Title: Instructor Introduction
Course: Personal Finance - Saving - Sample Syllabus - for Canvas Upload > Section: Personal Finance - Saving - Sample Syllabus

Standard and Benchmarks

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

Saving - Talking Points

Saving is the decision to set aside part of income for future usage. Students will investigate the opportunity costs of choosing to save or spend. They will also learn the benefits of compound interest and the impact interest rates have on spending or saving.

Talking Points

1. People’s income is saved, spent on goods and services, or used to pay taxes. People choose between immediate spending and saving for future consumption. Because some people are less patient than others, they choose immediate spending over saving.

2. Setting a savings goal can serve as an incentive to encourage people to save. And having a savings plan helps people reach their savings goals.

3. People may choose to save money in many places. For example, they can save at home, at a commercial bank, a credit union, or a savings and loan.

4. Banks and other financial institutions often pay interest on deposits. People also deposit money in banks because banks are a safe place to keep money.

5. Banks and other financial institutions loan money they receive from depositors (deposits) to borrowers. Banks charge borrowers interest for the loans. Part of the money received as interest from these loans is used to pay interest to depositors for the use of their money.

6. An interest rate is usually expressed as an annual percentage of the amount saved. The interest rate paid on savings and charged on loans, like all prices, is determined in a market. When interest rates increase, people earn more on their savings and their savings grow more quickly. Principal is the initial amount of money deposited on which interest is paid.

7. Compound interest is the interest that is earned on the principal and the interest already earned.