to save and invest money.

Teaching Strategies Related Content1. Facilitate a discussion on why it is

important to save money. Elaborate by asking students how they can, or do, save money. If it comes up, begin to discussing the difference between saving and investing.




Saving Money Maintains a pool of available funds Increases the amount of money earned

by providing additional income through interest payments

Investing Money Generally considered “at risk”

investments Provides opportunity for higher return

with greater risk of financial loss


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2. Refer back to discussion from beginning of objective before introducing ways to save and invest money. Instead of using notes page, students may fill in notes on AP4.3.

Slide 13-21 in AP4 Financial Planning

**For an alternative teaching method, have each student ready AP4.11 to completed AP4.3.

Importance of saving money In business applications, it provides

cash reserves for future investments, business acquisitions, replacement capital, business interruptions, and operating capital during cash flow deficit periods, etc.

Personal savings provide for emergency funds, retirement, sinking funds replacement (home repair, home improvements, car, or other), education, other

Ways to save and invest money1. Insured savings account – Available

through banks, savings and loans, credit unions, and other financial institutions; Can be started with a small amount of money that earns interest and is readily available if needed in an emergency or for other investments; Interest rates are lower than other methods, but deposits under $100,000 are insured by the government

2. Certificates of deposit – Also known as CDs; Available through banks and some other financial institutions; Issues for different amounts and for different lengths of time; Not readily available as money invested in saving accounts since penalties are assessed for early withdrawal of money; Earn higher interest rates – Longer the period of time until maturity, the higher the interest rate; Insured by the government

3. Annuities – Similar to a CD, but issued by an insurance company rather than a bank; Usually higher interest than a CD; Penalty assessed for early withdrawal of invested money

4. US savings bonds – Bond purchased at amount less than face value and grows to face value at the maturity date specified on the bond; Lower interest rates, but money is guaranteed by government; Good method of supporting the government


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3. Facilitate a discussion on what students think they would need to do to start an individual savings and investment plan.


4. Have students examine the cash flow pages of their Missouri Record Books while they complete AP4.4.

5. Treasury bonds – Issued by US Treasury Department; Available in amounts of $1000 to $1 million and mature after periods of 30 days up to 5 years; Riskier than savings bonds because they fluctuate in value depending on interest rates if sold before they reach maturity; Longer time to maturity, the greater the interest rate

6. Bonds – Certificates of debt that promise payment of interest upon specified dates and payment of the original investment upon maturity; Higher interest rates, but more risk because value depends upon financial well-being of corporation or agency issue bond

7. Mutual Funds – Diversified investments that are managed professionally; Investment in several different companies; Allows investors to pool their money to meet various investment objectives; Potential for large returns exists; earnings are not guaranteed

8. Futures contracts – Contracts for the purchase and sale of commodities for future delivery are traded on commodities exchanges; Subject to margin calls and risk loss of a portion, or all of the original investment

9. Stock – Represents a share of ownership in a company; Price of share increases or decreases based on historical and projected success of the company; The amount of value change may or may not be equal to profit or loss due to appreciation or devaluation in value from speculative investor purchases or sales of the stock; an “at risk” investment – Careful management of stocks can have financial rewards; losses may be just as large

Developing an individual savings and investment plan

1. Create a personal budget to determine


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5. Following the completion of AP4.4, have students share their thoughts and ideas (not necessarily specifics on personal money) with the class, a group of students, or a partner. Have them make any changes necessary after this discussion.

amount of funds available for savings and investment plans

2. Determine amount of funds and frequency of contributions to be made

3. Decide if you will be active in investment process or if investment directive is to be automated (direct deposit) or investments directed through financial advisors

4. Determine investment objective risk level

5. Choose a mix of investments that complement each in terms of risk, value, and time

Objective 3: Identify four reasons for maintaining a regular budget, determine breakeven price, and modify a budget using a given scenario.

Teaching Strategies Related Content1. Ask students, “What is a budget?”

Facilitate a discussion on the parts of a budget, why budgeting is important, how we start a budget, etc. Capture ideas on the board to refer back to later in the objective.


2. Facilitate a discussion on what percentage of monthly income is used for food, housing, car, cell phone, etc.

Importance of a budget Two parts – Shows expected income

for the period; Shows planned expenditure of that income

Budget becomes a forecast of income and expenditures for a specific period of time

Used to monitor spending At end of budgeting period, plans made

for spending income can be compared to actual spending – Allows individuals to makes changes in the amount or type of spending where necessary

Help meet unexpected expenses when they occur – If sufficient money is available, the planned budget can still be carried out in spite of unexpected expenses; If not, changes must be made to budget based on needs and wants

Being able to adjust a personal budget makes it possible to achieve financial objectives and goals even if delayed by unexpected expenses

Guidelines for personal budgeting


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Slide 24-25 in AP4 Financial Planning

3. “As a business owner, why would it be important to have a budget?”



4. Practice figuring breakeven price on AP4.9.

5. Have students complete AP4.5 individually, as pairs, or in small groups.

6. Have groups, pairs, or individuals share their plan for the Smiths with the class.

The amount of monthly income to be spent on various expenses varies, but a general guideline to work towards may be Short-term Saving 3%, Long-term Saving 7%, Housing/Insurance 31%, Food 15%, Car Payment 12%, Car Expenses/Gas 4%, Utilities 8%, TV/Cable/Dish 2%, Phones 2%, Clothing 4%, Entertainment 4%, Credit Card 5%, Miscellaneous Expenses 3%

Importance of business budget Allows business to set and track goals

in regards to revenue and profitability of an operation

Serves as a formalized communication tool used for other stakeholders in the business operation

General Business Budgeting Guidelines Enterprise and consolidated budgets

should be prepared on a cash and accrual basis to measure profitability of each segment

Capital purchases and term financing (intermediate and long-term loans needed for capital purchases)

Long-term sustainable revenue projections (reliable long term prices for commodities, livestock or other business applications) should be considered to support new intermediate and long-term loans for capital purchases or business expansion

Budget results should include stress test to assess impact of reduced revenue and/or increased expenses for sensitivity analysis when considering new intermediate or long- term loans

Breakeven analysis should be completed by enterprise to include all allocated expenses, debt service, taxes, management fees, family living expenses, and capital replacement


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7. Examine Form 103 of the Missouri Record Book. Complete AP4.6 as a sample example.

Review/SummarySlide 28 in AP4 Financial Planning

Financial planning involves recording money received and spent and using this information to plan how to meet personal and business financial goals and objectives. In business applications, key employees (management) not only manage money and company resources, but are responsible to execute and follow the company’s financial plan. A budget is an important tool for financial planning because it provides a forecast of income and expenditures for a specific period of time, allows spending to be monitored, enables a person or group to set goals for spending, and helps meet unexpected expenses. Saving money is important not only because additional money can be earned through interest payments, but also because money will be needed to meet future goals and objectives and may be needed for emergencies. Many different methods of saving and investing money may be used to generate additional income, but a good savings and investment plan starts with placing money in an insured savings account and builds gradually into a diversified investment program.

Review: Farm Management CDE Breakeven Practice: Complete AP4.10.

Slide 29 in AP4 Financial PlanningExit cards: Students will answer the following questions on a note card or small slip of paper and hand to teacher as they exit:

What did you learn today about financial planning? What questions do you still have about financial planning?

Application

Extended ActivitiesEach student will track his/her income and expenses for two weeks. At the conclusion of these two weeks, have them create an excel spreadsheet with one section (itemized then totaled) for income and one section (itemized then totaled) for expenses. Next, have students identify changes they could make so they were able to save 10% or an additional 5% if they already have a savings plan in place of their monthly income. Have students share their results and ideas with classmates to get their feedback.


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Examine Form 103 in the Missouri Record Book. Each student will create a budget for the upcoming year based upon income and expenses from the previous year. Remind students to keep in mind future goals they have set for the Supervised Agricultural Experience Program and to allow their budgets to reflect the achievement of those goals. Discuss the budget during the next SAE visit.Show the local FFA chapter budget to the class. Have them figure the percentage of total money used on each broad activity (National FFA Week total, FFA meetings total, National FFA Convention total, etc.). Locate areas of concern based upon these totals and the number of students that benefit from each of the activities. Create a chart with the current information and a column of the class or individual suggestions for changes. Present these changes at the next FFA officer meeting or chapter meeting.

EvaluationFinancial Planning Blog AP4.7

Alternate - Paper-pencil Quiz Evaluation AP4.8

Answers to EvaluationEvaluation AP4.7Answers will vary. Use scoring guide on AP4.7 to assess student work.

Alternate Evaluation AP4.81. D2. B3. Proper management of company resources by employees helps the company reach

financial goals, creates job stability, opens opportunities for advancement, and allows for increased earnings by employees.

4. A financial plan reveals how much money is received, enables the planner to monitor spending, and can help an individual accomplish his or her goals

5. C6. A7. A8. Expected income and planned expenses9. 46.9 bushels


Documents

Student Learning Objectives - missouriffa.org Financial Planning/AP4... · Web viewMissouri Personal Finance SI.4 Compare the risk, return, liquidity, manageability and tax aspects