In this lesson, students will learn about current trends in student borrowing and determine a reasonable debt load for hypothetical students. College costs have escalated over the past two decades, and more and more students are relying on student loans to cover the costs. Therefore, it is more important than ever to carefully consider the costs of college, your anticipated career income, and how to best finance those college expenses.
COMPELLING QUESTION Can arbitrary numbers stick in our minds and affect our decision making? Students will participate in a trading game in which students are either a buyer or seller in a market. In this market students will be exposed to a particular number to serve as an anchor. The goal is to see if the students who are the sellers were able to get a higher price from the students with the higher anchor than the students with the lower anchor. This activity will be an introduction to analyze and discuss one of the most powerful tools for negotiation and a widely discussed topic in behavioral economics.
The practice of saving and investing is definitely a good thing, but there are many ways to save and invest. In thinking about the options, it is important to consider the degree of risk involved and the potential for return. Typically, the higher the risk, the higher the potential return. The key is to work up to the riskier investments, where you stand to earn the most money, but only after you've successfully established some safer holdings. This lesson walks students through the stages of investing, demonstrating why that sort of sequential order is important. At the end of the lesson, students are asked to serve as financial advisors and give advice to people considering investments at different stages of the investment ladder.
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