Connecticut
9th-12th Grades
State Standards
Financial Literacy Standards
9.1Earning Income
12.1Compensation for a job or career can be in the form of wages, salaries, commissions, tips, or bonuses, and may also include contributions to employee benefits, such as health insurance, retirement savings plans, and education reimbursement programs.
12.1.aResearch potential income and employee benefit packages that are likely to be offered to new employees by various companies, government agencies, or not-for-profit organizations.
12.1.bExplain why people should evaluate employee benefits in addition to wages and salaries when choosing between job and career opportunities.
12.1.cDifferentiate between contributory and non-contributory employee benefits.
12.1.dExamine the benefits of participating in employer sponsored retirement savings plans and healthcare savings plans.
12.2In addition to wages and paid benefits, employees may also value intangible (noncash) benefits, such as good working conditions, flexible work hours, telecommuting privileges, and career advancement potential.
12.2.aGive examples of intangible job benefits.
12.2.bDescribe how intangible benefits can affect a worker's career choices and income.
12.2.cEvaluate the tradeoffs between income and non-income factors when making career or job choices.
12.3People vary in their opportunity and willingness to incur the present costs of additional training and education in exchange for future benefits, such as earning potential.
12.3.aEvaluate the costs and benefits of investing in additional education or training.
12.3.bExplain how differences in people's life circumstances can affect their opportunity and willingness to further their education or training.
12.3.cCompare earnings and unemployment rates by level of education and training.
12.4Employers generally pay higher wages or salaries to more educated, skilled, and productive workers than to less educated, skilled, and productive workers.
12.4.aIdentify different types of jobs and careers where wages and salaries depend on a worker's productivity and skills.
12.4.bExplain why wages or salaries vary among employees in different types of jobs and among workers in the same jobs.
12.4.cDiscuss possible explanations for the persistence of race and gender pay gaps.
12.5Changes in economic conditions, technology, or the labor market can cause changes in income, career opportunities, or employment status.
12.5.aDiscuss how economic and labor market conditions can affect income, career opportunities, and employment status.
12.5.bEvaluate the impact of technological advances on employment and income.
12.5.cDiscuss the effects of an economic downturn on employment opportunities for people with different characteristics, such as education, experience, employment type, ethnicity, and gender.
12.6Federal, state, and local taxes fund government-provided goods, services, and transfer payments to individuals. The major types of taxes are income taxes, payroll taxes, property taxes, and sales taxes.
12.6.aCalculate the amount of taxes a person is likely to pay when given information or data about the person's sources of income and amount of spending.
12.6.bIdentify which level(s) of government typically receive(s) the tax revenue for income taxes, payroll taxes, property taxes, and sales taxes.
12.6.cDescribe the benefits they receive, or may receive in the future, from government-collected tax revenue.
12.7The type and amount of taxes people pay depend on their sources of income, amount of income, and amount and type of spending.
12.7.aInvestigate the federal and state tax rates applicable to different sources of income.
12.7.bCompare sales tax rates paid on different types of goods in their state and for online purchases.
12.7.cDifferentiate between gross, net, and taxable income.
12.7.dExplain why some income is reported on an IRS Form W-2 and some is reported on an IRS Form 1099, and how that could affect their taxes.
12.8Interest, dividends, and capital appreciation (gains) are examples of unearned income derived from financial investments. Capital gains are subject to different tax rates than earned income.
12.8.aExplain the difference between earned and unearned income.
12.8.bCompare the tax rates assessed on earned income, interest income, and capital gains income.
12.9Tax deductions and credits reduce income tax liability.
12.9.aComplete IRS Form W-4.
12.9.bExplain the difference between a tax credit and a tax deduction.
12.9.cIdentify several examples of tax credits, determining whether they are refundable or non-refundable, and the groups of people who benefit most from each type.
12.10Retirement income typically comes from some combination of continued employment earnings, Social Security, employer sponsored retirement plans, and personal investments.
12.10.aIdentify different potential sources of retirement income.
12.10.bDescribe the importance of having multiple sources of income in retirement, such as Social Security, employer sponsored retirement plans, and personal investments.
12.10.cExplain the importance of participating in employer sponsored retirement plans, when available, and contributing enough to qualify for the maximum employer match.
12.10.dReport the average benefit paid to a retiree living on Social Security today.
12.11Owning a small business can be a person's primary career or can supplement income from other sources.
12.11.aEvaluate the benefits and costs of gig employment, such as driving for a cab or delivery service.
12.11.bDiscuss the pros and cons of small business ownership as their primary source of income.
9.2Spending
12.1A budget helps people achieve their financial goals by allocating income to necessary and desired spending, saving, and philanthropy.
12.1.aIdentify their short-term and long-term financial goals.
12.1.bDevelop a budget to allocate current income to necessary and desired spending, including estimates for both fixed and variable expenses.
12.1.cExplain methods for adjusting a budget for unexpected expenses or emergencies.
12.1.dEvaluate the advantages of using budgeting tools, such as spreadsheets or apps.
12.2Consumer decisions are influenced by the price of products or services, the price of alternatives, the consumer's budget and preferences, and potential impact on the environment, society, and economy.
12.2.aSelect a product or service and describe the various factors that may influence a consumer's purchase decision.
12.2.bDescribe a process for making an informed consumer decision.
12.2.cList the positive and negative effects of a recent consumer decision on the environment, society, and the economy.
12.3When purchasing a good that is expected to be used for a long time, consumers consider the product's durability, maintenance costs, and various product features.
12.3.aExplain the factors to evaluate when buying a durable good.
12.3.bAnalyze the cost and features of three competing products or services.
12.3.cCompare product choices based on their impacts on the environment or society.
12.4Consumers may be influenced by how prices of goods and services are advertised, and whether prices are fixed or negotiable.
12.4.aList different ways retailers advertise the prices of their products.
12.4.bDescribe how inflation affects purchase decisions and the price of goods and services.
12.4.cSummarize how negotiation affects consumer decisions and the price of goods and services.
12.5Consumers incur costs and realize benefits when searching for information related to the purchase of goods and services.
12.5.aExplain how pre-purchase research encourages consumers to avoid impulse buying.
12.5.bBrainstorm consumer research strategies and resources to use when making purchase decisions.
12.5.cAnalyze social media marketing and advertising techniques designed to encourage spending.
12.6Housing decisions depend on individual preferences, circumstances, and costs, and can impact personal satisfaction and financial well-being.
12.6.aIdentify financial and personal reasons that younger adults often choose to rent a home instead of buying.
12.6.bCompare the short-term and long-term costs and benefits of renting versus buying a home in their city of residence.
12.6.cDefine key rental contract terminology, including lease term, security deposit, grace period, and eviction.
12.7People donate money, items, or time to charitable and nonprofit organizations because they value the services provided by the organization and/or gain satisfaction from giving.
12.7.aDiscuss the motivations for and benefits of donating money, items, or time.
12.7.bDevelop a list of charitable organizations and provide a possible reason that a donor might want to give money to each organization.
12.7.cIdentify specific steps one should take when researching charitable and other not-for-profit organizations.
12.8Federal and state laws, regulations, and consumer protection agencies (e.g., Federal Trade Commission, Consumer Affairs office, and Consumer Financial Protection Bureau) can help individuals avoid unsafe products, unfair practices, and marketplace fraud.
12.8.aDescribe the roles and responsibilities of government agencies that help protect consumers from fraud.
12.8.bIdentify state and federal consumer protection laws based on the issues they address and the safeguards they provide.
12.8.cInvestigate common types of consumer fraud and unfair or deceptive business practices, including online scams, phone solicitations, and redlining.
12.8.dMake recommendations for sources of help for consumers who have experienced fraud.
12.9Having an organized system for keeping track of spending, saving, and investing makes it easier to make financial decisions.
12.9.aExplain how having a system for financial record-keeping can make it easier to make financial decisions.
12.9.bDevelop a system for keeping track of spending, saving, and investing.
12.9.cResearch financial technology options for financial record-keeping.
9.3Investing
12.1A person's investment risk tolerance depends on factors such as personality, financial resources, investment experiences, and life circumstances.
12.1.aGive examples of factors that can influence a person's risk tolerance.
12.1.bDiscuss how a person's risk tolerance influences their investment decisions.
12.1.cAssess their personal risk tolerance using an online tool or worksheet.
12.2Investors earn investment returns from price changes and annual cash flows (such as interest, dividends or rent). The nominal annual rate of return is the annual total dollar benefit as a percentage of the beginning price.
12.2.aDescribe the different types of annual cash flows that can be received by investors.
12.2.bCompare nominal annual rates of return over time on different types of investments, including cash flows and price changes.
12.2.cExplain why assets that do not produce income or are exposed to large price fluctuation (such as collectibles, precious metals, and cryptocurrencies) are described as speculative investments.
12.3Investors expect to earn higher rates of return when they invest in riskier assets.
12.3.aDiscuss the advantages and disadvantages of investing in riskier assets.
12.3.bInvestigate the long-run average rates of returns on small-company stocks, large-company stocks, corporate bonds, and Treasury bonds.
12.3.cExplain why the expected rate of return on a value stock or mutual fund is likely to be lower than that of a growth stock or mutual fund.
12.3.dExplain why bonds with longer maturities generally earn a higher return than shorter-term bonds.
12.4Because inflation reduces purchasing power over time, the real return on a financial asset is lower than its nominal return.
12.4.aDescribe the impact of inflation on prices over time.
12.4.bExplain the relationship between nominal and real returns.
12.4.cFind the current rate paid on CDs at a bank and calculate the expected real rate after inflation.
12.5The prices of financial assets change in response to market conditions, interest rates, company performance, new information, and investor demand.
12.5.aDescribe factors that influence the prices of financial assets.
12.5.bPredict what could happen to the price of a stock if new information is reported about the company or its products.
12.5.cDiscuss how economic downturns that result in high unemployment can affect the prices of financial assets.
12.5.dExplain why the market price of some assets, such as bonds and real estate, increase when interest rates decrease.
12.6When making diversification and asset allocation decisions, investors consider their risk tolerance, goals, and investing time horizon.
12.6.aRecommend portfolio allocation between major asset classes for a short-term goal versus a long-term goal.
12.6.bDiscuss the pros and cons of investing in a diversified mutual fund versus investing in a small number of individual stocks.
12.6.cSuggest an appropriate asset allocation for a very risk averse person versus a very risk tolerant person.
12.6.dExplain how target date retirement funds reallocate investments over time to meet their investment objective.
12.7Expenses of buying, selling, and holding financial assets decrease the rate of return from an investment.
12.7.aDiscuss how the expenses associated with buying and selling investments can impact rates of return and investment outcomes.
12.7.bCompare the expense ratios for several mutual funds.
12.7.cExplain why an actively managed mutual fund usually has a higher expense ratio than an index fund.
12.8Tax rules affect the rate of return on different investments, and can vary by holding period, type of income, and type of account.
12.8.aCompare tax rates paid on interest income versus short term and long-term capital gains.
12.8.bDescribe the advantages of investing through a tax deferred account such as an IRA or 401(k) versus a taxable account.
12.8.cInvestigate the contribution limits and tax advantages of a traditional IRA versus a Roth IRA.
12.9Common behavioral biases can result in investors making decisions that adversely affect their investment outcomes.
12.9.aIdentify several behavioral biases that can result in poor investment decisions (e.g. loss aversion, investing in employer stock, home bias, mental accounting).
12.9.bBrainstorm methods for avoiding negative consequences from behavioral biases.
12.10Financial technology can counterbalance negative behavioral factors when making investment decisions.
12.10.aExplore common financial technologies used for investing, including automated trading platforms.
12.10.bExplain how automating investment activities can help people avoid making emotional investment decisions.
12.11Many investors buy and sell financial assets through discount brokerage firms that provide inexpensive investment services and advice using financial technology.
12.11.aDiscuss how the development of financial technology has made it easier for people of all income and education levels to participate in financial markets.
12.11.bChoose a discount broker and research the minimum starting account balance, minimum monthly investment, and trading costs.
12.11.cIdentify the advantages and disadvantages of robo advising and other investment-related financial technologies.
12.12Federal regulation of financial markets is designed to ensure that investors have access to accurate information about potential investments and are protected from fraud.
12.12.aExplain the role of federal regulators in financial markets.
12.12.bDiscuss why insider trading is illegal and harmful to investment markets.
12.12.cExplain the importance of having access to full and accurate information about potential investments.
12.13Investors often compare the performance of their investments against a benchmark, such as a diversified stock or bond index.
12.13.aExplain why investors often compare portfolio performance to a benchmark such as the S&P 500 Index.
12.13.bResearch the composition of the most popular benchmark indices and compare their recent performance.
12.13.cDiscuss the advantages of investing in an exchange-traded fund (ETF) that tracks a market index rather than investing in actively managed mutual funds or individual stocks and bonds.
12.14Criteria for selecting financial professionals for investment advice include licensing, certifications, education, experience, and cost.
12.14.aDiscuss reasons that a person might want to hire a financial professional to manage their investments or provide investment advice.
12.14.bExplain the importance of licensing, certifications, education, and experience as criteria for selecting a financial professional for investment management or advice.
12.14.cInvestigate where and how to find qualified financial professionals.
9.4Managing Credit
12.1Borrowers can compare the cost of credit using the Annual Percentage Rate (APR) and other terms in the loan or credit card contract.
12.1.aDescribe how credit card grace periods, methods of interest calculation, and fees affect borrowing costs.
12.1.bCompare the cost of borrowing $1,000 using consumer credit options that differ in rates and fees.
12.2Loans that are secured by collateral have lower interest rates than unsecured loans because they are less risky to lenders.
12.2.aGive examples of unsecured and secured loans.
12.2.bExplain why lenders charge lower interest rates on secured loans than on unsecured loans.
12.2.cCompare what happens if a borrower fails to make required payments on a secured loan, such as an auto loan or a home mortgage, versus failing to pay a credit card account.
12.3Monthly mortgage payments vary depending on the amount borrowed, the repayment period, and the interest rate, which can be fixed or adjustable.
12.3.aIdentify the type of collateral required for a mortgage loan.
12.3.bDifferentiate between adjustable-rate and fixed-rate mortgages.
12.3.cCompare monthly mortgage payments for loans that differ in repayment period, amount borrowed, and the interest rate.
12.4Post-secondary education is often financed by students and families/caregivers through a combination of scholarships, grants, student loans, work-study, and savings.
12.4.aDescribe the different sources of funding for postsecondary education.
12.4.bExplain the role the FAFSA plays in applying for college financial aid.
12.4.cIdentify scholarships and grants for which they are eligible.
12.4.dEstimate the reduction in total cost of education and potential student loan debt if they complete their first two years of college at a community college before transferring to a four-year institution.
12.5Federal student loans have lower rates and more favorable repayment terms than private student loans, and may be subsidized.
12.5.aCompare federal and private student loans based on interest rates, repayment rules, and other characteristics.
12.5.bDescribe the process of applying for a student loan.
12.5.cEstimate total interest on various student loans based on interest rates and repayment plans.
12.5.dPredict the potential consequences of deferred payment of student loans.
12.6Down payments reduce the amount needed to borrow.
12.6.aIdentify examples of loans that may require down payments.
12.6.bGiven the price of a home, estimate the amount of down payment required.
12.6.cFor a specified loan amount, compare the monthly loan payment with a 10% down payment versus a 20% down payment.
12.6.dExplain how a down payment makes a borrower more attractive to a lender and motivates loan repayment by the borrower.
12.7Lenders assess creditworthiness of potential borrowers by consulting credit reports compiled by credit bureaus.
12.7.aIdentify the primary organizations that maintain and provide consumer credit reports.
12.7.bAssess the value to a potential lender of the information contained in a credit report.
12.7.cExplain how a person can get a free copy of their credit report and why this is advisable.
12.7.dOutline the process of disputing inaccurate credit report information.
12.8A credit score is a numeric rating that assesses a person's credit risk based on information in their credit report.
12.8.aIdentify the main factors that are included in credit score calculations.
12.8.bExplain how a borrower's credit score can impact their cost of credit and their ability to get credit.
12.8.cRecommend ways that a person can increase their credit score.
12.9Credit reports and credit scores may be requested and used by entities other than lenders.
12.9.aExplain how landlords, potential employers, and insurance companies use credit reports and credit scores in decision making.
12.9.bProvide examples of benefits associated with having a good credit score.
12.9.cCompare the effect of soft versus hard credit inquiries on a person's credit score.
12.10Borrowers who face negative consequences because they are unable to repay their debts may be able to seek debt management assistance.
12.10.aDescribe how failing to repay a loan can negatively impact a person's finances and life.
12.10.bIdentify sources of assistance with debt management.
12.10.cCreate a plan for a person who is having difficulty repaying debt.
12.10.dCompare the costs and benefits associated with for-profit versus non-profit credit counseling services.
12.11In extreme cases, bankruptcy may be an option for people who are unable to repay their debts.
12.11.aDescribe the purpose of bankruptcy laws.
12.11.bInvestigate the effects of bankruptcy on assets, employment, and future access to credit.
12.11.cCompare the results of liquidation versus reorganization bankruptcy.
12.12Consumer credit protection laws govern disclosure of credit terms, discrimination in borrowing, and debt collection practices.
12.12.aExplain the rationale behind laws that require people to have access to full information about credit cards and loans before they borrow money.
12.12.bDiscuss the importance of protecting borrowers from discrimination and abusive marketing or collection practices.
12.12.cResearch where to find credible sources of up-to-date information on credit rights and responsibilities.
12.13Alternative financial services, such as payday loans, check cashing services, pawnshops, and instant tax refunds, provide easy access to credit, often at relatively high cost.
12.13.aIdentify products and practices that are classified as alternative financial services.
12.13.bDiscuss the costs and benefits of using alternative financial services relative to traditional banking.
12.13.cExplain how using payday loans can cause a cycle of debt.
9.5Managing Risk
12.1People vary with respect to their willingness to accept risk and in how much they are willing to pay for insurance that will allow them to minimize future financial loss.
12.1.aDiscuss whether a premium paid to insure against a crash that never happens is wasted.
12.1.bAnalyze the conditions under which it is appropriate for young adults to have life, health, and disability insurance.
12.2The decision to buy insurance depends on perceived risk exposure, the price of insurance coverage, and individual characteristics such as risk attitudes, age, occupation, lifestyle, and financial profile.
12.2.aIdentify individual characteristics that influence insurance purchase decisions.
12.2.bRecommend types of insurance needed by people with different characteristics.
12.3Some types of insurance coverage are mandatory.
12.3.aExplain why homeowners' insurance is required by a lender when a homeowner takes out a mortgage.
12.3.bDiscuss why most states mandate auto liability coverage.
12.3.cResearch the minimum auto liability insurance required in the state they live in and whether it is sufficient to cover typical auto accident financial losses.
12.4Insurance premiums are lower for people who take actions to reduce the likelihood and/or financial cost of losses and for those who buy policies with larger deductibles or copayments.
12.4.aResearch factors that result in lower auto insurance premiums.
12.4.bExplain why taking a safe driving course can lower a driver's auto insurance premium.
12.4.cDiscuss the pros and cons of buying an auto insurance policy with a higher deductible.
12.5Health insurance provides coverage for medically necessary health care and may also cover some preventive care. It is sometimes offered as an employee benefit with the employer paying some or all of the premium cost.
12.5.aDiscuss the advantages of obtaining health insurance coverage through an employer plan versus buying private insurance or being uninsured.
12.5.bCompare the cost of health insurance to the potential financial consequences of not having health insurance.
12.5.cEstimate the effect on different health insurance deductibles and coinsurance rates on out-of-pocket medical costs.
12.6Disability insurance replaces income lost when a person is unable to earn their regular income due to injury or illness. In addition to privately purchased policies, some government programs provide disability protection.
12.6.aCompare disability coverage offered by individual policies, employee benefit plans, Social Security, workers' compensation, and temporary disability programs (in some states).
12.6.bAssess the extent of financial risk and need for disability insurance using hypothetical disability scenarios.
12.7Auto, homeowner's and renter's insurance reimburse policyholders for financial losses to their covered property and the costs of legal liability for their damages to other people or property.
12.7.aExplain the primary types of losses covered by auto, homeowner's, and renter's insurance policies.
12.7.bDescribe situations where someone may be liable for injuries or damages to another person or their property.
12.7.cIdentify factors that influence the cost of renter's insurance and homeowners' insurance.
12.8Life insurance provides funds for beneficiaries in the event of an insured person's death. Policy proceeds are intended to replace the insured's lost wages and/or to fund their dependents' future financial needs.
12.8.aExplain how a person's death can result in financial losses to others.
12.8.bDiscuss the benefits and costs of purchasing life insurance on the primary earners in a household.
12.9Unemployment insurance, Medicaid, and Medicare are public insurance programs that protect individuals from economic hardship caused by certain risks.
12.9.aDiscuss how state unemployment programs can help reduce economic hardship caused by job losses during a recession or pandemic.
12.9.bCompare the Medicare and Medicaid programs based on who they cover and how they are funded.
12.10Insurance fraud is a crime that encompasses illegal actions by the buyer (e.g., falsified claims) or seller (e.g., representing non-existent companies) of an insurance contract.
12.10.aProvide examples of insurance fraud.
12.10.bInvestigate the legal consequences for individuals who are convicted of insurance fraud.
12.11Online transactions and failure to safeguard personal documents can make consumers vulnerable to privacy infringement, identity theft, and fraud.
12.11.aProvide examples of how online behavior, e-mail and text-message scams, telemarketers, and other methods make consumers vulnerable to privacy infringement, identity theft, and fraud.
12.11.bDescribe conditions under which individuals should and should not disclose their Social Security numbers, account numbers, or other sensitive information.
12.11.cRecommend strategies to reduce the risk of identity theft and financial fraud.
12.11.dExplain the steps an identity theft victim should take to limit losses and restore personal security.
12.12Extended warranties and service contracts are like an insurance policy.
12.12.aEvaluate the costs and benefits of buying an extended warranty on a specific item (e.g. cellphone, laptop, or vehicle) considering the likelihood of product failure, cost of replacing the item, and price of the warranty.
12.12.bExplain how extended warranties or service contracts are similar to and different from insurance.