Lesson 4.  Buying a car = 10 mins

“In order to buy a car you need to figure out all sorts of different things, like how much they cost, and what you can afford, and what type of insurance you’ll need, and what type of car will work best for you, and many other things.  But before you do any of that, in order to buy a car you’ll need to establish good credit. And you establish good credit by buying things on credit, and then paying your bills on time, and by not OVERDRAWING YOUR CHECKING ACCOUNT.  Who can tell me what it means to OVERDRAW your checking account?  Who can tell me what it means to Bounce A Check?  These are things you do not want to do because they will destroy your good credit.  And you can avoid these things by always keeping track of how much money you have in your account.  And you can do this by always keeping your bank book up to date, which is what we’re going to practice right now.  The good news is that each of you automatically got a credit card when you opened your checking account.  You can see it on the back of your Worksheet.  You also got your first Bills too, because you paid for last week’s Rent and Food and Personal Expenses with your new credit card.  That’s why you got paid $600 last payday, because you paid for some of your Needs with your credit card.  So now it’s time to pay your bills and you’re going to do this by writing a check from your checking account. 

Here’s how to write a check:

On each check you will include your Checking account number, the date you write the check, the amount of the check in numbers as well as in words, your signature and who you are paying the check to.  Look at the sample check to see how to fill one out.  You are going to write 2 checks: One check for Rent, and another for Food and Personal Expenses.  (Placard # 13) The Rent Check will be for $200 and you will pay it to Landlord; the second check will be for $200 and you will pay it to Johnson’s Market. 

You next need to record the amount of every check in your bank book, so you know how much money you have in your account.  Do that now.  First write out your two checks and then record them in your bank book.  When you’ve done that show them to your banker and you will receive your pay, as well as the interest you’ve earned in your account.  Make sure to write both of those transactions (your pay and the interest) in your Bank Book too.

Payday # 4.

Finally, figure out your total balance, after you have subtracted the two checks and added the two deposits.

Buying a Car = 5 mins

And now, you are ready to buy your car.  In this game (holds up a candy bar) this represents your first car.  The down payment on a car is $1,000.00.  And if you have that in your Bank Account, you can trade it for your car. 

If you don’t have $1,000.00 in your bank account, that’s because you did not save all your Disposable income.  You probably ate it.  And this is the most important lesson of the game, and it’s called delayed gratification.  Who can tell me what Gratification means?  (Gratification is the feeling of happiness)  Delayed gratification is when you hold off on doing what you want to do, so that you can do something better later on.  (Placard #14)  Like not eating your candy as soon as you get it, so you can get a candy bar later on.  Eating your candy as soon as you get it is called Immediate Gratification and it might feel good at the time, but it limits what you can do later on.  There are a lot of different ways Delayed Gratification can apply to your lives, can you think of any other ways it can apply to your life?