Title: Standards and Benchmarks
Course: Personal Finance - Saving - Sample Syllabus - for Canvas Upload

National Standards for Financial Literacy

Standard 3: Saving

Saving is the part of income that people choose to set aside for future uses. People save for different reasons during the course of their lives. People make different choices about how they save and how much they save. Time, interest rates, and inflation affect the value of savings.

Grade 12 Benchmarks

1. People choose between immediate spending and saving for future consumption. Some people have a tendency to be impatient, choosing immediate spending over saving for the future.

2. Inflation reduces the value of money, including savings. The real interest rate expresses the rate of return on savings, taking into account the effect of inflation. The real interest rate is calculated as the nominal interest rate minus the rate of inflation.

3. Real interest rates typically are positive because people expect to be compensated for deferring the use of savings from the present into the future. Higher interest rates increase the rewards for saving.

4. The nominal interest rate tells savers how the dollar value of their savings or investments will grow; the real interest rate tells savers how the purchasing power of their savings or investment will grow.

5. Money received (or paid) in the future can be compared to money held today by discounting the future value based on the rate of interest.

6. Government agencies supervise and regulate financial institutions to help protect the safety, soundness, and legal compliance of the nation’s banking and financial system.

7. Government policies create incentives and disincentives for people to save.

8. Employer benefit programs create incentives and disincentives to save. Whether or how much an employee decides to save can depend on how the alternatives are presented by the employer.