CITIZENSHIP, MATHS AND ICT

Unit Overview

Financial Literacy

Financial Literacy

Managing your finances is something which most people struggle with –

it’s not easy!

This unit is going to build on work which you will cover in your Maths and Citizenship

lessons – and it will use ICT to help you to learn how to manage your finances!

Unit Objectives

By the end of this unit, you should be able to…

• Understand about issues such as taxation, mortgages and insurance

• Understand how to manage your finances

• Use a computer system to help you to manage your money

• Use your system to make financial predictions and future plans

Your Task

Just imagine… …you are in your mid-twenties……you have a good job in your chosen career……you could be living anywhere in the country……you might be living with a partner or a

housemate…

There are lots of financial figures to keep track of!

To begin, in pairs, write a list of all the different income and expenses which you might need to keep a record of…

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Creating Your Financial Model

• Once you have most of the figures – including income and expenditure – you can begin to design your own financial system using the computer.

• Separate your figures into two sections – whether they are an income or an expense

• Then decide whether the figures you have are weekly, monthly or annual (yearly) amounts

Creating Your Financial Model

Now you’re ready to go! So…

1. On paper first, sketch out the design of how you want your system to look…

2. Decide on the software which will be most useful for handling numbers and making calculations automatically…

3. Begin to transfer your figures into the layout of your new financial model on the computer…

Your Financial Rules

There are some rules which your model needs to follow. This will help you to make your system more accurate and useful.

For example, you must pay one third of your salary in Income Tax.

The rules follow on the next slide (and on the help sheet here)

Your Financial Rules• You must pay one third of your salary in Income Tax• If you buy a house, you can only borrow four times your salary (before

tax)• You can share a house with up to two other people – in this case you

should divide your expenses by the number of people living in the house

If you own your house:• monthly mortgage payments are the price of your house divided by 300• monthly council tax bill is the price of your house divided by 2400If you are renting your house: • monthly council tax bill is the price of your monthly rental divided by 8If you buy a car:• monthly payments are the price of your car divided by 36• monthly car insurance is the price of your car divided by 225

Testing Your Financial Model

Now your model is complete, you need to check that it works properly…

1. Try entering some simple figures into your system and check whether the calculations are accurate.

2. If you change some of the figures, do the totals automatically re-calculate?

3. Make a note of what changes you make and check some of the calculations using either arithmetic or a calculator...

Now you can plan ahead!

You have a system whch works, so now we can look into the future…

Your ICT model should now enable you to predict what might happen, if…

Using Your Financial Model

Now use your model to predict what might happen to your finances, if…

1. Income tax goes up from one third of your income to one half of your income

2. Council tax goes down – divide your house price by 3000 or your monthly rental by 12

3. You get a pay rise! Add £10,000 to your annual salary!

Possible financial scenarios…

Finally, change your financial situation so…

1. You have money left at the end of each month2. You break even – every month you spend

almost exactly what you earn3. You are in debt – you end each month

spending more than you earn

Save each scenario as a separate file. You have proved that your model works and can predict thefuture!

Extending your model

Can you build upon this model to make it more complex or more useful?

Try looking at the following functions:-

• Conditional Formatting• Goal Seek• Data Validation• Input Messages and Comments• Graphs and Charts

How your ICT work will be marked…

Level 4With help, you are able to use a computer system to make calculations. The results of the calculations help you to understand your financial situation. You can understand why this work links to Maths and Citizenship.

Level 5You create a system using the computer, which makes calculations and can automatically display your financial situation. You can describe how and why your work connects to your Maths and Citizenship lessons.

Level 6You create a financial management system and can test it with different values to demonstrate more than one financial situation. You can use your system to make predictions about future financial situations and you are able to write a user guide to your system.

CITIZENSHIP, MATHS AND ICT

Unit Overview

Financial Literacy