Introduction for Educators: To a teenager, five years sounds like a long time. But as you know, it’ll go by fast. It would be easy to tell your students to live in the moment and simply enjoy their high school experience. But there’s a better way.
The habits your students form today will follow them the rest of their lives. Help your students identify the components of a five-year personal financial plan. This habit will help them prepare for college and give them a valuable tool for the rest of their lives.
Introduction for Students: The winter holidays have come and gone. Kwanzaa, Christmas and Hanukkah all include gift giving. Imagine if you had received money instead of gifts. How much money would you have today?
Now imagine if you had saved that money. How much would you have for college?
The Activity: Identify and specify a five-year plan that will prepare you for college.
Step 1: Name your goals. How much money do you want for college? What percentage of it can come specifically from saving?
Step 2: Determine how much money you currently have. This includes any money you’ve saved. If your family has set aside any money for your college savings, include that as well.
Step 3: Determine how much money you can make in the next five years. This includes gifts, allowance, and money that you can make when you start working at 16 years old.
Step 4: Calculate how much money you’ll make from interest. Use a tool that calculates based on college savings plans like the 529. One such tool can be found at http://finance.yahoo.com/calculator/career-education/col04/. You might also want to ask for help from your parents or teacher—or you can even visit a nearby bank.
Step 5: Compare how much you’ll save next to your initial goals. How close are you?