Teacher Lesson Plans

Beginning/Low Intermediate Level
Unit 2 - Planning for the Future

LESSON FOUR: Growing Your Money

Objectives | Materials | Activities | Web Links | Related In-class/Online Lesson: College and Retirement Savings

Lesson 4 Objectives

  • Understand the concept of compound interest and how it relates long-term investmenting.
  • Decide which investment is best for different situations.
  • Practice asking and answering questions related to long-term investing.
  • Language and/or EFF skills practiced: plan (for the future); speak so others can understand; listen actively; solve problems and make decisions.

Lesson 4 Materials

Lesson 4 Activities

Print All Lesson Materials

Activity 4-1 What Does it Mean to Grow Your Money?
Overhead 4-A: Saving Money over Time: Compound Interest

  • Concepts related to investing money, types of investments, and risks involved may be difficult for students to grasp. Many students at this language level may be relatively new to the U.S. and may be focusing on short-term needs and bill paying. Therefore, the objectives of this lesson are to 1) show examples of how a money saved over time can multiply through investments and 2) encourage students to talk to a financial counselor at a local bank or investment firm.
  • You may consider inviting a financial representative to come speak to the class. Ask to have someone who is familiar with the needs of immigrants, and who may speak the language of your students. Ask the representative to focus on how small amounts of money can grow over time, and that anyone, no matter how little money they have can speak to a financial counselor and set up investments accounts (ask them not to go into too much detail about types of investments and risk, rather to cover basics and encourage students to talk to investment counselors). If you can't get someone to come in, try to find out the name of someone who students could talk to at a local bank or investment firm.
  • Begin by asking students if they are saving money for the future, like for education or retirement. Ask how many students want to save for these things, or other things for the future. Ask them if they think it's possible to begin saving now.
  • Show Overhead 4-A to illustrate how saving $125 a month can multiply over time at different interest rates. Read the information on the Overhead to help you explain the chart. Let students know that saving just $25 a month can also add up over time.
  • Ask students how you might make 4% or 10% or more return on their money (instead of only 1-3% in a typical bank savings account) . The answer is through investments like real estate, stocks, bonds, mutual funds, an education savings plan, or retirement plan. It is fine to leave the discussion at that, you don't need to try to describe how these work for this language level. Students will "see" an example of this in the picture story. Again, if students want to learn more, encourage them to talk to someone in their own language at a reputable bank or investment institution.

Activity 4-2 The Housekeeper's Dream Picture Story
Overhead 4-B: The Housekeeper's Dream! Picture Story
Worksheet 4-2: The Housekeeper's Dream Picture Story and Activities

  • Following the instructions for Picture Story Best Practices, generate a story and complete related picture story activities. You can use the printed story below for telling the story to students and for other reading/writing activities, and/or for understanding the story sequence.

Anaya is a housekeeper for the Happy Maids Company. She dreams about owning a cleaning company. She needs $7,500 for a van and cleaning equipment.

Anaya puts her money in a piggy bank at home. She saves $5,000. She goes to the bank and talks to an investment counselor. He says “we have different kinds of accounts. The accounts have different interest rates and rules.” Anaya decides to open a Savings Bond.

After five years, her $5,000 grows to $7,500. Anaya buys a van and equipment. She paints her van. It says “Anaya’s Maids.” Her son Antonio helps her paint the van. They are happy.

Anaya wants to save money for Antonio’s college education. She tells the investment counselor, “I have $1,000 and I can save $300 every month.” He says “open a 529 Education Plan Account. In 10 years, you can have $60,000.”

In 15 years, Anaya goes to her son’s graduation from college. She says “I am very proud of you.” Her son says “I am proud of you too, mom.”

Activity 4-3 Conversation with a Financial Advisor at the Bank
Worksheet 4-3: The Housekeeper's Dream: Dialogue and Scrambled Sentences

  • Again, explain that banks and investment institutions have people you can talk to about how best to save your money. They are called financial or investment advisors or counselors.
  • Explain that like in the picture story, this person will ask you some questions to help you decide which savings option is best for you.
    • As in the picture story, write these questions on the board. You can create a couple scenarios as generated by students.
      • How much money do you have to save?
      • What are you saving for?
      • When do you need the money?
    • Ask if they can think of other important questions.
  • Act out the dialogue while students listen. Then pass out the dialogue, and have students read along while you repeat it. Next, have students repeat chorally. Call on individual students to repeat certain phrases. Practice any phrases that seem difficult.
  • Have students practice in pairs and call on volunteers to present their dialogue to the class.
  • Next, have students cut up the dialogue (sentence by sentence, not word by word) and put it back in order. They can continue to work with a partner on this activity. Circulate to ensure students are on track. For those who need extra practice, give them an extra copy to work on at home..

Activity 4-4 Ideas for Making Your Money Grow

  • In groups of three or four, have students come up with their ideas for the four best ways to make money grow over a lifetime. Give students at least 10 minutes to discuss this and circulate to be sure students are on task. Have each group offer one of their ideas. Answers will vary.
  • Write on the board, and have students copy, the list below offered by the Oprah Winfrey Show. The Oprah Winfrey Show has covered segments on financial planning and has information on its website (see link below.) This is a simplified version of the four-step plan that the show says "will put you on the road to riches":

1.

Open a retirement plan and contribute the most possible. Never touch that money.

2.

 Pay all personal credit-card bills before saving. Stay out of debt.

3.

 Save for emergencies - transportation, accidents, time off work

4.

 Start investing. Put money into mutual funds.

    Note: Some students may not have retirement savings plans offered through their jobs, but can still open a retirement account. See the Department of Labor information and link below. Students can start the process by talking to someone at their local bank.

Final Activity: Reflection

  • Ask students to write down, or tell you as you circulate around the room, one thing they learned in class today (it could be a new concept, a new word, a grammar point, it doesn't matter). This is a very useful technique to discover in what ways the lesson made an impact on individual students. It will also give you information for reporting financial literacy gains, so be sure to have your chart handy as you walk around the room, or for recording notes after class.

Web Links

Federal Reserve Bank of Dallas – Building Wealth: A Beginner’s Guide to Securing your Financial Future http://www.dallasfed.org/ca/wealth/pdfs/wealth.pdf. The content is too advanced for the beginner/low-intermediate level. Students' family members/friends may be able to use the site and share information with the student. The compound interest chart on page 12 is included in Overhead 4-A.

Individual Development Account http://www.cfed.org/imageManager/IDAnetwork/IDAs.doc. You may have students in your class who may qualify for an Individual Development Accounts (IDAs). Individual Development Accounts (IDAs) are matched savings accounts that enable low-income American families to save, build assets, and enter the financial mainstream. IDAs reward the monthly savings of working-poor families who are trying to buy their first home, pay for post-secondary education, or start a small business. This reward or incentive is provided through the use of matching funds that typically come from a variety of private and public sources. Similar to 401(k)s, IDAs make it easier for low-income families to build the financial assets they need to achieve the American Dream. Basic questions about IDAs are answered in this 4-page Fact Sheet linked above (also available in Spanish). If you wish to help one of your students open an IDA account, you will need to locate an IDA program near you to get started. You can search for programs by state using the online IDA Directory.

The Oprah Winfrey Show - Four Step Plan That Will Put You on the Road to Riches
http://www.oprah.com/tows/pastshows/tows_past_20010323_d.jhtml
A number of Oprah segments discuss financial planning. The list shares the“The four-step plan that will put you on the road to riches!” This list is included in the lesson above along with a more simplified list for ESOL students.

Practical Money Skills for Life http://www.practicalmoneyskills.com/english/index.php.
This is a free Web site designed to help educators, parents and students practice better money management. The link below covers the topics of saving and investing. It can help teachers explain the concept to students. http://www.practicalmoneyskills.com/english/at_home/consumers/credit/. The language level on this site is too high for beginner and low-intermediate level students. However, all the content on the site is available in Spanish and Chinese. This link shows a very simple example of how interest is earned a savings account - what happens with $1.00 saved over three years. http://www.practicalmoneyskills.com/english/pdf/teachers/lev_2/lesson_03/3_OV.pdf.

Randall’s ESL Cyber Listening Lab – Spending Money http://www.esl-lab.com/money/moneysc1.htm.
This "easy” level listening activity gives students listening comprehension practice on the topic of allowance and saving. It may be a fun activity for parents to do at home with their children, and to open the door to conversations at home about spending and saving.

Smartmoney.com college Cost Calculator http://www.smartmoney.com/college/investing/index.cfm?story=save
Help your students figure out how much it will cost them to send their children to college with this college cost calculator. With this level student, you will probably want to sit with students individually. Use the calculators on this website to figure out amount needed for college and how money grows over time.

U.S. Department of Labor - Women and Retirement Savings http://www.dol.gov/ebsa/publications/women.html
This one page document explains ways to save for retirement through your job or on your own. This is for teacher reference as the language level it too high for this level. The site gives information on pension plans and special information for women and retirement savings. Here's what it says about saving for retirement on your own: "Do you know how you can save for retirement even if you don't belong to an employer-sponsored pension plan? - Anyone receiving compensation, or married to someone receiving compensation, can contribute to an IRA. In addition, if you are self-employed, you can start a Keogh plan, a Simplified Employment Plan (SEP) or a Savings Incentive Match Plan for Employees of Small Employers (SIMPLE). As with other retirement savings plans, there may be tax consequences, and possibly penalties, if you withdraw your savings early. "