Banking Terms Worksheet

Match the banking terms in Column A with the definitions in Column B. Write the letter of the correct definition next to each number.

Column B: Definitions

A. Money you put into a bank account
B. Money you take out of a bank account
C. An account for daily spending and payments
D. An account to save money and earn interest
E. Money paid to you by the bank for keeping funds
F. Protection that covers losses under certain conditions
G. Machine that allows you to withdraw or deposit cash and check your balance
H. The amount of money in an account at a given time

Column A: Terms

1. Deposit ________
   
   
   
2. Withdrawal ________
   
   
   
3. Checking Account ________
   
   
   
4. Savings Account ________
   
   
   
5. Interest ________
   
   
   
6. Insurance ________
   
   
   
7. ATM ________
   
   
   
8. Balance ________
   
   
   

FDIC Role-Play Game

In this game, learners work in groups of three (Customer, Banker, FDIC Agent) to practice real-world banking conversations. Each triad draws one scenario card and role-plays for 5 minutes, then rotates roles or draws a new card.

Instructions

1. Form triads and choose roles: Customer, Banker, FDIC Agent.
2. Draw one scenario card.
3. Spend 5 minutes acting out the scenario. Use target vocabulary and polite banking phrases (see below).
4. Rotate roles (Customer → Banker → FDIC Agent) and draw a new card if time allows.

Scenario Cards

Card 1: Opening a New Account

• Customer: You want to open a savings account. Ask about minimum deposit, interest rate, and FDIC insurance.
• Banker: Greet the customer, explain account options (checking vs. savings), minimum deposit, and interest details. Mention FDIC insurance coverage.
• FDIC Agent: Explain how FDIC insurance protects deposits up to $250,000 and answer customer questions about the claim process.

Card 2: Making a Deposit

• Customer: You received your paycheck and want to deposit $500. Ask if you can split it between checking and savings and how to use the ATM.
• Banker: Show how to fill out a deposit slip, explain splitting funds between accounts, and how to use an ATM.
• FDIC Agent: Reassure the customer that all deposits are insured and explain what “balance” means.

Card 3: Filing an Insurance Claim

• Customer: You heard your bank failed. You want to know how to get your money back.
• Banker: Inform the customer that deposits are insured and introduce them to the FDIC Agent.
• FDIC Agent: Walk the customer through the steps to file a claim, required documents, and timeline for reimbursement.

Target Vocabulary & Phrases

• deposit, withdrawal, savings account, checking account, interest, insurance, balance, ATM
• “I’d like to open an account.”
• “How much do I need to deposit?”
• “What is the interest rate?”
• “Is my money insured?”
• “How do I file a claim?”

Session 1 Answer Key

This answer key provides correct responses and step-by-step explanations for both the Session 1 Quiz and the Banking Terms Worksheet. Use it to grade student work and to walk through the reasoning behind each answer.

Quiz Answers and Explanations

Material: Session 1 Quiz

1. FDIC stands for Federal Deposit Insurance ____.
   • Correct Answer: C. Corporation
   Explanation:
   • FDIC is an acronym: Federal (F) Deposit (D) Insurance (I) Corporation (C).
   • Option A (“Agency”) and B (“Association”) are common in other contexts, but the FDIC is legally a corporation.
   • Option D (“Commission”) is incorrect because FDIC is not a commission.
2. The FDIC insures deposits up to which amount per depositor, per bank?
   • Correct Answer: B. $250,000
   Explanation:
   • Since 2008, the standard insurance limit for deposits is $250,000.
   • $100,000 was the historic limit before 2008; $500,000 or $1,000,000 are not current FDIC limits.
3. Which type of account is primarily used for saving money and earning interest?
   • Correct Answer: B. Savings account
   Explanation:
   • Savings accounts are designed to hold funds over time and pay interest.
   • Checking accounts (A) are for daily spending, not primarily for earning interest.
   • Certificates of Deposit and Money Market accounts (C and D) also earn interest but were not introduced in Session 1.
4. What is interest?
   • Correct Answer: B. Money the bank pays you for keeping funds
   Explanation:
   • Interest is compensation to you for leaving money in an account.
   • It is not a fee you pay (A), the account balance (C), or insurance coverage (D).
5. Open-response: Match the terms with definitions.
   Correct Answer: 1-A, 2-B, 3-C, 4-D
   Step-by-Step Matching:
   • Deposit (Term 1) → A. “Money you put into a bank account”
   • Withdrawal (Term 2) → B. “Money you take out of a bank account”
   • ATM (Term 3) → C. “Machine that allows you to withdraw or deposit cash and check your balance”
   • Balance (Term 4) → D. “The amount of money in an account at a given time”
     Tips for Grading:
   • Check that students list the term number followed by the correct letter, e.g., “1-A, 2-B…”
   • Partial credit may be given if a student matches some correctly but not all.

Banking Terms Worksheet Answers

Material: Banking Terms Worksheet

Match each term in Column A with the correct letter from Column B.

Explanation of Key Matches:

• Deposit vs. Withdrawal: Opposite actions — putting money in (deposit) vs. taking money out (withdrawal).
• Checking vs. Savings Account: Checking for daily use; savings to hold and grow money.
• Interest: The bank’s payment to you, not a fee.
• Insurance: FDIC insurance protects deposits against bank failure.
• ATM and Balance: ATM is the machine; balance is the figure shown on account statements or ATM screens.

Grading Notes:

• Give full credit if all eight matches are correct.
• For partial credit: deduct one point per incorrect match.
• Look for common errors, e.g., confusing “balance” and “insurance.” Review definitions verbally if needed.

Use this key to provide clear feedback to learners and to guide review discussions in the next session.

Budgeting Basics Video

Watch the FDIC’s short explainer video on creating and managing a personal budget:

Watch “Budgeting Basics” (FDIC Video)

Key points to notice while watching:

• What is a budget?
• How does the video distinguish needs vs. wants?
• What are the main steps to build and stick to a budget?

Pause the video at these timestamps to discuss in class:

• 1:20 – Define a budget in your own words.
  
  
  
• 2:50 – List two examples of needs and two examples of wants.
  
  
  
  
  
  

Session 2 Budget Worksheet

Part A: Sample Budget

Assume a monthly income of $2,000. Use the expense figures below to complete the table.

• Rent: $800
• Groceries: $300
• Phone: $50
• Dining Out: $100
• Savings: $200
• Entertainment: $150

Balance Remaining: $_______

Part B: Reflection

1. Which expense category is the largest? ___________________________
   
   
   
2. Why is it important to separate needs from wants in a budget? ___________________________
   
   
   
   
   
3. How can you review and adjust your budget each month? ___________________________
   
   
   
   
   
   

Budgeting Scenario Game

In this paired activity, learners practice making real‐life budgeting decisions when income is limited. Each pair draws one scenario card, discusses needs vs. wants, chooses which non-essential expenses to cut, and explains their choices.

Instructions

1. Form pairs and draw one scenario card.
2. Read your scenario to identify total income and expenses.
3. Calculate the shortfall (Total Expenses – Income).
4. Decide together which want(s) to cut or reduce to eliminate the shortfall.
5. Be ready to share:
   • Which expense(s) you cut
   • Why you chose those items
   • How this helps balance the budget

Spend about 5 minutes per scenario. Rotate cards if time allows.

Scenario Cards

Card 1: Single Adult on a Tight Income

• Monthly Income: $1,500
• Expenses:
– Rent: $700
– Groceries: $300
– Phone: $50
– Dining Out: $150
– Entertainment: $100
– Subscriptions (streaming/gym): $80
– Transportation: $200

Total Expenses: $1,580 → Shortfall: $80

Card 2: Student Budgeting for the Semester

• Monthly Stipend: $800
• Expenses:
– Rent (shared): $400
– Groceries: $150
– Phone & Internet: $70
– Coffee & Snacks: $80
– Social Activities: $90
– Textbooks & Supplies: $100

Total Expenses: $890 → Shortfall: $90

Card 3: Small Family on a Fixed Income

• Monthly Income: $2,200
• Expenses:
– Rent/Mortgage: $900
– Groceries: $400
– Utilities: $150
– Childcare/School Fees: $300
– Cable & Internet: $80
– Eating Out: $150
– Savings Goal: $200

Total Expenses: $2,180 → Shortfall: $ -20 (Surplus $20 — decide if you can move extra to savings or add a small want)

Target Vocabulary & Phrases

• income, expenses, needs, wants, shortfall, surplus, cut, reduce, prioritize, balance
• “We need to cut ___ because it is a want.”
• “Let’s reduce ___ by $___ to cover the shortfall.”
• “This helps us balance our budget.”

Session 2 Answer Key

This answer key provides correct answers and step-by-step explanations for the Session 2 Quiz.

Quiz Answers and Explanations

Material: Session 2 Quiz

1. What is a budget?
   • Correct Answer: B. A plan that matches your income with your expenses
   Explanation: A budget is a roadmap for your money. It helps ensure all your expenses fit within your income, preventing overspending.
2. Which of the following is a need in a budget?
   • Correct Answer: B. Rent or mortgage payment
   Explanation: Needs are essential costs required for basic living (e.g., housing, utilities). Rent/mortgage is a fixed, non-negotiable expense.
3. List the five steps to build a personal budget in the correct order.
   • Correct Answer:
   1. Track your income
   2. List your expenses
   3. Categorize needs vs. wants
   4. Set spending limits
   5. Review regularly
      Explanation: These steps guide you to gather your money data, understand spending habits, prioritize essentials, allocate funds appropriately, and adjust as needed.
4. If your monthly income is $1,500 and your expenses total $1,580, what is your budget shortfall?
   • Correct Answer: C. $80 shortfall
   Explanation: Shortfall = Income – Expenses = $1,500 – $1,580 = –$80. A negative balance means you need $80 more to break even.
5. Why is it important to separate needs from wants in your budget?
   • Correct Answer: Separating needs from wants helps you prioritize essential expenses, control non-essential spending, and ensure you can cover your basic costs before extras.
   Explanation: Distinguishing between must-haves and nice-to-haves allows you to make trade-offs when money is tight and protects your basic needs first.

Use this key to grade quizzes and to guide class discussions on budgeting concepts.

Saving & Emergency Funds Video

Watch the FDIC’s short explainer video on saving strategies and how to build an emergency fund:

Watch “Saving & Emergency Funds” (FDIC Video)

Key points to notice:

• What is an emergency fund?
• Why is it recommended to save 3–6 months of essential expenses?
• How can SMART goals help you stay on track?

Pause and discuss in class:

• 1:15 – In your own words, define “emergency fund.”
  
  
  
• 2:30 – List two benefits of having a dedicated savings fund.
  
  
  
  
  
  

Session 3 Saving Strategies Worksheet

Part A: Monthly Savings Calculation

1. You want to build a $1,000 emergency fund in 6 months.
   • Monthly savings needed: $_______
   
   
2. You want to build a 3–6 month fund of $3,750 (3 months of expenses) in 3 months.
   • Monthly savings needed: $_______
   
   
   

Part B: Write Your SMART Saving Goal

Use the SMART framework to write a saving goal for an emergency fund.

S (Specific): ____________________________


M (Measurable): __________________________


A (Achievable): __________________________


R (Relevant): ____________________________


T (Time-Bound): __________________________

Part C: Reflection

1. What obstacles might prevent you from saving regularly?
   _______________________________________________________
   
   
   
2. What strategies can you use to overcome these obstacles?
   _______________________________________________________
   
   
   
   
   
   

Emergency Fund Discussion Guide

Purpose

Help learners identify common obstacles to saving and collaborate on practical solutions to build and maintain an emergency fund.

Group Setup (10 minutes)

1. Divide class into small groups of 3–4.
2. Assign one learner per group to record responses (note-taker).
3. Provide each group with chart paper or a board section.
4. Explain that they will discuss two questions and list two obstacles and two solutions.

Discussion Questions

1. What Obstacles Might Prevent You from Saving?

• Ask each group to brainstorm and list at least two challenges—for example:

• Irregular income or seasonal work
• Unexpected expenses (medical bills, car repairs)
• Low pay or high living costs
• Lack of budgeting habit or discipline
• Temptation to spend on wants

Follow-up prompts:

• “Which obstacle affects you most, and why?”
  
  
  

2. How Can You Overcome These Obstacles?

• For each obstacle, groups suggest at least two strategies, such as:

• Automate transfers to savings on payday
• Create a separate “rainy day” account
• Reduce non-essential expenses (e.g., subscriptions)
• Set small, regular saving targets (e.g., $5 per week)
• Use saving apps or reminders

Follow-up prompts:

• “How realistic is this strategy for you?”
  
• “What could be a first step to put this idea into action?”
  
  
  

Sharing & Reflection (5–7 minutes)

1. Each group posts their chart paper or shares via whiteboard.
2. Ask one group at a time to read an obstacle and its solution.
3. Invite other groups to add new ideas or ask questions.
4. Summarize common themes: which obstacles are most frequent and which solutions seem easiest to try immediately.

Teacher Tips

• Encourage use of target vocabulary: emergency fund, obstacle, strategy, automate, budget.
• Prompt quieter learners by asking direct questions: “Maria, can you share one obstacle?”
• Offer example scenarios if groups struggle (e.g., irregular hours, family emergencies).
• Emphasize action: end with each learner writing one personal saving commitment.

Saving Goal Game

In this paired activity, learners practice setting SMART savings goals, calculating monthly contributions, and negotiating trade-offs to meet those goals.

Instructions

1. Form pairs and draw one scenario card from the deck.
2. Read your scenario and identify:
   • Total savings goal
   • Time frame (months)
   • Monthly amount needed (Goal ÷ Time frame)
3. Compare with the leftover money after essential expenses (Income – Essentials).
4. Decide which wants you will reduce or cut to free up the needed monthly savings amount.
5. Write your SMART goal and explain:
   • What you will save each month
   • Which expense(s) you adjusted
   • Why this trade-off makes sense
6. Be ready to share your SMART goal and strategy with the class.

Spend about 10 minutes on your scenario. Rotate cards if time allows.

Scenario Cards

Card 1: Single Worker

• Monthly Income: $2,000
• Essential Expenses: $1,400 (rent, groceries, utilities)
• Current Wants Spending: $200 (dining out, subscriptions)

Savings Goal: $2,000 emergency fund in 12 months
• Monthly saving needed: $2,000 ÷ 12 = $167
• Available discretionary: $2,000 − $1,400 = $600 (includes $200 wants + $400 surplus)

Task: Choose which wants or surplus amounts to reduce so you can consistently save $167 each month.

Card 2: Young Couple

• Monthly Income (combined): $3,000
• Essential Expenses: $2,200 (mortgage, groceries, utilities)
• Current Wants Spending: $300 (entertainment, gym)

Savings Goal: 3 months of essentials = $2,200 × 3 = $6,600 in 6 months
• Monthly saving needed: $6,600 ÷ 6 = $1,100
• Available discretionary: $3,000 − $2,200 = $800

Task: Decide how to cover $1,100 monthly savings when discretionary is only $800. Which categories can you adjust or cut?

Card 3: Part-Time Student

• Monthly Stipend: $800
• Essential Expenses: $600 (rent share, groceries)
• Current Wants Spending: $100 (coffee, snacks, streaming)

Savings Goal: $600 emergency fund in 6 months
• Monthly saving needed: $600 ÷ 6 = $100
• Available discretionary: $800 − $600 = $200

Task: Plan how to dedicate $100 per month to savings. Which wants will you reduce or keep? Could you increase savings if you adjust another item?

Target Vocabulary & Phrases

• emergency fund, goal, time frame, monthly savings, discretionary, wants, trade-off, prioritize
• “My SMART goal is to save $2,000 in 12 months by putting aside $167 each month.”
• “I will reduce my dining-out budget by $100 to free up savings.”
• “This trade-off helps me build my emergency fund.”

Session 3 Answer Key

This answer key provides correct answers and step-by-step explanations for the Session 3 Quiz and the Saving Strategies Worksheet.

Quiz Answers and Explanations

Material: Session 3 Quiz

1. What is an emergency fund?
   • Correct Answer: B. Savings reserved for unexpected expenses
   Explanation: An emergency fund is money set aside solely for unplanned costs (e.g., car repairs, medical bills). It is not for everyday bills (A), a loan (C), or an investment (D).
2. FDIC recommends saving how many months of essential expenses for an emergency fund?
   • Correct Answer: B. 3–6 months
   Explanation: The FDIC’s “rule of thumb” is to build savings equal to 3–6 months of your essential living costs to cover income disruptions or emergencies.
3. You want to build a $1,000 emergency fund in 6 months. How much do you need to save each month?
   • Correct Answer: $167
   Explanation: Divide the total goal by the time frame: $1,000 ÷ 6 months = $166.67, rounded to $167 per month.
4. In SMART saving goals, what does the “T” stand for?
   • Correct Answer: C. Time-bound
   Explanation: The “T” in SMART stands for Time-bound, which means setting a clear deadline for when the goal will be achieved.
5. List two benefits of having an emergency fund.
   • Correct Answer Examples:
   • It helps pay for unexpected expenses without going into debt.
   • It reduces financial stress and provides security.
   • It prevents the need to borrow or use high-interest credit cards.
     Explanation: An emergency fund protects you from unplanned costs and helps maintain financial stability and peace of mind.

Saving Strategies Worksheet Answers

Material: Session 3 Saving Strategies Worksheet

Part A: Monthly Savings Calculation

1. $1,000 in 6 months → $1,000 ÷ 6 = $167 per month
2. $3,750 in 3 months → $3,750 ÷ 3 = $1,250 per month

Part B: Example SMART Saving Goal

S (Specific): Save $1,000 for an emergency fund
M (Measurable): Deposit $167 each month into a savings account
A (Achievable): $167 per month fits my budget
R (Relevant): It prepares me for unexpected expenses
T (Time-bound): Complete saving in 6 months

Note: Accept any SMART goal that clearly states a specific amount, monthly target, relevance to emergencies, and a deadline.

Part C: Reflection

Possible Obstacles:

• Irregular income or unpredictable hours
• Temptation to spend on non-essentials
• Unexpected bills that draw from savings
• Lack of a habit or reminder system

Possible Strategies:

• Automate a transfer of $____ to savings on payday
• Open a separate “rainy day” account
• Cut or reduce a want (e.g., dining out, subscriptions)
• Set small weekly saving targets (e.g., $5 per week)
• Use a budgeting or savings app for reminders

Note: Accept any reasonable obstacles and solutions. Look for clear connections between each obstacle and its strategy.

Use this key to grade student responses and guide review discussions on saving and emergency funds.

Credit Basics Video

Watch the FDIC’s short explainer video on credit fundamentals:

Watch “Credit Basics” (FDIC Video)

Key points to notice:

• What is credit?
• How does the interest rate affect borrowing cost?
• Why does your credit score matter?

Pause and discuss in class:

• 1:15 – In your own words, define credit.
  
  
  
• 2:30 – List two reasons why a credit score is important.
  
  
  
  
  
  

Credit Vocabulary Worksheet

Match the credit terms in Column A with the definitions in Column B. Write the letter of the correct definition next to each number.

Column B: Definitions

A. The cost of borrowing money, shown as a percentage.

B. Annual Percentage Rate, the total yearly cost of credit including fees.

C. Money you borrow which you agree to repay later.

D. A number (300–850) that indicates your creditworthiness.

E. A person or institution that lends you money.

F. A person who borrows money or uses credit.

G. A document summarizing your credit accounts, payment history, and inquiries.

H. A record of when lenders check your credit report.

Column A: Terms

1. Credit ________
   
   
   
2. Borrower ________
   
   
   
3. Lender ________
   
   
   
4. Interest Rate ________
   
   
   
5. APR ________
   
   
   
6. Credit Score ________
   
   
   
7. Credit Report ________
   
   
   
8. Credit Inquiry ________
   
   
   

Credit Report Discussion Guide

Purpose

Help learners practice reading a credit report, identify positive factors and red flags, and discuss how report items affect credit health.

Materials

• Simplified credit report excerpt (printed or projected)
• Chart paper or whiteboard
• Markers or sticky notes

Group Setup (10 minutes)

1. Divide learners into small groups of 3–4.
2. Provide each group with a copy of the simplified credit report excerpt.
3. Assign one learner to record group findings.
4. Explain that each group will analyze the report and answer two questions.

Discussion Questions

1. Identify a Positive Account Entry

• Look at the accounts section. Find one item that shows good credit behavior (e.g., on-time payments, low balance).
• Discuss: Why is this positive for the credit score?

Follow-up prompts:

• “Which factor does this influence (payment history, amounts owed, etc.)?”
• “How does this help your score?”

2. Spot a Red Flag or Concern

• Find one item that could hurt a credit score (e.g., late payment, high utilization, recent inquiry).
• Discuss: Why is this a problem?

Follow-up prompts:

• “What component of the score does this affect?”
• “What actions could you take to correct or improve it?”

Sharing & Reflection (5–7 minutes)

1. Each group posts or presents one positive item and one red flag.
2. Ask groups to explain:
   • How the item impacts credit score.
   • What steps a borrower can take to maintain or fix it.
3. Invite other groups to add ideas or ask questions.
4. Summarize key takeaways:
   • Importance of on-time payments and low balances.
   • How errors or late payments can be disputed or corrected.

Teacher Tips

• Encourage use of target vocabulary: payment history, credit utilization, inquiry, score component, dispute.
• Prompt quieter learners by directing a specific question: “Linh, can you explain why a late payment is a red flag?”
• If groups struggle, demonstrate by walking through one example together.
• Emphasize proactive steps: checking reports regularly, disputing errors, making on-time payments.

Credit Score Simulation Game

In this paired game, learners draw scenario cards and decide how each event would affect a credit score—positively or negatively. Then they discuss why and estimate the approximate impact.

Instructions

1. Form pairs and shuffle the scenario cards.
2. One learner draws a card and reads the scenario aloud.
3. Together, discuss:
   • Which credit score component is affected? (payment history, amounts owed, length of history, new credit, credit mix)
   • Will the score go up or down? Why?
   • Assign an approximate point change (e.g., +20, –30).
4. Share your scenario, component, and impact with the class.
5. Rotate and repeat as time allows.

Spend about 5 minutes on each card.

Scenario Cards

Card 1: On-Time Payment

You pay your credit card balance in full and on time this month.
• Component: Payment History
• Impact: ________________ (e.g., +35 points)

Card 2: Missed Payment

You miss a credit card payment and pay a late fee.
• Component: Payment History
• Impact: ________________ (e.g., –60 points)

Card 3: High Credit Utilization

Your credit card balance jumps to 90% of your limit.
• Component: Amounts Owed (Credit Utilization)
• Impact: ________________ (e.g., –25 points)

Card 4: New Credit Inquiry

You apply for a new loan and the lender checks your credit report.
• Component: New Credit/Inquiries
• Impact: ________________ (e.g., –10 points)

Card 5: Opening a Long-Term Account

You open a new credit card but then keep it open for over one year with a low balance.
• Component: Length of Credit History & Credit Mix
• Impact: ________________ (e.g., +15 points combined)

Card 6: Diversifying Credit

You add a small installment loan (like a car loan) while keeping your credit cards in good standing.
• Component: Credit Mix
• Impact: ________________ (e.g., +10 points)

Target Vocabulary & Phrases

• payment history
• credit utilization (amounts owed)
• length of credit history
• new inquiry
• credit mix
• score increase / score decrease
• “This event impacts my payment history, so the score will go down by about 60 points.”
• “High utilization hurts my amounts owed component, decreasing my score.”

Session 4 Answer Key

This answer key provides correct answers and step-by-step explanations for the Session 4 Quiz.

Quiz Answers and Explanations

Material: Session 4 Quiz

1. What is credit?
   • Correct Answer: B. Money you borrow and must repay
   Explanation: Credit is the act of borrowing funds with the agreement to pay them back, usually with interest. It is not money you save (A), earn from interest (C), or give as a gift (D).
2. Which component of a credit score has the highest weight?
   • Correct Answer: B. Payment history
   Explanation: Payment history accounts for about 35% of a credit score. It reflects whether you pay bills on time. Other factors—amounts owed (30%), length of history (15%), new credit (10%), and credit mix (10%)—carry less weight.
3. A credit score between 670 and 739 is considered:
   • Correct Answer: C. Good
   Explanation: According to standard score ranges:
   • 300–579 = Poor
   • 580–669 = Fair
   • 670–739 = Good
   • 740–799 = Very Good
   • 800–850 = Excellent
4. What does APR stand for and why is it important when borrowing?
   • Correct Answer: APR stands for Annual Percentage Rate; it shows the total yearly cost of credit including interest and fees, helping borrowers compare borrowing costs.
   Explanation: APR includes the interest rate plus any fees, expressed as an annual percentage. Knowing the APR lets you compare different loan or credit offers on an apples-to-apples basis.
5. From a credit report excerpt, identify one red flag (e.g., late payment) and explain how a borrower can address it.
   • Correct Answer Example: “A red flag is a late payment reported on a credit card account. A borrower can address this by bringing the account current immediately, making all future payments on time, and then asking the creditor to remove or update the late payment remark after demonstrating consistent on-time payments.”
   Explanation: Late payments negatively impact the payment history component. Corrective actions include paying any past-due balance, setting up automatic payments or reminders, and disputing errors or requesting goodwill adjustments from the creditor.

Use this key to grade quizzes and to guide review discussions on credit fundamentals, score components, and responsible borrowing practices.

Loans Basics Video

Watch the FDIC’s short explainer video on loan fundamentals:

Watch “Loans Basics” (FDIC Video)

Key points to notice:

• What is the difference between installment loans and revolving credit?
• How does term length affect your monthly payment?
• What roles do principal, interest rate, and APR play in calculating payments?

Pause and discuss in class:

• 1:20 – In your own words, explain the difference between installment and revolving credit.
  
  
  
• 2:35 – How does the length of the loan term change the monthly payment amount?
  
  
  
  
  
  

Session 5 Loans Worksheet

Part A: Monthly Payment Calculation
You take a $5,000 installment loan at 6% APR for 24 months.

1. What is the monthly interest rate?
   ____________________________________________
   
   
2. Use the formula or payment table to calculate your monthly payment.
   Monthly payment: $________
   
   
3. Show your calculation steps below:
   ____________________________________________________________________________
   
   
   ____________________________________________________________________________
   
   
   

Part B: Debt-to-Income (DTI) Ratio
Debt-to-Income Ratio = (Monthly debt payments ÷ Gross monthly income) × 100%

1. Scenario 1:
   • Monthly debts: $600
   • Gross monthly income: $2,400Calculate DTI: _____%
   
   
   Show your work:
   ____________________________________________________________________________
   
   
   
2. Scenario 2:
   • Monthly debts: $850
   • Gross monthly income: $3,000Calculate DTI: _____%
   
   
   Show your work:
   ____________________________________________________________________________
   
   
   

Part C: Reflection

Why is knowing your DTI important when applying for a loan?
______________________________________________________________________________

Debt Management Discussion Guide (Session 5)

Purpose

Guide learners in identifying and evaluating different debt‐reduction strategies to regain financial control.

Materials Needed

• Chart paper or whiteboard
• Markers or sticky notes
• Sample debt list (printed or projected)

Group Setup (10 minutes)

1. Divide class into groups of 3–4.
2. Provide each group with chart paper or a section of the board.
3. Explain they will discuss two questions and record two strategies for each.
4. Assign one learner per group as the recorder.

Discussion Questions

1. What Strategies Can Help You Reduce or Manage Debt?

• Brainstorm at least two approaches, for example:

• Debt Snowball Method: Pay smallest balances first.
• Debt Avalanche Method: Pay highest‐interest debts first.
• Consolidation: Combine multiple debts into one loan with a lower rate.
• Negotiation: Call lenders to request lower rates or payment plans.

Follow-up prompts:

• “Which strategy seems easiest to start?”
• “Who would benefit most from each method?”
  
  
  

2. What Are the Pros and Cons of Each Strategy?

• For each approach your group listed, note one advantage and one challenge.

• Example: Snowball → Pro: Quick wins boost motivation; Con: May pay more interest overall.
• Avalanche → Pro: Saves money on interest; Con: Slow progress on small balances.

Follow-up prompts:

• “How might your income level or debt type affect your choice?”
• “What obstacles could you encounter and how would you overcome them?”
  
  
  

Sharing & Reflection (5–7 minutes)

1. Have each group post their chart or share on the board.
2. One group at a time, read one strategy with its pro and con.
3. Invite other groups to add insights or ask questions.
4. Summarize common themes:
   • Which methods were most popular?
   • Key factors influencing strategy choice (balance size, interest rate, motivation).

Teacher Tips

• Encourage learners to use target vocabulary: principal, interest rate, APR, snowball, avalanche, consolidation, negotiate.
• If groups struggle, provide a sample debt list:
  • Credit Card A: $1,200 at 18% APR
  • Personal Loan: $3,000 at 8% APR
  • Store Card: $500 at 22% APR
• Prompt quieter learners by asking: “Maria, why might someone choose the avalanche method?”
• Emphasize action steps: after class, ask learners to list their own debts and pick one strategy to try this week.

Debt Snowball Game

In this paired activity, learners practice the debt snowball method: ordering debts from smallest balance to largest, making minimum payments on all debts, and applying any extra funds to the smallest balance first. As each debt is paid off, you roll its payment amount into the next smallest debt—building “snowball” momentum.

Instructions

1. Form pairs and shuffle the scenario cards.
2. Each pair draws one Debt Scenario Card.
3. List your debts from smallest to largest balance.
4. Calculate minimum payments for each debt.
5. Assume you have an extra $50 this month to put toward debt. Show:
   • Minimum payments on all debts.
   • Extra payment applied to the smallest debt.
6. Plan the payoff sequence: after the smallest debt is cleared, add its minimum payment + $50 extra to the next debt, and so on.
7. Share your plan with the class:
   • Order of debts
   • Month when each debt is paid off (estimate)
   • Total time to become debt‐free

Spend 5 minutes on your scenario, then rotate cards if time allows.

Debt Scenario Cards

Card 1: Three Debts

• Credit Card A: Balance $300, Minimum $25
• Store Card B: Balance $450, Minimum $30
• Personal Loan C: Balance $1,200, Minimum $50

Card 2: Four Debts

• Store Card: Balance $200, Minimum $20
• Credit Card: Balance $550, Minimum $35
• Medical Bill: Balance $400, Minimum $40
• Auto Loan: Balance $2,000, Minimum $75

Card 3: Two Small Debts + One Large

• Gym Debt: Balance $150, Minimum $15
• Utility Bill Arrears: Balance $225, Minimum $25
• Student Loan: Balance $3,000, Minimum $60

Target Vocabulary & Phrases

• debt snowball, minimum payment, balance, payoff sequence, extra payment, momentum
• “First, I will pay off the $150 debt by applying the $50 extra plus its $15 minimum.”
• “After Month 1, I add $65 to the next debt’s payment, totaling $90.”
• “This method helps me clear small debts quickly and build confidence.”

Session 5 Answer Key

This answer key provides correct answers and step-by-step explanations for the Session 5 Quiz.

Quiz Answers and Explanations

Material: Session 5 Quiz

1. What is the principal of a loan?
   • Correct Answer: C. The amount you borrow
   Explanation: The principal is the original sum of money you take out as the loan, before interest and fees are added. It is not the interest cost (A), the APR (B), or the loan term (D).
2. Which of the following is an example of revolving credit?
   • Correct Answer: D. Credit card
   Explanation: Revolving credit lets you borrow up to a set limit, repay, and borrow again (e.g., credit card). Installment loans such as auto (A), student (B), and mortgage (C) require fixed payments until the balance is zero.
3. You borrow $5,000 at 6% APR for 24 months. Approximately how much is your monthly payment?
   • Correct Answer: About $222 per month
   Explanation: Using a standard loan-payment formula or amortization table:Monthly rate = 6% ÷ 12 = 0.5% (0.005)Payment ≈ [0.005 × 5,000] ÷ [1 – (1 + 0.005)^–24] ≈ $222You can also use an online loan calculator to confirm the $220–$225 range.
4. How do you calculate the debt-to-income (DTI) ratio?
   • Correct Answer: B. (Monthly debts ÷ Monthly income) × 100
   Explanation: DTI measures the share of your gross income used for debt payments. You divide total monthly debt payments by gross monthly income, then multiply by 100%. Options A, C, and D are incorrect formulas.
5. Briefly describe the debt snowball method for paying off debts.
   • Correct Answer: Pay off the smallest balance first while making minimum payments on all other debts. Then, once the smallest debt is cleared, roll its payment into the next smallest balance, creating momentum (“snowball effect”) until all debts are paid.
   Explanation: The snowball method builds motivation by achieving quick wins on small debts. You apply any extra funds to the smallest balance first, then cascade those funds to larger debts as each balance is eliminated.

Use this key to grade quizzes and to guide discussion on loans, repayment calculations, DTI, and debt-management strategies.

Fraud Prevention Video

Watch the FDIC’s short explainer video on preventing and reporting financial scams:

Watch “Fraud Prevention” (FDIC Video)

Key points to notice:

• What is fraud?
• Name two common scam types and how they work.
• How can you report suspected fraud?

Pause and discuss in class:

• 1:10 – In your own words, define “fraud.”
  
  
  
• 2:20 – List two red flags that signal a possible scam.
  
  
  
  
  

Session 6 Scams & Prevention Worksheet

Part A: Identify Red Flags in Sample Messages

For each of the following messages, list at least two red flags that indicate it might be a scam. Write your answers below each message.

1. Email Message

“Dear Customer,

Your FDIC-insured account has been placed on hold due to suspicious activity. Please confirm your account number and Social Security number by clicking the link below immediately, or your access will be permanently suspended:

http://fdic-secure-verification.com

Thank you,

FDIC Security Team”

Red Flag #1: ____________________________



Red Flag #2: ____________________________

2. Phone Call Transcript

Scammer: “Hello, this is Agent Lopez from the IRS. You owe back taxes of $1,200 that must be paid by gift card within 24 hours to avoid arrest. Please read me the gift card codes now.”

Red Flag #1: ____________________________



Red Flag #2: ____________________________

3. Text Message Alert

“ALERT: Your debit card ending in 1234 was used in New York. If this was not you, reply YES to disable your card and provide your 4-digit PIN to verify.”

Red Flag #1: ____________________________



Red Flag #2: ____________________________

Part B: Prevention & Response

1. If you receive a suspicious message like one above, what steps would you take to verify its authenticity?
   __________________________________________________________________________
   
   
   
   
   
   
2. If you confirm it is a scam, where and how would you report it? (List at least two places or agencies.)
   __________________________________________________________________________
   
   
   
   
   
   
3. What can you do to protect your personal and financial information on a daily basis?
   __________________________________________________________________________
   
   
   
   
   
   

Fraud Prevention Discussion Guide

Purpose

Help learners share real‐world scam scenarios, brainstorm prevention measures, and practice reporting methods.

Materials

• Chart paper or whiteboard
• Markers or sticky notes
• Examples of scam messages (printed or projected)

Group Setup (10 minutes)

1. Divide learners into small groups of 3–4.
2. Provide each group with chart paper or a board section.
3. Assign one learner as recorder and one as presenter.
4. Explain they will discuss two questions and list two ideas for each.

Discussion Questions

1. How Can You Protect Your Personal and Financial Information?

• Brainstorm at least two prevention strategies, for example:

• Verify any unsolicited contact by calling the official number.
• Never share passwords, PINs, or full account numbers.
• Use strong, unique passwords and enable two-factor authentication.
• Keep software and antivirus up to date.

Follow-up prompts:

• “Which strategy is easiest to start today?”
• “What barriers might you face implementing it?”

2. Where and How Should You Report a Scam or Fraud Attempt?

• List at least two reporting actions, such as:

• Contact your bank or credit card company immediately.
• Report to the FDIC’s consumer fraud hotline or website.
• File a complaint with the FTC (Federal Trade Commission).
• Inform local law enforcement or the Internet Crime Complaint Center (IC3).

Follow-up prompts:

• “Which agency would you contact first and why?”
• “What information should you keep when reporting?”

Sharing & Reflection (5–7 minutes)

1. Each group’s presenter shares one key prevention strategy and one reporting action.
2. Invite questions or additions from other groups.
3. Summarize common themes:
   • Most practical prevention steps.
   • Key resources for reporting.
4. Encourage learners to choose one action they will do this week (e.g., set up two-factor authentication, bookmark FTC complaint page).

Teacher Tips

• Encourage use of target vocabulary: verify, two-factor authentication, report, hotline, complaint.
• Prompt quieter learners with direct questions: “José, which reporting agency would you choose?”
• Provide real FDIC and FTC URLs on the board for easy reference:
  • https://www.fdic.gov/scams
  • https://reportfraud.ftc.gov
• Reinforce action: ask each learner to write down their chosen next step on a sticky note and post it for accountability.

Scam Scenario Role-Play Game

In this paired activity, learners practice responding safely to common scam approaches by role-playing a Victim and an Advisor. Each pair draws one scenario card and spends 5 minutes acting out how to spot red flags, refuse requests, verify legitimacy, and report the scam.

Instructions

1. Form pairs and designate roles: one Victim and one Advisor.
2. Draw a scenario card from the deck.
3. Victim reads the scam approach; Advisor guides the Victim in:
   • Identifying at least two red flags
   • Politely refusing or pausing the request
   • Asking verifying questions (e.g., official contact, reason)
   • Explaining how and where to report the attempt
4. After 5 minutes, switch roles or draw a new card.

Scenario Cards

Card 1: Phishing Email

Victim: You receive an email stating your bank account will be closed unless you confirm your password and Social Security number immediately.

Advisor Prompts:

• “I’m not comfortable sharing that. Can I call your official number?”
• “May I have a secure link that matches your bank’s website domain?”
• Report to: bank fraud line, FTC at reportfraud.ftc.gov

Card 2: Government Imposter Call

Victim: You get a phone call from someone claiming to be an FDIC agent demanding an immediate wire transfer to recover “lost funds.”

Advisor Prompts:

• “I’ll need your badge number and official callback number.”
• “I will verify by calling the FDIC hotline at www.fdic.gov/scams.”
• Report to: FDIC consumer fraud page, local police

Card 3: Tech Support Pop-up

Victim: A pop-up on your computer warns of a virus and instructs you to call a “support” number and give remote access.

Advisor Prompts:

• “Can you show me the official software provider’s website?”
• “I will contact my IT provider instead of trusting this pop-up.”
• Report to: FTC and your antivirus company

Card 4: Romance Scam Text

Victim: You start chatting with someone online who then says they need money for an emergency overseas and asks you to buy gift cards.

Advisor Prompts:

• “How did we meet? Can we video chat instead?”
• “I will not send gift cards; please use a secure bank transfer if you’re real.”
• Report to: dating site support, FTC

Target Vocabulary & Phrases

• scam, phishing, imposter, red flags, verify, refuse, report, callback, official website
• “I’m sorry, I don’t feel safe sharing that.”
• “Can you provide an official phone number I can call?”
• “I will report this to my bank/agency and the FTC.”

Session 6 Answer Key

This answer key provides correct answers and step-by-step explanations for the Session 6 Quiz.

Quiz Answers and Explanations

Material: Session 6 Quiz

1. What is fraud?
   • Correct Answer: B. Intentional deception to steal money or personal information
   Explanation: Fraud is any deliberate act of tricking someone to gain money or personal data. It is not a service (A), insurance (C), or a regulation (D).
2. Which of the following is a common red flag of a financial scam?
   • Correct Answer: A. An unsolicited urgent request for personal or account information
   Explanation: Scammers often use urgency and unsolicited contact to pressure victims. Genuine institutions do not demand immediate personal data without verification.
3. List two red flags you might spot in a phishing email or scam message.
   • Correct Answer Examples:
   • Unsolicited urgent request for personal details
   • Poor spelling or grammar
   • Mismatched logos or unfamiliar URLs
   • Requests to pay via gift cards or cryptocurrency
     Explanation: Watch for errors, fake links, or payment methods that reputable organizations never use.
4. What is the safest first step if you receive a suspicious message asking for your bank account details?
   • Correct Answer: C. Contact the institution using a known phone number or official website
   Explanation: Never click links or provide information in the message. Instead, look up the legitimate contact info yourself and verify directly.
5. Name two places or agencies where you can report a suspected financial scam.
   • Correct Answer Examples:
   • Your bank’s fraud department
   • FDIC’s consumer fraud page (https://www.fdic.gov/scams)
   • FTC at https://reportfraud.ftc.gov
   • Local law enforcement or the Internet Crime Complaint Center (IC3)
     Explanation: Reporting to multiple agencies helps law enforcement track scams and can protect you from further attempts.

Use this key to grade quizzes and guide review discussions on identifying scams, spotting red flags, and taking action to protect personal information.