Unit 1: Exploring Personal Finance & Measures of Financial Literacy

Objective: Participants will demonstrate the ability to explain personal finance.

  1. You will identify the components of personal finance.
  2. You will solve questions to determine your financial literacy level.
  3. You will appraise how your own level of financial literacy impacts curriculum choices.


Tech Check:

  • Add the Unit 1 Google Doc to your Google Drive. This is where you will collect your knowledge from Unit 1.
  • Audio capability is required.


What is personal finance?

Personal finance is a phrase that gets thrown around a lot, in school and in life, but what does it actually mean? Is personal finance one thing or a collection of many things? Who has personal finances? Perhaps personal finance is challenging to define because of the multiple parts that may or may not be included. Disregard age and life experience for a moment, and consider personal finance over a lifetime.

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  • Spend 3-5 minutes reflecting on this phrase. Then, compose your best formal definition of personal finance.
  • List all the situations in life that are classified as matters of personal finance. Try to think of at least twenty (20) items!

Add these ideas to your Unit 1 Google Doc (#1-2).


Check your list against this list!. Did you get them all? Are there additional items that you included?

How financially literate are you?

Although we all use money throughout our daily lives, many people operate without a financial plan or a full understanding of their financial health, now or in the future. Lusardi and Mitchell (2011, Oct 11) used three questions to measure financial knowledge internationally across eight countries and found that “financial literacy is very low around the world, irrespective of the level of financial market development and the type of [retirement] pension provided” (Lusardi & Mitchell, 2011 Oct 11). In order for our population to make sound financial choices, and thus sustain ourselves over a lifetime, we need to promote the study of mathematics throughout high school. The results of a paper presented by Cole, Paulson, and Shastry (2013) “are particularly important given the tight link between math skills and many measures of financial literacy” (p. 6).

Of Lusardi and Mitchell’s three questions to determine financial literacy, “two are quite mathematical" (p.6).

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Let's solve them!


  1. What is the future value of $100 saved over 5 years at a 2% interest rate?
  2. How does the real value of savings change in an environment with 1% interest and 2% inflation? Use an example.

You may only use a four-function calculator, paper, and pencil to solve. Do not keep any math in your head - Write down all steps so you can review them later.

Check your work against these samples! Are your conclusions similar? Did you use a different approach to problem solving?

What is your influence on finance curriculum?

Now that you have explored some elements of finance, has your understanding of personal finance changed? Hopefully! Math educators hold an influential position in their students’ financial futures and can choose to prioritize financial literacy in their classrooms. Research shows “that individuals who were exposed to greater math requirements in high school are more likely to accumulate assets, have more real estate equity, are less likely to be delinquent on their loans, and are less likely to declare bankruptcy and undergo foreclosure” (Cole, Paulson, & Shastry, 2013, p. 32). Although classroom teachers cannot change learning standards, they can integrate financial topics into existing math courses and mentor all their students to take a math course each year of high school.

To take a closer look at the simple (and yet complex) matters in personal finance, watch a four-minute video from the Careers and Personal Finance collection produced by Khan Academy (2017): Options for tracking and managing your money. As you watch, consider how prior exposure to these matters influence one's comfort level to 'do the math' behind them as a consistent part of life:

  1. Identifying necessary expenses
  2. Setting up automated payments
  3. Using no-tech ways to track spending
  4. Using high-tech ways to track spending (online banking, money management apps, spreadsheets, etc.)


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  • Rewrite your formal definition of personal finance. Add this new knowledge to your Unit 1 Google Doc (#3).
  • Given your solutions to the financial literacy questions above, which statement from the table below most accurately describes you? Build a sentence that begins with your self-analysis and ends with an impact on content. Add this sentence to your Unit 1 Google Doc (#4) and write a paragraph to analyze the influence your own level of financial literacy has in your classroom.


Self-Analysis Impact on Content
I have a high level of financial literacy... ...and I use my knowledge to include personal finance content in the curriculum and thoroughly integrating real-world applications.
I have a moderate level of financial literacy... ...and I include the definition of terms when teaching personal finance using curriculum-provided word problems.
I have a low level of financial literacy... ...and I am nervous to include personal finance content in the curriculum because I may not know all the answers, terms, or applications.



Continue on to Unit 2: Connecting Algebra 2 Concepts to Personal Finance
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