Module One

Goal Setting – having a financial plan

In partnership with
 Module 1
Goal Setting – having a financial plan

OVERVIEW

Teacher Notes
Module Overview and Curriculum Mapping
Module 1 aims to alert students to the need for a planned approach to financial management.

ENDURING UNDERSTANDINGS
• Every personal and financial decision you make today affects the options you will have
tomorrow.
• Goals in your financial plan should reflect your values.
• Each financial plan should include short, medium and long term goals which specify what
you want to achieve and how.
• The power to control your financial success is in your own hands.

LEARNING OUTCOMES
Students:
• Identify their personal goals
• Identify the relationship between personal values and financial goals
• Develop an awareness of the life cycle and its effects on a personal financial plan
• Recognise that creating a financial plan involves the management of money to achieve
goals
• Understand that financial decisions made today have an opportunity cost that will impact
on the future

POWER WORDS Page 2

CURRICULUM MAPPING 3

LIST OF TOPICS
1.1 Identifying financial values 5
1.2 Setting personal goals 13
1.3 Opportunity Cost 18
1.4 Life cycle approach to making financial decisions 26
1.5 Making a financial plan 32

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 Module 1
Goal Setting – having a financial plan

POWER WORDS

Teacher Notes
Module Overview and Curriculum Mapping
As students work through each topic in this module they will encounter words that may be new
to them, crucial to understanding and completing the worksheets, and/or difficult to spell. In
addition, students may simply find some of this vocabulary interesting, planning to use it in the
future. Understanding and being able to use these words will provide students with more power
to make future financial decisions.
There are several approaches to using this “glossary”. The intention is for students to investigate
and find the meanings. They could be given the complete list before they start the module, or
they could set up a table and add new words as they progress through the activities. There are
also specific POWER WORD activities in some topics.
This list is not exhaustive.

Budget Financial Position

Choice Priority
Finance Resources
Goals Saving
Motivate Smart Goals
Needs Socio-Economic
Opportunity cost Strategy
Option Sustainable
Profile Values
Financial Plan Wants

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 Module 1
Goal Setting – having a financial plan

CURRICULUM MAPPING

Teacher Notes
Module Overview and Curriculum Mapping
ENGLISH MATHEMATICS GENERAL CAPABILITIES
LITERACY YEAR 9 CRITICAL & CREATIVE THINKING
Interpreting, analysing, Inquiring – identifying exploring &
evaluating organising information & ideas
• Interpret, analyse and evaluate Pose questions
how different perspectives • Pose questions to critically analyse complex
of issue, event, situation, issues and abstract ideas (ACELT1812,
individuals or groups are ACMSP228)
constructed to serve specific Reflecting on thinking and processes
purposes in texts (ACELY1742)
Think about thinking (metacognition)
• Give reasons to support their thinking,
and address opposing viewpoints and
possible weaknesses in their own positions
(ACELT1640, ACMSP247)
PERSONAL & SOCIAL CAPABILITY
Self-management
Develop self-discipline and set goals
• Critically analyse self-discipline strategies
and personal goals and consider their
application in social and work-related
contexts (ACELY1751)
Work independently and show initiative
• Establish personal priorities, manage
resources effectively and demonstrate
initiative to achieve personal goals and
learning outcomes (ACELY1756)

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 Module 1
Goal Setting – having a financial plan

CURRICULUM MAPPING

Teacher Notes
Module Overview and Curriculum Mapping
NCFLF DIMENSIONS
Knowledge & Understanding
• Identify and explain strategies to manage personal finances
• Explain the various factors that may impact on achieving personal financial goals
Competence
• Investigate the financial decisions required at significant life-stage events
Responsibility & Enterprise
• Research and identify the ethical and moral dimensions of consumer choices in specific circumstances
and consequences for themselves, their families, the broader community and/or the environment
• Explore the economic cost of individual and collective consumer decisions of the broader community
and the environment
• Appreciate that there is often no one right answer in making financial decisions because these
depend on individual circumstances, preferences and values

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 Module 1
Identifying financial values Topic 1.1

Teacher Notes
Classroom activity
Suggested time: 1-2 lessons

Resources
www.sorted.org.nz > calculators work>Money personality profiler
Financial Values, Attitudes and Goals - http://www.ag.ndsu.edu/pubs/yf/fammgmt/fs591.
pdf

Student worksheets:
Worksheet 1 Identifying Financial Values
Worksheet 2 What is important to me?
Worksheet 3 My Financial Values
Worksheet 4 Goals for Life

The following activities can be used to increase awareness that many factors e.g. culture, religion,
childhood experiences, gender, age and socio-economic situation can influence a person’s
financial goals.

(a) Students identify their own personality profile with regard to money matters.
Direct students to www.sorted.org.nz > calculators>Money personality profiler and:
• Complete the quiz.
• Print out and read the summary of their quiz results.
• Have a close friend or family member read the summary to find out if they agree this is
an accurate profile of their money personality.
Students could also complete the Financial Values Inventory and Money Attitude Worksheet
from the Financial Values, Attitudes and Goals publication.

(b) POWER WORDS activity. There are several approaches to using this glossary, but it would be
useful at this point to introduce vocabulary for Module 1. For example the teacher could run
a brainstorming activity on definitions for the power words. Students could find definitions
for the power words.

(c) Distribute Worksheet 1 – Identifying Financial Values

Present the range of statements and discuss the values that each statement might signify.
Ask students to suggest other value statements that may reflect personal attitudes to
financial decisions. Add these suggestions to the list. Some examples of financial values:
• More money, more problems ….
• Always save at least 10% of what you receive.
• Money doesn’t buy taste.
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 Module 1
Identifying financial values Topic 1.1

Teacher Notes
• If you’re going to make money, it helps to look like money.
• If you can’t be rich, spend your money to look rich.
• Choosing poverty is the ultimate form of wealth.
• Earn two dollars before spending one.
• Always spend less than you earn.
• Cash is King.
• The secret to money is to make more than you spend.
• Frugality is the mother of all virtues.
• The community owes its members a living.

(d) Students complete Worksheet 2 – What’s important to me?

This will encourage them to reflect on what is important to them. This activity lays the
groundwork for students to start to develop an understanding of how their interests and
values will impact on their financial life and decision making.

(e) Distribute Worksheet 3 – My Financial Values

This activity sets the scene for the next topic – Setting Goals. Using visuals or text to
portray concepts, students answer the statement:
The five most important things money can provide for me are

When this activity has been completed introduce the word MOTIVATION. Ask students
what the word means to them? Allow them to respond by brainstorming and/or creating
a mind map.
Then ask: Thinking specifically about money, what motivates you to acquire money?
Record the responses on the board.
Take this a step further and ask: Why do these things motivate you to obtain money?
Prompt with examples as needed: Do their parents motivate them so that they can enjoy
a better life? Does being able to make choices in life style motivate them to secure a
high paying job? Are they motivated to work for more money so they can avoid living in
poverty?
Allow time for discussion about what motivates students to get money and why. After
some discussion, ask: ―Is money itself the real motivator? Or is it what money can get
you?
Introduce the concept that personal values and financial values are connected, and can
motivate us to use financial skills to direct our lives. Ask students to think about their
response to the original statement (The five most important things money can provide for
me are – and then create a new list:
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 Module 1
Identifying financial values Topic 1.1

Teacher Notes
The three most important things that I can make money do for me are

Some examples may include:

• Maintaining a particular lifestyle
• Helping loved ones
• Having the time and flexibility to travel, follow personal interests, etc
• Reducing stress and worry
• Being able to help people in need

(f) Distribute Worksheet 4 – ‘Goals for Life’. Students in small groups generate a diagram
to illustrate the financial goals of an average person over the course of their life. They
should use their individual responses from worksheets 1 2 and 3 to create this diagram.

(g) Reflective Learning

Working individually, after completing Worksheet 3, students could reflect on their
personal values and spending decisions.

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 Module 1
Identifying financial values Topic 1.1

Worksheet 1
Identifying financial values
Our personal values affect our attitude to financial decisions. Use the code shown
below to indicate your position on these statements. There are no correct or incorrect
answers.

SA Strongly agree
A Agree
D Disagree
SD Strongly disagree

SA A D SD
Parents should support their children for as long as it takes for
them to become financially independent.
Children should financially support their parents.
Money makes the world go round.
The people with the most money are the happiest.
Arguing about money is one of the reasons people divorce.
The gifts you receive are a reflection of what you are worth as a
person.
It’s important to be generous when spending money to buy gifts
for your family.
It’s important to be generous when spending money to buy gifts
for your friends.
It’s important to live a happy and comfortable life, and to spend
your savings or use credit if necessary to buy the things that will
make you happy.
"Make as much as you can, save as much as you can, give away
as much as you can". Martin Luther
Don’t buy anything unless you can afford to pay cash for it.
All wealthy people deserve to be respected as successful and
hard workers.
You can’t spend it when you’re dead.
You should earn money before you spend it.
The best things in life are free.
Money talks.
You can’t take it with you.

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 Module 1
Identifying financial values Topic 1.1

Create a profile of your current opinion in these areas by marking the box that best describes

Worksheet 2
What’s important to me?
your attitude to each of these issues relating to quality of life.

issue Not Somewhat Very

important important important
Prestige ■ ■ ■
Job security ■ ■ ■
Money ■ ■ ■
Making changes in society ■ ■ ■
Being indoors/outdoors ■ ■ ■
Helping others ■ ■ ■
Creativity ■ ■ ■
Authority/Power ■ ■ ■
Travelling ■ ■ ■
Being alone ■ ■ ■
Family ■ ■ ■
Education ■ ■ ■
Keeping healthy ■ ■ ■
Savings ■ ■ ■
Variety ■ ■ ■
Quiet atmosphere ■ ■ ■
Regular routine ■ ■ ■
Responsibility ■ ■ ■
Pleasant living conditions ■ ■ ■
Personal appearance ■ ■ ■
Religion ■ ■ ■
Recreational activities ■ ■ ■
Retirement security ■ ■ ■
Look at your survey results. What surprised you about these results?

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 Module 1
Identifying financial values Topic 1.1

Worksheet 3
My financial values
Your values are reflected in what you consider to be important.
These values motivate and shape choices, including the financial choices that you make.

PART A
The five most important things money can provide for me are

1.

2.

3.

4.

5.

PART B (MOTIVATION)
Each of these is important to me because:

1.

2.

3.

4.

5.

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 Module 1
Identifying financial values Topic 1.1

Worksheet 3
My financial values
PART C
Imagine that you were given $200 for your birthday. What would you use it for? Choose from
the following list. You can choose just one item, or allocate the $200 for up to 3 items. For
the big ticket items, assume that you would put the money into your savings..

Wardrobe items Gifts for others Sports Car

Charity Travel Hobbies General savings
Education Home ownership Social
Retirement Personal care items Personal digital items
(grooming, hair and (Phone, computer,
skin products etc) etc)

3.

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 Module 1
Identifying financial values Topic 1.1

Goals for life

Worksheet 4
Working in groups of 3, generate a diagram which illustrates the
financial goals of an average person over the course of their life. Create
a pictorial collage or use graphic organiser software to produce this
illustration. The statements from Worksheets 1 2 and 3 will help you to
complete this task. Group members can list ideas here to get started.

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 Module 1
Setting personal goals Topic 1.2

Teacher Notes
Classroom activity
Suggested time: 1 lesson

Resources:
http://bfc.mebank.com.au/programs/P1.html?Chapter=2# (Building Financial Confidence
Program)

Student worksheet:
Worksheet 5: What are my goals?

The following activity can be used by students to reflect on their personal goals. The class
could brainstorm some of the factors affecting an individual’s goals over time. At this point
it may be helpful to demonstrate the difference between goals and values (from previous
worksheets).Some factors students might identify as influencing the personal goals people set
for themselves include:
• their age/stage of life
• values and interests
• lifestyle
• circumstances
(a) Use the “Establishing your Goals” module from the Me Bank resource (above) to
introduce students to goal setting. You could also provide students with examples of
personal goals, such as participating in the school formal, buying a new Smartphone or
participating in a school exchange trip, etc).
The emphasis should be on students’ understanding that the goals they establish are
SMART goal.
S: specific
M: measurable
A: achievable
R: realistic
T: timely
(b) Students complete Step 1 of Worksheet 5: What are my goals? Students identify personal
goals for three months, six months, two years, five years and twenty years. Students then
consider whether there is a relationship between personal priority values and financial
goals. They complete Step 2 of Worksheet 5: “What are my goals?” to establish what
money resources will be required if they are to achieve their personal goals.

13
 Module 1
Setting personal goals Topic 1.2

Teacher Notes
(c) The class could analyse all student responses to worksheet 5. Students prepare a numeric
summary using the following headings:

Goals Do not need money to be Cannot be achieved

achieved without money
Within three months
Within six months
Within two years
Within 5 years
Within 20 years

The teacher organizes the data via a board summary. The class analyses the results and
draws conclusions:
• How many goals cannot be achieved with money?
• How many goals require a SIGNIFICANT amount of money to be achieved?
• Does this relationship appear to be closer/less close at different ages/life stages?

(d) Extension activity

Students could use this data in a spreadsheet to prepare charts/graphs as a basis for
class analysis of the apparent relationship between ‘goals’ and ‘money resources’.

(e) Reflective learning

• Students consider the implications of the relationship between personal value
priorities and financial goals.
• Students reflect on how financial decisions they make now, which seem
unimportant, may become very important at a later stage of their lifetime.
Students participate in class discussion and activities and complete worksheet 5.

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 Module 1
Setting personal goals Topic 1.2

What are my goals?

Worksheet 5
SMART GOALS

The goal must be clearly defined.

Specific I want to go to Japan for the end of year school trip.

The exact amount of money needed to achieve the goal must be

specified.
Measurable I need to save $1500 so that I can go (and not just that I need to save
some money).

The goal must be possible to reach, and not just a dream.

Achievable I have a part time job so I can put aside savings each week.

The goal must align with other life requirements and objectives.
Relevant I can save $50 a week from my wages and still meet my other needs.

A time frame in which the goal will be achieved must be specified.

Time based I have a year to save what I need in order to achieve my goal.

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 Module 1
Setting personal goals Topic 1.2

What are my goals?

Worksheet 5
1. Remembering the need for your goals to be SMART, complete the table below. Identify your
personal goals for the next three months, six months, two years, five years and twenty years.

NEXT THREE MONTHS

MY GOALS ARE TO ACHIEVE THIS GOAL

I DO NOT NEED MONEY MONEY IS ESSENTIAL

NEXT SIX MONTHS

MY GOALS ARE TO ACHIEVE THIS GOAL

I DO NOT NEED MONEY MONEY IS ESSENTIAL

NEXT TWO YEARS

MY GOALS ARE TO ACHIEVE THIS GOAL

I DO NOT NEED MONEY MONEY IS ESSENTIAL

NEXT FIVE YEARS

MY GOALS ARE TO ACHIEVE THIS GOAL

I DO NOT NEED MONEY MONEY IS ESSENTIAL

NEXT TWENTY YEARS

MY GOALS ARE TO ACHIEVE THIS GOAL

I DO NOT NEED MONEY MONEY IS ESSENTIAL

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 Module 1
Setting personal goals Topic 1.2

What are my goals?

Worksheet 5
2. Add up the number of your goals which fit into each category, and transfer the total
number to the table below:

Goals Do not need money Cannot be achieved

to be achieved without money
Within three months
Within six months
Within two years
Within 5 years
Within 20 years

3. Describe the connection you have identified between your goals and the need for money
resources.

4. Look at the data for your class as a whole. What relationship did you observe between
goals and the need for money for the class as a whole?

5. Compare the relationship you found for yourself with that of the whole class.

6. In what ways might this connection between goals and money change over time?

7. Were these results in line with your expectations or were they different?

8. Did the decision-making impact of this activity change your ideas about the need for
taking care with your financial resources in order to achieve your goals or your thoughts
on financial planning?

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 Module 1
Opportunity Cost Topic 1.3

Teacher Notes
Classroom discussion
Suggested time: 1 lesson

Student worksheets:
Worksheet 6: Decisions, Decisions
Worksheet 7: I have a choice!

This activity is designed to develop an awareness of the opportunity cost of financial

decision-making.
Opportunity cost is the value of the next best choice that one gives up when making a
decision.
(a) For this activity divide students into small groups. Each group will act as a panel of
financial advisors and be presented with an opportunity cost case study. Groups (or
panels) could also include mentors from the community such as parents, a professional
person from the finance industry, a teacher, a School Council member, and so on.
(b) Present each the panel with one of the six case studies from Worksheet 6. The panel
discusses the situation and considers the options.
(c) Each panel reports back to the class on the case study and possible options. The panel
needs to:
• identify the effects the event will have on the person’s financial situation, given the
options listed
• identify the (financial) opportunity costs that may arise as a result of the options
presented.
(d) Teachers should emphasize that as financial resources are limited for almost everybody,
care needs to be taken when making financial decisions. As well as identifying the
values associated with each decision students could consider the financial outcomes or
consequences of making alternative decisions.
(e) Students complete Worksheet 7 – I have a choice!
For this activity, students need to think about a future financial decision and identify the
personal opportunity cost.
Another example would be deciding to buy a car. Some options would be to buy a new
car, a less expensive used car (which might need repairs) or to not buy a car and use
public transport.
(f) Reflective learning
Consider:
• Opportunity costs involving some day to day choices where the student has been
involved in the decision making process.
• A situation that will need managing, within the next ten years. Consider the
alternative choices and the impacts or consequences.

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 Module 1
Opportunity Cost Topic 1.3

Decisions, Decisions
Worksheet 6
CASE STUDY 1
A FAMILY WINS A TRIP TO DISNEYLAND

David and Anna, parents of three children (10, 12, 16 years

old) win a trip to Disneyland for four people (2 adults, 2
children). The holiday value is $20,000.
The family recently purchased a new home, and the mortgage
repayments have increased substantially. The total cost of taking one extra child is $4,000.
Should the family:
(a) cash in the holiday (cash value $8,000)?
(b) take the extra child, for which they need to borrow the money ($4,000)?
(c) leave one child behind?

FINANCIAL PANEL REPORT

• Identify the effects the event will have on the person’s financial situation, given the
options listed

• Identify the (financial) opportunity costs that may arise as a result of the options
presented.

REFPORT PREPARED BY

DATE:

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 Module 1
Opportunity Cost Topic 1.3

Decisions, Decisions
Worksheet 6
CASE STUDY 2
DUE FOR A HOLIDAY

Fran works as an Administrative Manager in a manufacturing

business. She’s been saving for two years to go on a holiday
to Europe, and she needs to save for another 4 months before
she has enough money. She did not take annual leave last year,
so will be going away for 6 weeks in 6 months’ time.
Fran’s employer has just offered her a promotion to Operations Manager, which would
mean a substantial rise in salary. However she would be required to start within the next
2 months, and work in the new position for at least 12 months before she could take any
leave. Should Fran:
(a) accept the promotion (which is a fantastic opportunity) and forgo her dream
holiday for the time being?
(b) go on the holiday (which she desperately wants to do) and hope that another
opportunity for promotion comes up in the near future?
(c) borrow money and go to Europe immediately?

FINANCIAL PANEL REPORT

• Identify the effects the event will have on the person’s financial situation, given the
options listed

• Identify the (financial) opportunity costs that may arise as a result of the options
presented.

REFPORT PREPARED BY

DATE:

20
 Module 1
Opportunity Cost Topic 1.3

Decisions, Decisions
Worksheet 6
CASE STUDY 3
HOME OR BUSINESS?

Loretta has been contributing to an investment scheme for

the past eight years. Her cash payout immediately would be
$15,000. If she kept contributing to the scheme for another
two years, it would be $30,000, enough for a deposit to buy
her own home.
Her best friend has invited her to go into partnership in their own catering business,
something Loretta is very passionate about. To do this, she needs to cash in her
investment.
Should she:
(a) cash in the fund now and invest in the business, fulfilling a lifetime ambition?
(b) wait two years for the larger payout, and take the time to look at a wider range
of business opportunities.
(c) buy the house now with a smaller deposit and start a new investment plan for a
business?

FINANCIAL PANEL REPORT

• Identify the effects the event will have on the person’s financial situation, given the
options listed

• Identify the (financial) opportunity costs that may arise as a result of the options
presented.

REFPORT PREPARED BY

DATE:

21
 Module 1
Opportunity Cost Topic 1.3

Decisions, Decisions
Worksheet 6
CASE STUDY 4
SHOULD I TAKE THIS JOB?

Figure 1
Ari has just started the final year of his apprenticeship as a
plumber. His boss has suddenly decided to sell his business,
move, and begin a new business partnership with his brother
interstate. As Ari is a great worker the boss wants him to move too.
However, Ari still lives at home which enables him to save, and he would miss all his friends
if he had to move interstate. Should he:
(a) Move interstate, continue working with his boss, and use his savings to find a
place to rent?
(b) Wait until his boss closes the business and take on whatever job he can find for
the rest of the year, even if it means not finishing his apprenticeship until the
following year.
(c) Start looking immediately for another plumber who can take him on now so that
he can finish his final apprenticeship year?

FINANCIAL PANEL REPORT

• Identify the effects the event will have on the person’s financial situation, given the
options listed

• Identify the (financial) opportunity costs that may arise as a result of the options
presented.

REFPORT PREPARED BY

DATE:

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 Module 1
Opportunity Cost Topic 1.3

Decisions, Decisions
Worksheet 6
CASE STUDY 5
HOW AM I GOING TO PAY FOR MY EDUCATION?

Kishore is leaving school and is reluctant to get a student loan.

However, he recognises the need for further education and
wants to study a business course at University.
The fees are likely to be $8000 a year and he will need to
afford living costs as well.
Should he:
(a) decide to take out a student loan after all to cover the costs (fees and living
costs)?
(b) participate in the higher education loan program (HELP)?
(c) borrow from his parents
(d) work for a year and then study the following year?

FINANCIAL PANEL REPORT

• Identify the effects the event will have on the person’s financial situation, given the
options listed

• Identify the (financial) opportunity costs that may arise as a result of the options
presented.

REFPORT PREPARED BY

DATE:

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 Module 1
Opportunity Cost Topic 1.3

Decisions, Decisions
Worksheet 6
CASE STUDY 6
TRANSPORT DILEMMA

Marcus believes he needs "wheels" to get to school, instead

of catching the bus. To pay for this he will have to take a part
time job after school.
He knows this will clash with his time for homework and study.
Should he:
(a) buy the car, knowing the potential opportunity cost
(b) continue to catch the bus
(c) go halves with another friend who also wants to buy a car?

FINANCIAL PANEL REPORT

• Identify the effects the event will have on the person’s financial situation, given the
options listed

• Identify the (financial) opportunity costs that may arise as a result of the options
presented.

REFPORT PREPARED BY

DATE:

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 Module 1
Opportunity Cost Topic 1.3

Making decisions means making a choice. As a result, you give up another option or

I have a choice!
Worksheet 7
alternative. Financial decisions will impact on many aspects of your life and as a consequence,
the effects of that decision may be felt for many years to come.

1. Suggest an important financial situation where you need to make a choice. It should be
one that you would encounter within the next 10 years. For example, how would you
fund further study after year 12?
2. List 3 options/alternatives that you could consider taking Do you want to be repaying
the HECS-HELP debt for some years, or would you rather work for a few years to save
enough for fees and living expenses?
3. For each option, state the consequences (short or long term) of that decision and describe
its impact on both your present and future lifestyle.

SITUATION:

OPTION 1 CONSEQUENCES/IMPACT

OPTION 2 CONSEQUENCES/IMPACT

OPTION 3 CONSEQUENCES/IMPACT

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A ‘Life Cycle’ approach to making Module 1
financial decisions Topic 1.4

Teacher Notes
Classroom activity
Suggested time: 1 lesson

Student worksheets:
Worksheet 8: Life cycle timeline
Worksheet 9: The life cycle approach
Worksheet 10: My Goals

The following activity can be used to alert students to the impact of stages in their life cycle
on financial decision making. They may recognise that financial decisions require a long lead-
in time and so need to be considered at a time of their life when they are not yet seen as
important.
The following activity can be used to alert students to the impact of stages in their life cycle
on financial decision making. They may recognise that financial decisions require a long lead-
in time and so need to be considered at a time of their life when they are not yet seen as
important.
(a) Students work in groups to draw a life cycle timeline digitally, on the board, a large sheet
of paper, etc.

10 20 30 40 50 60 70
YEARS

(b) Distribute a set of life cycle cards to each group from Worksheet 8. Each group places
the life cycle cards along the line. Students consider all events that may have significant
financial impacts in a life time and write them on their timelines. .
It is important that students recognise that some events:
• can occur more than once
• may not occur
• may occur in an unexpected way
• may be group specific
The positioning of these cards is to reflect the group’s decisions at this stage.
Groups report back to the class to explain and justify their life cycle decisions.
(c) Brainstorm and record on paper the financial or planning decisions that the students
would need to make if they were going to manage each event well. Example: $10,000
saved in a bank account by the time you wish to travel overseas.
(d) Distribute Worksheet 9 – ‘The life cycle approach’ to students. Discuss the different
types of events that may impact on financial planning at different stages in a lifetime.
Discuss with students the importance of establishing goals, making reference to previous
worksheets. What do they think will happen over the course of their lives?
(e) Students fill in the rungs of the Worksheet 10 – My Goals. For each goal, identify the
stage at which the planning decision must be implemented.
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A ‘Life Cycle’ approach to making
financial decisions
Module 1
Topic 1.4

Work in groups to create a life cycle timeline. Position the life cycle cards at appropriate points.

Life cycle timeline

Worksheet 8
Life cycle card suggestions

Start a family Travel overseas Buy a home

Buy a car Buy a sound system Job training

Start full-time employment Retire Gain a driver’s licence

Get a Tax File Number Tertiary education Open a bank account

Join a superannuation Take out insurance for

Funeral costs
scheme personal assets

Wedding expenses Start a family Leave home

Take a holiday Get a job Widowhood/Divorce

Study part time to get a

Take out health insurance Take out income protection
better job

Get a part-time job Job promotion Change job

Lose job – employer goes

Move interstate due to job
broke
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A ‘Life Cycle’ approach to making Module 1
financial decisions Topic 1.4

The life cycle approach

Worksheet 9
Many students begin earning income in part-time work in their early teens before moving on
to full-time employment. Earning income is a prerequisite to spending and saving. Decisions
about spending that income will change over your lifetime with changing needs.
(a) During your life you will need to plan for and deal with most of the following:
• Investments - shares, property, trusts
• Financial documents
• Retirement planning, superannuation
• Purchasing or renting a house
• Travel finance
• Insurances - assets, life, health, income
• Credit alternatives - hire purchase, store credit, loans
• Taxation
• Student loans
• Banking products
• Savings
• Personal budgeting

Our life cycle will include many events, some of which will affect us financially. These will
include:
• unexpected events (e.g. death of a partner or child).
• expected events (e.g. travel, buying a new car, becoming a parent).

Planning can, and should, occur for all events. Some of this planning will include financial
measures such as insurance, saving and budgeting.

28
A ‘Life Cycle’ approach to making Module 1
financial decisions Topic 1.4

The life cycle approach

Worksheet 9
(b) Using the information presented so far plot your own life cycle event expectations against
the following timeline.
You may add or delete life events.
As a guide, use the events on the life cycle cards from worksheet 8.

80 years

70 years

60 years

50 years

40 years

30 years

20 years

10 years

29
A ‘Life Cycle’ approach to making Module 1
financial decisions Topic 1.4

My goals
Worksheet 10
Goals: are objectives we want to achieve (or acquire). They represent our
ambitions. Goals can include wanting to gain a scholarship, to be selected for a
sports team, to save $100, to get fit, to be a successful designer or to retire early.
Goals can be short term, medium or long term. Achieving your goals requires
positive goal setting. Goal setting requires thought about the pathways to your
goal, identifying the prerequisites and the steps along the way. For example: To
become a Physical Education teacher you need:
• fitness and sports ability
• academic success
• good interpersonal skills

1 Record some of your goals on the ladder.

2 Outline some of your planning decisions which will enable you to reach your goals.

3. What are the key points you have learned so far?

(a) About your own values and attitudes

Some examples might be: I am very concerned about my own personal financial security. I
am focused on very short time frames.

(b) About financial decision making.

Some examples might be: Reaching a financial goal requires financial planning. Goals can
change according to where I am in my life.

(c) In considering options for the future

– Have any of the activities I’ve just completed influenced me?
– How have other people I have spoken with influenced me?

30
A ‘Life Cycle’ approach to making Module 1
financial decisions Topic 1.4

My goals
Worksheet 10
Goal setting is much like climbing a ladder. See below:

LADDER OF MY GOALS

Long Term Goals Planning Decisions

Medium
Term
Goals

Short
Term
Goals

31
Making a financial plan
Module 1
Topic 1.5

Teacher Notes
Classroom discussion
Suggested time: 1 lesson

Resources: www.consumer.vic.gov.au >Resources and Education>Teacher

resources>Resource books>Secondary teacher resources>Commerce
resource book>SECTION E Managing your money

A range of videos, digital activities, and lesson plans can be found on

the MoneySmart web site:

www.moneysmart.gov.au >Educators>MoneySmart
teaching>search financial planning

http://teaching.moneysmart.gov.au/resource-centre/
moneysmart-rookie-for-educators

Student worksheets:
Worksheet 11: How do I plan?
Worksheet 12: Understanding my money personality

This activity introduces students to the concept of creating a personal financial plan.
Creating a personal financial plan is the process of establishing what you are going to do
with your money. A financial plan enables a person to achieve their financial goals. Once
an individual has established their personal goals, the financial plan identifies the financial
decisions they must make to achieve these goals.
There are five steps involved in developing a financial plan.
1. Set your goals
2. Consider your current financial position
3. Decide on your action plan
4. Implement your plan
5. Review when things change
(a) As a class brainstorm:
• What is a financial plan?
• Why do I need a financial plan?

(b) Read the case studies on Worksheet 11 – How do I plan? Students recognize the
differences between short, medium and long term goals and identify appropriate
elements of a financial plan for each profile.

32
 Module 1
Making a financial plan Topic 1.5

Teacher Notes
(c) Students identify a long term personal goal. (Worksheet 11) They develop a strategy to
obtain the resources to achieve this goal. This strategy should include a specific target,
time frame and actions that need to be carried out.
If appropriate within the particular class group students could swap and evaluate a
partner’s plan, considering the following aspects of the plan. Is it:
• appropriate
• sustainable/achievable over time
• flexible
Students could point out any possible ‘shocks’ or ‘risks’ that could prevent the plan being
implemented and make any recommendations relevant.

(d) Complete Worksheet 12: Understanding my money personality.

(e) EXTENSION ACTIVITY

Revisit the Money personality profiler at www.sorted.org.nz>Calculators and take the
quiz, adopting the persona’ of a working adult, or a specific persona such as a celebrity,
sporting identity, etc. This activity should provide students with the understanding that
there is a wide range of attitudes to money and the spending of money. It is important
for students to identify their own profile when making financial plans.
Students could print the money personality profile.

(f) Reflective Learning

• Students could reflect on how they could apply to their own future life what they
have learned from this activity/module.
• Students decide individually, or in a class discussion whether they agree/disagree/
have no opinion about the following concepts:
1. Every personal and financial decision you make today affects the options you
will have later.
2. Goals in your financial plan should reflect your values.
3. Each financial plan should include short, medium and long term goals which
specify what you want to achieve and how.
4. You have the ability to influence your own financial success.

33
Making a financial plan
Module 1
Topic 1.5

How do I plan?
Worksheet 11
Read the following case studies.
a) Usha plans to become a fashion designer. Once she leaves school, she will
need to complete a course in fashion designing. The course will take four
years to complete, including one year she is required to work in the industry.
When she went to the College Open-day, one of the course advisors told
her that the College has good contacts with overseas designers, and could
probably get her a work placement with a European fashion house. She
would need to pay for her air fare and have some cash for living expenses.
Usha would receive a small income while working overseas. In her free time
she could travel around Europe.
b) Simon is interested in sound recording. He wants to set up a small recording
studio in his parents’ home. His parents are supportive and are prepared to
let him use the garage for the studio, if he is able to earn some money to
pay for half of the sound equipment. He prices the items and finds he needs
to save $5000 to pay for his share of the minimum equipment required.
c) Lee wants to buy a special outfit for the year 12 formal which is less than
three months away. This is the highlight of the school year, and it’s important
for Lee to leave the school with a lasting impression. The total cost of the
outfit is $650.

1. Working with a partner, complete the following table:

USHA SIMON LEE

Length of goal
(Short, medium,
long term)

Specific target

Timeframe

Actions that need to

be taken

Resources required

Planning pathway
(How will the goal
be achieved?)
34
Making a financial plan
Module 1
Topic 1.5

How do I plan?
Worksheet 11
2. Individually, identify a personal, long term goal.
Develop a planning pathway to assist your achievement of this goal.
3. Exchange plans with your partner from Part 1 of this worksheet and review each other’s
strategy.

YOUR LONG TERM GOAL PARTNER’S REVIEW OF

STRATEGY
Goal

Specific target

Timeframe

Actions that need to be

taken

Resources required

Planning pathway

4. What are some factors that might:

• speed up the achievement of your goal

• hinder the achievement of your goal?

• cause you to rethink your goal?

35
Making a financial plan
Module 1
Topic 1.5

Understanding my money personality

Worksheet 12
1. Think carefully about the attitudes of different money personalities for each of the
following situations. Suggest how different attitudes to each can reflect a person’s
attitude to money or spending.
Example: use of the clothes dryer - one person may be reluctant to use the dryer as it
would cost money while another person would turn it on and walk away from it without
thinking about the cost.
Consider these situations. Write down what your attitude/money behaviour would be in
each of the following situations.
• Takeaways versus cooking at home
• Having friends over who don’t ever bring food or anything else
• Time spent taking a shower
• Using the air conditioner
• Buying gourmet foods
• Use of mobile phones
• Phoning overseas
• Buying a new car
• Buying items for a home - appliances, utensils, and furniture
• Buying clothes
• Buying gifts for friends
• Lending money to friends

2. Rank items in order of spending priority from 1 to 6 with 1 being the highest priority.

■ Entertainment
■ Clothes
■ Transport
■ Mobile Phone
■ Food
■ Rent/Board
3. What has this activity shown you about your own attitudes to money? Why do you need
to consider your attitude when making financial plans?

36
 Module Two
Income - where does it come from?

In partnership with
 Module 2
Income – where does it come from?

Teacher Notes
Module Overview and Curriculum Mapping
OVERVIEW
Module 2 aims to build students’ capacity to plan and to make informed decisions around
meeting their future income needs.

ENDURING UNDERSTANDINGS
• Earning an income is one’s individual responsibility.
• Income from work brings personal and economic satisfaction.
• Employment opportunities and income sources change over a lifetime.
• All forms of government transfer payments are variable in amount and can alter with
changing circumstances.
• Government social and welfare payments have opportunity costs.

LEARNING OUTCOMES
Students:
• Are aware of the impact of changes in income on personal lifestyle
• Recognise their own income potential
• Identify and evaluate alternative forms of income
• Calculate and analyse an individual’s net worth
• Recognise, prepare for and respond to income shocks
• Recognise the social value of working for an income
• Appreciate the implications of net worth on lifestyle and future security

POWER WORDS Page 2

CURRICULUM MAPPING 3

LIST OF TOPICS
2.1 Identifying sources of income 5
2.2 Exploring government social and welfare payments 20
2.3 Establishing how much income is needed 25
2.4 Investigating income and employment opportunities 27
2.5 Opportunity Cost 35
2.6 Net worth 39
2.7 Recognising the volatility of asset values 44
2.8 Dealing with income shock 47

1
 Module 2
Income – where does it come from?

Teacher Notes
Module Overview and Curriculum Mapping
POWER WORDS
As students work through each topic in this module they
will encounter words that may be new to them, crucial
to understanding and completing the worksheets, and/
or difficult to spell. In addition, students may simply find
some of this vocabulary interesting, planning to use it in the
future. Understanding and being able to use these words will
provide students with more power to make future financial
decisions.
There are several approaches to using this “glossary”. The
intention is for students to investigate and find the meanings.
They could be given the complete list before they start the
module, or they could set up a table and add new words as
they progress through the activities. There are also specific
POWER WORD activities in some topics.
This list is not exhaustive.

asset liability
Balance sheet liquidity
capital mortgage
Capital gain Net worth
commission Newstart allowance
continuum Opportunity cost
bonus overtime
Employee Passive income
employer Post graduate
entrepreneur priority
deduction redundancy
gender retainer
goal risk
HECS-HELP salary
income superannuation
Income - gross Transfer payment
Income - net Asset Volatility
inflation wage
Intangible asset

2
 Module 2
Income – where does it come from?

CURRICULUM MAPPING

Teacher Notes
Module Overview and Curriculum Mapping
ENGLISH MATHEMATICS GENERAL CAPABILITIES
LITERACY YEAR 9 STATISTICS & NUMERACY
Creating texts PROBABILITY YR 9 Estimating & calculating with whole numbers
• Create imaginative, Data representation & Use money
informative and interpretation
• Evaluate financial plans to support specific
persuasive texts that • Identify everyday financial goals (ACMNA211)
present appoint of questions and issues
view and advance or involving at least one Recognising & using patterns & relationships
illustrate arguments, numerical and at Recognise & use patterns & relationships
including texts that least one categorical • Explain how the practical application of
integrate visual, print variable, and collect patterns can be used to identify trends
and/or audio features data directly and from (ACMNA208)
(ACELY1746) secondary sources
(ACMSP228) Interpreting statistical information
Interpret data displays
• Evaluate media statistics and trends by
linking claims to data displays, statistics and
representative data (ACMSP253)

INFORMATION & COMMUNICATION

TECHNOLOGY CAPABILITY
Investigating with ICT
• Define and plan information searches
• Select and use a range of ICT independently
and collaboratively, analyse information to
frame questions and plan search strategies or
data generation
Select & evaluate data and information
• Develop and use criteria systematically to
evaluate the quality, suitability and credibility
of located data or information and sources
(ACMMSP239)
CRITICAL & CREATIVE THINKING
Reflecting on thinking and processes
Think about thinking (metacognition)
• Give reasons to support their thinking, and
address opposing viewpoints and possible
weaknesses in their own positions (ACELT1640,
ACMSP247)

3
 Module 2
Income – where does it come from?

CURRICULUM MAPPING

Teacher Notes
Module Overview and Curriculum Mapping
NCFLF DIMENSIONS

Knowledge & Understanding

• Identify and explain strategies to manage personal finances.
• Explain the different ways in which people are paid including wages, salaries, commissions, self-
employment and government benefits.
• Identify and explain common terminology and categories for deductions used on pay slips.
• Explain the various factors that may impact on achieving personal financial goals.

Competence
• Investigate the financial decisions required at significant life-stage events.

Responsibility & Enterprise

• Explore the economic cost of individual and collective consumer decisions of the broader community
and the environment.
• Explain the role played by governments and the voluntary sector in the community to help those in
financial need and explore the cost benefit to the economy.

4
 Module 2
Identifying sources of income Topic 2.1

Teacher Notes
Classroom activity:
Suggested time: 3 - 4 lessons
Resources: http://www.humanservices.gov.au/
www.jobsearch.gov.au
Student worksheets:
Worksheet 1 Types of income
Worksheet 2 Calculating earned income
Worksheet 3 A lifetime of income
Worksheet 4 Income word puzzle

The focus of this topic is income source (earned, passive, transfer payment and unearned) and
how an individual’s income source may change over time.

(a) Introduce the module vocabulary using the POWER WORDS list.

(b) Brainstorm with the class the various sources of income available in Australia. Students
consider any source of income they know about. Teachers should introduce the following
concepts:
• What is meant by ‘an income‘?
• Why do we need an income?
• What are the components of total household income?

(c) In small groups, students:

• Classify the brainstormed sources of income as earned (from work), passive (from
investments), and transfer payments (social and welfare payments). (Some students
will relate to the terms “centrelink payments”, “on the dole”, etc as types of transfer
payment.)
• debate the classification of income received from gifts and gambling

5
 Module 2
Identifying sources of income Topic 2.1

Teacher Notes
(d) Students complete Worksheet 1 - Types of income. This activity can be completed as a class,
individually or with a partner.

(e) Complete worksheet 2 - Calculating earned income

To set up this activity for students it will be necessary to introduce and discuss the following
concepts:
• The different systems used to determine income from employment (earned income):
wage, salary and commission
• The advantages and disadvantages of these different methods of payment
• Whilst gross deductions are not included in this activity, it may be useful at this point to
discuss these and clarify the difference between gross pay and net pay at this point.

The focus of the activity is to create spreadsheets to determine income earned.

6
 Module 2
Identifying sources of income Topic 2.1

Teacher Notes
SOLUTIONS
WAGE
Butler, John
Dawson, Scott 1025
Ehrlich, John 1820
Ewing, Craig 1335
Francis, Meredith 800
Ibrahim, Allah 1025
Kreiger, Jutta 1330
Perry, Josie 1250
Toma, Lemalu 1400

SALE AMOUNT COMMISSION PAYABLE

650000 9500
475000 7750
1000000 13000
723000 10230
345000 6450
430000 7300

(f) Complete worksheet 3 – A Lifetime of Income

This involves students’ preparing two life cycle charts. The first is in response to the case
study of Beri. The second life cycle chart or continuum should reflect a student’s personal
expectations of what types and combinations of income they will be receiving throughout
their life. Direct students to reflect on the pattern of changes in income required at
different stages, and how circumstances may change at different stages of people’s lives.
Events (such as losing a job, having to change jobs, having hours reduced, etc) causing
income shocks should also be discussed. This personal continuum can be adjusted
with new considerations as students progress through this module. This activity can be
completed digitally or as a hard copy (using the worksheet).

7
 Module 2
Identifying sources of income Topic 2.1

Teacher Notes
(g) Students complete worksheet 4

SOLUTION

Wordsearch solution

8
 Module 2
Identifying sources of income Topic 2.1

Teacher Notes
(h) Extension activities
• Discuss the options relating to large windfall sums of money. For example, what is
the distinction between treating these as income or as capital?
• Students could determine actual income amounts for worksheet 1.They should
search the Department of Human Services and Jobsearch websites, which will be
accessed throughout this module. (Specific page links have not been provided for
these websites as they tend to be updated regularly. Teachers will need to provide
some scaffolding for students to access this information.)
• Create spreadsheets (or provide a template) to determine more complex calculations
– for example different rates of overtime, deductions for superannuation, savings
and health insurance. The teacher will need to provide data for this activity.
• Create spreadsheets to calculate annual leave loading.

(i) Reflective Learning

Students could:
• Discuss implications of casual work with regard to calculation of wages.
• Predict time spent (and the resulting impact on lifestyle) receiving ‘earned’, ‘passive’
or ‘transfer payment ‘ income during a life cycle.
• Consider the impact on standard of living as a result of spending time on earning
income.
• Review their predictions and consider how best they can prepare themselves for the
expected patterns of income earning.

9
 Module 2
Identifying sources of income Topic 2.1

A person’s sources and amount of income vary significantly according to a number of factors

Worksheet 1
Types of income
- including time spent earning income, age, education levels, skills and abilities, location and
the number and type of assets owned. For the people described below:
• List the main sources of income that you think MIGHT apply to each of the following
people.
• Classify the sources as earned from work, passive from investments, transfer payments
from social and welfare sources or unearned from gifts or gambling.
• Undertake research to determine approximate weekly income. Try these websites:
http://www.humanservices.gov.au/
www.jobsearch.gov.au

SOURCES OF CLASSIFICATION WEEKLY

INCOME (earned, AMOUNT (high,
passive, transfer medium or low)
payment or
unearned
income)
Jasmine is a 12 year old school 1.
student. 2.
3.

Abdul is 22, worked for a while 1.

after leaving school but is now 2.
going to university full time. He
3.
has some savings, but not enough
to support him throughout his 3
year course.
Abbie is a 17 year old senior- 1.
school student with a part time 2.
job at a fast food store.
3.

10
 Module 2
Identifying sources of income Topic 2.1

Worksheet 1
Types of income
The Mitchells have children - 1.
Andrew (5) and Zac (7). Anna is 2.
a doctor working full time, and
3.
Brian works from home as a web
site designer.

Evelyn, 47, works in retail and 1.

won $200,000 as her share of a 2.
first division lotto syndicate.
3.

Kylie is a single parent and has a 1.

young toddler. She is not in the 2.
paid workforce.
3.

The Almeida family is a 2 parent 1.

family with 2 teenage children. 2.
– Juan is a self-employed baker
3.
and Gloria works part-time in the
business.

Grigor and Josie Smith are 1.

retired. Grigor was a teacher and 2.
contributed to superannuation
3.
throughout his working life.

Jenny is 68, retired and 1.

lives by herself. She has no 2.
superannuation but has shares
3.
and cash valued at $100 000.

Hatea and Konono work as lab 1.

technicians, have 3 adult children, 2.
and own 2 investment properties
3.
(houses) in inner city Sydney.

11
 Module 2
Identifying sources of income Topic 2.1

Worksheet 1
Types of income
Adam is 27 years old and has 1.
suffered brain damage in a 2.
climbing accident. He lives
3.
in a government provided
independent-living unit.

Bharati is 45 years old and works 1.

part time as a shop assistant. She 2.
spends the rest of her time caring
3.
for her partner who is an invalid
and is unable to work.

Gary is 20 years old, single, 1.

and has no dependents. Since 2.
finishing year 12, he worked as
3.
a sales assistant in an electronics
store, but has just been
retrenched.
Bethany is 16 years old and 1.
has just commenced an 2.
apprenticeship as a pastry chef.
3.

Sian South and Antonio 1.

Martinuzzi are expecting their first 2.
baby. They both work full time as
3.
registered nurses.

12
 Module 2
Identifying sources of income Topic 2.1

As an employee your income earned can be calculated

Worksheet 2
Calculating earned income
in several ways, including:
• salary
• wage
• commission

SALARY
A salary is a payment based on one year’s work and is usually
paid in equal fortnightly or payments. Salaries usually apply to
professional occupations such as teachers or accountants.
To calculate a salary, divide the annual payment by 26 if it’s paid
fortnightly, or 12 if it’s paid monthly. Complete the following
table. Take amounts to the nearest whole dollar.

NAME SALARY MONTHLY EARNINGS FORTNIGHTLY EARNINGS

Crawford, Harry $55500
Lee, Ting $103000
Simpson, Gloria $47700
Tran, Joseph $70000

WAGE
A wage is a weekly or fortnightly payment based on hours of work completed. Workers are
able to a higher rate (overtime) for hours worked in excess of the award conditions.
To calculate a wage multiply the hourly amount by the hours worked. Create a spreadsheet to
calculate the weekly wages using the data for each employee. (The hourly rate and overtime
worked for each employee follows the table.) You will need to work out a formula to
calculate the weekly wages. Overtime is paid at 1½ times the hourly rate.

KISHORE DEVY NORTHSIDE PLUMBERS

EMPLOYEE HOURLY REGULAR OVERTIME WEEKLY

RATE HOURS HOURS GROSS
WORKED WAGE
Butler, John $25 35 2 950
Dawson, Scott 35
Ehrlich, John 38
Ewing, Craig 40
Francis, Meredith 40
Ibrahim, Allah 35
Kreiger, Jutta 38
Perry, Josie 35
Toma, Lemalu 40
13
 Module 2
Identifying sources of income Topic 2.1

WEEKLY PAYROLL DATA

Worksheet 2
Calculating earned income
EMPLOYEE HOURLY RATE OVERTIME
HOURS
Butler, John 25 2
Dawson, Scott 25 4
Ehrlich, John 40 5
Ewing, Craig 30 3
Francis, Meredith 20 0
Ibrahim, Allah 25 4
Krieger, Jetta 35 0
Perry, Josie 25 10
Toma, Lemalu 35 0

COMMISSION
In some industries based on sales (such as real estate, new and
used car retailers), employees are paid a percentage of the value
of goods sold. They may also receive a base salary in addition
to the commission. In some cases this salary is regarded as a
retainer, and must be repaid to the employer when commission
is earned.
To calculate commission payable, simply multiply the values of
sales by the applicable commission percentage. Complete the
following table for a real estate business.

SELLING PRICE COMMISSION

First $100000 3%
Next $100000 2%
After $200000 1%

SALE COMMISSION
AMOUNT PAYABLE
650000
475000
1000000
723000
345000
430000

14
 Module 2
Identifying sources of income Topic 2.1

PART A – LIFE CYCLE CONTINUUM FOR BERI

A lifetime of income
Worksheet 3
Chatting before school Beri’s best friend Trudy told her about a dream she had last night.
Trudy saw her life over the next 50 years and it was a bit scary! It got both of them thinking
about where their future income will come from. How will their sources of income change?
Will the income earned to support a lifestyle be classified as earned, passive, transfer payment
or unearned?
After speaking with Trudy, Beri started thinking about what income sources she can expect
during the course of her life and how much income will be needed. Complete the table
below based on the situations described.
List the sources of income that Beri expects to receive in each life cycle stage, and classify as
earned, passive, transfer payment or unearned.

NOTE – Is it realistic of Beri to include a lotto win in her life cycle?

LIFE CYCLE STAGE SITUATION INCOME

Earned/Passive/Transfer
Payment/Unearned
Teenager Still living at home with
parents and studying at
high school. Receives pocket
money from parents for
doing housework around the
home.

17- 24 Now studying full-time at

University. Main source
of income is the Youth
Allowance paid fortnightly
from Department of Human
Services. Working part time
in a local café.

25-35 Working hard to build up

career as an accountant with
a major accounting firm.

15
 Module 2
Identifying sources of income Topic 2.1

A lifetime of income
Worksheet 3
35-50 Now working as a manager
of a large bank. Owns an
investment property and
tenants pay rent for this.

50-65 Wins $10 000 from a Lotto

ticket. Now left the bank and
runs a successful mortgage
business

65+ Happily retired on the

Gold Coast and living on
two sources of income- a
government pension and
superannuation saved during
her working life.

16
 Module 2
Identifying sources of income Topic 2.1

PART B – PERSONAL LIFE CYCLE CONTINUUM

A lifetime of income
Worksheet 3
You can now create your own life cycle continuum based on your current expectations of how
your working life will evolve.
Beri’s continuum didn’t include a partner or children. You may wish to factor in this
information for your own personal expectations.

MY LIFE CYCLE CONTINUUM

LIFE CYCLE STAGE SITUATION Earned/Passive/Transfer

Payment/Unearned
Teenager

17- 24

25-35

35-50

17
 Module 2
Identifying sources of income Topic 2.1

A lifetime of income
Worksheet 3
50-65

65+

Remember that not everything goes to plan! Suggest some lifecycle events (such as having
children) that could occur, causing an income shock.

18
 Module 2
Identifying sources of income Topic 2.1

INCOME WORD PUZZLE

Worksheet 4
Income word puzzle

19
Exploring government social and Module 2
welfare payments Topic 2.2

Teacher Notes
Investigation:
Suggested time: 2 - 3 lessons
Resources: www.humanservices.gov.au/customer/
http://www.abs.gov.au
http://www.fairwork.gov.au

Student worksheet:
Worksheet 5: How much is enough?

Students identify the changing nature and levels of government income support transfer payments.
From a long term perspective, students should understand that government support for any age
group cannot be relied on as a source of adequate income.
Keep in mind that content covered in this topic may be of a sensitive nature for some students.
(a) As an introduction, students brainstorm a variety of government transfer payments that
they have heard about or someone they know personally may have received.
They could also discuss the implications for taxpayers and other areas of government
spending, e.g. education? In pairs or groups, brainstorm the opportunity costs of
transfer payments and discuss. For example, a person may be happy to receive transfer
payments, but there may be a link with the impact of opportunity costs, including loss of
working networks; no work experience gained; loss of self-esteem, etc.

(b) Complete Worksheet 5 How much is enough?

Students research the Department of Human Services website to identify a range of
benefits applicable to different life situations. (Students could also explore other situations
not listed on the worksheet.) To complete this investigation students search the Australian
Bureau of Statistics for average weekly earnings, and the Fairwork site for minimum
weekly earnings. Students next consider the relationship of these transfer payments to
minimum and average weekly wages.
Specific page links have not been provided for these websites as they tend to be updated
regularly. Teachers will need to provide some scaffolding for students to access this
information.
As students may lack specific knowledge about living costs etc it may be helpful to
include a simple case study including rent, transport, number of children at school etc
and ask students whether the Newstart allowance recipient has sufficient income to meet
these competing needs.
After collating this information, students work within a small group to prepare and argue
a case either to increase the level of the Newstart Allowance or to keep it at its current
level.

20
Exploring government social and Module 2
welfare payments Topic 2.2

Teacher Notes
(c) Reflective learning
• After all students have presented their case, a personal reflection on whether they
have changed their minds about the level of the Newstart Allowance could be
undertaken.
• Students could also consider how individuals and families need to adjust to changes
in circumstances which necessitate reliance on transfer payments. Due to the
sensitive nature of this topic, discussion may need to be restricted, or replaced with
students making comments on “positives” and “negatives” in their topic notes.

21
Exploring government social and Module 2
welfare payments Topic 2.2

How much is enough?

Worksheet 5
PART A
BREAKING NEWS: Average weekly wage tops $????
So how much is the average weekly wage? How does it
compare with transfer payments? What is the current minimum
wage for Australian workers? For this activity you are required
to complete the following table using data from these websites.
You will need to adjust figures to weekly amounts.
1. Go to the Department of Human Services website -
http://www.humanservices.gov.au/ - and search for “Payment Finder”. Select the
appropriate options for the following situations to find the current fortnightly payment
for each.
2. Go to the Australian Bureau of Statistics website - http//:www.abs.gov.au
and search for the current average weekly earnings.
3. Lastly, go to the Fairwork Ombudsman website - http://www.fairwork.gov.au - and
search for the national minimum wage (applicable when there is no award wage).

DATE WEBSITES ACCESSED __________________________

DEPARTMENT OF HUMAN SERVICES

Single, 23 years old, no children
SITUATION NAME OF BENEFIT FORTNIGHTLY WEEKLY AMOUNT
PAYMENT
Student or apprentice
Looking for work
Working full time with
a disability
Retrenched
Single, 65 years old, no children
SITUATION NAME OF BENEFIT FORTNIGHTLY WEEKLY AMOUNT
PAYMENT
Retired

22
Exploring government social and Module 2
welfare payments Topic 2.2

How much is enough?

Worksheet 5
AUSTRALIAN BUREAU OF STATISTICS
AVERAGE WEEKLY EARNINGS
Full time adult worker
Average weekly ordinary earnings
Average weekly total earnings

FAIRWORK OMBUSDSMAN
MINIMUM WEEKLY WAGE
Full time adult worker
Full time minimum wage

23
Exploring government social and Module 2
welfare payments Topic 2.2

How much is enough?

Worksheet 5
PART B
Consider the average weekly ordinary earnings of an
employed person with a person who is unemployed
and receiving the Newstart Allowance.
In small groups prepare a 1-2 minute presentation to
the class, taking one of the following positions.
1. Firstly, you can argue that the current rate of
Newstart Allowance for an unemployed person is
adequate and should not be increased.
2. Alternatively you can take the position that compared to the average weekly wage for
an Australian worker; the Newstart Allowance for an unemployed person is too low and
therefore needs to be increased.
3. Finally, you could argue that the minimum wage should be increased.
Consider which side of the argument you are going to take and write down your ideas in the
table below. A sample point for each position has been suggested to get you started.

Arguments for increasing the Newstart Allowance for unemployed people are:
• The rate is so far below the average weekly wage that it is difficult for an
unemployed person to maintain an adequate lifestyle and meet all weekly expenses.

•
Arguments for not increasing the Newstart Allowance for unemployed people are:
• Taxpayers should not have to support people who choose not to work.

•
Arguments for increasing the minimum wage
• The gap between the minimum wage and Newstart Allowance should be higher in
order to encourage people to find a job.

24
 Module 2
Establishing how much income is needed Topic 2.3

Teacher Notes
Classroom activity:
Suggested time: 1 lesson
Resources: www.abs.gov.au for latest figures on average weekly earnings

Student worksheet:

Worksheet 6: Money - How much do I actually need?

This activity is designed to alert students to the fact that different levels of income are
necessary at different stages of the life cycle; that as responsibilities increase/decrease and the
family size alters income requirements change.
(a) Use Worksheet 6 – Money – How much do I actually need? to record decisions.
Students should determine the estimated timing of their likely lifestyle circumstances.
They should consider:
• secondary education
• further education and training
• getting a job
• entering a relationship
• family responsibilities
• changing jobs
• preparing for retirement
• life after work (retirement).

Students should also refer to PART B of worksheet 3 for input for this worksheet.
Students estimate income ranges (in the space provided) that they would consider
necessary to meet the lifestyle circumstances.

(b) Reflective Learning

• Students could investigate appropriate monthly or annual income to fund the
lifestyle described. Use a spreadsheet to graph this information.
• Students have their completed charts checked by a peer for feedback and to ensure
that columns for the income range and lifestyle correlate.

25
 Module 2
Establishing how much income is needed Topic 2.3

Money – How much do I actually need?

Worksheet 6
You will need different levels of income at different stages of your life. This will vary as
responsibilities increase/decrease and the family size alters. Before completing this Lifestyle-
Income-Continuum it will be useful to do some background research into what income and
financial priorities you may expect at different stages of your life. It may help to refer back to
PART B of Student Worksheet 3 when deciding on your financial priorities.

IN YOUR TEENS Lifestyle Requirements Income required to fund

these requirements
(high, medium, low)

IN YOUR 20s AND 30s Lifestyle Requirements Income required to fund

these requirements
(high, medium, low)

IN YOUR 40s AND 50s Lifestyle Requirements Income required to fund

these requirements
(high, medium, low)

FOR RETIREMENT Lifestyle Requirements Income required to fund

these requirements
(high, medium, low)

26
Investigating income and employment Module 2
opportunities Topic 2.4

Teacher Notes
Investigation:
Suggested time: 1 – 2 lessons
Resources: www.abs.gov.au
www.jobsearch.gov.au
www.graduatecareers.com.au
www.seek.com.au
www.myfuture.edu.au
www.joboutlook.gov.au

Student worksheet:
Worksheet 7: What do people earn?
Worksheet 8: How much can I earn?

The focus of this topic is an investigation of income levels and factors affecting the income
earned in different occupations. Students may need help to navigate around these websites
as pages, hyperlinks and data presented will change frequently. For this reason pathways to
specific pages are not always shown in this topic.

(a) Students complete Worksheet 7: What do People earn?

• Compare the information on the myfuture website for various occupations in a
range of industries.
• Record and reflect on the information.
• Take a career quiz
• Create an online personal career profile

(b) Have students collect information on up to five (depending on class time available)
occupational classifications which are of personal interest to them. Encourage students
to include occupations requiring different qualification and skill levels. The information
required includes:
• income level (weekly earnings)
• skills level required (eg Bachelor Degree, experience, apprenticeship, etc)
• unemployment levels
• occupation size (how many people are employed in a particular industry)

(c) Record results on Worksheet 7 - How Much Can I Earn?

27
Investigating income and employment Module 2
opportunities Topic 2.4

Teacher Notes
(d) Using the information gathered, students write a brief comment or generalisation for
each occupational classification.

For example:
Discuss the link between weekly earnings and skill level required for each occupation?
Were there any trends identified with any occupations (such as gender bias, high
unemployment levels etc)?

(e) Extension Activity

• Use some of the information on the worksheet 7 table to create comparison graphs
in excel.
• Undertake further research to compare income distribution between males and
females from various occupational groups.
• Another research area to which students could be directed is the data for
unemployment across a range of occupations (www.abs.gov.au). Students could
look for patterns with levels of education, graduate unemployment, age range of
unemployed, trends over time, etc.

(f) Reflective Learning

Students discuss how the information gathered either confirmed or altered the
expectations of their selected occupations.
Considering the data revealed, students review their income expectations (referring to
Worksheets 3, 6, 7, 8).
Do students need to adjust their plans for the future expectations?

28
Investigating income and employment Module 2
opportunities Topic 2.4

Worksheet 7
What do people earn?
Graduates are less likely to be unemployed than are non-graduates.
Australian Bureau of Statistics figures show that graduates
have an unemployment rate half that of non-graduates.

1. Comment on this statement and consider why this

might be the case. To research the issue further you
can go to www.graduatecareers.com.au and search
on the site for the Australian Graduate Survey. This
will give you links to the latest Australian Graduate
Survey reports.

2. Why do you think that a new

graduate is likely to start on a
salary that is above that of the
average annual wage for all
Australian workers?

3. The website http://joboutlook.gov.au/ is an excellent source of employment statistics.

The activity on the next page requires you to navigate around this site to compare the
income range (before tax deductions, and employer superannuation contributions) of
persons working on a full-time basis in a variety of industries.

4. Add three occupations of special interest to you, and complete this table.

5. Take the career quiz http://joboutlook.gov.au/careerquiz.aspx

6. You can sign up at www.myfuture.edu.au and build a personal career plan. This
website also has a large amount of information on many occupations covering details
such as duties, earnings and qualifications required.

29
Investigating income and employment Module 2
opportunities Topic 2.4

Worksheet 7
What do people earn?
OCCUPATION WEEKLY % MALES/ WEEKLY % EDUCATIONAL
EARNINGS FEMALES HOURS EMPLOYED ATTAINMENT
WORKED IN YOUR (HIGHEST %)
STATE
MEDIAN ACROSS
ALL OCCUPATIONS
ACTOR
AIR TRANSPORT
PROFESSIONAL
ANIMAL
ATTENDANT &
TRAINER
BEAUTY
THERAPIST
BIOMEDICAL
ENGINEER
CONSTRUCTION
WORKER
ELECTRICIAN
FINANCIAL
PLANNER
GAMES
DEVELOPER
HAIRDRESSER
INDIGENOUS
HEALTH WORKER
KITCHENHAND
NURSE
REGISTERED
OPTOMETRIST
FOOD & DRINK
FACTORY WORKER
RETAIL MANAGER
RIGGER
TRAVEL
CONSULTANT

30
Investigating income and employment Module 2
opportunities Topic 2.4

Worksheet 7
What do people earn?
• Using the data in your table, identify which occupation had the largest amount of full-
time workers earning $1000 or more per week? Why do you think this is so?

• Which occupation had the largest amount of full-time workers earning less than $1000
per week? Any comments?

• Did the income earned from any particular occupation surprise you? Explain.

• Why do you think some occupations have many more workers earning $1000 plus than
other occupations?

• To what extent would the expected income level of an occupation influence your choice
of career?

31
Investigating income and employment Module 2
opportunities Topic 2.4

How much can I earn?

Worksheet 8
PART A
The following table can be completed after finding the information at www.jobsearch.gov.
au.
This Australian website has a large amount of information on all aspects of the current
employment market. You will find the information under “Career Information>Job Outlook”.

Use the alphabetical search to select five occupations that most interest you.
Record the information for each of the selected occupations in the table below.
An example (using information from 2011 statistics) has been completed for you.
When you have finished this activity, complete the “Job Outlook Career Quiz”
(on the “Career Information>Job Outlook” page).

32
Investigating income and employment Module 2
opportunities Topic 2.4

How much can I earn?

Worksheet 8
INVESTIGATING INCOME AND EMPLOYMENT OPPORTUNITIES TABLE

Occupation No. of Weekly % Working Unemployment Skill Level Required

Title People Earnings Full-time Level
working in
occupation
Eg: Very large $1400 (Full- 83.5% Below average Jobs in this group usually
Accountant 158,100 time before require completion of
tax) a recognised Bachelor
Degree, or extensive
relevant experience. Some
jobs also require post
graduate qualifications
1.

2.

3.

4.

5.

33
Investigating income and employment Module 2
opportunities Topic 2.4

How much can I earn?

Worksheet 8
PART B
SUMMARY QUESTIONS:
1. Explain the link between the weekly earnings figure and the
skill level required to enter your researched occupations.

2. Were there any specific features identified with specific occupations?

(For example gender breakdown, unemployment level, salary earned etc).

34
 Module 2
Opportunity cost Topic 2.5

Teacher Notes
Investigation and Case Study:
Suggested time: 2 - 3 lessons
Resources: www.studyassist.gov.au
www.jobsearch.gov.au
www.humanservices.gov.au - Youth Allowance.
www.realestate.com.au
www.ato.gov.au - Higher Education Loan Schemes

Student worksheet:
Worksheet 9: What are my choices?

For this activity students assess the income related value of

undertaking further education or on the job training, and the
costs associated with pursuing study after completing high
school. Students will also be able to develop and correlate their
research findings and actions from worksheets 4 6 & 7.
(a) To focus students on the concept of “opportunity cost”,
(and with reference to worksheets 4 6 & 7) students
• Calculate the equivalent full-time wage of a job similar
to their current part-time jobs. Note that wage rates
for full time work will be lower than casual rates.
• Work out how many hours a week/weeks per year they would have to work to earn
their desired income level stated on the lifestyle-income continuum.
• Calculate the opportunity cost of continuing education by comparing the full time
wage equivalent and possible part-time wage available while completing further
training.
• Work out how long it would take them to make up their lost income by comparing
the income achievable from the new job (gained from the qualifications).
• Calculate how many years of their working life they have left at the new income
level to identify how much better off they will be.

(b) Use the information and links in the case study to consider the various costs involved in
pursuing further education in Australia.

(c) Research the suggested websites and reply to Kim’s letter about the costs of acquiring a
tertiary qualification. (Students may need assistance to identify suburbs close to selected
campuses.)

35
 Module 2
Opportunity cost Topic 2.5

Teacher Notes
(d) Extension Activty
The first part of first activity in worksheet 9 presents an excellent opportunity for students
to explore complex ICT functions by creating a spreadsheet to address the investigation
of opportunity cost.
The following issue could be added to Kim’s dilemma.

Our school is in a rural area, so I would need to move to the capital city to study at either
TAFE or at university.
I would need to rent a 1 bedroom flat close to the city and I would like to know how
much this will cost. My careers counsellor told me that I would be eligible for the
maximum rate of youth allowance as a student who is living away from home. Do you
know how much this will be?

• To find out the cost of a 1 bedroom flat close to your capital city, go to
www.realestate.com.au and enter the name of an inner city suburb
• Alternatively, you may like to look at the cost of renting in the suburbs that surround
one of the tertiary institutions you have identified, and suggest this location to Kim.
• What are some of the other expenses associated with further education and living
away from home, which Kim should be aware of?
• If Kim chooses to move close to the city to study would she be giving up any other
opportunities - things that matter to her?

e) Reflective learning
Students report their findings to the class for their individual course of study.
The class assesses worthwhile prospects in relation to qualifications and training.
How are costs of different qualifications reflective of potential earnings?

36
 Module 2
Opportunity cost Topic 2.5

Worksheet 9
What are my choices?
PART A
Opportunity cost is the cost of an alternative
that must be forgone in order to pursue a
certain action. www.investopedia.com
In other words, what you will miss out on if you
choose one option over another, or the benefits
you could have received by taking an alternative
action. This can be losing money or it might be
missing out on something else such as working
in a job you don't really like.
How are you going to fund your desired lifestyle?
Refer to www.jobsearch.gov.au www.studyassist.gov.au and your worksheets 3, 5 & 6 to
complete this table.
Any surprises?

MY CURRENT PART TIME JOB POSITION

HOURLY RATE $
FULL TIME GROSS INCOME (40 HOURS) PER $
WEEK
DESIRED WEEKLY INCOME LEVEL FOR $
20s/30s (WORKSHEET 6)
HOURS PER WEEK AT CURRENT JOB
REQUIRED TO ATTAIN THIS INCOME
MY PREFERRED OCCUPATION
(WORKSHEET 7)
FULL TIME GROSS INCOME PER WEEK $
YEARS OF STUDY REQUIRED TO QUALIFY
FOR THIS JOB
TOTAL LOST INCOME FROM ORIGINAL JOB $
WHILE STUDYING
NUMBER OF YEARS IN PREFERRED
OCCUPATION TO REGAIN THIS INCOME

37
 Module 2
Opportunity cost Topic 2.5

Worksheet 9
What are my choices?
PART B
Kim’s Dilemma
You have just been appointed the editor of your school’s student magazine and have come
across this letter from one of your readers.

Dear Editor
My name is Kim and my dream is to become the
manager of a hotel. I just spoke to the careers
counsellor at school and he said it would be a
good idea to do some further study in this area. He
suggested I could enrol in a two year Diploma of
Hospitality Management course offered at TAFE or
do a Bachelor of Business (Hospitality Management)
which takes three years at university. My careers
counsellor also told me that both these courses
would attract fees.
Could you please tell me what it would cost to study hospitality management at TAFE
and at university? Am I entitled to any payments from Centrelink?
Your help in these matters would be greatly appreciated.
Regards
Kim

Your task is to respond to Kim’s letter. To help you give accurate advice, look at the resource
list below:
• For information on HECS fees applicable for university study go to
www.studyassist.gov.au
• For information on TAFE fees go to the TAFE website for your state, and search for the
appropriate course.
• For information on Youth Allowance go to www.humanservices.gov.au
• What are some of the other expenses associated with further education, which Kim
should be aware of?

Now that you’ve completed some background research you can respond to Kim’s letter.

38
 Module 2
Net worth Topic 2.6

Teacher Notes
Classroom activity
Suggested time: 2 lessons
Resources: www.moneysmart.gov.au
http://www.investors.asn.au/education/investment-basics/net-worth/

Student worksheets:
Worksheet 10: Identifying net worth
Worksheet 11: Analysing relative net worth
Earning an income is only part of the solution to gaining financial security. Establishing and building net
worth is an outcome of appropriate management of income. A high income does not necessarily mean
that the person will be well off. How that income is used may be even more important, especially if it
means increasing debt. From these activities, students gain an appreciation of an individual’s net worth.
(a) An excellent way to introduce this topic is to register a game of ESSI Money (Financial Basics Foundation) for
your students. This online interactive game is structured around a challenge for students to earn income and
build their net worth. Alternatively, it would also be useful as a reflection activity at the end of the topic.

(b) Worksheet 10 - Identifying net worth

Refer to the POWER WORDS list as an introduction to the topic. Be sure that students are familiar with terms
such as “assets” “liabilities” “net worth” “capital”, “balance sheet”, “liquidity” etc before starting this
topic.
Assist students to create a Statement of Net Worth for Leroy. After classifying the items use this introductory
activity to demonstrate the concept of net worth.
NET WORTH = ASSETS – LIABILITIES or NET WORTH = WHAT WE OWN- WHAT WE OWE

SOLUTION
STATEMENT OF NET WORTH FOR LEROY
As at / /
ASSETS $ LIABILITIES $
Cash in bank account 200 School canteen owing on account 20
Christmas savings 150 Credit Card Balance 1500
Sports equipment 300 Loan from parents 800
Clothes 600 TOTAL LIABILITIES 2320
Stereo 1000
Motor Bike 2000 NET WORTH 1930
TOTAL ASSETS $4250 $4250

39
 Module 2
Net worth Topic 2.6

Teacher Notes
c) Discuss the reasons why a financial adviser would consider net worth just as important as current
income in evaluating Leroy’s financial position.

(d) Students complete a case study on Ioane and Kilee to determine their net worth, Worksheet 10
- Identifying net worth. Based on the information in the case study students can show their own
calculations to determine net worth, or use the net worth calculator located on the MoneySmart
website.

(e) Have students analyse the net worth for both Rika and Gillian and complete the activities on
Worksheet 11 Analysing relative net worth.

(f) Extension activities

• It may be possible to invite a financial professional into the classroom to discuss the relative
difference in net worth and the importance of building up net worth.
• Another issue which could be discussed is the relative merit of short term decisions for long
term benefits. Students could also be given example of how saving over a period of time on a
compound interest basis is of more benefit than leaving saving until later.
• Students create a personal Statement of Net Worth.
• Students set up a spreadsheet using a formula to calculate net worth.

(g) Reflective Learning

• Discuss the significance of a substantial net worth in comparison with a substantial income. How
does each impact of a person’s current and future financial position? What are the considerations
in maintaining and growing the value of net worth?
• Consider what actions are appropriate for a young person (who has recently left secondary
school) to build up net worth.

40
 Module 2
Identifying net worth Topic 2.6

PART A

Worksheet 10
Identifying net worth
LEROY’S NET WORTH
Leroy is 18 and studying for a Diploma in Hospitality at Hometown TAFE.
1. Classify the following items as assets or liabilities. Write A or L next to each item.

Leroy’s assets (what is owned) and liabilities (what is owed)

Motor bike $2000 Sports equipment $300
Loan from parents $800 Christmas savings $150
Cash in bank account $200 Credit card balance owing $1500
Stereo $1000 School canteen owing on account $20
Clothes $600

2. Now, you’re ready to calculate Leroy’s net worth. Complete the following STATEMENT
OF NET WORTH. This is also known as a BALANCE SHEET or STATEMENT OF ASSETS &
LIABILITIES.
STATEMENT OF NET WORTH FOR LEROY
As at / /
ASSETS $ LIABILITIES $

TOTAL LIABILITIES

NET WORTH
TOTAL ASSETS $ $

Assets (what is owned) = Liabilities (what is owed) + Net Worth

Therefore:
Net worth = Assets - Liabilities

41
 Module 2
Identifying net worth Topic 2.6

PART B

Worksheet 10
Identifying net worth
IOANE AND KILEE’S NET WORTH
Ioane and Kilee are unsure of their net worth. They
seek help in working out this figure based on the
information supplied below:
They own a house in Sydney that is valued at
$830,000. The family owns a car worth $9,000 and
household contents are valued at $75,000.
Ioane’s wife Kilee has jewellery valued at $15,000.
They have $4,000 in a savings account and $8,000
worth of shares. Kilee collects early Australian pottery
and her collection is worth $1,500.
As well as the above assets the family also has some
liabilities. Ioane and Kilee have a $500,000 mortgage
on the house. They also owe $2,000 on the car and $1,000 to EziFinance for furniture they
recently purchased.
The family owes $2,000 on a low interest credit card and $500 on a Target store card. Kilee
also recently borrowed $4,000 from her mum.
1. Prepare a Statement of Net Worth (either manually or set up a spreadsheet) for Ioane and
Kilee.
• The family’s total assets are: $
• The family’s total liabilities are: $
• The calculated net worth for the family is: $

2. Check your calculations of the family’s net worth by using the Net Worth calculator
available at www.moneysmart.gov.au

3. Comment on the financial position of this family. Consider

• Total assets
• Current debt
• Ability to repay existing debt
• Potential future debt

42
 Module 2
Identifying net worth Topic 2.6

Calculate the net worth for each of the individuals detailed below.

Analysing relative net worth

Worksheet 11
Rika is a sole proprietor of a local computer store.
She takes an income from the business of $55,000 a year.
Gillian is employed at the local college as an assistant teacher.
Her annual income is $45,000.

RIKA’S PERSONAL BALANCE SHEET GILLIAN’S PERSONAL BALANCE SHEET.

Assets: $ Assets: $
Cash at bank 25,000 Cash at bank 5,000
Term investment 40,000 Term investment 5,000
Shares 15,000 Shares 1,000
Other investments 33,000 House 280,000
Business capital 200,000
House 450,000
Liabilities: $ Liabilities: $
Mortgage 400,000 Mortgage 65,000
Business loan 150,000 Credit card debt 2,500
Credit card debt 25,000
Rika’s net worth = $ Gillian’s net worth = $

1 Comment and provide reasons for the differences between Rika’s and Gillian’s net worth.

2 Consider the differences in their net incomes and relate this to their net worth
differences.

3 Discuss the possible ways in which the relative positions of

Rika and Gillian could change over a two to five year period.

43
 Module 2
Recognising the volatility of asset values Topic 2.7

Teacher Notes
Classroom activity
Suggested time: 1 lesson

Student worksheet:
Worksheet 12: Asset case study

This is a challenging topic, and may not be suitable for some classes. Once students
understand the difference between assets and liabilities, the concepts of asset value, risk and
volatility could be introduced.
(a) Discuss the meaning of risk and volatility. Volatility can be described as the extent to
which values of assets fluctuate over time. Risk or volatility is assessed as high/medium/
low.
(b) At this point the concept of personal intangible assets could be introduced.
Intangible assets are nonphysical assets. Some intangible assets add value to a personal
Balance Sheet. Examples include one’s income earning potential and health. Examples
include a small business concept or idea, the cost of education leading to a higher
income, etc. (It’s also worth noting the existence of intangible future liabilities/future
commitments and known risks. A future commitment could include the future cost of
educating children.)
b) Brainstorm a list of examples of intangible assets with the class.
c) Students complete the case study of Paula in Worksheet 12. Guide students in compiling
a list of assets and liabilities. Attention should be drawn to superannuation, household
effects, etc. There should also be some discussion around Paula’s possible future
commitments (buying a home, education of children, etc). Note that the increased
earning capacity of her future career could be listed as an intangible asset.
d) Reflective learning
Students:
• consider how they would measure the concepts of ‘value‘ and ‘importance
• consider how a value is assigned to an intangible asset
• discuss how they can best secure their financial security, given the concepts
introduced in this activity.
• may wish to revisit the Life Cycle - Income continuum (Worksheet 4) to readjust their
lifestyle and income choices.
• Add a list of intangible assets to their Personal Statement of Assets and Liabilities
created in Topic 2.7.

44
 Module 2
Recognising the volatility of asset values Topic 2.7

Worksheet 12
Asset case study
Paula is 30 years old and a single parent with two
dependent children, both still in primary school. She
is paying off a 2 bedroom apartment and owns a
10 year old car. Paula works as a receptionist in a
medical practice, and is studying nursing part time.
She has shares in Pacific Mining and a Term Deposit
at Provincial Credit Union. Her transaction account
is currently overdrawn.

1. Compile a list of Paula’s assets and liabilities. (All possible assets and liabilities are not
necessarily mentioned above.) Rank Paula’s future commitments/ liabilities in order of
importance, 1 being the most important. Note any changes she may need to make to
her asset structure.

ASSETS LIABILITIES

FUTURE COMMITMENTS/LIABILITIES

45
 Module 2
Recognising the volatility of asset values Topic 2.7

Worksheet 12
asset case study
2. Assets are often recorded at their purchase
price. However, that value may rise or fall.
Add examples for each of the following asset
groups and assess the level of risk and potential
direction of movement (the likelihood of the
asset maintaining, increasing or decreasing in its
value) for each.

ASSET TYPE LEVEL OF RISK DIRECTION OF

(high, medium or MOVEMENT (up,
low) down or stable)
Tangible assets (eg, shares, home, car)
•
•
•
•
•
•

Intangible assets (e.g. income potential)

•
•
•

3. List other items of information you would want to know about Paula in order to
satisfactorily assess the value, priority and risk/volatility of her intangible assets and future
commitments/liabilities.

46
 Module 2
Dealing with income shock Topic 2.8

Teacher Notes
Classroom activity:
Suggested time: 1 - 2 lessons
Resources: Worksheet 6 - How much do I actually need?

Student worksheet:
Worksheet 13 Income shock case study

Unexpected financial surprises, leading to income shock, can occur any time, and can affect
individuals or whole economies. Students will explore examples of income shocks, with
the objective of forming a realistic perspective of financial surprises over which we have no
control. The activity may encourage them to think of a ‘financial defence kit’ for emergencies
and disasters, as well as “saving for a rainy day”!
(a) Class to brainstorm types of income shocks. Examples include:
• Loss of job, redundancy, etc
• Market decline affecting assets
• Inflation
• Illness or accident
• Divorce
• Birth of a child
• Unexpected windfall (inheritance, lotto, etc)
Current national and global issues (stock market movement, closure of firms, inflation,
change in government policy, etc) and the effects (impact on net worth, employment,
standard of living, etc) of these on individuals could also be discussed.
(b) In groups, students discuss how income shocks affect a person's or family’s current and
future net worth, income level and potential earnings.
(c) Students record their ideas and report back to the class on at least one of these shocks
and the impact on net worth, income level and potential earnings.
(d) Students complete Worksheet 13 – Income Shock Case study. This activity looks at how
someone running a business can experience an income shock.
(e) Ask students to talk with an older person, perhaps a grandparent, about
• the unexpected income shocks that have occurred over their lifetime.
• the personal impact and impact on their family.
• what actions, if any, they took in response.
(f) Refelctive Learning
Students make further adjustments to worksheet 6 to include possible income shocks
and their considered reactions. Income and lifestyle may require further adjustment.

47
 Module 2
Dealing with income shock Topic 2.8

Income shock case study

Worksheet 13
1. Read the following case study
Many people working in the business world have
experienced both high points and low points in their
career. Simone grew up in Sydney in a dog loving
family. She and a friend researched a business idea
by creating accessories for the family dogs. Friends
and neighbours were interested in what they made
and a large number of accessories was sold. After
a successful 3 month trial at weekend markets they
decided to go into business full time. Simone and her friend – both only 19 years old -
set up a partnership agreement. Things looked promising as the business grew quickly.
After attending a trade show they signed a contract to provide a range of accessories to
a chain of pet supply retail outlets. After 18 months of rapid growth, Simone’s business
partner wanted to leave the business to travel overseas. Simone borrowed additional
funds to buy her out. 12 months later, an Australia-wide chain store introduced a similar
range of products that were sourced from Asia. Simone was unable to compete on price,
and she lost the majority of her market.
Simone reviewed her business plan and decided to compete on quality and individuality
of product, rather than on mass produced cheaper goods. She offered products that
incorporated the pet’s name, preferred colour and design options, and exclusive
packaging. Her business concentrated on supplying stores that met the needs at the
higher quality end of the market. She took less cash from the business and concentrated
on paying off debt, to reduce her interest payments. Within 12 months Simone had
turned the business around.

2. What income shock/s did Simone face?

3. What led to the financial difficulties that affected Simone’s business?

4. How did Simone cope with these income shocks?

48
 Module 2
Dealing with income shock Topic 2.8

Income shock case study

Worksheet 13
5. Can you suggest some other strategies that Simone could have used?

5. Can you think of any other risks to small business which leads to income shock?

6 Can an entrepreneur take steps to protect their business from the actions of competitors?

7. What strategies would you suggest to prevent financial hardship?

8. What strategies would you suggest to a person who has suffered an income shock to
overcome their difficulties?

49
 Module Three
Budgeting – managing your money

In partnership with
 Module 3
Budgeting – managing your money

OVERVIEW

Teacher Notes
Module Overview and Curriculum Mapping
Module 3 aims to equip students with the skills to manage their finances by creating and
implementing a personal budget.

ENDURING UNDERSTANDINGS
• Managing your income requires a plan.
• Personal values and goals should be considered when developing a successful budget.
• Budgeting is an essential life-time skill.
• There is assistance available for budgeting.
• A budget should balance the income earned with the amount spent and saved.
• A budget should be based on an accurate record of expenditure.
• A budget should be evaluated and adjusted regularly to meet changing circumstances.
• Financial records are required to monitor a budget.

LEARNING OUTCOMES
Students:
• Define a budget and its components, and explain its use
• Be aware of important budgeting terminology
• Prepare a personal financial budget that considers the expenditure incurred over a 12
month period
• Consider the role of short term and long term goals in the budgeting process as well as
the importance visualisation of goals can play in achieving these goals sooner
• Locate and use websites with calculators and other tools which assist in the preparation
of personal budgets
• Modify a budget in terms of additional expenditure or the need to repay debt
• Recognise the role of savings in a budget
• Implement a monitoring system for a budget
• Understand the role played by financial counsellors in helping those people experiencing
financial difficulties

POWER WORDS Page 2

CURRICULUM MAPPING 3

LIST OF TOPICS
3.1 Personal financial goal setting 5
3.2 Sources of income and expenses 10
3.3 Creating a budget 16
3.4 Dealing with financial hardship 22
3.5 Adjusting a budget 28
3.6 Monitoring a budget 32
3.7 Who else budgets? 34
3.8 The budgeting game 37 1
 Module 3
Budgeting – managing your money

POWER WORDS

Teacher Notes
Module Overview and Curriculum Mapping
As students work through each topic in this module they will encounter words that may be new
to them, crucial to understanding and completing the worksheets, and/or difficult to spell. In
addition, students may simply find some of this vocabulary interesting, planning to use it in the
future. Understanding and being able to use these words will provide students with more power
to make future financial decisions.
There are several approaches to using this “glossary”. The intention is for students to investigate
and find the meanings. They could be given the complete list before they start the module, or
they could set up a table and add new words as they progress through the activities. There are
also specific POWER WORD activities in some topics.
This list is not exhaustive.

Term Financial counsellor

annum FOS
average goal
Budget income
capital inflation
commitment insurance
consequence Interest - compound
counsellor Interest - simple
Creditor monitor
debt mortgage
Department of Human Services ombudsman
deposit option
depreciation overdrawn
Direct payment Plan
Down payment priority
encumbrance Repayment
equity salary
expenses - fixed shopaholic
expenses - variable utilities
Financial advisor wage

2
 Module 3
Budgeting – managing your money
CURRICULUM MAPPING

Teacher Notes
Module Overview and Curriculum Mapping
ENGLISH MATHEMATICS GENERAL CAPABILITIES
LITERACY YEAR 9 NUMBER & ALGEBRA YR 8 NUMERACY
Creating texts g Money & financial ESTIMATING & CALCULATING WITH
mathematics WHOLE NUMBERs
• Create imaginative, informative
• Solve problems involving profit Use money
and persuasive texts that
& loss, with and without digital • Evaluate financial plans to support specific
present appoint of view
technologies (ACMNA189) financial goals (ACMNA211)
and advance or illustrate
arguments, including texts that
integrate visual, print and/or
INFORMATION & COMMUNICATION
audio features
TECHNOLOGY CAPABILITY
Investigating with ICT
Define & plan information searches
• Select and use a range of ICT independently
and collaboratively, analyse information to
frame questions and plan search strategies
or data generation
Creating with ICT
Generate ideas, plans & processes
• Select and use ICT to articulate ideas and
concepts, and plan the development of
complex solutions (ACELY1751)
CRITICAL & CREATIVE THINKING
Reflecting on thinking and processes
Think about thinking (metacognition)
• Give reasons to support their thinking,
and address opposing viewpoints and
possible weaknesses in their own positions
(ACELT1640, ACMSP247)
PERSONAL & SOCIAL CAPABILITY
Self-Management
Develop self-discipline and set goals
• Establish personal priorities, manage
resources effectively and demonstrate
initiative to achieve personal goals and
learning outcomes (ACELY1756)

3
 Module 3
Budgeting – managing your money
CURRICULUM MAPPING

Teacher Notes
Module Overview and Curriculum Mapping
NCFLF DIMENSIONS
Knowledge & Understanding
• Identify and explain strategies to manage personal finances.
• Explain the different ways in which people are paid including wages, salaries, commissions, self-
employment and government benefits.
• Identify and explain common terminology and categories for deductions used on pay slips.

Competence
• Investigate the financial decisions required at significant life-stage events

Responsibility & Enterprise

• Appreciate that there is often no one right answer in making financial decisions because these
depend on individual circumstance, preferences and values
• Demonstrate awareness that family, community and socio-cultural values and customs can influence
consumer behaviour and financial decision-making.

4
 Module 3
Personal financial goal setting Topic 3.1

Teacher Notes
Classroom activity:
Suggested time: 1-2 lessons
Resources: internet access, Magazines/newspapers rs

Student worksheets:
Worksheet 1: Budget scavenger hunt
Worksheet 2: I want …..
Worksheet 3: Personal financial goal contract

This activity helps students to recognise the importance of visualising goals that are specific,
realistic and have a set time frame. Students will also focus on key terms relating to the
budgeting process.

a) As an introduction to this topic teachers could outline some real-world examples

of budgeting that would be interesting for their students. Examples that could be
considered include:
• students saving for formals and end of year activities
• large sports clubs which must budget for salary caps
• small sports clubs budgeting to meet basic expenses
• planning and budgeting for a holiday.
• Concepts and implications of government budgets
The intention is to emphasize that budgeting occurs in a variety of settings to assist
people and organizations to achieve their goals.

b) POWER WORDS activity. There are several approaches to using this glossary, but it
would be useful at this point to introduce vocabulary for this unit. For example the
teacher could manage a brainstorming activity on definitions for the power words,
students could find definitions for the power words.

c) The Worksheet 1 activity - Budget Scavenger Hunt - involves students collecting copies
of financial documents. These can be used as references for later activities in this
module. Make sure that students understand the privacy issues around indentifying
account holders if they choose to submit actual documents. The activity can be used
as a competition with the winner being the first to collect every item on the list, or the
person with the highest score.

5
 Module 3
Personal financial goal setting Topic 3.1

Teacher Notes
d) The Worksheet 2 activity encourages students to start thinking about making a
commitment towards a financial goal. It can then be incorporated into their individual
budget expectations.
Students brainstorm a variety of targets that they would find appropriate and that they
would like to achieve within the next 1-4 years, for example:
• outright purchase of a new phone
• deposit for a car/motorbike
• purchase of specialist sports clothes or equipment
• a target sum of money for spending on an overseas trip
• fees/books for first year of tertiary education.
• Replacing a computer

e) After selecting one specific goal students could decide what conditions need to exist to
make this goal possible. The elements in goal setting include ideas such as ensuring the
goal must be SMART. See module 1 for further information.

Specific The goal must be clearly defined.

Measurable The exact amount of money needed to achieve the goal must be specified.

Achievable The goal must be possible to reach, and not just a dream.

Relevant The goal must align with other life requirements and objectives.

Time based A time frame in which the goal will be achieved must be specified.

Example: My SMART goal is to have $500 in a bank account to spend on the family holiday at
the Gold Coast next Christmas.

f) Each student establishes a personal goal and works out the time chosen for achieving it.
(Worksheet 3) – Personal financial goal contract.
Students consider such things as how many weeks/pay periods there are before the
target date? What is the average amount required for saving towards the target? Is
this possible all weeks? How could the target be reached if for some weeks the average
amount of savings is not possible? Do priorities need to be set?

g) Students could work in pairs and give feedback and constructive suggestions or
comments about the other person’s plan of action.

h) Reflective Learning
Students could consider:
• the opportunity cost of formally committing to the personal plan. Does this increase/
decrease the commitment to the goal and/or make it easier to manage?
• creating a document using images to visualise goals. This may motivate them to
worker harder to achieve the goals
6
 Module 3
Personal financial goal setting Topic 3.1

Budget scavenger hunt

Worksheet 1
To help you understand the concepts of budgeting you will need to learn
about some important financial documents. So to get started your task
is to collect as many of the following documents as you can. You should
submit:
1. Examples from web searches, or
2. Copies of actual documents (You MUST have permission from the
owners (for example, your parents) to submit these. You must also
BLACK OUT personal details, ie, account numbers and names or
other identifying information.)

EXAMPLE OF FINANCIAL DOCUMENT POINTS POINTS EARNED

Tax invoice for goods 5
Tax invoice for services 10
Tax invoice for a service on a motor vehicle 10
Tax invoice that has no GST charge 10
Bank statement 5
Credit card statement 5
Bank or Credit card statement which shows a direct debit entry 10
Power bill (Electricity and/or Gas) 5 each
Mobile phone bill 5
Home phone bill 5
Receipt from an ATM transaction 5
EFTPOS record of purchase 5
Vehicle registration renewal notice 10
Any document which is evidence of a transaction in a foreign currency 10
TOTAL POINTS

YOUR SCORE
100 + CONGRATULATIONS, you have collected some very valuable resources which
will help you on your way to becoming a BUDGETING HERO.
80 – 90 GREAT DETECTIVE SKILLS, these documents will help you to budget
successfully.
50 – 80 WELL DONE, you’ll make great progress in learning how to budget.
Less than 50 BE CAREFUL, you may need some help with developing good budgeting skills.

Now, don’t throw these documents away. They’ll be useful in helping you to complete some
of the other worksheets in this module!

7
 Module 3
Personal financial goal setting Topic 3.1

“I want ….”
Worksheet 2
Visualising what you want can be one way to achieve your goals sooner. Find 6 images of
items you would like to buy within the next 1-4 years. (For example, a new pair of running
shoes, a car, holiday, new smart phone, etc).
• Create a document in word or other appropriate software to illustrate your personal wish
list
• Add the images.
• Describe the items you have selected. Why are they important to you and your lifestyle?
• How could visualising what you want help you to achieve these goals?
• What are some steps you could take to obtain the money to purchase these items?

To achieve goals they need to be SMART - specific, measurable, achievable, realistic - and
have a time frame. If you are hoping to own a big screen TV, establish a specific goal such as
"I plan to own a 68cm Polytechnics brand smart TV by April next year.”. (Rather than “I want
to get a tv next year.”)
You also need to be realistic. You may want to own a 75” screen television but this may
be beyond your budget. So, this goal is specific (identifies the actual TV), measurable (you
can establish a definite cost), realistic (this is something that you will be able to reach),
achievable (you’ve selected a TV suitable for your budget) and within a time frame.

GOALS
It is appropriate to have a mix of both short term and long term
goals. A short term goal for a school student might be saving $15
a week to buy a pair of jeans, whereas a long term goal could be
putting aside $25 a week for a holiday at the end of the year.
To achieve these goals you will need to make sacrifices, but, the
more focused and motivated you stay the more likely you will
achieve these goals.
Now it’s time to decide whether your visualised goals are short-term or long-term goals.
Add this classification for each goal to your document.

8
 Module 3
Personal financial goal setting Topic 3.1

Personal financial goal contract

Worksheet 3
PERSONAL FINANCIAL GOAL CONTRACT
Choose one of your 6 goals from worksheet 2 and estimate its total cost.
• My goal is:

• The cost of this goal is:

• The date I would like to achieve this goal by:

• How many weeks are available between now and the date of achievement?

(c) Financial contribution to the goal each week is $

• If this amount cannot be put aside every week, what do I need to do?
What priorities should I set?

• What impact would this plan have on your current budget?

• The impact of making a formal record of goals is

SMART goal checklist:

My goal is specific – it states exactly what I want to achieve
My goal can be measured - a definite amount is targeted
My goal is achievable - a small enough step to really happen
My goal is realistic - within the realm of my capability
My goal has a time frame - a specific time is allotted

Signature Date
9
 Module 3
Sources of income and expenses Topic 3.2

Teacher Notes
Research and classroom activity:
Suggested time: 1 - 2 lessons

Student worksheets:
Worksheet 4: Spender or saver?
Worksheet 5: How much do I actually spend?

From this activity students can gain an understanding of the sources of income, expenses and
attitudes other teenagers have towards spending and saving. From a long-term perspective
students also gain an awareness of what they spend their money on over a typical year and
therefore how much income is needed to accommodate their current lifestyle.
(a) As an introduction, brainstorm with the class to identify possible sources of income for
teenagers. This list might include:
• allowance or pocket money
• gifts
• income from casual employment such as baby sitting, part time employment in retail, etc,
• government benefits
• interest from savings.
Once this list is developed students could discuss the regularity, consistency, certainty and
amounts of these sources of income.

(b) Working in pairs students list the main items of expenditure they incur. Once this task
is completed, this information can be shared with the class, and students can develop
appropriate categories for the main areas of spending.

(c) The teacher should introduce the concept of saving as another allocation of income.
Aspects that should be included are:
• What is saving?
• Do students think saving is worthwhile?
• What should savings be used for?
• What percentage of income should be saved?
Students could participate in a value line on these topics. For example, volunteers could
be asked to State and justify their position on a statement such as “Pay yourself first.
(That is, put aside money for savings.)
The issue of personality types as either "spenders" or "savers" could be discussed.
Students could reflect on their own spending/saving characteristics.

(d) Read the case studies from Worksheet 4 – Spender or saver? Students select a profile
and classify the spending as necessary or other expenses. The class could all work on
the same profile and debate the differences in expense classification between groups.
Alternatively, students could work on different profiles and defend their choice of
expense classification according to the circumstances of the specific profile.
10
 Module 3
Sources of income and expenses Topic 3.2

Teacher Notes
(e) Students complete the 3 sections of Worksheet 5 – How much do I actually spend? - and
use their own information to complete an annual expenditure planner.
What expenses do people have? They should list all of their expected expenditure over
a 12 month period. Students will also need to include items they may be required to
purchase at different times of the year (such as gifts for birthdays, etc)
The completed ANNUAL EXPENDITURE PLANNER is reviewed by a peer for accuracy
(calculations). Comments about allocation could be made if the teacher considers this to
be appropriate.

(f) Students could then brainstorm some possible estimated expenses for their lifestyle if the
following scenarios were to occur:
• they have just left home to go to a tertiary institute or have just started a job
• they are permanently employed with family responsibilities
• they are approaching retirement.

(g) Students can take home a copy of the completed Yearly Expenditure Planner to
their parents. They may be able to use this as a negotiating tool to set their monthly
allowance.

(h) Reflective learning

Students could download and use a budgeting app such as TrackMySpend. They may
need some help in creating and setting up the cycle settings.
https://www.moneysmart.gov.au/tools-and-resources/calculators-and-tools/mobile-
apps/trackmyspend
Students consider the:
• similarities and differences in people’s approaches to spending requirements and why
different people have different needs.
• benefits and outcomes of identifying what we actually spend our money on (This
leads into the creation of a budget, covered in Topic 3.2.)
• function of savings as another allocation of income
• the function of savings as a means of meeting short term goals (avoiding financial
crises)
• the function of savings as a means of working towards long term goals

11
 Module 3
Sources of income and expenses Topic 3.2

Spender or saver?
Worksheet 4
READ THE CASE STUDIES BELOW:
Profile 1: Brett is 17 and wants to be a drummer in a lead band. He works
part time at hardware store earning approximately $150 a week. He is
very keen to buy a better drum kit and is putting $50 a week away. Brett
pays for his own transport to school $15 a week, and rides his bike to
his job. Each week he spends $20 on entertainment, buys his lunch each
day ($25 per week), and selected a $80 a month cap plan for his mobile
phone. He always keeps within this limit. His parents buy his clothes but
he pays for gifts for family and friends. These average about $10 a week
over the year. Any money he has over he leaves in his bank account.

Profile 2: Lee is 16 and earns about $100 a week working in her parents’
business. She pays for her own lunches, and personal items. Her father
provides her with a clothing allowance of $1500 a year and her mum pays
for her school clothing and other school expenses, including transport to
and from school. Lee loves talking and texting her friends so her mobile
phone bill is usually about $240 a month. She has no savings as she
spends all her money on clothes and going out with friends. If she has any
money left at the end of the month she buys CDs or DVDs.

Profile 3: Rohan is 17 and wants to be a professional golfer. His life consists

of sporting practice and gym work. In his spare time he watches a lot of
sport – both live and on cable. He is thinking of working more hours but
he is worried that it will interfere with his training and playing schedule.
His parents provide him with a weekly allowance of $80. They also pay
his coaching and membership fees and all his school and sport expenses.
He spends his allowance on his mobile phone (approximately $30 a week)
and entertainment – tickets to various sporting events and going out with
friends. He saves none of his allowance. Rohan sometimes helps out in
the pro shop at his golf club, cleaning equipment and serving behind the
counter. He earns $20 an hour and could work up to 20 hours a fortnight
if he wanted, but he usually doesn’t bother to work many hours.

Profile 4: Natalie who is 16 wants to do well at school and go to university

to train as a vet. She lives in the country and will need to live away
from home when she attends uni. There are very few jobs available for
teenagers where she lives: however, the local vet is prepared to give her
some part time work helping out cleaning cages and other jobs. Natalie
earns $12 an hour and usually works between 5 – 8 hours per week
depending on how many hours the vet requires assistance. Natalie works
30 hours a week during the school holidays whenever she can. Generally
this is about 8 weeks a year. She saves most of her earnings. She has a
prepaid mobile phone which averages out at $10 per week. Natalie pays
for her own clothing and entertainment.
12
 Module 3
Sources of income and expenses Topic 3.2

Spender or saver?
Worksheet 4
For each profile find the following information:
• What are the sources of income?
• What is the weekly income total?
• How is the income distributed (weekly payments)?
• Classify as a ‘spender’ or ‘saver’?

INCOME WEEKLY WEEKLY SPENDER

SOURCE INCOME TOTAL PAYMENTS OR SAVER??

Brett

Lee

Rohan

Natalie

• Do you think that any of these people live beyond their means? Identify and explain why
you think this..

• Could any of these people cope with an unexpected financial emergency?

• Should any of these people trim their spending, or make other changes to their financial

• How would you convince to spenders to become savers?

13
 Module 3
Sources of income and expenses Topic 3.2

How much do I actually spend?

Worksheet 5
How you manage the money you receive during your lifetime will have a large impact on how
comfortable you can expect your lifestyle to be. Whether or not you will have a comfortable
lifestyle will depend on two things:
1 The income you receive
2 How you distribute this income
The way that you plan to distribute (what you spend your money on) your income is called a
BUDGET.
Add a definition for budget to your POWER WORDS LIST now.
The main rule for a budget is that you should spend less than you receive. Often people on
low to middle incomes can accumulate significant wealth through planned budgeting and
monitoring what they spend. On the other hand, people on high incomes who don’t budget
can struggle financially if they don’t control their spending. So, no matter what you earn
budget wisely!
Before you can prepare a budget, it is important to consider your expenditure items.
• In small groups, use the table below to make a list of all the things that a typical student
of your age would spend money on over a full year.
• Also write down the approximate cost of each item and the quantity you would expect
the student to buy in one year.
• From this list, select the items applicable to you personally and include them in the next
table.
• Finally check your list thoroughly because any expenses added at a later date will affect
your calculations.

WHAT DOES A TYPICAL STUDENT SPEND MONEY ON???

APPROXIMATE NUMBER OF UNITS TOTAL YEARLY

ITEM
COST PER YEAR AMOUNT

14
 Module 3
Sources of income and expenses Topic 3.2

CREATING AN ANNUAL EXPENDITURE PLANNER:

How much do I actually spend?.

Worksheet 5
Using the list above you are now ready to move to the next step towards a personal budget –
your personal ANNUAL EXPENDITURE PLANNER. Make sure that you include EVERYTHING! Use
the following template to create a spreadsheet. For example, for birthday gifts, add "Birthday
Gifts" in the left hand column and then the price of the gift in the months where birthdays
occur in your family.
You could use this if you were negotiating your allowance (pocket money) with parents/
guardians. Don’t be surprised if they think that you are asking for too much. If you can justify
each item, you may have a better chance of a successful negotiation!

MY ANNUAL EXPENDITURE PLANNER

ITEM Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

15
 Module 3
Creating a budget Topic 3.3

Teacher Notes
Practical and research activity:
Suggested time: 3 lessons
Resources: http://bfc.mebank.com.au/programs/P1.html?Chapter=2#
computer access (internet and spreadsheet)
Student worksheet:
Worksheet 6: Creating a budget:
• Carlo’s budget
• Maddie’s budget
• My budget
From this activity students gain an insight into the budgeting process. To begin with they are
given the data for a student who leaves home to begin an apprenticeship. From a long term
perspective students can reflect on the costs involved to leave home to pursue further study.
Information for drawing up a budget may be presented in a variety of ways. Some
information may be incomplete and not in a consistent format. Students will need to be
alerted to the need to convert all financial information to the same time frame for adequate
comparison. Payments made quarterly or yearly still need to be budgeted for and saved.

(a) As an introduction, students could individually complete the ‘Making a Budget that
Works module on the Me Bank website
http://bfc.mebank.com.au/programs/P1.html?Chapter=2#
It would then be appropriate to establish a definition and aims of a budget. Students
could research and brainstorm or the teacher could provide a specific definition for
students to add to their POWER WORDS list. For example:
The way that you plan to distribute your income (what you spend your money on)
is called a BUDGET. A budget is a list of all income expected to be received and all
payments expected to be made over a specified time period.
• A budget is an essential feature of any good money management strategy.
• With a carefully planned budget you will know exactly where your money is going.
• When people see their actual spending habits itemised in a budget, they often
realise that they are wasting a lot of their hard earned money.
• You should always spend less than you receive.
• Your budget should include savings (for a rainy day and for achieving goals).
• Creating a budget may help you to make your money work more effectively for you.
The difference between fixed and variable expenses should also be covered at this point.

16
 Module 3
Creating a budget Topic 3.3

Teacher Notes
(b) Create a budget for a student – CARLO’S BUDGET. Teachers may need to update the
data for wages and youth allowance for Carlo who has a hospitality apprenticeship.
Students use the income and expense information provided to complete a budget
template.
• Use a spreadsheet program to enter Carlo’s weekly income and expenses to find
out how much money he has left over each week to put into a savings account.
This is an excellent opportunity for students to develop skills in creating spreadsheet
formulae.
• Make some observations on the completed budget

(c) Create a budget for a young employed person sharing leased premises – MADDIE’S
BUDGET. In this case, Maddie’s expenses are greater than her income. Students can
modify the template given, or use an online planner such as the MoneySmart planner
https://www.moneysmart.gov.au/tools-and-resources/calculators-and-tools/budget-
planner or www.wesleymission.org.au (search budget planner), or teachers may
prefer to provide a spreadsheet worksheet for students.
Students should make observations on this budget, and suggest some solutions. Some of
the possible expenses which were not factored into this budget include:
• Health insurance
• Contents insurance
• Phone

(d) A personal future budget MY BUDGET. Students will need to undertake internet research
to determine amounts for income and expenditure. Observations and class debriefing
on the budgets could be made.

(d) Reflective learning

• Teachers could build in some “what if” scenarios for each of these budgets.
• Students reflect on the reality of renting, (including bond payments, unexpected
expenses, etc), how weekly rent can vary depending on the standard and location of
accommodation sought.
• They could also consider typical expenses a young person (either studying or
working) is likely to face when they leave home, and how best to cover these
expense.
• Students reflect on the importance of regular savings in a budget.

17
 Module 3
Creating a budget Topic 3.3

Creating a budget
Worksheet 6
Carlo’s Budget
To complete the following task you will need to have internet access and use of Microsoft
Excel to create a budget for Carlo.
Carlo is an 18 year old who has recently finished Year 12. He has been able to secure an
apprenticeship in hospitality, but needs to move to the other side of the city and board with
his aunt and uncle to be close to work and his RTO. Following is the data for Carlo’s expected
fortnightly income and expenditure:
Income:
Wages - $250 net per week
Living away from Home Youth Allowance (2013) $407.50per fortnight
Expenses:
Weekly board $200
clothing allowance $30 per week
Public transport $30 per week
Phone $50 per month
Study expenses/books $20 per week
Entertainment/spending money $50 per week
Carlo has to buy a uniform and safety shoes in order to start work. The cost will be $220.

Your Task:
Use the following template to create Carlo’s first fortnightly budget.

18
 Module 3
Creating a budget Topic 3.3

Creating a budget
Worksheet 6
CARLO’S FORTNIGHTLY BUDGET
Income
Wages/salaries $
Living away from Home Youth Allowance $
Total weekly/monthly income $

Less expenses
Board $
Phone $
Entertainment/spending money $
Study expenses/books $
Clothes and shoes $
Public transport fares $
Food
Other items $
Total weekly payments $
Savings $

• Does Carlo have enough income to manage?

• On average, how much should Carlo be saving each fortnight?

• Is this an acceptable amount for savings?

• What do you think Carlo’s short, medium and long term savings goals might be?

• Classify each of Carlo’s expenses as fixed or variable.

19
 Module 3
Creating a budget Topic 3.3

Creating a budget
Worksheet 6
MADDIE’S BUDGET
Maddie and Shakira have been friends since school, and are ready
to move out of home. Shakira’s aunt owns a furnished unit close
to the city, and has agreed to lease it to the girls for a total of
$500 per week. They move in on Saturday and pay 2 weeks’ rent
in advance. Both Maddie and Shakira have decided to make a
fortnightly contribution of $200 each for groceries and $70 each
for utilities and unexpected expenses.
This is the first time Maddie has not lived at home, and she’s looking forward to some
independence. She does not have a credit card. She has $1200 saved in an online account
and tries to save 10% of her income each week. She earns $604.50 net per week.
On Saturday afternoon Maddie buys bed linen and towels for herself for $170, and
contributes $150 for kitchen ware for the apartment.
Her daily transport costs to work are $7.70 and she spends approximately $10 per day on
lunch. She usually spends $60 per week on social activities and $75 on clothes. She has a
prepaid mobile phone with an average cost of $75 per month.
Create a fortnightly budget for Maddie which also takes into account any deposits and
withdrawals from her savings account.

• Can Maddie afford her current living arrangements?

• Can you determine how many weeks Maddie has until she runs out of money?

• Can you suggest ways in which Maddie can modify her budget?

• Can you think of anything else that the girls haven’t factored into their budget?

20
 Module 3
Creating a budget Topic 3.3

Creating a budget
Worksheet 6
MY BUDGET – MOVING OUT OF HOME
Many young people look forward to moving out of home and living an independent life. They
are often quite surprised at how much this costs! There are many hidden costs of running
a household that must be taken into account to successfully manage a budget. A good
approach is to investigate this very carefully and make the move with a fully costed budget
already prepared. So, here you go, start working on YOUR OWN BUDGET!
Before you begin this process, go to http://teaching.moneysmart.gov.au/resource-centre/
moneysmart-rookie-for-educators#moving and watch the video on moving out of home.
Make sure you don’t make any ROOKIE ERRORS when completing this budget.

1. Decide on an occupation to suit you and go to www.mycareer.com.au to find the annual

pay rate for your state. As you’ll be only just starting work, assume you will be earning the
minimum. Calculate your weekly wage.
2. Now go the www.ato.gov.au >Businesses/Pay staff>How much tax to withhold>Tax withheld
calculator>Individual non-business calculator. For this exercise accept the default assumptions
re TFN, Medicare levy, etc. Enter your gross weekly wage and use the information to find the
net amount.
3. Go to a real estate website like www.domain.com.au www.rentalproperty.com.au or www.
realestate.com.au and search for a property in your area which is suitable for you to share
with a mate.
4. Start preparing your fortnightly budget. Make a list of fixed expenses for the rental. Following
are some suggestions:
• Rent
• Electricity
• Gas
• Insurance
• Food
5. Now calculate (and research where applicable) your personal expenses, such as:
• Bus or train fares to work
• Fuel for car
• Insurance and registration for car
• Lunch
• Entertainment expenses
• Phone
• Clothing
• Medical insurance
6. You are now ready to create your own budget. Your teacher will tell you which template to
use. (Don’t forget to include savings!)

21
 Module 3
Dealing with financial hardship Topic 3.4

Teacher Notes
Research activity:
Suggested time: 1 lesson
Resources: www.moneysmart.gov.au>Managing your money>Managing
debts
www.financialbasics.org.au>Students>Money tips and tools>
What the Debt Collector Says
http://learn.bankofamerica.com/quizzes/money-management/get-
to-know-your-money-personality.html
http://www.bankers.asn.au/Consumers/Financial-Literacy-Program/
Booklets/Smarter-Banking
See pages 34 - 36 for information for Worksheet 8

Student worksheets:
Worksheet 7: Please help me!
Worksheet 8: Save for your life.

From the information provided in this activity, students gain an understanding of the sources
and types of assistance available to people experiencing financial difficulties.
(a) As people’s situations change, their budget will need to change also. Sometimes people
may find themselves with large amounts of debt which they are unable to repay. Students
research the problems on Worksheet 7 - Please help me to find appropriate solutions.

TYPICAL PROBLEMS SOLUTIONS

General Advice Talk to your credit provider
Apply for a hardship variation
Ask for help
Paying utility bills Contact your provider
Call the HESS Helpline
Apply for a rebate or voucher
See a financial counsellor
Smooth out your bills
Make a complaint
Reduce your usage
Credit cards – multiple cards Keep up your repayments
Pay the highest interest rate or smallest
debt first
Close each account as you go
Lower the limit on your last card
Problem with Credit Report Get free help from Ombudsman
Lodge a complaint with the OAIC
Problems paying your mortgage Contact your lender
Create a budget
Your options
Ask for help
22
 Module 3
Dealing with financial hardship Topic 3.4

Teacher Notes
(b) After the research activity
This task would be enhanced through inviting a guest speaker into class. A financial
counseling service provided by organisations such as Wesley Mission provides free advice
on strategies for readjusting budgets to suit circumstances. The speaker could be working
for an organisation such as the Wesley Mission in the role of financial counsellor. The
speaker can advise students on how they can avoid the many financial pitfalls seen on a
regular basis, as well as the importance of budgeting.
The speaker could also talk about prioritising bill payments as essential (such as rent or
mortgage payments) and non-essential payments. The following table provides guidance
on the different priority bill payments which might be considered.
In general, the advice may be as follows, if things get really desperate:

FIRST PRIORITY
MUST KEEP GOING
(or there will be consequences)
●• Rent or mortgage, rates and repair if you own the property
●• Power and gas
●• Phone — not a luxury in Australia
If the phone is cut off, a payment is required to reconnect, so keep it on if at all possible
● • Basic food for household
SECOND PRIORITY
THINGS TO KEEP YOURSELF GOING
●• Doctor, dentist, prescriptions
●• School and education costs
●• Clothing and shoes
THIRD PRIORITY
ARRANGE TO REDUCE OR RESCHEDULE PAYMENTS
●• Petrol and/or transport costs
●• Other debts - legally must still be paid, but the creditor may consider some
rescheduling
(c) Students can now complete Worksheet 8 – Save for your life. Using the instructions
on this worksheet, students will research important savings tips that they can use in
everyday life.
(e) Reflective learning
• There are also case studies on page 36 of the Smarter Banking resource which
would be suitable for class discussion.
• Consider strategies to avoid or minimise financial hardships caused by negative
changes in personal situations.
• Students read and discuss the ACUN article on TIPS FOR SHOPAHOLICS

23
 Module 3
Dealing with financial hardship Topic 3.4

Please help me!

Worksheet 7
These days it’s very easy for just about anyone to get credit.
However, it’s not so easy to get rid of debt!

Your task is to find out how people having problems with managing debt can get help.

1. Read the following article: www.financialbasics.org.au>Students>Money tips and

tools>What the Debt Collector Says

2. Now go to the www.moneysmart.gov.au website and read the information in>

Managing your money>Managing debts

3. List some possible solutions for these financial problems.

TYPICAL PROBLEMS SOLUTIONS

General Advice

Paying utility bills

Credit cards – multiple cards

Problem with Credit Report

Problems paying your mortgage

24
 Module 3
Dealing with financial hardship Topic 3.4

Please help me!

Worksheet 7
4. What is an “Ombudsman”?

5. Why would you contact such an organisation?

6. What are the functions of the following organisations?

• Telecommunications industry ombudsman

• Energy and Water Ombudsman

• Financial ombudsman

• Credit ombudsman

7. What is a hardship variation?

8. Make a list of organisations able to provide financial counselling and assistance to people
experiencing financial difficulties.

9. Create a brochure or fact sheet (one A4 page only) which suggests 5 or 6 guidelines for
consumers on how to use credit wisely. Use diagrams

25
 Module 3
Dealing with financial hardship Topic 3.4

Save for your life

Worksheet 8
Go to the following web site:
http://www.bankers.asn.au/Consumers/Financial-Literacy-Program/Booklets/Smarter-
Banking and find the necessary information in the Smarter Banking booklet to complete the
task below.
Why is it important to work to a budget?

Look for the information on good money habits. Select 5 and explain why you think these
habits are the most effective.

5
What are 3 methods of reducing debt?

SETTING YOUR SAVINGS GOALS

• How can you reduce your spending?

• Where should you keep your savings?

• What is the benefit of compound interest?

• How can a budget help?

26
 Module 3
Dealing with financial hardship Topic 3.4

Save for your life

Worksheet 8
Go to http://learn.bankofamerica.com/quizzes/money-management/get-to-know-your-
money-personality.html and take the Money Personality quiz.
Create a word document and summarise what you have learnt about yourself and your
personal spending and saving habits.
Read this information which has been published by the Australian Credit Union Network
(ACUN). This will help you to complete some of the following worksheets.

TIPS FOR SHOPAHOLICS

Before you blow your budget ask yourself:
• Do I really need it?
• Will I really use it?
• Will I still like it next month/next year?
• If I don’t buy it now, do I want it enough to make a special trip later to get it?

10 ways to cut your expenses

1. Draw up a realistic budget and stick to it! (Don’t forget to put aside 10% of your income
for savings).
2. Make your own lunch. It can save you $1,000 or more a year!
3. Avoid temptation by limiting your access to money. Withdraw a set amount of cash each
week and leave your credit cards at home.
4. Do you really need a car? Catching one or two taxis a week costs less than registering,
insuring and maintaining a vehicle. Use public transport—you’ll save on petrol, parking,
maintenance and someone else is worrying about the traffic.
5. Shop around before you buy. Keep an eye out for sales.
6. Try buying second-hand goods at auctions or garage sales. It can be great fun and you
might find a bargain!
7. At the supermarket compare products and brands, try a few of the no-name labels.
They’re much cheaper and the quality is often the same. Also, don’t go shopping when
you’re hungry!
8. Plan meals ahead of time and make a shopping list before going to the supermarket.
Studies prove that shoppers without a list buy more items than those who come
prepared.
9. Avoid making major purchases on impulse. Give yourself a day to sleep on the idea and
consider how you will pay for it, if you really need it or just want it, and if you could find
it cheaper elsewhere.
10. Carry a small notepad with you and keep track of everything you buy over a month.

You’ll be surprised how much is unbudgeted for. You may also like to go to
www.financialbasics.org.au, click on the Students section and choose Money Tips and Tools
to read through some interesting articles written by other teenagers.
27
 Module 3
Adjusting a budget Topic 3.5

Teacher Notes
Case study profile:
Suggested time: 2 lessons
Resource: Website www.humanservices.gov.au

Student worksheets:
Worksheet 9: Leanne

This activity focuses on changing levels of income and expenditure for different people and
for different stages of life. “Shock circumstances” which will require adjustments to the
budget are also explored. Students undertake problem solving and creation of strategies to
minimize risks.

(a) The class considers how unexpected events can impact on individuals and families.
In groups students can:
- list financial problems that are caused by changed circumstances (car/stereo
repossession, etc) that could impact on individuals and families
- suggest how these situations could be dealt with and what strategies could be used
to avoid these situations in the future.
The teacher could develop a board summary of the major events and strategies suggested

(b) Case Study

Students read the case study on Leanne, who is on the Parenting Payment – Single.
Note that students will need to recalculate some expenses as fortnightly amounts so
that a comparison can be made with the income Leanne receives. It would be useful
for students to create a spreadsheet at this stage. It can be used to analyse her current
budget, and then create a new one.

(c) Monitoring progress

Students:
- answer questions on the case study of Leanne.

(d) Debriefing –

(e) Reflective learning

Students could consider:
- the risks that were taken by Leanne. How can these risks be anticipated and
controlled or managed?
- possible courses of action to avoid getting into these financial circumstances
- if and how each of these circumstances would prevent you from reaching your long
term goals.
28
 Module 3
Adjusting a budget Topic 3.5

Personal circumstances for different people, and at different stages of life, will impact on

Leanne
Worksheet 9
budgeting and spending. Our financial situation may not always be as we’d wish, but often
we don’t have a choice, and must modify our spending accordingly.

CASE STUDY - LEANNE

Leanne receives the Parenting Payment (Single) from the
Department of Human Services. She also has a part time
job at the local bakery. She has two children, a boy aged 7
years and a girl aged 4. She does not receive any payment
from her ex-partner. She has moved to a rural town to cut
accommodation costs. She has a car that she uses to go to the
supermarket in the large town 40 km away, and to take the children to the local swimming
pool for swimming lessons. The car has just broken down and it will cost about $550 to get
it repaired. Leanne’s only form of home entertainment is the TV and DVD player. Her loan
repayments on the car are $20 a week and she is three weeks behind.
Leanne moved to her new rental property only four weeks ago. She is unable to connect a
home phone until she pays the arrears from her last mobile phone account. The mobile phone
is locked and disconnected due to non-payment. Arrears total $100 and the reconnection fee
is $33. She is currently using an old prepaid mobile a friend has lent her.
Leanne’s daughter has a medical condition and has ongoing pharmacy costs. Personal cash
pays for cigarettes ($22 a week), Lotto ticket ($5 on benefit day) and the rest on social outings
with her friends.
Following is Leanne’s typical income and payments. Use a suitable spreadsheet to reflect this
information in a FORTNIGHTLY budget for Leanne.

29
 Module 3
Adjusting a budget Topic 3.5

Income:

Leanne
Worksheet 9
Includes Human Services payment, part-time job (30 hours per fortnight), and benefit
supplements $1287 fortnightly
Expenses
Food $210 weekly
Rent $450 fortnightly
Fuel $80 fortnightly
Personal cash $100 fortnightly
Children’s pocket money $50 fortnightly
Children’s education costs $30 fortnightly
Credit card payments $50 per month
TV and dvd player hire purchase $15 a week
Energy costs (power account) $105 per month
Mobile phone – prepaid $50 per month
Car ownership costs (including car registration & 3rd party
car insurance) and repairs $1340 per year
Presents (Christmas and birthdays) $200 per year
Medical and prescriptions $40 per month
Clothing $700 per year
Swimming lessons for children $25 per week
Other debts:
Credit card $450 outstanding balance
Personal loan repayment? $20 per week

Just checking:
1 Is Leanne spending more than she needs to on some items or too little on others?
2 What are "realistic" or "reasonable" figures for the essential items of spending?
3 How could she reduce her costs in some of the areas e.g. energy costs?

30
 Module 3
Adjusting a budget Topic 3.5

READJUSTING THE BUDGET

Leanne
Worksheet 9
Taking into account the situation described, and the information on outgoings and
income, readjust Leanne’s budget. Consider the following, then insert a new worksheet
on the spreadsheet you created for Leanne’s original budget to reflect your recommended
adjustments.
• Decide her priorities for adjusting her budget.
• Decide on the amounts she will allocate and the time frame over which she should
consider.
• Should she be allowing for items not in the budget? Eg, dental, contents insurance, etc?
• Create a new budget for Leanne
• Investigate if some of the larger expenditure items (clothing, presents, and car ownership)
are realistic.
• Suggest sources of financial assistance for Leanne.
• Discuss the impact and consequences for Leanne and her children of making the
adjustment decisions
• What are the long term consequences of not repaying the debts owed?
• What savings options does Leanne have — in the short term, in the long term?

31
 Module 3
Monitoring a budget Topic 3.6

Teacher Notes
Classroom activity:
Suggested time: 1-2 lessons

Student worksheet:
Worksheet 10: Finding the right information

From the following activity students will be made aware that there is more to sound financial
management than to simply create a budget. They must also keep track of actual expenditure
and income and compare it with their planned budget. A record of income, spending and
saving requires attention to detail and discipline.

(a) In groups or as a class, students brainstorm what information they would collect to
monitor their financial activities. Why should this be done? What records should be kept
so that all information is included? Documents collected in the Activity 1 Scavenger Hunt
can also be referred to.

(b) Students could design a spreadsheet to determine:

• how much income they have received over a financial year
• on what categories of items they have spent their money during the financial year
• when payments for items, other than weekly items fall due (such as phone bills, gym
membership payments, a layby,
• renewals of car registration and insurance,)
• a record of credit card transactions so that the user knows how close he/she is to the
credit limit and how much is owing on the card at any one time
• a record of cash in and cash out and the balance of a savings account
• a method for keeping short term payments separate from long term commitments
• a debt rescheduling form
• a record of payments made and payments outstanding.
• methods of organising hard copies this information, and if indeed these are
necessary.
• Superannuation payments and balance

(c) Invite a financial planner or budget adviser to discuss what is involved in financial
monitoring.

(d) Students will complete the matching exercise (Worksheet 10 – Finding the Right
Information) about record keeping

(e) Reflective learning

Students could consider any shift in their attitude to budgeting and monitoring their
finances as they have progressed through this module.
32
 Module 3
Monitoring a budget Topic 3.6

Finding the right information

Worksheet 10
Sound financial management means that you need detailed information about actual spending
and income. In the table below draw a line across to the records that provide information
about each item. For example for the first item "How much income have I received this week"
draw a line across to the response that would record how much income you actually received.
Some records may be used twice. Some records may not be applicable to any information.

RECORDS REQUIRED TO PROVIDE

INFORMATION ABOUT
INFORMATION
How much income have I received this
Monthly credit card statement
week?
How much income have I received during the
pay slip
last financial year?
How much cash do I have available to
Loan contract
spend?
How close am I to the credit limit on my Tax Return
When is my credit card payment due? Annual budget
What categories of items I spent money ATM
What are the terms of a short-term loan Pay TV monthly statement
Superannuation contribution from employer Bank account statement
Superannuation Fund annual statement to
Direct Debit Electricity bill
members
Banked interest earned Lease agreement
Rent paid Bank statement
Cost of mobile phone calls Mobile phone contract

Jamie doesn’t bother to keep any financial statements or records received by email, post, or
when she shops. She believes that banks and business organisations keep accurate records
and will tell her what she needs to know.
Do you agree with Jamie? What problems could Jamie experience with this approach to
record keeping?

33
 Module 3
Who else budgets? Topic 3.7

Teacher Notes
Classroom and community activity:
Suggested time: 2 lessons

Student worksheets:
Worksheet 11: Budgeting Language

This activity would alert students to the fact that budgeting occurs in all forms of financial
activity – government and business, as well as their own personal situations.

(a) As a revision activity at the beginning of the lesson students complete the budgeting
word search and missing word quiz on Worksheet 11 – Budgeting language. Students
should complete this activity by referring to and updating their Module 3 Power Words
file.

(b) Using the resource of a local business person, government representative, or treasurer of
a local sporting or interest group club, arrange a classroom visit to allow students to learn
more about the budgeting process that occurs in business.. Topics to be addressed by the
speaker could include:
• How often is a budget prepared?
• What decisions need to be made?
• who prepares it and where do they get the information they require?
• what people need to see the budget in its various stages and in its final form?
• who approves the final form?
• what categories of income and expenditure are budgeted for?
• is the budget reviewed during its time span and if so how often?
• what monitoring systems are in place?
After the visit Students should be encouraged to send an email or letter to thank the
person concerned.

(c) Reflective learning

• Conduct a debriefing on the guest speaker’s presentation on budgeting.
• Students could consider the similarities and differences in budgeting between
governments, businesses and individuals?

34
 Module 3
Who else budgets? Topic 3.7

BUDGETING LANGUAGE

Budgeting language
Worksheet 11
S S F Z D P N K C U Q X Q S O

T P K I R M R X C D P S D P S

N E S C X A T I O K R L P D T

E N Y P O E P S O O G O O P L

M D G E C H D G T R R D V J Q

Y I Y R O T S I H T I D E R C

A N L Q E W D E U K E T X S N

P G J G A E T N M V B Y Y G E

E I D N R P I M A O D X X N E

R U T C S T D L Q P C I Q I D

B S M I Y N U X I B Z N B V S

T T N C V A R I A B L E I A Q

F B O B T E S N E P X E J S X

G S E E I N C O M E S L A O G

T P G D B M C K U V Q G E D N

Find each word below in the above word search.

When you have found the word cross it out.

Budget Income shock

Credit History Needs
Creditors Opportunity cost
Debt Priority
Evaluate Repayments
Expense Savings
Fixed Spending
Goals Variable
Income Wants

35
 Module 3
Who else budgets? Topic 3.7

Refer to (or update if you need to!) your POWER WORD file to identify the correct term for

Budgeting language
Worksheet 11
each of these statements.

Your income from work if you are paid the same amount each payday, even if you work more
than your normal hours.

Another name for a person or organisation you owe money to.

To have the best chance of achieving goals they need to be ……

This type of expense is likely to change or vary from week to week.

For your future financial security you should always put aside a set amount of your income for
this purpose

Your home mortgage payment is an example of this type of budget expense

The type of effect on your savings account balance when you earn interest on your interest

The cost of choosing one option over another

An independent officer appointed by the government to investigate consumer complaints

This is the effect of adding interest to the principal (for money saved, and money owing)

36
 Module 3
The budgeting game Topic 3.8

Teacher Notes
Suggested time: 1 lesson
Student worksheets:
Worksheet 12: Extreme money makeover challenge
Worksheet 13: Personal record of learning

After completing the extreme money makeover challenge, students will be able to formulate
appropriate guidelines for managing debt.
(a) Students should now be in a position to complete the extreme money makeover
challenge (Worksheet 12). They will read about the story of Molly and the financial
difficulties she is facing. Based on what they have learnt students will be able to provide
practical advice to turn Molly’s financial circumstances around.

(b) Monitoring progress and assessment

- The teacher can use the student responses to Molly’s financial scenario to assess
problem-solving skills in relation to the budgeting process. (Worksheet 12)
- Students complete their personal record of learning about the key points learnt in
this module (Worksheet 13).
(c) Debriefing –
Reflective learning
Students consider Molly’s plight and consider guidelines for preventing such a situation
from occurring in their own lives.

37
 Module 3
The budgeting game Topic 3.8

Extreme money makeover challenge

Worksheet 12
You now understand the importance of monitoring your spending THROUGHOUT the
budgeting process. You are now in a position to assist Molly who has heard about your
budgeting skills and is desperately in need of your advice.
Read the facts carefully below and then write a response that will give Molly practical advice
to turn her poor financial state around.

THE STORY OF MOLLY:

Molly is unhappy with her life at the moment. She is 20 years old and is in her second year
at university. She works 30 hours per week as a bank teller. Her apartment is close to work as
well as the university campus. Molly is doing well in her studies but has a very busy life with
having to work long hours to support herself.
She has a student loan, but will repay this once she finishes her degree. Molly spends up to
$1000 a year on textbooks, and also pays a tutor to help her with one of her subjects.
She feels like she is drowning under a mountain of debt due to her carefree attitude. Currently
she has few assets and has over $15 000 in credit card debtl. Molly tells you about her
lifestyle.
She reveals that she doesn’t enjoy cooking and therefore buys lunch every day and often eats
take-away in the evenings. Molly is also very image conscience and will only shop at exclusive
boutiques. She loves technology and updates her smart phone annually. To keep fit Molly
works out regularly at the gym in her apartment building. She goes to the medical centre next
door to her apartment. The doctors at the centre do not bulk bill. She prefers to drive to work
and university and pay for parking.
When Molly shops, she rarely has a set list of items to buy, so if she sees something that she
likes she will use her credit card to buy it immediately.
Based on this information write a report detailing some strategies that Molly can implement to
improve her financial situation.

38
 Module 3
The budgeting game Topic 3.8

Personal record of learning

Worksheet 13
GOAL SETTING AND REVIEWING Date:

You will need to retrieve your responses to Worksheets 3 and 8 to complete this final activity.

1 Review your PERSONAL GOAL CONTRACT. Have you made any progress on this yet?

2 What are the key points you have learned about yourself from this module?
• About personal goal setting and budgeting
(An example might be: I can achieve a short term goal but sometimes lose interest in
saving once that has been achieved.)

• About budgeting
(An example might be: I can see now that changing circumstances can require a
change in the budget.)

3 After completing the activities, have you reconsidered any of your options for the future?

4 Has talking to any other people influenced you in considering your options for the future?

39
 Module 3
The budgeting game Topic 3.8

Personal record of learning

Worksheet 13
BUDGETING - MANAGING YOUR MONEY

Major principles
1 Managing my income requires a plan. In order to prepare a plan, I need to decide:
•
•
•

2 Personal values and goals should be considered when developing a successful budget.
Personal values and goals I have established as being highly important are:
•
•
•

4 Budgeting is an essential life-time skill. In order to further improve my budgeting skills, I

will need to:
•
•
•

5 There is assistance available for budgeting. Organisations and people I could seek help
from include:
•
•
•

6 A budget should reflect accurate records of income/expenditure. Records that I will need
to set up and maintain to help me do this are:
•
•
•

7 A budget should be evaluated and adjusted regularly to meet changing circumstances.

Changes I could anticipate in the next 10 to 20 years are:
•
•
•
40
 Module Four
Insurance – managing risk

In partnership with
 Module 4
Insurance – managing risk

Teacher Notes
Module Overview and Curriculum Mapping
OVERVIEW
Module 4 aims to alert students to the importance of insurance, and that the types of
insurance needed will vary between different people and over time through the life stages they
experience.

ENDURING UNDERSTANDINGS
• Protection against the loss of earning power, life, health, and assets is an important
consideration in a financial plan.
• The purpose of insurance is to protect against unexpected financial loss.
• Insurance operates on the basis of shared risk.
• Risk and protection take many forms.
• Life cycle, net worth and life style expectations will affect insurance needs.
• Utmost good faith is the cornerstone of the insurance contract.
• Modern insurance operates in an integrated global market.

LEARNING OUTCOMES
Students:
• Identify the types of risk for insurance coverage
• Recognise appropriate types of insurance
• Understand changing risk management needs in the life cycle and in relation to net worth
• Evaluate the costs and benefits of insurance
• Appreciate their rights under the General Insurance Code of Practice
• Identify a range of providers of insurance coverage

POWER WORDS Page 3

CURRICULUM MAPPING 4

LIST OF TOPICS
4.1 What is risk? 6
4.2 Managing and sharing risk 46
4.3 What about me? From the consumer’s point of view 61
4.4 Assessing the reality of risk 69
4.5 Do I REALLY need insurance? 81
4.6 I’ve got rights...but what about responsibilities? 98
4.7 Who are these insurance companies? 121
4.8 Purchasing a car 131
4.9 Getting around with insurance 141

2
 Module 4
Insurance – managing risk

Teacher Notes
Module Overview and Curriculum Mapping
POWER WORDS
As students work through each topic in this module they will encounter words that may be
new to them, crucial to understanding and completing the worksheets, and/or difficult to
spell. In addition, students may simply find some of this vocabulary useful for use in the future.
Understanding and being able to use these words appropriately will provide students with more
power to make more effective financial decisions in the future.
There are several approaches to using this “glossary”. The intention is for students to investigate
and find the meanings. They could be given the complete list before they start the module, or
they could set up a table and add new words as they progress through the activities. There are
also specific POWER WORD activities in some topics.
This list is not exhaustive.

actuary full disclosure net worth

agreed value gap insurance no claim bonus
ancillary gender opportunity cost
assessor general insurance policy overtime
asset goal passive income
balance sheet health insurance payout
broker HECS-HELP PDS
capital income policy
capital gain indemnity policy holder
claim insurance pooling
commission insurance broker postgraduate
compensation insurance contract renewal premium
comprehensive insurance policy priority
contents insurance premium redundancy
continuum insurance underwriter reinsurance
cooling off period insured renewal
cover insurer replacement
cover note intangible asset retainer
depreciation inventory risk
disclaimer liability risk pooling
duty of disclosure loss salary
employee loss adjustor shared risk
employer loss of profits superannuation
evaluate marine insurance transfer payment
excess market value wage
exclusion mitigate under/over/insurance
Financial Ombudsman Service mortgage underwriting
fixtures and fittings natural disaster utmost good faith

3
 Module 4
Insurance – managing risk

CURRICULUM MAPPING

Teacher Notes
Module Overview and Curriculum Mapping
NCFLF DIMENSIONS

KNOWLEDGE & UNDERSTANDING

• Identify and explain strategies to manage personal finances
• Explain the various factors that may impact on achieving personal financial goals
• Analyse and explain the range of factors affecting consumer choices
• Identify types of consumer and financial risks to individuals, families and community and ways of managing them

COMPETENCE
• Investigate the financial decisions required at significant life-stage events
• Accurately complete and explain the purpose of a range of financial forms, including for online transactions
• Analyse relevant information to make informed choices when purchasing goods and services and/or to resolve consumer
choices
• Compare overall ‘value’ of a range of goods and services using IT tools and comparison websites as appropriate

RESPONSIBILITY & ENTERPRISE

• Explore the economic cost of individual and collective consumer decisions of the broader community and the environment
• Apply informed and assertive consumer decision-making in a range of ‘real-life’ contexts

7-10 HISTORY, CIVICS & CITIZENSHIP, ECONOMICS & BUSINESS

HISTORY
Explanation and communication
• Develop texts, particularly descriptions and discussions that use evidence from a range of sources that are referenced
(ACHHS174)
• Select and use a range of communication forms (oral, graphic, written) and digital technologies (ACHHS175)

CIVICS & CITIZENSHIP

Problem-solving and decision-making
• Recognise and consider multiple perspectives and ambiguities, and use strategies to negotiate and resolve contentious
issues (ACHCS086)

ECONOMICS & BUSINESS

Knowledge & Understanding
• Why and how people manage financial risks and rewards in the current Australian and global financial landscape
(ACHEK040)
Questioning & Research
• Gather relevant and reliable data and information from a range of digital, online and print sources (ACHES044)
• Interpretation and analysis
• Analyse data and information in different formats to explain cause-and-effect relationships, make predictions and illustrate
alternative perspectives (ACHES045)
Communication & Reflection
• Present reasoned arguments and evidence-based conclusions in a range of appropriate formats using economics and
business conventions, language and concepts (ACHES048)

4
 Module 4
Insurance – managing risk

CURRICULUM MAPPING

Teacher Notes
Module Overview and Curriculum Mapping
MATHEMATICS
STATISTICS & PROBABILITY YEARS 9 & 10
Data representation & interpretation
• Identify everyday questions and issues involving at least one numerical and at least one categorical variable, and collect
data directly and from secondary sources (ACMSP228)
• Identify everyday questions and issues involving at least one numerical and at least one categorical variable, and collect
data directly and from secondary sources (ACMSP228)
• Evaluate media statistics and trends by linking claims to data displays, statistics and representative data (ACMSP253)

ENGLISH
LITERACY YEAR 9
Creating texts
• Create imaginative, informative and persuasive texts that present a point of view and advance or illustrate arguments,
including texts that integrate visual, print and/or audio features (ACELY1746)

GENERAL CAPABILITIES
INFORMATION & COMMUNICATION TECHNOLOGY CAPABILITY
Investigating with ICT
• Define & plan information searches
• Select and use a range of ICT independently and collaboratively, analyse information to frame questions and plan search
strategies or data generation
Creating with ICT
• Generate ideas, plans & processes
• Select and use ICT to articulate ideas and concepts, and plan the development of complex solutions
• Generate solutions to challenges and learning area tasks
• Design, modify and manage complex digital solutions, or multimodal creative outputs or data transformations for a range
of audiences and purposes
Communicating with ICT
• Understand computer mediated communications
• Understand that computer mediated communications have advantages and disadvantages in supporting active
participation in a community of practice and the management of collaboration on digital materials

PERSONAL & SOCIAL CAPABILITY

Self-management
• Work independently & show initiative
• Become confident, resilient and adaptable
Social management
• Communicate effectively
• Work collaboratively
• Make decisions

5
 Module 4
What is risk? Activity
Topic 4.14.1

Teacher Notes
Classroom activity:
Suggested time: 10+ Lessons

Student worksheets:
Worksheet 1: What do I know?
Worksheet 2: What could possibly go wrong?
Worksheet 3: What’s risk got to do with it?
Worksheet 4: Rate my risk
Worksheet 5: Risk, the world and my community
Worksheet 6: Insurance: What does it all mean?
Worksheet 7: Sharing the risk around

Resources:
https://play.kahoot.it/#/?quizId=0259d2a1-3084-4450-bb99-dce32b47ae12
Worksheet 1 - What do I know? Kahoot Quiz
https://bubbl.us/ Free brainstorming site
https://www.youtube.com/watch?v=bKR_N8ETcYM
What is Insurance? How to make insurance work
https://www.youtube.com/watch?v=mRaOHTZSaA8
The basic principles of insurance
http://www.bbc.com/news/av/world-us-canada-39048670/harrison-fords-plane-near-miss
Harrison Ford’s near miss with passenger jet when flying his light plane
http://www.scholastic.com/nextgeneration/videos.htm
Risk: “Talking about Risk”
http://www.smh.com.au/news/national/steve-irwin-killed-by-stingray/2006/09/04/1157222051512.html
Death of Steve Irwin
http://www.abc.net.au/news/2011-08-01/flood-inquiry-report-released/2819106
Queensland Floods 2011
https://youtu.be/ZpaeFVakeTQ
We asked Kids: What is Insurance?
https://www.youtube.com/watch?v=6TlMflQEpt8
What is Life Insurance and how does it work?

The focus of this topic is the concept of risk, specifically as it applies to insurance. It
encourages students to reflect on risks that are part of everyday life, as well as to consider
insurance that can be utilised to minimise risk. This topic is the foundational unit of Module 4,
however it could also serve as a shorter standalone unit on the concept of risk.

6
 Module 4
What is risk? Activity
Topic 4.14.1

Teacher Notes
(a) Introduce the Insurance topic by brainstorming with the whole class what they know
about protecting their belongings. Have students create in their workbooks a KWL (what
I KNOW, I WANT to know and what I LEARNED) table. This will be referred to throughout
this module, so it is suggested that students construct this document over 1-2 pages of
their workbooks.
Distribute Worksheet 1 - What do I know? OR use the electronic pre-made Kahoot listed
in the lesson materials. Both versions of Worksheet 1 - What do I know? can be found
within the support materials for this module.
Kahoot teacher note:
The online version uses the website kahoot.it, which requires NO login for students. You
will require internet enabled devices for each student/groups of students and an internet
enabled device of your own with projection screen to display and run the quiz.
For ease of identification, it is recommended you have students use their first name
and last initial (e.g. BruceW). The online version of this quiz is set up as a competition,
with points awarded for correct answers in the fastest time. At the end of this quiz you
will also be able to download your class results, with an individual breakdown of each
student’s responses.

To find out more about Kahoot as a learning tool, please visit

https://getkahoot.com/how-it-works.
If completing via Kahoot, load the link:
https://play.kahoot.it/#/?quizId=0259d2a1-3084-4450-bb99-dce32b47ae12 to play.
Follow the prompts to start the game. A game pin will load on the screen. Students
simply need to go to kahoot.it on an internet enabled device and enter this pin and an
identifying name to enter the game.

(b) Students complete Worksheet 1 - What do I know? in the desired format. Use these
questions to stimulate discussion on what students know about risks and insurance.
Correct responses can be found in the solution below. In the online Kahoot version
of this quiz the correct answer for each question will be shown immediately after all
students have answered the question within Kahoot.

7
 Module 4
What is risk? Activity
Topic 4.14.1

Teacher Notes
SOLUTION

Question Solution
1. The term risk can mean the possibility of loss or injury. T
2. The purpose of insurance is to provide you with some protection against T
a possible risk.
3. An insurance premium is paid to an insurance company which agrees to T
cover agreed risks or events
4. Having Life Insurance means that my house is also insured, because I live F
there.
5. Underwriting is the process by which individual insurance applications F
are assessed.
6. Income Protection insurance protects you in the event you cannot work T
due to sickness or injury.
7. Income Protection insurance claims, if successful, are paid in one lump F
sum.
8. Health insurance is insurance against the risk of incurring medical T
expenses.
9. Insurance is available to cover pets against injury, illness and/or expensive T
medical bills.
10. Which of the following are types of insurance available to you in All of these
Australia?
11. Not having an insurance policy means taking a gamble and hoping for T
the best.
12. The law requires you to have some form of compulsory insurance if you Compulsory
drive a car. This is called: Third Party
13. Only old people need insurance. F
14. The contract between the insurer and the insured is known as the _____ Policy
15. My family, or someone I know, has had to make an insurance claim. T/F

(c) At the end of the Worksheet 1 - What do I know? activity, lead students in a whole group
discussion about the quiz and their KWL. Ask students if anyone in their network of family
and friends has had to claim on insurance. This is likely to result with mention of property,
vehicle, travel, health, public liability, income insurance, pet insurance and WorkCover/
Workers’ compensation insurance.
Prompt students with scenarios/personal stories if these types of insurance scenarios
are not raised by students. If prompting students for scenarios/stories ensure you create
clear guidelines for the types of stories that are acceptable and appropriate within the
classroom and school environment.
Prior to moving on, direct student to revisit their KWL table, adding to the appropriate
sections.

8
 Module 4
What is risk? Activity
Topic 4.14.1

Teacher Notes
(d) POWER WORDS activity. There are several approaches to using this glossary, but it would
be useful at this point to introduce vocabulary for this unit. Before continuing, students
should add the Power Words to their workbook, allowing space for definitions and notes
to be added throughout the unit. More specific instructions, ideas and teacher notes
regarding this can be found in the appropriate Power Words section at the beginning of
this module.

(e) Distribute Worksheet 2 – What could possibly go wrong? Students read through
the case studies to develop an understanding of the Key Concepts (KC) underlying
insurance and to identify types of insurance (TI) appropriate to each case study. They
will have the opportunity to apply the key concepts to the appropriate case study and
make suggestions, where required, on what the case study subject should have done
differently.

Prior to moving on, have student re-address their KWL table, adding to the applicable
sections.

SOLUTION
Worksheet 2 – What could possibly go wrong?
Key Concept (KC), Type of Insurance (TI).
• Case study 1: Ernie
– KC: The purpose of insurance is to protect against unexpected financial loss;
protection against the loss of earning power is an important part of any
financial plan.
– TI: Comprehensive Vehicle/Car Insurance; Income Protection Insurance.
• Case study 2: Dana
– KC: Insurance rests upon full disclosure by both parties to the contract.
– TI: Comprehensive Vehicle/Car Insurance.
• Case study 3: Joe & Celia
– KC: Protection against the loss of earning power is an important part of any
financial plan.
– TI: Income Protection Insurance.
• Case study 4: Aaron
– KC: Insurance operates on the basis of shared risk; the purpose of insurance is
to protect against unexpected financial loss.
– TI: Travel Insurance.

9
 Module 4
What is risk? Activity
Topic 4.14.1

Teacher Notes
(f) Have students brainstorm the differences between what they consider to be low, medium
and high risk. Create a whole class discussion on types of jobs and the risks involved. To
stimulate more discussion, introduce the article,
http://www.smh.com.au/news/national/steve-irwin-killed-by-stingray/2006/09/04/1157222051512.html
on Steve Irwin’s death. Give the class an opportunity to read it and talk about the risks
involved in Steve’s job.

(g) Distribute Worksheet 3 – What’s risk got to do with it?

• Load and play the video from the worksheet, http://www.scholastic.com/
nextgeneration/videos.htm - Risk: “Talking about Risk”. (2:32)
• Watch as a class.
• Run the teacher led discussion from Worksheet 3 – What’s risk got to do with it?
around:
– What are some examples of risk that ordinary people face in everyday life?
– What are some examples of risky activities people might choose to engage in?
– What can be done to avoid or minimise these risks?
Suggested prompts on risk minimisation: Safes, regular maintenance, defensive driving
course, barriers, alarms and detectors, insurance.
Provide students with a definition of risk for Question 3, for example, “The term risk can
mean the possibility of loss, financial loss or injury.” Once this has been provided, move on to
Question 3a.
When students have decided on their own definition, engage the whole class in discussion
around the pair responses. Combine unique elements that each pair provides into a whole
class RISK definition. Question students for explanation and justification and use any
disagreements as the opportunity for an informal debate.
Complete the table provided in Question 4 in pairs, then engage the whole class in
discussion around the pair responses. A whole class 'WHAT IS RISK?' table could be created
from pair responses. At this point, students should also re-address their KWL table, adding to
the appropriate sections.

(h) This “expert group” activity on how insurance works can be used to support the content of
the first three worksheets. Play the following YouTube video and check for understanding
with questioning and discussion.
Video: https://www.youtube.com/watch?v=mRaOHTZSaA8 – The basic principles of
insurance. (1:52)

10
 Module 4
What is risk? Activity
Topic 4.14.1

Teacher Notes
Break students in to three expert groups to research, discuss and decide on a group
answer to their specific question. If internet access is available for each group, give them
time to look up information to construct and prepare their expert response.

Group 1: How do insurance companies pay for financial losses?

Group 2: How do companies work out the charges for each person?
Group 3: Who are the actual people involved in an insurance company?

It is suggested that you inform students that charges for insurance fall under two broad
categories:
i. Community based pricing (e.g. health insurance) where everyone within the same
category (e.g. single parent) pays the same.
ii. Individual risk profiles (e.g. motor insurance) that take into account factors such as
address, age, gender, type of car, etc.

Each expert group will need to come back to the class group with a presentation which
answers their given question.
Some suggestions of presentation types:
• Digital presentation
• Hand drawn visual (e.g. butchers paper/card and markers)
• Verbal presentation
• Role play/acted scene with summary

(i) Distribute Worksheet 4 – Rate my risk. Have students work in pairs on this activity.
Students brainstorm and assess potential risks for eight people based on the information
provided, and then rate each person’s risk level using a score of 1 (low) to 5 (high) from
the standard table provided (comparing impact vs likelihood). Once completed, have
students compare their ratings within a group. Students then must negotiate and agree
on a risk rating. See further notes within Worksheet 4 – Rate my risk.

(j) Open the website

http://www.abc.net.au/news/2011-08-01/flood-inquiry-report-released/2819106
that shows some of the events of the 2011 floods in Queensland. Ask students to talk
about other major catastrophes that have occurred in their own - and other - states that
claimed many lives, properties and businesses. Discuss the risks of natural and man-made
disasters.

11
 Module 4
What is risk? Activity
Topic 4.14.1

Teacher Notes
(k) Distribute Worksheet 5 – Risk, the world and my community. This worksheet in its entirety
has a high literacy demand and requires ability to analyse and process sophisticated
written text. These questions provide students with an opportunity to identify natural
disasters as a risk and how they affect people.
There are general examples from global and Australian statistics provided, however it
is recommended that the teacher introduce students to regional and local area specific
disasters as part of discussing these issues and connecting the information to the local
context.
To extend the direction of this worksheet students investigate whether people would want
to come to Australia, or stay away, based on risk.
Divide the class in two, provide time and materials for them to construct a response, and
then facilitate a discussion/debate between the two halves to decide where Australia sits
in terms of risk compared to the rest of the world.

Construct a presentation in any format, proving, from an insurance perspective:

• Group 1: Why you should avoid Australia if you wish to avoid risks associated with
catastrophes.
• Group 2: Why you should come to Australia if you wish to avoid risks associated with
catastrophes.

This worksheet and activity sequence should be concluded with a debrief, in the form of a
PMI (Plus, Minus, Interesting) chart. The two most common forms of these are as a simple
table or a Y-chart format. Both are shown below.

Once students have completed their chart, these can be used as the basis of a teacher led
class discussion, focussing upon relevant points from each category that the students have
written down and share.

P M I
P

M I

12
 Module 4
What is risk? Activity
Topic 4.14.1

Teacher Notes
(l) Distribute Worksheet 6 – Insurance: What does it all mean? There are several ways that
this next activity could run, based upon the needs of your class. The aim of the activity is
to develop a ‘class jigsaw’ connecting a series of insurance terms and definitions to create
a deeper understanding of important terminology and concepts. The suggested method
involves breaking your class in to groups and then having those groups work together.
The activity may easily be modified to run with students working individually or as a whole
class.

Suggested method – small groups:

• Use the first group of ‘teacher example’ terms and accompanying example layout
to demonstrate to students how to complete the activity. Have students add in the
missing items in the example on their worksheet as you show them how to complete
the activity.
• Break students in your class in to four groups.
• Provide each group of students with a set of 4 definitions from the tables provided.
They will be responsible for these throughout this activity. These tables are all on
separate sheets, with one to be distributed to each group.
• Provide each group with blank pieces of A4 paper and pens.
• The purpose of this activity is to have students complete a jig-saw map of the way
that the definitions and terms in the table connect to one another.

Example layout:

PROVIDES

INSURANCE POLICY INSURANCE COVER

ALLOWS
ASSESSED BY

INSURANCE CLAIM LOSS ADJUSTOR

OR

ASSESSOR

13
 Module 4
What is risk? Activity
Topic 4.14.1

Teacher Notes
Once students have their paper and term/definition allocation, guide them to complete
the following activities.
i. As a small group:
• Cut out the words and definitions from their individual tables and use these to
move around and organise their response.
• Write down their insurance term AND definition on their own paper.
• Make the insurance heading stand out.
• Make sure the definition and heading are legible for their classmates.
• Connect the four insurance terms that their group has been provided with in as
many ways as they can find, as per the example provided.
• A blank version of this example has been included on Worksheet 6 – Insurance:
What does it all mean? To assist you with introducing and demonstrating the
requirements of this activity.
• Bring their completed group pages to the class jig-saw area designated by you.
• Ensure there are further blank pieces of paper and space for the group/s of
students to work.
ii. Once in the group jig-saw area:
• Have the groups of students take turns in laying out their individual definitions
and connections so that four distinct groups of definitions and connections
exist.
• Students will do this by laying down each of their terms and definitions, using
arrows to connect the insurance terms together.
• Make sure students add brief descriptions to the arrows as per the example
layout provided.
iii. Once each group completes their individual 4 definition map:
• Allow the groups to rotate around, reading the definitions and terminology that
the other groups have mapped.
• Put all four group names/numbers in to a random draw (names in a hat,
electronic name generator) and allow groups to take turns in moving definitions
and terms to connect their group of definitions to another group of definitions.
• Allow each group to make a set number of changes (of your choice) in each
turn until the entire set of terms and connections is laid out and no further
connections can be made.
• Sticky-tape the jig-saw together and take time to break-down the way students
have connected the terms and terminology.

Wrapping up:
• Have students check their Power Words list and add any new definitions and
terms from this activity.

14
 Module 4
What is risk? Activity
Topic 4.14.1

Teacher Notes
(m) Distribute Worksheet 7 – Sharing the risk around. This activity looks at the concept of
spreading the risk, specifically as it relates to insurance. It will require students to examine
some historical information around the concepts of risk pooling and risk sharing and
connecting this to the modern day, and to their lives. They will have the opportunity
to complete problem-solving exercises around monetary calculations and personal
judgements on insurance risks and the accompanying premium amounts.

Prior to completing Question 2 of the worksheet, watch the following two video clips in
the order provided and discuss the key issues and concepts covered with students.
Video 1: https://www.youtube.com/watch?v=6TlMflQEpt8
– What is Life Insurance and how does it work? (2:39)
Video 2: https://www.youtube.com/watch?v=bKR_N8ETcYM
– What is insurance | how to work it. (1:56)

ICT Option: If there is access to ICT resources for students when completing this activity, it
is suggested that students complete Question 2 of Worksheet 7 – Sharing the risk around
by using a spreadsheet program to record the data for this activity, complete calculations
and use graphs to answer Question 2 (a) – (h).

Extension: For Question 2 (g) and (h) have students create their own sample data to
input into the spreadsheets they have created to produce sample data to support their
responses.

SOLUTION
Roman soldier scenario:
• (10 x 10 men) = 100 men
• (10 x 10 men) x .05 = 5 men die per year
• (10 x 10 men) x .02 = 2 men die per year from battle wounds
• (10 x 10 men) x .03 = 3 men die per year from illnesses unrelated to battle
• 2 x ((225 x 2) + 50) = 1,000 denarii
• 1,000 denarii/100 men = 10-denarii premium per soldier per year.
• Upon hitting the front lines, more casualties; higher risk of death; more money would
have to be contributed per soldier.
• If all casualties were doubled, students would need to double the calculation for (b).

15
 Module 4
What is risk? Activity
Topic 4.14.1

Teacher Notes
(n) Extension Activity
Students work in groups of 2-4 with a video recording device (e.g. iPad, camera, phone,
etc.)
i. Watch the video https://youtu.be/ZpaeFVakeTQ - We asked Kids: What is Insurance? (1:21)

ii. Challenge students to plan and create a video of their own (3-5min in length)
using resources and information available to them. The purpose of the video is to
explain an insurance concept to these primary school students to help them better
understand insurance.
This activity can be completed as a single ‘one shot’ recording, or video editing
equipment can be used to edit the video as the students and teacher deems
appropriate.

iii. Students will need to plan how they will make this video, taking into account such
factors as:
• What will they say?
• How will they create a script?
• Will they use some kind of off-camera teleprompt (e.g. large script on
cardboard)?
• Where will they film it?
• When will they film it?
• Who will be involved in what role?
• What is the most important Concept they should address?
• What can they use to explain or demonstrate the concept to the students in the
video who didn’t know much at all?
• Other considerations you deem appropriate.

(o) Reflective Learning

Have students consider:
• The importance of a safety net or a plan B in life. What does it mean and how can
we ensure our safety? What insurance could they consider to strengthen their plan B?
• If there any factors in their life— hobbies, job, lifestyle, health habits—that might
make them a higher risk for an insurance company?
• The pros and con of insurance and what role insurance plays in risk management.
To finalise this activity, students complete their KWL, completing all sections. The teacher
could facilitate a “needs basis” discussion based on KWL elements.

16
 Module 4
What is risk? Activity
Topic 4.14.1

Worksheet 1
What do I Know?
Please circle your answer.

1) The term risk can mean the possibility of loss or injury. T/F

2) The purpose of insurance is to provide you with some protection against

a possible risk. T/F

3) An insurance premium is paid to an insurance company which agrees to

cover agreed risks or events. T/F

4) Having Life Insurance means that my house is also insured, because I

live there. T/F

5) Underwriting is the process by which individual insurance applications

are assessed. T/F

6) Income Protection Insurance protects you in the event you cannot work
due to sickness or injury. T/F

7) Income Protection Insurance claims, if successful, are paid in one lump

sum T/F

8) Health Insurance is insurance against the risk of incurring medical expenses. T/F

9) Insurance is available to cover pets against injury, illness and/or expensive

medical bills. T/F

10) Which of the following are types of insurance available to you in Australia?
Health Insurance / Travel Insurance / Home & Contents Insurance / All of these

11) Not having an insurance policy means taking a gamble and hoping
for the best T/F

12) The law requires you to have some form of compulsory insurance if you drive a car.
This is: Comprehensive / Compulsory Third Party / Property / Fire and Theft

13) Only old people need insurance. T/F

14) The contract between the insurer and the insured is known as the _____
Bill / Policy / Premium / Cover

15) My family, or someone I know, has had to make an insurance claim. T/F

17
 Module 4
What is risk? Activity
Topic 4.14.1

What could possibly go wrong?

Worksheet 2
In looking at insurance and risk there are some key concepts that must be identified. The
following case studies illustrate some key insurance concepts and some types of insurance.
Read each case study and:

a) Select the key insurance concept (KC) it BEST illustrates from the list of concepts below.
b) Indicate the type of insurance (TI) that would be best suited to the situation outlined in
the case study.

KEY CONCEPTS TO CHOOSE FROM:

• Insurance operates on the basis of shared risk.

• Insurance rests upon full disclosure by both parties to the contract.
• Protection against the loss of earning power is an important part of any financial plan.
• The purpose of insurance is to protect against unexpected financial loss.

TYPES OF INSURANCE:

• Comprehensive Vehicle/Car Insurance – cover for your vehicle and other people’s property
- covers events such as liability for loss or damage your car causes to other people's
property and accidental loss or damage to your car.
• Income Protection Insurance covers you for loss of income in the case of sickness,
accident or death.
• Travel Insurance covers against the risk of things such as medical expenses, personal
baggage loss, cancellation charges and other unexpected risks and events that can occur
whilst you are travelling.
• Home and Contents Insurance covers loss or damage to your home and its contents from
events such as floods, storms, fires and theft.
Source: Suncorp Insurance https://www.suncorp.com.au/insurance/

18
 Module 4
What is risk? Activity
Topic 4.14.1

What could possibly go wrong?

Worksheet 2
CASE STUDIES:
1. Ernie owns and operates Ernie’s Earthmoving. He won a large job tender in a regional
town to excavate for a new sports centre. Ernie loaded his largest earthmover onto his
semitrailer. Out on the highway an approaching van, which had blown a tyre, swerved
onto the wrong side of the road, forcing Ernie to take evasive action. Unfortunately his
semitrailer rolled over, damaging the earthmover beyond repair. His insurance company
paid the full value of a replacement earthmover.
KEY CONCEPT:

TYPE OF INSURANCE:

2. Dana has just recently purchased a car and applied for comprehensive car insurance.
She filled out the form, but did not tell the insurance company that when she was 18,
she was involved in an accident when she was driving her boyfriend’s car. She had failed
to give right of way at a stop sign and severely damaged another car, as well as her
boyfriend’s.
On her way to work one morning last week, Dana was stopped at the traffic lights. The
car behind didn’t stop and collided with her, causing a lot of damage to her car and
breaking Dana’s collarbone in the impact. When she took her car for a quote the repairer
recognized her from the last accident and mentioned it to the insurance company. The
insurance company then refused to pay out on her claim.
KEY CONCEPT:

TYPE OF INSURANCE:

19
 Module 4
What is risk? Activity
Topic 4.14.1

What could possibly go wrong?

Worksheet 2
CASE STUDIES:
3. Joe and Celia have recently purchased a house on a new estate. Their bank manager
suggested they should consider taking out insurance to cover them for loss of income in
the case of sickness, accident or death. Celia was playing netball with a local team and
fell over, severely injuring her knee. As she was a self-employed courier she was not able
to drive her van for five months, and was thus unable to earn an income. Fortunately, her
insurance policy paid 80% of her estimated weekly earnings. This enabled Joe and Celia
to keep up the mortgage payments on their house.
KEY CONCEPT:

TYPE OF INSURANCE:

4. A group of students from the local secondary college went on a three week exchange
visit to Japan. All students and staff were required to take out insurance, including extra
cover for active/adventurous activities. Their exchange hosts organised two days snow
skiing in the mountains for the group. Aaron, an Australian student, fell heavily and badly
broke his leg. He needed surgery, and required three seats on the plane on his return to
Australia. The $35,000 bill for hospital, medical and transport costs were covered under
the adventure extras in his policy. No claims were made by any of the other students.
KEY CONCEPT:

TYPE OF INSURANCE:

20
 Module 4
What is risk? Activity
Topic 4.14.1

What’s risk got to do with it?

Worksheet 3
1. Watch the video http://www.scholastic.com/nextgeneration/videos.htm -
Risk: “Talking about Risk” (2.32).

2. Contribute to the class discussion around:

• What are some examples of risk that ordinary people face in everyday life?
• What are some examples of risky activities people might choose to engage in?
• What can be done to avoid or minimise these risks?

3. Risk
(a) Write down the definition of RISK provided by your teacher:

(b) This definition of risk is quite short and does not provide much detail.
Work with a partner to add to this definition of risk so that it agrees with how you
both define risk.

21
 4.
Types of risk Examples Consequences How to prevent or minimise risk
Risk from an • Playing cricket. • Concussion from being struck in head • Wear protective cricket helmet.
action • with ball. •
• • •
• • •
What is risk?

•
Risk that comes • Not putting on seatbelt. • Greater injury in accident, police fine. • Put on seatbelt.
with lack of • • •
action:
• • •
• • •
a strategy to reduce or minimise the risk.

Risks you know • Sunburn/Spending lots of time in the • Skin cancer. • Follow sun safety guidelines.
about but don’t sun. • •
think will happen •
to you: • •
• • •
•
Everyday risks • Driving a car. • Crash/accident. • Don’t text and drive, keep car serviced.
worth taking: • • •
• • •
• • •

Making decisions • Gambling. • Loss of money, addiction. • Set time/financial limits and stick to those.
• • •
• • •
• • •
Continue working with your partner and complete the following table. Provide at least
two more examples for each risk category, a potential consequence for the example and
Topic
Activity
4.14.1

Worksheet 3

22
What’s risk got to do with it?
Module 4
 Module 4
What is risk? Activity
Topic 4.14.1

What’s risk got to do with it?

Worksheet 3
5. The consequences of risks have personal and financial implications.
(a) From your table, choose a risk example that has a serious consequence. Describe
how you and your family might be affected both personally and financially by this
consequence.

People face risks every day. Many people think of risk only as involving things that are
considered dangerous. In reality, risk is a part of everyday life. It’s just that some risks are
greater or more obvious than others, and people tend to notice those and associate them with
the word “risk.” For example, walking down stairs is considered less risky than bull riding. In
order to manage and minimise the risks they face, both major and minor, it is important that
people ensure they have adequate insurance and undertake insurance management and risk
management.

6. Add the following two definitions to your Power Words list:

Insurance management: The management of all your insurance needs and policies.
Being aware of and managing your insurance policies to ensure they are appropriate to
your needs and protect against or reduce risk.
Risk management: The practice of identifying potential risks in advance, analysing them
and taking precautionary steps to reduce the risk.
Source: The Economic Times, http://economictimes.indiatimes.com/definition/risk-management.

23
 Module 4
What is risk? Activity
Topic 4.14.1

Worksheet 4
Rate my risk
Risk is part of life. It also plays a key role in insurance. Underwriters who work at insurance
companies study policy applicants to assess their potential risk factors. The underwriter then
compares an applicant’s risk factors with others in a group to determine whether the applicant
is a high risk or a low risk and to determine how much the applicant should be charged for
insurance. Underwriters use three primary factors to classify risk: age, gender, and health.
Other aspects of the applicant’s life such as where they live and type of property are also
examined and factored into his or her risk level. The table below provides a simplified method
of risk assessment. Refer to this table when completing the risk assessment activities on this
worksheet.

IMPACT
5 4 3 2 1
Catastrophic High Moderate Low Negligible

5 Extreme Extreme High High Medium

Almost (1) (1) (2) (2) (3)
certain

4 Extreme Extreme High Medium Low

Likely (1) (1) (2) (3) (4)
LIKELIHOOD

3 Extreme High High Medium Low

Possible (1) (2) (2) (3) (4)

2 High High Medium Low Low

Unlikely (2) (2) (3) (4) (4)

1 Medium Medium Low Low Low

Rare (3) (3) (4) (4) (4)

Extreme risks that are likely to arise and have potentially serious consequences
Extreme requiring urgent attention
Major risks that are likely to arise and have potentially serious consequences requiring
High urgent attention or investigation

Moderate Medium risks that are likely to arise or have serious consequences requiring attention

Low Minor risks and low consequences that may be managed by routine procedures

Source: ausport.gov.au https://www.ausport.gov.au/__data/assets/word_doc/0005/454928/Risk_Management_process.doc

24
 Module 4
What is risk? Activity
Topic 4.14.1

Worksheet 4
Rate my risk
1. One of the main categories of insurance that would consider factors such as those listed
below are insurances that cover against a loss of income due to sickness or accident, or
loss of life. If a person’s risk factors are high, an insurance company may elect not to offer
them insurance, or to offer them insurance that carries with it an extremely high cost
(called a premium) to the insured (person wishing to take out an insurance policy). In the
table below, assess the potential risks for each person listed. Next rate each person’s risk
level using a scale of 1 to 5, with 1 being “low risk” and 5 being “high risk.”

Professional Hobbies Related Risks Risk Rating

EXAMPLE:
Mick is a 52 year old sales Gardening; Although he is Possible,
assistant in a retail store. He Travelling overweight, he still does High = 2
is overweight and suffers around the gardening which is a form
from asthma. world of exercise.
Respiratory problems;
Has to be on medication.
Janelle is a retired teacher. Watching
She is 64 years old and has television;
recently had heart surgery. quilting.
She is a smoker and has a
social drink with friends.
Norm is a 21 year old NRL Participating
sportsperson. He often has in triathlons;
to spend time on the injured dirt bike
list as he has had some bad/ riding.
heavy contact resulting in
broken bones and snapped
tendons.
Tarryn is a 27 year old Reading;
computer programmer. Bird watching;
She loves exercising and is Cooking;
a regular at her gym. She
drives a Toyota Prius.
Annie is a 38 year old lawyer. Water skiing;
Every morning she goes for a Crafting;
2km walk and eats a healthy Painting.
diet. Annie has had asthma
since childhood, occasionally
requiring medication.

25
 Module 4
What is risk? Activity
Topic 4.14.1

Worksheet 4
Rate my risk
Professional Hobbies Related Risks Risk Rating
Edward works as a nurse in Hiking;
a privately owned medical Photography;
practice. He has a family Bird watching.
history of heart disease and
type 2 diabetes. Edward likes
hiking and photography.
Damian is an 18yr old male Dirt bike
who has just purchased riding;
a WRX. He operates Mountain
earthmoving equipment as biking; Xbox.
part of his job.
Kat is a personal trainer. Triathlon;
She trains individual clients Netflix;
and runs group classes at a Cooking
local gym. She competes in
triathlon, which involves a lot
of training in road cycling,
running and swimming.
Kat is currently undertaking
training as a nutritionist.
Tim is a miner who works Weight lifting;
underground on a Fly-In, Fly- Swimming;
Out contract. He has a wife Playing with
and two children under four. his kids.
Tim splits his time between
operating machinery and the
mine emergency response
team. He is a non-drinker &
non-smoker.

26
 Module 4
What is risk? Activity
Topic 4.14.1

2. Rank the Professionals in the table you just completed from highest to lowest risk rating.

Worksheet 4
Rate my risk
Where risk ratings are the same, you will need to decide which order to place them in.
Only one name can appear on each line.

Rank Name
1.

2.

3.

4.

5.

6.

7.

8.

3. What were the toughest decisions you had to make? What factors did you use in coming
to your final ‘risk list’?

4. Which of the above people would you expect to pay the highest insurance premiums?
Why?

27
 Module 4
What is risk? Activity
Topic 4.14.1

In this next activity, read the article provided by Sigma, a Swiss Reinsurance Company that has

Risk, the world and my community

Worksheet 5
published the following information for worldwide catastrophe losses in 2016. A table has
also been provided that outlines the countries with the most costly losses. As you are reading,
you will see the term ‘insured losses’ come up repeatedly. An insured loss means that those
experiencing the loss had insurance coverage. Carefully read the article and table below and
answer the questions that follow.

SIGMA Research 2016 & 2017

• Global total economic losses from disaster events were USD 175 billion in 2016, up from
USD 94 billion in 2015.
• Insured losses from disasters were USD 54 billion in 2016, up 42% from 2015, and the
highest since 2012.
• Earthquakes, storms, flood events and wildfires caused extensive damage across many
regions.
• Disaster events claimed around 11 000 victims in 2016.

Total economic losses from natural catastrophes and man-made disasters amounted to USD
175 billion in 2016, almost twice the USD 94 billion seen in 2015, the latest sigma study from
the Swiss Re Institute says. Global insured losses from disasters were USD 54 billion in 2016,
up from USD 38 billion in the previous year. The losses in 2016 – both economic and insured
– were the highest since 2012 and reversed the downtrend of the last four years. This was
due to a high number of sizable disaster events, including earthquakes, storms, floods and
wildfires in 2016, across all regions. Some events struck areas with high insurance penetration,
which accounted for the 42% increase in insured losses. That also means that many people
in those areas were better equipped to recover from the shock of a disaster, for example with
prompt settlement of their insurance claims.
Globally there were 327 disaster events in 2016, of which 191 were natural catastrophes and
136 were man-made. In total, the disasters resulted in economic losses of USD 175 billion,
almost double the level in 2015. As in the previous four years, Asia was worst hit in terms
of the number of disaster events (128) and resulting economic losses (approximately USD 60
billion). The earthquake on Kyushu Island, Japan in April inflicted the heaviest economic losses,
estimated to be between USD 25 billion and USD 30 billion. Worldwide, around 11,000
people lost their lives or went missing in disasters in 2016, down from more than 26,000 in
2015.

Notable increase in insurance payouts in 2016

Global insured losses last year were USD 54 billion, significantly higher than in 2015 and
in line with the inflation-adjusted annual average of the previous 10-years (USD 53 billion).
Natural catastrophes resulted in claims of USD 46 billion, the same as the 10-year annual
average. Insured losses from man-made disasters were USD 8 billion, down from USD 10
billion in 2015.

28
 Module 4
What is risk? Activity
Topic 4.14.1

"In 2016, both economic and insured losses were close to their 10-year averages. Insured

Risk, the world and my community

Worksheet 5
losses made up about 30% of total losses, with some areas faring much better because of
higher insurance penetration," says Kurt Karl, Chief Economist of Swiss Re. For example,
North America accounted for more than half the global insured losses in 2016. This was
largely due to a record number of severe convective storm events in the US, and the level
of insurance penetration for such storm risks in the US is high. The costliest was a hailstorm
that struck Texas in April, resulting in economic losses of USD 3.5 billion, of which USD 3
billion were insured, so about 86% of losses were covered. Many households and businesses
were insured, and they were well covered for the heavy damage to property caused by large
hailstones.

Table 1: Total economic and insured losses in 2016 and 2015

USD Billion (in 2016 prices) 2016 2015 annual change 10 year average

Economic losses (total) 175 94 85% 175

Nat cat 166 82 102% 163
Man-made 9 12 -28% 12
Insured losses (total) 54 38 43% 53
Nat cat 46 28 64% 46
Man-made 8 10 -19% 7

Table contains rounded numbers

Source Cat Perils and Swiss Re Institute

Table 1 indicates the large opportunity for insurance to help strengthen worldwide resilience
against disaster events. The shortfall in insurance relative to total economic losses from all
disaster events – the protection gap – was USD 121 billion in 2016.
Insurance coverage is not universal. For example, while a high-level of insurance penetration
in New Zealand meant that households and business were well equipped to recover from the
damage caused by the quake that struck the South Island in October 2016, in Japan's Kyushu
Island only around 20% of the economic losses from the earthquake in April were covered by
insurance. And in Ecuador, the quake on the same day in April caused estimated economic
losses of USD 4 billion, but insured losses of just USD 0.5 billion. "In many parts of the world,
insurance can play a much bigger role in helping households and communities recover from
the losses and shock that disasters can inflict", Karl continues.

29
 Module 4
What is risk? Activity
Topic 4.14.1

Canada burning: buildings and forests destroyed by fire

Risk, the world and my community

Worksheet 5
One area where communities benefitted from having insurance in 2016 were the wide
expanses of Alberta and Saskatchewan in Canada, which were engulfed by wildfires from
May through to July. This was just one of many wildfires in North America last year, sparked
by severe dry weather conditions. It was also the most destructive wildfire, burning many
buildings and 590 000 hectares of forest land. Many homes were destroyed and around 88
000 people were evacuated from the impacted areas. Overall economic losses from the fires
were USD 4 billion, of which close to USD 2.8 billion (70%) were covered by insurance. Once
the evacuation order had been lifted, insurance personnel was given immediate access to the
affected regions in order to assist returning residents. There were record payouts by insurers
and 68% of all personal property claims had been settled by the end of the year.

Floods in many regions

There were also many severe precipitation events in 2016, which in turn triggered major
flooding over large areas. At the end of May and the beginning of June thunderstorms,
torrential rain and flooding – river and flash floods – hit France, southern and central Germany
and Belgium, leading to combined economic losses of USD 3.9 billion, and insured losses of
USD 2.9 billion. In China, there was extensive flooding along the Yangtze River basin in July.
The economic losses were estimated to be USD 22 billion, making it the costliest Yangtze River
flood event since 1998. Here, however, with low insurance penetration, the insured losses
were just USD 0.4 billion.
The US was also hit by floods. There were four separate multi-billion dollar-loss floods in 2016,
the worst being the inland flooding of southern Louisiana and Mississippi in August. The
topography of southern Louisiana – largely wet and low-lying land through which many rivers
run – makes the region vulnerable to flooding. The banks of many rivers burst after extreme
rainfall, resulting in widespread flooding of adjacent areas, and accumulated economic losses
of USD 10 billion. In the US, however, flood risk remains critically underinsured, even though
much of the country is exposed to flooding. In the case of the Louisiana and Mississippi
floods, less than a third of the economic losses – around USD 3 billion – were covered by
insurance.
Source: http://www.swissre.com/media/news_releases/nr20170328_sigma_2_2017.html

30
 Module 4
What is risk? Activity
Topic 4.14.1

Table 2: The most costly catasptophe insured losses in 2016 (USD blllion)

Risk, the world and my community

Worksheet 5
Insured Total economic
Month losses1. losses Event Country
2.
April 4.9 25 to 30 Earthquakes Japan
2.
Oct 4.0 12.0 Hurricane Matthew US and Carribean
Aug 3.1 10.0 Severe storms and
3.
flooding in Lousiana US
4.
April 3.0 3.5 Hailstorm US
2.
May/June 2.9 4.0 Storms and floods in Europe Europe
5.
May/June 2.8 4.0 Fort McMurray wildfires Canada
2.
November 1.7–2.4 3.9 Earthquake Mw 7.8 New Zealand

Note: (1) Property and business interruption, excluding liability and life insurance losses.
Source: (2) Swiss Re Cat Perils estimate: (3) IS natual catastrophe figures with the permission of Property Claims
Services and Swiss re estimate: (4) US natarual catastrophe figures with the permission of Property Claims Services:
(5) CatIQ.

Figure 1: Insured vs Unisured losses 1970-2016 (USD billion), at 2016 prices

Source: http://www.swissre.com/media/news_releases/nr20170328_sigma_2_2017.html

31
 Module 4
What is risk? Activity
Topic 4.14.1

1. Were more economic losses caused by natural causes or man-made causes? Why do you

Risk, the world and my community

Worksheet 5
think that this is the case?

2. When looking at Table 2 & Figure 1 above, how do the insured losses compare to the
uninsured losses?

3. What factors do you think contribute to there being so many billions of dollars in
uninsured losses?

4. Would you prefer to be in the insured or uninsured section of Figure 1? Why?

32
 Module 4
What is risk? Activity
Topic 4.14.1

Risk, the world and my community

Worksheet 5
5. What recommendation would you make to people living in the areas affected by these
events, with regards to insurance?

6. In this next activity, use the data provided on insurance losses, globally and within
Australia to answer the questions that follow.
Top 10 Costliest World Insurance Losses, 1970-2016 (1)
(2016 $ million)

Source: http://www.iii.org/fact-statistic/catastrophes-global

10 Largest Catastrophe Events in Australia (2011 adjusted dollar amounts)

Rank Event Year Location State Loss (AUD$) Normalised Loss*
(2011) (AUD$)
1 Hailstorms 1999 Sydney NSW 1,700,000,000 4,296,000,000
2 Tropical Cyclone Tracy 1974 Darwin NT 200,000,000 4,090,000,000
3 Earthquake 1989 Newcastle NSW 862,000,000 3,240,000,000
4 Flood 1974 Brisbane QLD 68,000,000 2,645,000,000
5 Flood 2010/11 Multiple QLD 2,380,000,000 2,380,000,000
6 Hailstorm 1985 Brisbane QLD 180,000,000 2,063,000,000
7 Ash Wednesday Bushfires 1983 Multiple VIC/SA 176,000,000 1,796,000,000
8 Severe Storm 2007 Multiple NSW 1,480,000,000 1,742,000,000
9 Tropical Cyclone Madge 1973 Multiple QLD/NT/WA 30,000,000 1,492,000,000
10 Tropical Cyclone Yasi 2011 Multiple QLD 1,300,000,000 1,352,000,000

Source: http://www.insurancecouncil.com.au/issue-submissions/issues/catastrophe-events

33
 Module 4
What is risk? Activity
Topic 4.14.1

Types of Natural Disasters

Risk, the world and my community

Worksheet 5
Bushfire Cyclones Hail
Most property losses occur Most property damage Hail is a very significant
in NSW, VIC, WA, SA and occurs in Northern QLD, NT factor in insured losses. The
the ACT between September and WA between December worst affected states are
and March. With increasing and April. Under climate NSW, VIC and QLD. The
urban development and a change predictions, severe worst months for damaging
climate that is both getting cyclones are expected to hail are from October to
drier and warmer, bushfires occur further south than at April, though hail can occur
are an increasing risk for present. at any time.
today's property owners.
Flood Earthquake Severe Storms
Inland flood is a significant Australia has a low incidence The worst affected states are
issue in Australia, historically of highly damaging NSW and QLD, followed by
accounting for nearly 1/3rd earthquakes. The most WA, VIC, SA and TAS. Most
of insured losses. From an affected states are NSW and severe storms have occurred
insurance perspective the WA, with four significant between September &
worst affected states are earthquakes causing an February.
NSW and VIC, followed by insured loss occurring in the
QLD, SA and WA typically past 40 years.
occurring from April to
October.

Source: http://www.insurancecouncil.com.au/issue-submissions/issues/catastrophe-events

(a) What risks are a feature of some countries but are not common in Australia?

(b) Which risks identified in the Top 10 Costliest World Insurance Losses are most likely to
occur in Australia?

34
 Module 4
What is risk? Activity
Topic 4.14.1

(c) Are some risks relevant to some states in Australia but not relevant to others? Explain.

Risk, the world and my community

Worksheet 5
(d) Why do some of the natural disasters that cause significant loss of life and property not
appear high on the insurance charts?

(e) Focus your attention upon the location within the Australian State or Territory that you
currently reside in. From the information above, and your own knowledge/experience,
which natural disaster do you think it is the most important to have your home and
contents insured against? Explain your reasons.

35
 Module 4
What is risk? Activity
Topic 4.14.1

Await instructions from your teacher before engaging with the materials in this activity.

Insurance: What does it all mean?

Worksheet 6
Teacher example:

INSURANCE POLICY INSURANCE COVER

INSURANCE CLAIM LOSS ADJUSTOR

ASSESSOR

If you wish to find out more about the terms covered in this activity, please use the materials
provided by your teacher or those available on the Internet from sites such as:

• http://understandinsurance.com.au/glossary
• http://www.investopedia.com/dictionary/
• www.google.com.au
Search term = define: insurance – replace ‘insurance’ with word/phrase of choice in
Google define.

36
 Module 4
What is risk? Activity
Topic 4.14.1

Teacher example:

Insurance: What does it all mean?

Worksheet 6
Term Definitions

Insurance A document detailing the terms and

Policy conditions of a contract of insurance.

Insurance Insurance coverage is the amount of risk

Cover or liability that is covered for an individual
or entity by way of insurance services,
including the damage/loss that the cover
provides for (e.g. building – flood or
cyclone damage).

Insurance An insurance claim is a formal request

Claim to an insurance company asking for
a payment based on the terms of the
insurance policy.

Loss An insurance agent who assesses the

Adjustor amount of compensation that should be
paid after a person has claimed on their
insurance policy.

Assessor Similar to a loss adjustor, the assessor

works for the insurer (but it can be
outsourced). For car insurance, they will
normally be from the smash repair industry
and hold appropriate qualifications. For
building, the assessor normally comes from
the building industry. Most large insurers
use assessors, loss adjustors tend to be
for commercial or rural claims (where the
insurer has no presence)
37
 Module 4
What is risk? Activity
Topic 4.14.1

Group 1:

Insurance: What does it all mean?

Worksheet 6
Term Definitions

Insurance Has advanced math training (probability

Actuary and statistics). He or she calculates
the risks based on loss percentages
and determines insurance rates and
premiums.

Indemnity Security or protection against a loss or

other financial burden.

Insurance An arrangement by which a company

or the state undertakes to provide a
guarantee of compensation for specified
loss, damage, illness, or death in return
for payment of a specified premium.

Loss The fact or process of losing something

or someone.

38
 Module 4
What is risk? Activity
Topic 4.14.1

Insurance: What does it all mean?

Worksheet 6
Group 2:

Term Definitions

Insurance An amount to be paid for a contract

Premium of insurance.

Risk pooling Premiums and losses of each member

of a group of policyholders are
allocated within the group based on
a predetermined formula.

Insurance Employee of an insurance company

Underwriter who evaluates risk and assigns
premium amounts. Age, gender and
health are key factors they use to
determine risk.

Insurer Insurance company that issues an

insurance policy to an insured person
or entity.

39
 Module 4
What is risk? Activity
Topic 4.14.1

Group 3:

Insurance: What does it all mean?

Worksheet 6
Term Definitions
Insurance Insurance brokers are professional
Broker advisers who work on behalf of their
clients. They have access to a variety of
insurance products and can deal with a
range of insurance companies directly.

Insured A person or entity covered by an

insurance policy.

No A discount based on the number of the

Claims years in which an insured person or entity
Discount haven't made a claim on their insurance
policy. The amount that its worth varies
from insurer to insurer.

PDS A Product Disclosure Statement is

a document that financial service
providers must provide to you when they
recommend or offer a financial product.
It must include information about the
product’s key features, fees, commissions,
benefits, risks and the complaints
handling procedure.

40
 Module 4
What is risk? Activity
Topic 4.14.1

Group 4:

Insurance: What does it all mean?

Worksheet 6
Term Definitions

Renewal Is when an existing contract comes to an

end (e.g. expires), and the parties agree to
enter into a new contract (usually for the
same or very similar services).

Risk The possibility of loss or injury.

Payout A payout is a sum of money paid to a

policyholder when a claim is accepted.

Insured The person or entity protected by or

receiving insurance provided by the
insurer.

41
 Module 4
What is risk? Activity
Topic 4.14.1

1. Risk pooling refers to the spreading of financial risks evenly among a large number of

Sharing the risk around

Worksheet 7
contributors to the insurance program. Humans have historically been very interested in
reducing the chance and impact of something bad happening, for example merchant
vessels spreading their cargo in case of loss.
In terms of formal insurance and risk pooling, in the 1600s, the British Empire was the
hub of a vast shipping network, where goods were shipped back and forth from colonies
all over the world. Sailing the ocean was a risky exercise at that time, so the people who
had goods at risk sought to minimise those risks. As a result they would insure themselves
by having individuals and business meet with them and agree to insure specific parts of
their cargo against loss or damage, in return for a share of the profit if the ship and cargo
arrived safely.
Source: http://www.investopedia.com/articles/08/history-of-insurance.asp

2. This next story explains how shared risk in insurance works, and has indeed worked for
a very long time. The Ancient Romans understood the concept of sharing the risk when
soldiers in the Roman Legion went to war. In those days, soldiers pledged to take care of
the families of their fellow warriors who died in battle. If each soldier put in a little bit of
money, there would be enough to help a family that suffered a loss. These soldiers were
practising risk pooling.

Now, let’s work out how each soldier paid towards this “insurance”.

You are Caesar Stone, statistician to the Roman Legion. One of the army centurions has
come to you because his troops are expected to contribute to a fund that would pay each
soldier’s burial expenses and help support the family for two years following the soldier’s
death in battle. It is your job to determine how much each soldier must contribute to help
cover anticipated troop losses.

Here is the information the centurion has given to you:

• He commands 10 units, made up of 10 men each.
• The yearly salary of his men is 225 denarii (silver coins).
• The fund only provides support for the families of soldiers who were killed in battle
or who died of their battle wounds.
• Based on army records for the last 10 years, the legion will lose about 5% of its men
each year; 2% from battle wounds and 3% from illnesses unrelated to battle.
• These records reflect that this legion has been located far from front lines of battle
for several years.
• An average burial for a soldier costs 50 denarii.

Source: http://www.scholastic.com/nextgeneration/pdf/risk-ed-guide.pdf

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 Module 4
What is risk? Activity
Topic 4.14.1

Using the information in Question 2, answer the following questions:

Sharing the risk around

Worksheet 7
i. How many men in total are involved in this scenario?

ii. How many men does the group lose per year in this scenario?

iii. How many men does the group lose per year to battle wounds?

iv. How many men does the group lose to illnesses unrelated to battle per year?

v. In any given year, how much money in total needs to be placed in the fund to cover
the burial costs and two years of lost income to support the families of warriors who
will die in battle?

vi. How much does each soldier have to put into the fund
each year?

43
 Module 4
What is risk? Activity
Topic 4.14.1

vii. What do you think would happen to these numbers if the Legion was called to the

Sharing the risk around

Worksheet 7
front lines? What does this do to the risk pool? Discuss within your group.

viii. If the Legion was called to the front lines in a vicious war, where all loss percentages
were doubled, how would this affect the amount each soldier was required to pay?
Discuss with your group.

In the present day, there are many

options available to everyone,
including soldiers, to insure
themselves, their home and contents,
and even their pets, against risk.
Insurance companies provide a
reliable, safe way to share many kinds
of risks by allowing people to become
members and taking out a policy of
their choice & paying the associated
premium. Once this is done, this risk is
insured!

ix. Consider the insurance options available in Australia today, including products from
insurers such as:
• Suncorp Insurance – https://www.suncorp.com.au/insurance/
• AAMI Insurance – https://www.aami.com.au/
• Allianz Insurance – https://www.allianz.com.au/

44
 Module 4
What is risk? Activity
Topic 4.14.1

Using these websites, and any others of your own choosing, investigate the insurance

Sharing the risk around

Worksheet 7
options available in Australia. What types of insurance policies would you recommend for
the Roman Centurions? List as many types as you think are relevant and your reasons.

Insurance type: Reasons:

45
 Module 4
Managing and sharing risk Activity
Topic 4.24.1

Groupwork and classroom activity:

Teacher Notes
Suggested time: 2-3 lessons

Student worksheets:
Worksheet 8a: Sharing the risk
Worksheet 8b: Sharing the risk - FBIC student representative worksheet
Worksheet 9: What’s MOST important to me?

Resources:
Downloaded mobile phone insurance Product Disclosure Statements:
Virgin Mobile PDS:
https://www.virginmobile.com.au/mobile-phone-insurance-pds/
Optus Mobile PDS:
http://smb.optus.com.au/opfiles/Shop/Consumer/Assets/PDFs/Mobile-Insurance-PDS.
pdf?_ga=2.242167489.210498220.1496577065-1187907599.1496577065
Telstra PDS:
https://www.telstra.com.au/content/dam/tcom/personal/mobile-phones/pdf/premium-
care-fsg-pds.pdf
For each student:
Printouts of a mobile phone, $50 play money and an insurance policy/token/certificate.

BRAND X PHONE
COST $450

46
 Module 4
Managing and sharing risk Activity
Topic 4.24.1

The focus of this topic is to demonstrate how risk is shared, and to encourage students to

Teacher Notes
reflect on what risks they’re willing to take when it comes to insuring their assets. It will also
cover utilising insurance to minimise risk, the importance of clearly understanding the details
of the PDS and exactly what is and is not covered for any insurance policy that is taken out.

(a) Worksheet 8 – Sharing the risk is a group activity which works for between 20 and 25
students. You’ll need to lower the value of the phone if your class is smaller than this.
Initially two students will be working independently of the rest of the class. For the
purposes of this activity, these two students assume the role of the Financial Basics
Insurance Company (FBIC) representatives. Once they have completed their task, they join
in with the rest of the class until their work is required as part of the activity.
For this activity to work optimally, you will need to select insurance company
representatives who are able to think on their feet and problem solve, as well as perform
simple mathematical calculations quickly (with or without the assistance of a computer).

(b) The FBIC representatives will need a copy of Worksheet 8a – Sharing the risk, Worksheet
8b – Sharing the risk - FBIC student representative worksheet and enough insurance policy
printouts to issue to half of the class. Each of the remaining students will need a copy of
Worksheet 8a – Sharing the risk, and printouts of the mobile phone and $50 play money.
Using the mobile phone Product Disclosure Statements provided in the Resources section,
assist the class to come up with a short agreement on what a possible class insurance
policy relating to their phones will cover. This PDS will be honoured by the FBIC. Examples
of PDS items may include:
• Loss or damage for physical loss of, or accidental damage to your mobile telephone
including its battery and its related cellular telephone parts and accessories. This cover
extends to events occurring anywhere in the world.
• Unauthorised calls.
• Mechanical or electronic breakdown/failure provided that the breakdown/failure
occurred not more than two (2) years from the original new purchase date.
• LIMIT OF LIABILITY – The insurer will not be liable for more than the cost of replacing
the insured equipment.

(c) While students are working on the PDS, the FBIC representatives will collect the
information they require. Working in pairs, one student insures the phone, and one
doesn’t. The student insuring the phone provides their details to the FBIC representatives
for their records, and pays a $50 insurance premium to FBIC. They receive an insurance
policy on payment of the premium. FBIC insurance representatives will use this
information to complete the appropriate section of the table on their worksheet and
share with the class when the PDS activity is completed.

47
 Module 4
Managing and sharing risk Activity
Topic 4.24.1

(d) Select one pair of students and remove (loss or theft) or destroy (damage or breakdown)

Teacher Notes
their phone printouts. When removing or destroying the device, the teacher should
provide a scenario that is covered under the terms of the PDS constructed as a class (e.g.
phone stolen from bag, screen broken when dropped, fell from pocket into puddle of
water, etc.).
The insured student makes a claim to FBIC for the loss, theft or destruction of their
device, which is to be honoured by the insurance company. They should receive a payout
of $450. Discuss with students what kind of incident may have occurred to cause the
removal or destruction of the device that met the requirements of their PDS. This part of
the activity could be broadened by providing a structure (role play phone call, or create a
claim form) to make the claim.
It is important to stop here, answer student questions and facilitate a discussion around
the issues they raise to ensure their understanding of the insurance concepts playing out.
The student without insurance has effectively lost their $450 item, and will need to either
go without or purchase a new one.

(e) Once the claim is completed, FBIC representatives need to record the claim and payout to
their tally spreadsheet or table, linked to the appropriate student name.
FBIC representatives should share this data with the class so that students can update
their worksheet. Facilitate a discussion on the insurance pool of funds that was that was
created by their class and those who chose to insure their phones. If students do not
notice, the teacher should point out and that there are funds remaining in the pool that
the insurance company still holds.
Whether students ask or not, now is a good point to discuss with students how insurance
companies generate profit, which in its simplest form boils down to them investing
money that is left in their insurance pool from the premiums members pay after the costs
of honoured claims and overhead costs are taken out.

(f) For Part B of this worksheet select a different pair of students and describe another
event which results in loss or damage to their phones that will once again impact on
both students. This scenario should be one that is NOT covered under the class PDS, or a
scenario that falls into a grey area that may or may not be covered. For this scenario to
work at its optimal level, it is suggested you select an insured student who is capable of
thinking on their feet and arguing their point of view clearly.
Take the phones from both students in the selected pair and remove/destroy them.
Examples of events that may not have been covered in the policy may include being
caught in the rain, dropping the phone in the toilet, having it fall out of their pocket
whilst riding a bike or mowing the lawn, being chewed by the pet mouse, and many
others.

48
 Module 4
Managing and sharing risk Activity 4.2

Teacher Notes
Allow the insurance policy holder to re-examine the class PDS and lodge an insurance
claim regarding the incident that just occurred. Oversee the lodgement of an insurance
claim between the insured student and the insurance company and ensure that students
all interact appropriately.
After receiving the student claim, allow the FBIC representatives to briefly confer and
respond to the claim in one of the following three ways:
• Honour the full claim amount ($450)
• Honour a partial claim at a portion (e.g. half) of the insured amount. Insurers must
give their reasons for only honouring half the amount, e.g. the claim was only
partially covered by the PDS.
• Refuse the claim.
Once a decision has been reached, FBIC representatives must inform their customer, the
insurance policy holder, of the outcome. They MUST provide their reasons, including
reference to the PDS. Note: In the case of a ‘real’ insurance claim, this would be
provided in writing. In consideration of time, it is suggested in this activity that this
section be completed orally, with students being informed that the decision is normally
rendered in writing.
Once this process has been completed, allow the student with the insurance policy to
decide whether to accept or appeal the claim. If they elect to appeal to the Financial
Ombudsman Service (you), allow the insurance policy holder and the insurance company
representatives equal amounts of time (suggest 2-3 minutes) to prepare the main points
of their appeal and present them to you as the final arbitrator and the remainder of the
class as witnesses.
Weigh the details of the claim from both parties and render your final verdict, which (in
this role play) both parties must honour.
This is a recommended point to stop and debrief the activity so far, including outlining
the role of the Financial Ombudsman Service (http://www.fos.org.au/ for more details)
in helping resolve insurance claim disputes.
Remind students that in both incidents, the class members who did not have their phone
insured have completely lost the use of the device and must either go without their
device or pay for a new one.
Students complete Questions 3 – 6 of Worksheet 8a – Sharing the risk.

49
 Module 4
Managing and sharing risk Activity 4.2

Teacher Notes
(g) Introduce the concept of Indemnity and Replacement Value insurance options.
• NOTE: Different insurance policies may offer different options. House and contents
policies may offer ‘market value’ or ‘new for old replacement value’, while vehicle
insurance may offer ‘agreed value’ or ‘market value’. Teachers could refer to
individual company policies to point out the distinctions to students.
• In general, cash payments are usually made by the insurer where there is a total loss,
however if the approved claim is for damage, this is normally repaired. Even in a
total loss scenario the insurer may choose to replace rather than pay the cash, as this
is often cheaper for them.
• From this activity, students will assess their personal situation in relation to their own
belongings and understand the shared risk concept. This activity alerts students to
the general principle of indemnity and the requirement for the customer to specify
the type of policy required.

(h) Distribute Worksheet 9 – What’s MOST important to me? This can be completed
individually, in pairs or small groups.
This activity involves having students consider what types of insurances are most
important to them. The intent is to have students consider and rank 10 types of
insurance from the list provided, and then conduct some analysis of their answers and
develop more of an understanding on what specific types of insurance actually cover.

(i) Reflective learning

Students could:
• Consider the community responsibility towards people who decide not to take up
the insurance option and then suffer losses.
• Write about their own view on the shared risk principle of insurance and the
relationship between the level of risk and the size of the premium could be explored.

50
What’s it worth? Module 4
Agreed value or replacement value Activity
Topic 4.24.1

Insurance is based on the concept of ‘sharing the risk'.

Worksheet 8a
Sharing the risk
Part A:
1. Working as a class, examine the mobile phone PDS resources provided by your teacher
and come up with a simple class PDS for phone insurance that all students agree on.
Record the essential features of class policy below.
FBIC PDS details:

2a. Using the information provided to the class by the FBIC Representatives, complete the
following information (updating throughout this activity as required):

BRAND X PHONE VALUE $450

TOTAL NUMBER OF PHONES INSURED

Total value of phones insured

Insurance premium per phone collected

Total premiums collected

Total claims

Total claim payouts

Total remaining in FBIC premium pool

2b. Based on the information recorded in Question 2a, how much money does the insurer
have in your class mobile phone insurance pool?

51
What’s it worth? Module 4
Agreed value or replacement value Activity
Topic 4.24.1

2c. After your teacher has conducted some removal/loss/damage scenarios within your class,

Worksheet 8a
Sharing the risk
the insurance company representatives will update their records. Based on the information
recorded in Question 2a, after incidents, claims (and appeals, if any), how much money
does the insurer have left in your class mobile phone insurance pool?

Part B:
Indemnity or replacement value

3. Write down the value of your phone referred to in the activity.

4. How would you feel if you were offered a payout for half the value upon loss, breakage
or theft of the phone? Explain.

5. For your class insurance agreement, why would you possibly not be covered in full for
loss, breakage or theft of your phone?

6. Choose one commercial PDS that you examined previously. Under the terms and
conditions of this commercial PDS, why would you possibly not be reimbursed in full for
loss, breakage or theft of your phone?

52
What’s it worth? Module 4
Agreed value or replacement value Activity
Topic 4.24.1

7. Fair Market Value (FMV) in insurance terms means:

Worksheet 8a
Sharing the risk
8. Replacement Value in insurance terms means:

9. Consider the following situation that you may face in the not too distant future. You’re
18, you’ve left school and you’re working full time. You and one of your friends from
school share an apartment with a 19 year old TAFE student you found when advertising a
room for rent online. Some of your possessions include:
• A 10 year old second hand car
• Your parents old lounge suite, comprising 2 recliners and a 2 person bench seat
• 50” 125cm TV and surround sound
• Smartphone
• Internet router/modem
• Microwave
• Bed
• Student desk
• Pushbike
• Small bookshelf
• Gaming console
• Sporting equipment
• Tablet computer
• Refrigerator

53
What’s it worth? Module 4
Agreed value or replacement value Activity
Topic 4.24.1

Other possessions you think you might own after moving out of home at 18:

Worksheet 8a
Sharing the risk
Think about the types of items from the list you created that you would be likely to
insure. Be realistic – you are unlikely to insure an item valued at less than $100. Which
items would you be happy to have Fair Market Value insurance cover for and which
items would you prefer to be insured for Replacement Value? List these items in the chart
below:
Think about the types of items from the list you created that you would be likely to
insure. Be realistic – you are unlikely to insure an item valued at less than $100. Which
items would you be happy to have Fair Market Value insurance cover for and which
items would you prefer to be insured for Replacement Value? List these items in the chart
below:

FAIR MARKET VALUE REPLACEMENT VALUE

INSURANCE ITEMS INSURANCE ITEMS

54
What’s it worth? Module 4
Agreed value or replacement value Activity
Topic 4.24.1

10. The value of things

Worksheet 8a
Sharing the risk
a. Which item from the ‘Fair Market Value’ list do you consider to be the item you’d be
most comfortable having insured in this manner?

b. What reason or reasons do you have for not having this item in the ‘Replacement
Value’ list?

c. Which item from the ‘Replacement Value’ list do you consider to be the item you’d
consider to be a ‘must have’ in this category?

d. What reason or reasons do you have for not wanting this item to be in the ‘Fair
Market Value’ list?

55
What’s it worth? Module 4
Agreed value or replacement value Activity
Topic 4.24.1

11. The shared risk principle of insurance is about:

Worksheet 8a
Sharing the risk
12. What relationship exists between the level of risk and the size of the premium (for
example, investigate house values and insurance premiums)?

56
What’s it worth? Module 4
Agreed value or replacement value Activity
Topic 4.24.1

FOR FBIC INSURANCE REPRESENTATIVES ONLY

Sharing the risk - FBIC student representative worksheet

Worksheet 8b
Instructions for FBIC representatives:

Complete the following details for your class, either on a document similar to this one, or in
a spreadsheet. Complete the table and calculate the total class value of the phones:
• Complete the table with the names of the students in the class (1 per pair) who are
insuring their phone.
• Class tally of phone type = numbers of students in the class (again, unless the class has
multiple phone types).
• Unit price = $450, as per the resources, unless the teacher has included further
phone types.
• Total per phone = Class tally x Unit price for phone
• Update these records ASAP as soon as events happen in class that involve anything
regarding your company and your clients within the class who hold insurance policies
with you.

57
What’s it worth? Module 4
Agreed value or replacement value Activity
Topic 4.24.1

1. Complete the insurance company records and calculations in the table below, either on

Sharing the risk - FBIC student representative worksheet

Worksheet 8b
this document or in a spreadsheet:

Phone
Premium Claim
Client name Phone model insured Claim reason Payouts
collected amount
value
$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

$ $ $ $

TOTALS: $ $ $ $

Total funds remaining in the FBIC insurance $

pool (total premiums – total payouts)

58
What’s it worth? Module 4
Agreed value or replacement value Activity
Topic 4.24.1

2. Summarise the information you have collected and calculations you have completed for

Sharing the risk - FBIC student representative worksheet

Worksheet 8b
distribution to your clients (the class):

BRAND X PHONE VALUE $450

TOTAL NUMBER OF PHONES INSURED

Total value of phones insured

Insurance premium per phone collected

Total premiums collected

Total claims

Total claim payouts

Total remaining in FBIC premium pool

59
 Module 4
Managing and sharing risk Activity
Topic 4.24.1

Below is a list of items that can be insured. Place these items on the 10 rungs of the table that

What’s MOST important to me?

Worksheet 9
follows, with 10 being the item you consider most needs to be insured and 1 being the item
you consider least needs to be insured.

Rules:
• One item only per rung of the table.
• No rungs to be left blank.
• Only 10 items can be placed in total, which means that some items miss out on the
rankings altogether.

Your choices:
• Home
• Contents and items within the home
• Car
• Pushbike
• Laptop
• iPad
• Mobile phone
• Health
• Travel
• Income (money you receive from work)
• Pet
• Alien abduction
• Flood
• Bushfire
• Hail
• Terrorism
• Body parts (e.g. voice)
• Ride-on mower

60
What about me? Module 4
From the consumer’s point of view Activity
Topic 4.34.1

Classroom activity:

Teacher Notes
Suggested time: 1 Lesson

Student worksheets:
Worksheet 10: Insurance stories

Resources:
To complete this activity students will require internet access.
Jump-off websites:
https://www.suncorp.com.au/insurance/
https://www.aami.com.au/
https://www.budgetdirect.com.au/
https://www.allianz.com.au/

This topic focuses on the variety of circumstances that can surround insurance claims and
experiences. The students will investigate a range of situations that may arise and lead the
consumer to think differently about the factors surrounding their insurance policies.
(a) Distribute Worksheet 10 – Insurance stories. Students work individually to complete the
worksheet questions related to the seven insurance story case studies.

CASE STUDY SOLUTION

Case
Appropriate insurance policies
Study
1 Travel Insurance.
2 Comprehensive Motor Vehicle Insurance.
3 Health Insurance, Boat Insurance, Income Protection Insurance.
4 Income Protection Insurance, Health Insurance.
5 Home and Contents Insurance.
6 Home and Contents Insurance, Caravan Insurance.
7 Pet Insurance.

(b) Students access insurance company websites to complete research activity relating to their
case studies to help determine which insurance is required.

61
What about me? Module 4
From the consumer’s point of view Activity
Topic 4.34.1

(c) Reflective learning. Students could:

Teacher Notes
• complete their own research on ‘insurance stories’ within their own experience, as set
out in the second part of the handout.
• choose one or more of the situations discussed and create a list of points that they
would need to take into consideration when taking out a particular insurance policy.

(d) Extension activity:

Have students prepare an oral report, edited or unedited podcast (such as recorded
conversation on a mobile phone or tablet), poster or PowerPoint display on their personal/
family ‘insurance story’. Students report back to the class as a whole on their insurance
story. You will need to create clear ground rules on appropriateness and types of
insurance stories that are allowable in a school environment. Recorded stories will need to
be checked by the teacher prior to playing for the class.

62
What about me? Module 4
From the consumer’s point of view Activity
Topic 4.34.1

1. Read through the case studies at the end of this worksheet and complete the table below.

Worksheet 10
Insurance stories
As you complete each case study you will be asked to provide the type of insurance policy
that may cover these situations. Possible policies include:

• Comprehensive Motor Vehicle Insurance

• Home and Contents Insurance
• Boat Insurance
• Caravan Insurance
• Travel Insurance
• Income Protection Insurance
• Accidental Injury Insurance
• Kidnapping and Ransom Insurance
• Compulsory Third Party Insurance
• Pet Insurance
• Health Insurance
• Roadside Assistance Cover
• Body Parts Insurance
• Life Insurance

63
What about me? Module 4
From the consumer’s point of view Activity
Topic 4.34.1

Worksheet 10
Insurance stories
Will their
Type of insurance policies
Case claim be
that may cover this Reasons
Study successful?
situation
Y/N
1

64
What about me? Module 4
From the consumer’s point of view Activity
Topic 4.34.1

Worksheet 10
Insurance stories
CASE STUDY ONE
For years Maria and Dimitra had dreamt of travelling to Greece, the birthplace of their
grandparents. For both girls, this was their first trip overseas. Being young students they
planned to backpack their way around Greece and to finish their holiday with a week in
the Greek Islands, finishing with a trip to the party island of Mykonos. Both girls decided
to travel with backpacks. When Maria and Dimitra arrived at Athens airport they collected
their luggage and went through the customs point. Maria asked Dimitra to look after her
backpack while she visited the bathroom. However Dimitra was distracted by the display in
one of the airport shops. When Maria returned from the bathroom she discovered that her
backpack was missing.

CASE STUDY TWO

Sheldon, who had been learning to drive on his grandparents’ farm, was ready to apply for
his learner’s permit test. He asked his older brother Marco (owner of a registered vehicle
and a full drivers licence) to take him for a practice drive. Marco needed to go to the local
shopping centre so decided to let Sheldon drive. When Sheldon arrived at the shopping
centre he parked next to a BMW convertible. Sheldon misjudged the turn into the parking
bay and scraped the side of the BMW.

CASE STUDY THREE

Joe is a keen jet skier and takes his jet ski out on most weekend days during summer. One
weekend he was using his jet ski near a busy wharf area. He slipped on the jet ski and lost
control. The jet ski collided with the side of a yacht. There was a large gash in the side of
the yacht and the jet ski was broken beyond repair. Joe required rescuing as a result of the
collision and ended up in hospital with two broken legs. This incident caused him to lose his
job as a delivery driver.

CASE STUDY FOUR

Penny is a self-employed mother of two. She runs her own beauty treatment business from
home. She has several regular clients but the business is only large enough to cover her
own wages. She does not have enough business to hire anyone to help her out. This is her
only source of income. She is also a keen horse rider. Last weekend when she was horse
riding on the beach she was thrown from her horse and fractured her pelvis. After being
released from hospital, Penny was informed that the only treatment was to stay in bed. Her
doctor advised that she should move around as little as possible for up to twelve weeks.
This meant that she was unable to continue with the business and faced the expense of
hiring someone to deal with the regular clients.

65
What about me? Module 4
From the consumer’s point of view Activity
Topic 4.34.1

Worksheet 10
Insurance stories
CASE STUDY FIVE
Idris Random came home to discover the front door to his home open. He went inside
to find that the house had been ransacked and the new OLED screen TV and home
entertainment unit was missing. Upon closer investigation, he realised that he couldn’t be
sure that he’d locked the front door or the lounge room window when he left for work. He
called the police immediately to report the loss.

CASE STUDY SIX

Rajesh always holds the work Xmas BBQ the day before he takes his family on a caravan
holiday down the coast. This year the BBQ looked as if it could be spoilt by stormy weather.
However Rajesh was not to be put off. He backed the caravan down the driveway of his
home and placed the BBQ in front of it so that the BBQ was protected from the wind.
Despite these efforts the BBQ was difficult to light. Everyone had arrived and the party was
progressing well. Rajesh decided to use some kerosene to help to light the BBQ. He poured
kerosene over the BBQ and placed the gas bottle under it. He set a match to the BBQ, the
flame took, but was quickly out of control. In moments the caravan was alight and the fire
spread across the lawn and into his neighbour’s greenhouse.

CASE STUDY SEVEN

Dan and Linda are breeders of pure-bred Labrador dogs. As per their local zoning
regulations they live on acreage 10km from their local town centre. One breeding mother,
Winter, ate a poison bait that was placed on their property by accident when the local
council was performing wild dog baiting. Winter required urgent transport to the local vet,
a one week stay under 24-hour monitoring and 3 weeks on prescription medication once
back at home to make a full recovery.

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From the consumer’s point of view Activity
Topic 4.34.1

Worksheet 10
Insurance stories
2. Research task
There is a wide variety of circumstances surrounding insurance claims and experiences.
As homework, interview a family member or friend who has had an insurance claim, or
a situation where something happened that in hindsight they would have liked to have
insurance for.
Record an "insurance story" placing emphasis on:
• The event
• What kind of insurance was involved
• Why it happened
• Why the person had/did not have insurance
• How the person felt about the outcome of the insurance claim
• Any changes the person would make to their insurance situation as a result of
the event.

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From the consumer’s point of view Activity
Topic 4.34.1

Worksheet 10
Insurance stories

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Assessing the reality of risk Activity
Topic 4.44.1

Classroom activity:

Teacher Notes
Suggested time: 2-3 Lessons

Student worksheets:
Worksheet 11: What are the risks around me?
Worksheet 12: What do I want to know from the Pro?

Resources:
https://carsafe.com.au/risk-rating Risk Ratings
https://carsafe.com.au/motorists Preventing car thefts, safety tips for motorists
https://carsafe.com.au/local Local theft profiles
http://www.padlet.com Online ‘sticky note wall’ resource

Guest speaker (optional): Arrange for a guest speaker from the insurance industry

In Topics 4.2 and 4.3, students looked at potential risk and its minimisation. This topic
addresses the insurance industry’s concern about the incidence of some activities, such as the
prevalence of certain types of thefts, which push up the price of premiums.

(a) Distribute a copy of Worksheet 11 – What are the risks around me? Working in groups
students investigate the concept of risk and the impact of theft on insurance costs.
Students read the website article and answer questions.

(b) Arrange for a representative from the insurance industry to visit the class.
Before the visit:
• Distribute Worksheet 12 – What do I want to know from the Pro?
• Students prepare a list of appropriate questions for the industry visitor. Examples
include:
– Why is the cost of car insurance different here than other places in the state?
– How do you figure out how much insurance will cost?
– What kind of things does your company insure?
– How does your company make money if they are paying out insurance claims all
the time?

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During the visit:

Teacher Notes
• Insurance companies often deal with situations where loss or damage has occurred to
personal property. In Question 2 students prepare a list of scenarios of loss that could
occur and determine their own estimate of the yearly cost of insuring against the risk
in each scenario. Whilst the insurance industry representative is visiting, have students
present some of these scenarios and record the insurance industry representative’s
responses next to their own estimations. Examples include:
– Theft of possessions while at school.
– Sporting injuries among students.
– The probability of a male having a motor accident within 1-3 years of gaining his
driver’s licence.

After the visit:

– Provide each student with 2 x sticky notes.
– On one sticky note, students write down one thing they learned or found
interesting as a result of the guest speaker’s visit. This MUST fit on the note and
be readable, so they will need to summarise.
– On the second sticky note, students write down one thing they’d like to know
more about as a result of the guest speaker’s visit. This MUST fit on the note and
be readable, so they will need to summarise.
– Provide two spaces in the classroom (door, windows, board, etc.) for students to
place their respective sticky notes.
– Engage the class in a reflective discussion stemming from the notes by selecting
some at random from both the ‘interesting’ and ‘want to know more’ categories.

This activity can also be completed online using the padlet (online ‘sticky note all’
learning tool). This can be done by:
– Teacher signs up for a free account on padlet.com.
https://padlet.com/auth/signup
– Students DO NOT need an account for this activity.
– You can find instructions on creating a padlet, and more about what padlet is
here: http://jn.padlet.com/article/40-how-do-i-create-a-padlet.
– Once you’ve created your class padlet, provide your students with the link to the
padlet for this activity, and have them add an ‘interesting’ and ‘want to know
more’ question to the class wall.
– It is recommended you have students add their names to their posts and monitor
the postings on your computer to remove any inappropriate padlet posts.
– Engage the class in a reflective discussion stemming from the notes by selecting
some at random from both the ‘interesting’ and ‘want to know more’ categories.

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(c) Extension activity:

Teacher Notes
Students prepare a printed poster or online infographic explaining ways of avoiding or
minimising risks of loss or disastrous situations. For instance, students could prepare a
poster (online or paper based) on how to minimise the risk of:
• Car theft
• Bike theft
• Mobile phone theft
• Household theft

Detailed instructions on the creation of an online infographic can be found in the Teacher
Notes for Topic 4.6 - I’ve got rights...but what about responsibilities?

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1. Consumers and the insurance industry are concerned about potential risk and its

What are the risks around me?

Worksheet 11
minimisation.
The insurance industry is concerned about insurance fraud and theft, and the way they
push up the premium price making it more expensive for consumers to buy.
Read the following article and answer the questions that follow:

Thefts down, but car crooks not immobilised

When it comes to car theft, police win some and lose some.
As car makers have invented new ways to prevent theft, villains have overtaken the
technology. To beat immobilisers, which became compulsory on all new cars sold after
January 2001, thieves simply found new ways to obtain the keys.
They break into houses, steal cars from petrol stations or respond to a classified ad
posing as a prospective buyer and steal the car on an extended test drive.
Another cunning method involves the thief deliberately crashing into the rear of a car
and, when the owner gets out to exchange particulars (details), the thief muscles his
way in and drives off.
Then there are the thieves who simply tow cars away.
Nola Watson, the head of fraud and security at NRMA Insurance, said car theft would
never go away but authorities "must not give up the fight". Car theft added about
$150 to the cost of the average premium, she said, and cost the community $1 billion
a year.

Source: http://www.smh.com.au/articles/2002/08/07/1028157965899.html

Answer the following:

(a) Explain what measures car manufacturers have taken to minimise the risks of
car theft?

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(b) How has the rate of car theft impacted on the cost of insurance?

What are the risks around me?

Worksheet 11
(c) Outline what you consider to be the responsibilities of the car owner in relation to
car theft?

(d) What actions can individuals can take to avoid a car theft? List five actions that an
individual can take to minimise the risk of car theft. Help for this activity may be
found from https://carsafe.com.au/motorists

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2. Load the website ‘Local Threat Profile’ at https://carsafe.com.au/local. Enter the

What are the risks around me?

Worksheet 11
post code for your local area and use at the data generated to answer the following
questions.
(a) How many motor vehicle thefts have occurred in your area in the last year?

(b) What percentage of motor vehicle thefts have occurred from residences?

(c) How many vehicle thefts per day occur on average in your state?

What are the risks around me?

3. Think about a car that you or your family own, or a car that you would like to own.
For the purposes of this activity this can be real or hypothetical. Load the website
https://carsafe.com.au/risk-rating and enter in the name and model of this car,
choosing the closest match to the car you are thinking of and answer the following
questions:
(a) What is the star risk-rating for your car?

(b) How does your state compare to other Australian states in terms of risk-rating for
your car?

(c) What is the main factor you think contributes to your star rating being different to
the other states which are higher or lower than your star ranking?

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(d) Underneath the star rating for your car, you will

What are the risks around me?

Worksheet 11
find tips to reduce the risk of theft. Using this
information, complete the ‘tips table’ below,
outlining each tip and how you think following
that tip will help reduce the risk of theft.

HOW WILL THIS HELP REDUCE

TIP
THE RISK OF THEFT?
TIP 1:

TIP 2:

TIP 3:

4. In terms of numbers of thefts, the ‘Nissan Pulsar N15’ has consistently been one of the
most stolen cars in Australia. This car originally came out pre-2000. What factors do you
think contribute to this car consistently being one of the most stolen cars in Australia?

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What are the risks around me?

Worksheet 11
5. The ‘Holden Commodore VE’, which first came out in 2006, is also one of the most
stolen cars in Australia. This is a much newer car, with more security features than the
‘Nissan Pulsar N15’. What factors do you think contribute to this car consistently being
one of the most stolen cars in Australia?

6. Below are two quotes for comprehensive car insurance from Suncorp. To obtain
these quotes, identical customer and vehicle details were entered in the request a full
comprehensive car insurance quote in two different Australian locations. The only variable
that changed was the postcode and address.
Quote 1: Location that experienced 16 car thefts in 2016: $833.54 (annually).
Source: https://www.suncorp.com.au/insurance/car.html > Get a quote

Quote 2: Location that experienced 6 thefts in 2016: $734.31 (annually).

Source: https://www.suncorp.com.au/insurance/car.html > Get a quote

Theft rates are not the only factor taken into account when assessing the cost of insuring
an item, such as a car, in a certain area. The insurance industry takes into account many
considerations when calculating premium costs in different locations, including factors
such as the number of incidents (e.g. crashes) that occur in that location. As you can see
from the premiums above, it is very clear that it can cost you significantly more for certain
kinds of insurance based upon where you live.

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Do you think it is fair that where you live can increase your insurance premium,

What are the risks around me?

Worksheet 11
sometimes quite significantly? Explain why or why not.

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The purpose of this worksheet is to get ready for a visit from a representative working within

What do I want to know from the Pro?

Worksheet 12
the insurance industry.
1. List any questions you have about insurance. Consider questions you have about
insurance in general as well as questions specific to your local area:

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Topic 4.44.1

2. Conduct your own assessment of the risk of various scenarios taking place and the

What do I want to know from the Pro?

Worksheet 12
cost of insuring that risk (for example, the theft of possessions at school). These can be
around the school, in the local community or in other locations with the approval of your
teacher. Ask the visiting insurance industry representative for their thoughts on these
scenarios, including the cost of insuring the risk.

COST OF INSURING THE RISK

(PREMIUM) PER YEAR
RISK
INDUSTRY REP.
YOUR OPINION
OPINION
SCENARIO 1:

SCENARIO 2:

SCENARIO 3:

SCENARIO 4:

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3. Use this space to jot down any thoughts you have during the visit, and any new

What do I want to know from the Pro?

Worksheet 12
questions you may have. When the teacher indicates it is time to do so, ask the insurance
industry representative any questions you have, including those listed in questions 1 & 2
(if they have not been answered).

4. After the insurance industry representative has visited your class, complete the PMI chart
below reflecting on the visit.

PLUS MINUS INTERESTING

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Do I REALLY need insurance? Activity
Topic 4.54.1

Classroom activity:

Teacher Notes
Suggested time: 1-2 Lessons

Student worksheets:
Worksheet 13: What do I have to lose?
Worksheet 14: Insurance and my life cycle

Resources:
https://www.businessinsider.com.au/insurance-for-every-age-2014-6?r=US&IR=T
Types of insurance you should buy at every age
https://www.covermore.com.au/interactive-claims-map
Interactive travel insurance claims map
https://carsafe.com.au/local
Statistical data on car thefts
https://www.bettercloud.com/monitor/the-academy/how-to-create-custom-maps-in-google-maps/
How to guide to build a customised google map
http://understandinsurance.com.au/glossary
Glossary of terms

Students will need large sheets of paper to complete the life cycle activity.

This activity encourages students to assess their requirements for different insurance needs
from a life cycle approach. Students will come to recognise that people have different
insurance priorities over their life cycle according to factors such as age, employment, net
worth etc. Insurance needs should be continuously reassessed.

(a) Distribute Worksheet 13 – What do I have to lose?

• Students respond to the first question by indicating their level of agreement on the
continuum. Students then summarise their own attitudes to insurance. Working in
small groups students can compare and discuss their attitudes towards insurance
needs.
• Students investigate https://www.covermore.com.au/interactive-claims-map in
the second question, considering the claims people have made in various destinations
around the world. Students then re-examine their opinion on the different insurance
statements given.

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(b) Distribute Worksheet 14 – Insurance and my life cycle. This works as either an individual

Teacher Notes
or group activity.
To focus students on their life cycle, PART A directs them to consider what their individual
life stages might be.
Before starting PART B, it is important for students to recognise that some insurance
cards may:
• not be used at all
• be used occasionally
• be used more than once
• be added or duplicated in the blank sections provided

Individual activity:
Students select and place insurance cards within each life stage. Depending on the
composition and needs of your class, responding to the task with a spreadsheet or word
table may be preferable for individual submissions.
Students join in a class discussion to negotiate and complete a class consensus response
for the life cycle insurance requirements. They will need to consider how they believe
these insurance needs would alter at different stages of the life cycle.

Group activity:
Within small groups students draw the life cycle as a continuous line on a large sheet of
paper. Students negotiate to place the insurance cards along the line.
Groups report back to class on how they believe these insurance needs would alter
at different stages of the life cycle. A life cycle line for insurance based on the class
consensus could be constructed.

(c) Once students have completed the timeline activity, have them access a printed or online
version of:
https://www.businessinsider.com.au/insurance-for-every-age-2014-6?r=US&IR=T
Have students compare the Business Insider insurance recommendations and timelines to
their life cycle insurance requirements and answer the following questions:
• What similarities did you have to the Business Insider insurance suggestions?
• What differences did you have to the Business Insider insurance suggestions?

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Facilitate a class discussion around the similarities and differences that students

Teacher Notes
encountered. Some suggested points and discussion starters:
• What justifications and reasons do students have for the choices they have made?
• How do students feel about the list the Business Insider has provided? Do they agree
or disagree with the items on the list?
• What insurance needs do students strongly feel should occur at specific points in the
life cycle? Why?
• What similarities and differences exist between the groups within the class? Use
these to construct a whole class response to insurance throughout the life cycle.

(d) Reflective learning

Students:
• Come together as a class to examine what similarities and differences existed
between the groups within the class. Use these to construct a whole class
response.
• Construct an individual life cycle, taking into account their specific personal goals,
what they have covered in this topic and considered within their group.
• Evaluate any change or confirmation of opinion relating to insurance needs –
consider the possibility of ‘over’ or ‘under’ insurance and investigate examples of
these.

(e) Extension activity

• Have students investigate raw data on insurance claims in their area (such as that
shown at https://carsafe.com.au/local) and construct a custom google map
showing this data for their region, using custom pins. Students will need an @gmail.
com email account for this activity.
• Step by step instructions on how to create a custom google map (including how-to
video) can be found at https://www.bettercloud.com/monitor/the-academy/how-
to-create-custom-maps-in-google-maps/

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1. What are your feelings about insurance? Place an "x" on the line to indicate the extent

What do I have to lose?

Worksheet 13
to which you agree or disagree with each of the following statements:

I don’t need any private health insurance.

1 2 3 4 5

Strongly Disagree Strongly Agree

Reason for rating:

If you have superannuation you definitely don’t need life insurance.

1 2 3 4 5

Strongly Disagree Strongly Agree

Reason for rating:

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Superannuation isn’t necessary for retirement, because once you finish work you can live

What do I have to lose?

Worksheet 13
on the aged pension.

1 2 3 4 5

Strongly Disagree Strongly Agree

Reason for rating:

Comprehensive motor vehicle insurance should be compulsory for all motor vehicle owners.

1 2 3 4 5

Strongly Disagree Strongly Agree

Reason for rating:

Travel insurance is only necessary for older people who may become ill and have to cancel
their trip.

1 2 3 4 5

Strongly Disagree Strongly Agree

Reason for rating:

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Young people living in shared flats don’t need to bother about insuring their personal

What do I have to lose?

Worksheet 13
property; their landlord will take care of it.

1 2 3 4 5

Strongly Disagree Strongly Agree

Reason for rating:

It is important that I take out insurance on my pets as soon as I become their owner

1 2 3 4 5

Strongly Disagree Strongly Agree

Reason for rating:

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2. Investigate at least five or more locations, such as the one shown in the example below,

What do I have to lose?

Worksheet 13
on the interactive travel claims map at:
https://www.covermore.com.au/interactive-claims-map
Click through this interactive map, examining some of the insurance claims that have
been made by Cover-More insurance customers all over the world.
Consider Debra and her experience in Papua New Guinea as an example:

Source: https://www.covermore.com.au/interactive-claims-map)

Investigation notes:

Use the space below to make notes on the stories that you read. When reading through
the experiences outlined on the website above, write down a brief summary of five or
more experiences of your choosing. Some suggestions on things to consider in making
your choices:
• Experiences that caught your attention
• Events or amounts of money that you thought were interesting, serious, unusual or
just plain weird

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3. Once you have examined five or more locations, use a different coloured pen to review

What do I have to lose?

Worksheet 13
the rating you gave to the statement ‘Travel insurance is only necessary for older people
who may become ill and have to cancel their trip’ in Question 1.

(a) Has the placement of your ‘x’ changed? Circle: Y / N

(b) Why or why not?

(c) The travel insurance that was taken out by people on the interactive claims map
meant that they had insurance coverage against some extremely costly events that
occurred whilst travelling.
When considering your insurance needs, you have to ask yourself how willing you
are to risk something going wrong for you without any kind of insurance cover.
Taking into account the data you have just investigated on travel insurance, review
the placements of your other ‘x’ markers in Question 1.

(d) Briefly outline which markers stayed the same, which ones changed, and the reasons
for them staying the same or changing.

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A person’s lifetime will be punctuated by many events, some of which will possibly require

Insurance and my life cycle

Worksheet 14
insurance protection. Many events, from very minor to extreme have a risk of occurring in
everyone’s life, regardless of income or location.
• Some events are unexpected (e.g. fire, sudden death)
• Some events are expected (e.g. travel)
• Most events can be planned for, and can include risk management measures such as
insurance

PART A

Think about what you’ll be doing during your lifetime.

What do you expect/hope/plan to be doing at each of the

time intervals listed in this table? As you complete each
section add in as much detail as you can to your response.
For example, consider:
• What might your first job be?
• What destination might you go to your first big trip?
• Where do you think you’ll be living at the different
points listed?
• What kind of real estate do you think you’ll be living
in at the various points listed?
• What relationship / family commitments do you think
you will have?

Your responses to these factors may influence your need

for insurance.

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My thoughts on the future:

Insurance and my life cycle

Worksheet 14
AGE WHAT WILL I BE DOING?

15

20

25

30

35

40

50

60

70

80

90

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Topic 4.54.1

PART B

Insurance and my life cycle

Worksheet 14
Before starting this activity cut out and review the individual insurance cards. If you are
unfamiliar with any of the terms, check http://understandinsurance.com.au/glossary,
Google define or an insurance company website such as www.suncorp.com.au.

Now read through the My Life Cycle life stages and add cards for all types of insurance you
think you’ll need for each life stage. It’s important to note that some cards may:
• not be used at all
• be used occasionally
• be used more than once
• be added or duplicated in the blank sections provided

My Life Cycle
Events and their insurance requirements in my lifetime:

When I retire from work:

What do I expect to be doing?

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Insurance and my life cycle

Worksheet 14
When I turn 60:
What do I expect to be doing?

When I take my first international boat cruise:

What do I expect to be doing?

When I buy my ‘midlife crisis’ purchase (e.g. car, motorcycle)

What do I expect to be doing?

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Insurance and my life cycle

Worksheet 14
When I go on a big trip (e.g. around Australia, world trip):
What do I expect to be doing?

When I turn 40:

What do I expect to be doing?

When I start the type of family I want (consider pets, children, adoption,
fostering, etc.):
What do I expect to be doing?

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Insurance and my life cycle

Worksheet 14
When I buy my first home, or enter in to a long-term rental or lease agreement:
What do I expect to be doing?

When I settle down, on my own or with someone else:

What do I expect to be doing?

When I get a permanent, full time job:

What do I expect to be doing?

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Insurance and my life cycle

Worksheet 14
When I buy my first car:
What do I expect to be doing?

When I leave school:

What do I expect to be doing?

Before I turn 18:

What do I expect to be doing?

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Insurance Cards

Insurance and my life cycle

Worksheet 14
Cut out and use the cards on this sheet to complete the My Life Cycle activity. Write out any
insurances that you need more than one card for in the blank sections provided.

Full private health insurance Trauma health insurance

Landlord insurance Whole of life insurance

Motor vehicle insurance Third party vehicle insurance

Householders’ insurance Public liability insurance

(home owners) Income protection or disability insurance

Travel insurance Loss of profits insurance

Insurance for business contents Household contents insurance

Mortgage insurance Renters insurance

Pet insurance Jewellery insurance

Riot insurance Extended warranty

Marine insurance Public liability insurance

Farm, stock and livestock insurance Jewellery insurance

Marine insurance Extended warranty

Farm, stock and livestock insurance Public liability insurance

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Insurance and my life cycle

Worksheet 14

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I’ve got rights…but what about Module 4
responsibilities? Activity
Topic 4.64.1

Classroom activity:

Teacher Notes
Suggested time: 1-3 lessons

Student worksheets:
Worksheet 15: Insurance rights and responsibilities
Worksheet 16: Putting the pieces together
Worksheet 16a: Case studies and jigsaw pieces

Resources:
https://www.moneysmart.gov.au/insurance Summary of insurance types
http://understandinsurance.com.au/glossary Insurance terms glossary
https://piktochart.com/ Online infographic maker
https://www.canva.com/create/infographics/ Online infographic maker
https://www.jigsaw.org/ Jigsaw activity tips and steps
scissors, sticky tape, blu tack
Case study and jigsaw printouts. The number of printouts will be dependent on class numbers.

Infographics:
http://infographics-images.idlelist.com/wp-content/uploads/2012/08/all-you-need-to-know-about-facial-hair.jpg
‘Beards’ infographic
https://s-media-cache-ak0.pinimg.com/originals/21/f4/72/21f472d8a953e035de2d288130923ed6.jpg
‘Women’s health’ infographic
https://www.moneysmart.gov.au/insurance/travel-insurance/australians-and-travel-insurance
‘Travel insurance’ infographic

By completing this activity, students will be able to appreciate the rights and responsibilities of
consumers and insurers.

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I’ve got rights…but what about Module 4
responsibilities? Activity
Topic 4.64.1

(a) Distribute Worksheet 15 - Insurance rights and responsibilities. Have students access the

Teacher Notes
summaries of different insurance types from the Understanding Insurance website
http://understandinsurance.com.au/glossary. If this is not possible, issue students with
a printed copy of the summaries of different insurance types from the Understanding
Insurance website.

(b) Students read the worksheet and answer Questions 1 – 3. Discuss responses to these
questions as a class. Students keep this response sheet with them for the following
activities.

(c) Provide students with Worksheet 16 – Putting the pieces together. Complete Question 1
of this worksheet individually before setting up the jigsaw activity.

(d) Follow the procedure outlined below to utilise the case studies and jigsaw pieces to
complete an expert group activity which will culminate in small groups of students helping
each other to learn about the core concepts of each case study.
Once each small group is finished, they will have learned from each other and have a
completed group jigsaw. It is suggested that the teacher photocopy Worksheet 16a –
Case studies and jigsaw pieces with the jigsaw piece on one side and the matching case
study on the other. The number of copies required will vary depending on class size, as
detailed in the ‘Jigsaw expert group activity – procedure’ section.

Jigsaw expert group activity - overview:

In the activity that follows, students will form both home groups and expert groups at
various points. The home group will be the starting and finishing point for each student.
Each home group will consist of five students, with each student being given one of
five different case studies (and corresponding jigsaw piece) relating to specific type of
insurance. They will then move away from their home group to form expert groups with
the other students in the class who share the same case study.
Students will work with their expert group members to develop an expert response; each
student in the expert group will take a copy of this agreed response back to their starting
home group and share their newfound expertise with the other students in the home
group. For a more detailed explanation of how expert groups work and tips for their
implementation, please refer to https://www.jigsaw.org/.

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Jigsaw expert group activity - procedure:

Teacher Notes
i. For the next part of this activity students work in both home and expert groups. This
works best with 25 students but can be modified for more or fewer students.
This activity consists of five case studies. Place students into groups of five, seated
together in their own space with room to work. If you have less than 25 students
discard one of the case studies and address each of the 4 case studies in groups of 4.
If you have more than 25 students or cannot distribute evenly pair some students up
to work as one unit within the home and expert groups.
Allocate students to their home group and distribute to each student one of the 5
case studies with jigsaw piece. These groups that have just been formed will be the
‘home groups’ of the jigsaw.

Example home group:

Student 1 – case study, questions and jigsaw piece for ‘The stolen phone’
Student 2 – case study, questions and jigsaw piece for ‘Just around the corner’
Student 3 – case study, questions and jigsaw piece for ‘A case of theft’
Student 4 – case study, questions and jigsaw piece for ‘A sick puppy’
Student 5 – case study, questions and jigsaw piece for ‘Blow me down’

ii. Explain what the home groups will do

Explain to students that they will be moving from their home group and examining
a case study about insurance, and developing an agreed ‘expert group’ response.
Once this ‘expert’ response is completed, tell students that they are going to then be
responsible for presenting and explaining their case study to the home group they are
sitting with now.

iii. Break into expert groups

Have students leave their home group to sit with a group of students assigned to the
same case study, their ‘expert group.’ Ensure this group has space to sit together and
work.
Provide this expert group with an extra copy of their case study and jigsaw answer
sheet for them to construct their agreed ‘expert’ response. Ask students to begin
reading the case study to themselves, or have a nominated student within the group
read the case study aloud.
When students are finished reading, the group should discuss their case study, fill
out their jigsaw answer sheet, and decide how they should present and explain this
information to their home groups.
Each student cuts out and completes their jigsaw puzzle piece with the information
from the agreed group response to take back to their home group.
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Students may add whatever colour, text, diagrams, etc. that they deem necessary to

Teacher Notes
answer and present their information and answers to their home group. The experts
will be considering their case study in the context of the following questions, included
on the student worksheet:

• Is the insured person justified in going ahead with an insurance claim? Make
sure students give their reasons.
• What were the rights and responsibilities of both the consumer and the
insurance company? Make sure students give their reasons.
• What can be done or should have been done to minimise any loss from the
consumer’s perspective? Make sure students give their reasons.
• How could you protect yourself from something similar happening?
• Should the insurance company pay this claim? Make sure students give their
reasons.

iv. Regroup with Home Groups

Students regroup with their home groups. Each student is responsible for presenting
and explaining their case study and expert group response to their home group.
Once completed, students provide the opportunity for their home group to ask
questions.
After this Q & A is completed, the presenter adds their jigsaw puzzle piece to
their home group response. The puzzle pieces have been designed in such a way
that once cut out they can be turned to complete a jigsaw in a variety of different
configurations. At the completion of the activity, it is suggested that the jigsaws are
stuck together and displayed where students can see them.

(e) Extension activity:

Students will need to refer to the summary table they created in Question 1 of Worksheet
15 – Putting the pieces together, as well as information from
https://www.moneysmart.gov.au/insurance and other resources of their own choosing
(e.g. Google search) to complete this activity.
The following activity can be completed individually, in pairs, or in small groups, however
it is advised that the teacher have students work in their home groups from the jigsaw
activity to complete this exercise.

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(f) Infographic activity procedure:

Teacher Notes
i. Show students examples of well-designed and informative infographics, such as:
Travel insurance:
https://www.moneysmart.gov.au/insurance/travel-insurance/australians-
and-travel-insurance
Beards:
http://infographics-images.idlelist.com/wp-content/uploads/2012/08/all-
you-need-to-know-about-facial-hair.jpg
Female heart disease:
https://s-media-cache-ak0.pinimg.com/originals/21/f4/72/21f472d8a953e035
de2d288130923ed6.jpg

These infographics have all been saved and included at the end of these teacher
notes.

As a class, identify some of the key features of an infographic that make them
visually appealing and informative. Some suggestions of key features:
• Clear purpose and heading.
• Accurate data that makes an impact, catches attention and/or makes a
point.
• Snippets of short, sharp pieces of information presented to catch attention
and be quick and easy to read. Text gets to the point quickly, adding to the
visual information.
• Uses visuals and texts to tell a story or get key information across.
• Some items are highlighted more than others.
• Clear and easy to read fonts and colours.
• Use of shapes to highlight information.
• Varying use of sizes of infographic elements.

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ii. Students meet with their home group and choose one of the insurance types

Teacher Notes
listed below. These are the insurance types that they created summaries for in
Question 1. Detailed information can be found at https://www.moneysmart.
gov.au/insurance:
• Car insurance - including special information for young drivers
• Consumer credit insurance - is it the right option for you?
• Contents insurance - how to choose the right policy for you
• Funeral insurance - things to consider before you sign up
• Home insurance - including storm, flood and fire cover
• Health insurance - for different types of health costs
• Life insurance - including life cover, disability cover and income protection
• Mobile phone, tablet and laptop insurance - coverage for these important
electronic items
• Pet insurance - cover for your pets
• Travel insurance - protection when you are travelling
• Disaster proof your finances - disaster proof your important documents and
financial records
• Renewing your insurance - how to assess your existing policy

iii. Have student groups create an infographic online, by hand or using a computer
program (such as Microsoft Word, Apple Pages, etc.) for a display showcasing
important information about the type of insurance they have chosen.
Infographic online creation tools:
• https://piktochart.com/
• https://www.canva.com/create/infographics/

Students should be encouraged to peruse and use the summary provided in the
ASIC MoneySmart link (https://www.moneysmart.gov.au/insurance) as a jump
off point prior to looking for other relevant information, images, statistics, etc. to
include in their infographic.

Information to include in the infographic:

• Considerations when choosing this insurance
• What the insurance commonly covers
• What the insurance does not cover (“excludes”)
• Positives and negatives of this insurance
• Australia statistics on this insurance type (e.g. Amount of people with this
insurance, total claims each year nationwide, value of claims made)

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Differentiation note:

Teacher Notes
The pet insurance and travel insurance categories of the Money Smart website
(https://www.moneysmart.gov.au/insurance) contain a pre-made infographic that
you may wish to have some students use as a more visually accessible starting point.
Infographic image files:

Source: https://www.moneysmart.gov.au/insurance/travel-insurance/australians-and-travel-insurance 104

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Teacher Notes
Source: http://infographics-images.idlelist.com/wp-content/uploads/2012/08/all-you-need-to-know-about-facial-hair.jpg

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Teacher Notes
T H E H E A R T T R U T H ® C E L E B R AT E S

A DECADE OF INSPIRING
WOMEN TO PROTECT THEIR

That year, the National Heart,

Lung, and Blood Institute
launched The Heart Truth
campaign to make women
HEART DISEASE IS THE M A K I N G H E A R T H E A LT H
FA S H I O N A B L E

more aware of the danger of

heart disease. It all started with #1 KILLER 83
The annual Red Dress Collection
Fashion Show brings the issue to life
and raises awareness. Top designers
a little red dress…
OF WOMEN DESIGNERS
like Diane von Furstenberg and
Michael Kors have lent their talent
with appearances by Heidi Klum,

178 CELEBRITIES
Vanessa Williams, and Sheryl Crow.

Two thirds of women say

that the Red Dress makes
208
RED DRESSES
them want to learn more
about heart disease.

$800,000
in grants awarded to support
community education in
We have provided
partnership with the
thousands of free heart
Foundation for the National
disease risk factor
Institutes of Health.
screenings for women H E A R T D I S E A S E I S P R E V E N TA B L E
OUR MESSAGE
I S N AT I O N A L across the country. By leading a healthy lifestyle, women
The Red Dress® has We launched National can lower their risk of heart disease.
appeared on Wear Red Day® with our

29 BILLION partners in 2002. Each year

product packages
on the first Friday of February,
thousands of people across the
country wear red in support community leaders have
480 EAT RIGHT

1.7 MILLION of women’s heart health. been trained as Heart

Truth Champions,
REGULAR
Red Dress Pins PHYSICAL ACTIVITY
have been educating more than half

54%
distributed across a million people on heart
the country. disease prevention.
30% 46% LIVE SMOKE FREE
Awareness of

48%
heart disease
KNOW YOUR
among women has
1997 2003 2009 nearly doubled.
30% NUMBERS

Women who are informed about heart disease 1997 2009

are 35% more likely to be physically

47
More women are speaking
% active and 47% more likely to report
to their doctors about
weight loss compared with those who are
heart disease.
less aware.

Although significant progress has been made, there is still

work to do. Help The Heart Truth and its partners continue
to make strides. Sources: Unpublished NHLBI tabulation of 2008 mortality data. / Mosca, L.,
et al., Twelve-Year Follow-Up of American Women’s Awareness of

SHARE THIS INFOGRAPHIC WITH AT LEAST ONE Cardiovascular Disease Risk and Barrier to Heart Health. Circulation. Feb 2010;
3:120-127. / Mosca, L., et al., National Study of Women’s Awareness,

WOMAN IN YOUR LIFE.

Preventive Action, and Barriers to Cardiovascular Health. Circulation. Jan 2006;
113(4): 525-34. / The Heart Truth partner-funded survey. March/April 2010.

FACEBOOK.COM/HEARTTRUTH The Heart Truth, its logo, and the Red Dress are registered trademarks of HHS.
®

®
National Wear Red Day is a registered trademark of HHS and AHA.

Source: https://s-media-cache-ak0.pinimg.com/originals/21/f4/72/21f472d8a953e035de2d288130923ed6.jpg
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Over the course of this worksheet you will develop a base understanding of some of the key

Insurance rights and responsibilities

Worksheet 15
terminology that relates to the rights and responsibilities of both insurers and those who hold
insurance policies. You will need this information to develop a shared understanding of some
important insurance concepts with your classmates.

1. Using http://understandinsurance.com.au/glossary, define the following terms:

TERM DEFINITION

PREMIUM

POLICY

EXCLUSIONS

DUTY OF
DISCLOSURE

EXCESS

NO CLAIM
BONUS

PRODUCT
DISCLOSURE
STATEMENT

CLAIM

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2. What is a general insurance policy? Give two examples.

Insurance rights and responsibilities

Worksheet 15
3. What does a policy holder have to disclose to an insurance company?

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Over the course of this activity you and your classmates will take part in ‘jigsaw’ expert

Putting the pieces together

Worksheet 16
groups. Together, you will complete the jigsaw activity on the sheets provided, develop
expertise and share this expertise with a small group of your classmates.

1. Complete the table below, providing a 1-2 sentence summary of what each type of
insurance covers. Refer to the website https://www.moneysmart.gov.au/insurance:

INSURANCE SUMMARY

CAR
INSURANCE

CONSUMER
CREDIT
INSURANCE

CONTENTS
INSURANCE

FUNERAL
INSURANCE

HOME
INSURANCE

HEALTH
INSURANCE

LIFE
INSURANCE

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Jigsaw activity outline:

Case studies and jigsaw pieces

Worksheet 16a
• You will be allocated to a ‘home’ group that you will begin and end this
activity in.
• You will be given a case study to examine.
• You will work with other students in the room in ‘expert’ groups to
develop an expert response to this case study.
• You and your group may add whatever colour, text, diagrams, etc. that
you deem necessary to answer and present this information and your
answers to your home group.
• You will take this expert response back to your ‘home’ group and share
it with them.

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CASE STUDY - The stolen phone

Case studies and jigsaw pieces

Worksheet 16a
Alexi was travelling overseas. She has always had insurance to cover her belongings while
at home in Australia. She has taken out special travel insurance which covers her from loss
while overseas.
Her phone, worth $1,200 was stolen from her backpack while on a train in London.
Alexi had her backpack with her at all times, however she believes she may have been
pickpocketed at the crowded doorway while getting on or off the train.

Complete your group response on the jigsaw piece provided with this case study:

• Would you recommend Alexi make/lodge an insurance claim? Make sure you give your
reasons.
• What are the rights and responsibilities of both the consumer and the insurance
company? Make sure you give your reasons.
• What can be done or should have been done to minimise any loss from the consumer’s
perspective? Make sure you give your reasons.
• Explain how could you protect yourself from something similar happening to you?
• Should the insurance company pay this claim? Make sure you give your reasons.

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Case studies and jigsaw pieces

Worksheet 16a
THE STOLEN PHONE

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CASE STUDY - Just around the corner

Case studies and jigsaw pieces

Worksheet 16a
Peter drove to Akbar’s house late one Saturday afternoon. A few friends had gathered for
a BBQ. Although Peter had not intended to have a drink, by 5:00pm he had had a number
of beers. Akbar noticed that they were running out of beer and asked Peter to jump in his
car and drive around to the local pub to get some more. Peter realised that he had had
too much to drink and refused but offered Akbar the keys to his car so that Akbar could
get the beer. Peter did not realise that Akbar has also had had too much to drink. On the
way to the pub Akbar lost control of the car and ran into a lamp post. The police were
called to the accident and breathalysed Akbar. He was over .05. Peter intends to make a
claim on his comprehensive car insurance.

Complete your group response on the jigsaw piece provided with this case study.

• Is Peter justified in going ahead with an insurance claim? Give your reasons.
• What are the rights and responsibilities of both the consumer and the insurance
company? Make sure you give your reasons.
• What can be done or should have been done to minimise any loss from the consumer’s
perspective? Make sure you give your reasons.
• Explain how you could protect yourself from something similar happening to you
• Should the insurance company pay this claim? Make sure you give your reasons.

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Case studies and jigsaw pieces

Worksheet 16a
JUST AROUND THE
CORNER

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CASE STUDY - A case of theft

Case studies and jigsaw pieces

Worksheet 16a
George lodged a $73,000 claim for the theft of his car and also a tablet computer and
a digital SLR camera which were in the car at the time of theft. Investigations revealed
he had increased the sum of his insured property one month before the theft and that
George had run up substantial debts on his credit cards. As proof of ownership George
showed the insurance company photographs of the tablet computer and the digital
camera. Further investigations revealed he had prior convictions from 2007 for shoplifting,
burglary and obtaining property by false pretences. George had not disclosed these
convictions to the insurance company. Investigations have not uncovered anything to
implicate George in the theft of his car, or his associated possessions.

Complete your group response on the jigsaw piece provided with this case study.

• How do you feel about George lodging this claim? Is he justified in doing so? Make sure
you give your reasons.
• What are the rights and responsibilities of both the consumer and the insurance
company? Make sure you give your reasons.
• What can be done or should have been done to minimise any loss from the consumer’s
perspective? Make sure you give your reasons.
• Explain how you could protect yourself from something similar happening
• Should the insurance company pay this claim? Make sure you give your reasons.

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Case studies and jigsaw pieces

Worksheet 16a
A CASE OF THEFT

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CASE STUDY - A sick puppy

Case studies and jigsaw pieces

Worksheet 16a
Himsara has a 2 year old kelpie, Rocky, who he rescued from an animal shelter as a 6
month old pup. No information was available regarding Rocky’s pre-shelter medical history
at the time of adoption. Just to be safe, Himsara took out pet insurance as soon as he
adopted Rocky. When getting Rocky his annual injections at the vet, the vet noticed a
lump on Rocky’s neck. Blood samples and a biopsy revealed a non-cancerous tumour that
needed to be removed, which included surgery and a 2 day stay at the vet surgery.
The following month Himsara and Rocky were back at the vet after Himsara came home
to find Rocky had ingested some paracetamol tablets that had been left within his reach.
The vet saved Rocky through an emergency procedure and kept Rocky in the surgery for
a week, with daily treatment, until he was allowed home. After paying these vet bills,
Himsara lodged a claim for these two vet visits with his pet insurance provider at the same
time, a total of two months after the initial incident had taken place.

Complete your group response on the jigsaw piece provided with this case study.

• How do you feel about Himsara lodging this claim? Is he justified in doing so? Make sure
you give your reasons.
• What are the rights and responsibilities of both the consumer and the insurance
company? Make sure you give your reasons.
• What can be done or should have been done to minimise any loss from the consumer’s
perspective? Make sure you give your reasons.
• Explain how you could protect yourself from something similar happening
• Should the insurance company pay this claim? Make sure you give your reasons.

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Case studies and jigsaw pieces

Worksheet 16a
A SICK PUPPY

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CASE STUDY - Blow me down

Case studies and jigsaw pieces

Worksheet 16a
Asha purchased a trampoline for her son as a surprise for his fifth birthday. The same night
as she finished assembling the trampoline, a huge storm hit her town, with wind gusts
of over 100km/hr. One of these wind gusts sent the trampoline tumbling down the back
yard, crashing into and damaging the fence. The trampoline was destroyed beyond repair.
Asha had not made any effort to secure the trampoline to the ground, as she had no
materials to do so and was not aware the storm was on its way. She lodged a claim under
her comprehensive home and contents insurance for the replacement of the trampoline
and the cost to repair the fence the day after the storm.

Complete your group response on the jigsaw piece provided with this case study.

• How do you feel about Asha lodging this claim? Is she justified in doing so? Make sure
you give your reasons.
• What are the rights and responsibilities of both the consumer and the insurance
company? Make sure you give your reasons.
• What can be done or should have been done to minimise any loss from the consumer’s
perspective? Make sure you give your reasons.
• Explain how you could protect yourself from something similar happening.
• Should the insurance company pay this claim? Make sure you give your reasons.

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Case studies and jigsaw pieces

Worksheet 16a
BLOW ME DOWN

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Classroom activity:

Teacher Notes
Suggested time: 1 lesson

Student worksheets:
Worksheet 17: So…insurance, where do I get it?

Resources:
Access to the Internet. [If you do not have access to the Internet you may consider printing
a list of insurance companies and brokers relevant to your area.]
https://www.petsecure.com.au/compare/
Pet insurance data
www.canstar.com.au > insurance
Canstar insurance comparison

Insurance ads:
https://www.youtube.com/watch?v=LGMLHOFMKMc
NRMA ‘Get confidence by your side comprehensive car insurance
https://www.youtube.com/watch?v=NakAFY7eibA
NRMA ‘Get confidence by your side’
https://www.youtube.com/watch?v=pZzG1wOW_Ic
Suncorp Home Insurance
https://www.youtube.com/watch?v=1O-hv4Xyu-8
Suncorp Car Insurance
https://www.youtube.com/watch?v=xK21q5kVcn0
Suncorp Home and Contents Insurance
https://www.youtube.com/watch?v=WTvggwX5_-M
Allianz insurance ‘hose that got away’
https://www.youtube.com/watch?v=oLCHlX8_cj0
Allianz insurance ‘Not your typical drive to school’
https://www.youtube.com/watch?v=e7WcpMBYbJ4
Allianz ‘Ahh moments’
https://www.adforum.com/creative-work/ad/player/34502458/dont-steal-lorettas-lunch/aami
AAMI ‘Don’t steal Loretta’s lunch’
https://www.youtube.com/watch?v=v_C-UznraQg
GIO insurance

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This activity is designed to familiarise students with the range of insurance organisations and

Teacher Notes
their main products.

(a) Distribute Worksheet 17 – So…insurance, where do I get it?

Divide the class into groups.
Each group brainstorms the names of insurance companies with which they are familiar.
Students complete an activity identifying the ‘branding’ of insurance companies and their
products.
Group responses are compiled into a whole class response on the board. Which ones were
most commonly known? Which group came up with the most companies and products?
Once students have brainstormed as a group, play for them the selection of insurance
ads provided in the Resources section. You may have other ads to include as part of this
activity. As each ad is played, have students add to/edit their response table completed in
Question 1.
After playing all of the advertisements, have students reflect on the following questions
for each advertising company. The format of the student responses is at the discretion
of the teacher (e.g. class discussion, answer in notebooks, think-pair-share, etc.) For
the purposes of this activity, ‘branding’ in advertising means, ‘The process involved in
creating a unique name and image for a product in the consumers' mind, mainly through
advertising campaigns with a consistent theme. Branding aims to attract and maintain
loyal customers.’
Source: http://www.businessdictionary.com/definition/branding.html

• What kind of image is the company trying to present through their branding?
• Does the branding or advertising you’ve seen for this company make you consider
taking out insurance with them in the future? Provide your reasons.

(b) Provide students with the following definition of an insurance broker OR have them look
up this definition for themselves if resources are available.
An insurance broker is, ‘A specialist in insurance and risk management. A broker will help
you identify your individual and/or business risks to help you decide what to insure, and
how to manage those risks in other ways.’
Source: http://understandinsurance.com.au/insurance-brokers

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(c) Provide students with an explanation of what an insurance comparison company is and

Teacher Notes
what they do (e.g. www.canstar.com.au > insurance) These companies collate together
details of a large number of insurance providers in one location, allowing customers to
search and compare details in one location, rather than searching for each insurer and
their insurance policy offerings individually. It is suggested that when explaining this
concept that that teacher load and complete a sample search in one or more insurance
comparison websites, such as Canstar, to show students what they look like and how they
work. Remind students not all companies or products may be considered on comparison
websites, and inform them that comparison websites often make their money based upon
a commission from the insurance companies and products they recommend.

(d) Students individually research and prepare a list of insurance companies and what they
offer. They may start with the ones they have identified in their table, researching exactly
what those companies offer prior to looking at additional insurance companies. Their
selections should be comprised of:
• 3 insurance companies that appealed to them
• 1 insurance brokerage company
• 1 insurance comparison website

(e) Have students complete the worksheet activities. Once completed, work as a class to
discuss student responses to Question 3 of the worksheet.
• Are there any insurance agents or insurance brokers listed? What does an insurance
broker do?
• Would you insure your pet? Why or why not?
• How many companies would you contact as part of your shopping around for
insurance?

(f) Extension activity - conduct a role play.

Role play details:
In order for this activity to run optimally, the students you select as insurance brokers
will need to be able to skim read effectively and answer questions ‘on their feet’ on
information that is going to be quite new to them.
For this role play, student should refer to the insurance activities and life cycle timeline
created on Worksheet 14 – Insurance and my life cycle from Topic 4.5.
Divide the class in two. One half of the class will be insurance company representatives,
the other half will be people shopping for insurance cover.

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Insurance company representatives:

Teacher Notes
• Choose an insurance provider (including brokers) and investigate what that company
offers.
• Using Worksheet 14 – Insurance and my life cycle, identify which insurance products
your company offers that you identified as being necessary over the course of
different life cycle time periods and events.
• Review your summary of the offered products and make brief notes on how best
to present information and answer questions about these products with shoppers
considering this company’s products.
• Be honest with your potential clients. If you don’t offer a particular service that they
are asking about, let them know.

Shoppers:
• Using Worksheet 14 – Insurance and my life cycle, have students choose a particular
‘time of your life’ that may occur in the future. Write a list of dot points covering as
many aspects of that ‘time of life’ they can think of. Include a list of the insurances
they will need at that stage.
• Using their list of insurance types, students should prepare relevant questions specific
to the insurance types they have identified. This data will help them shop around and
make an informed choice about who to choose as their provider for this insurance.

Whole class:
• Once the shoppers and insurance company representatives are ready, have shoppers
put their questions to the insurance provider panel. This can be done turn based as
a whole class, or by setting up insurance company ‘booths’ around the room for
students to approach individually or in smaller groups.
• At the end of the role play, have shoppers write down which insurance provider they
would choose for each of the types of insurance listed and the reasons why they
might need it.
• At the discretion of the teacher, students may choose from a provider represented on
the panel, or from any other of their choosing – provided they can justify their choice.
• While the shoppers are writing up their choices and reasons, have the insurance
company representatives write up their own ‘time of life’ scenario and investigate
whether the company that they represent can cover all of their insurance needs for
that scenario.

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Teacher Notes
Example scenario: I am 32 and I have just purchased my first home with my fiancée. She
has a dog and I have two cats. We both own a lot of stuff, including furniture and TVs, as
well as a car and pushbike each. Insurance to consider: Home and contents, pet insurance,
health insurance, vehicle insurance, life insurance.
Extra information: This couple have loans on their cars and a mortgage on their home,
which means that insurance is compulsory on these items

(g) Reflective learning

• As a class discuss or debate the merits of spreading insurance cover over a range
of providers or taking the ‘all eggs in one basket’ approach.
• Consider the benefits of shopping around.
• Explain what is important for you when choosing insurance cover.
• Refer to the life cycle completed in Worksheet 14 – Insurance and my life cycle
from Topic 4.5. Reflect on the life cycle and its related insurance needs. Discuss if
the consumer needs to review where to buy insurance cover at different stages of
the life cycle.

125
I’ve got rights…but what about Module 4
responsibilities? Activity
Topic 4.74.1

1. The major insurance companies may sell a variety of insurance products, but they tend

So…insurance, where do I get it?

Worksheet 17
to "brand" the company name with a particular image. Working in groups, think about
online, newspaper, TV or magazine advertising you have seen for insurance companies
and their products.
How many insurance companies can your group name in the table below? From your
own knowledge, for each insurance company that you name complete as many items as
you can on the following chart:

LOGO/COLOUR INSURANCE
COMPANY GENERAL IMPRESSION
SCHEME/THEME/ PRODUCT
NAME (WHAT YOU THINK OF THEM)
SLOGAN PROMOTED

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I’ve got rights…but what about Module 4
responsibilities? Activity
Topic 4.74.1

2. Are there any insurance brokers listed in your table? What is an insurance broker?

So…insurance, where do I get it?

Worksheet 17
An insurance broker is…

3. Are there any insurance comparison companies or websites listed in your table? What is
an insurance comparison site?
An insurance comparison site is…

127
I’ve got rights…but what about Module 4
responsibilities? Activity
Topic 4.74.1

4. Working individually, search the Internet to prepare a list of five insurance companies and

So…insurance, where do I get it?

Worksheet 17
the products that they offer. Your selections should be composed of:
• 3 insurance companies that appealed to you
• 1 insurance brokerage company
• 1 insurance comparison website

COMPANY - (INCLUDE THEIR WEBSITE) PRODUCTS OFFERED

Home & Contents Insurance

Example: Life Insurance
Health Insurance
Financial Basics Foundation Insurance
Pet Insurance
www.fbfifakewebsite.com.au Travel Insurance
Kidnapping & Ransom Insurance

128
I’ve got rights…but what about Module 4
responsibilities? Activity
Topic 4.74.1

a) People often have insurance for their own health and that of their human family

So…insurance, where do I get it?

Worksheet 17
members, however, often pets can be overlooked when it comes to insurance. Do any
of the companies listed in your table from Question 2 offer pet insurance? If any do, list
them below.

b) If you have, or were to get a pet, would you insure it? Why or why not?

c) Go to https://www.petsecure.com.au/compare/ and read through the summary of

average yearly insurance costs for pets vs the cost of the most common health issues that
are associated with pet ownership. What were the three highest average claims? List the
category and the claim amount in your answer.

d) What were the three highest claims? List the category and the claim amount in your
answer.

129
I’ve got rights…but what about Module 4
responsibilities? Activity
Topic 4.74.1

e) After completing (c) and (d), is your answer to (b) above the same, or has it changed?

So…insurance, where do I get it?

Worksheet 17
Provide your answer and your reasons.

f) ‘Shopping around’ generally means to consider multiple options and gather information
on those options prior to making a choice. What are the benefits of shopping around for
insurance cover?

130
 Module 4
Purchasing a car Activity
Topic 4.84.1

Classroom activity:

Teacher Notes
Suggested time: 1-2 lessons

Student worksheets:
Worksheet 18: Research my ride

Resources:
Local newspapers, local car dealership promotional materials

Purchasing a car:
www.carsales.com.au
www.redbook.com.au
www.tradingpost.com.au
www.carsguide.com.au
www.drive.com.au
www.carpoint.com.au

Car costs:
https://www.suncorp.com.au/money-profile/security/car-costs.html
Suncorp’s ‘The cost of the car, and why economical is best’
https://rac.com.au > Car & motoring > Hidden costs of running your car
www.mynrma.com.au > Motoring Services > Safety & Advice > Buying & Selling >
Buying advice > Car Operating Costs > Car Operating Costs Calculator
https://www.racq.com.au > Cars & Driving > Cars > Owning & maintaining a car >
Car running costs
http://www.raa.com.au > Motoring & Road Safety
http://www.ract.com.au > Products & Services > Motoring Services
http://www.aant.com.au/ > Motoring
https://www.racv.com.au/ > On the road > Buying a car

General information:
https://youtu.be/WbYMVLGgXko
CommBank used car buying guide
https://www.nab.com.au/personal/loans/personal-loans/personal-loan-calculators/
car-loan-repayment-calculator
NAB personal loan calculator
https://www.strattonfinance.com.au/car-finance/loan-calculator/hire-purchase-
calculator.aspx
Stratton finance hire purchase calculator 131
 Module 4
Purchasing a car Activity
Topic 4.84.1

This activity addresses the range of decisions that students are required to make in

Teacher Notes
relation to purchasing a car. Set the scene for this activity by watching the easy to
follow CommBank video guide to buying a used car at
https://youtu.be/WbYMVLGgXko. The purpose of this activity is to establish a base
point for students to make insurance decisions on their car, covered in the next topic.

(a) Distribute Worksheet 18 – Research my ride. For Questions 1-3 students individually select
possible cars for Hannah to choose from that come under her $4,000 cash budget and
complete recommendations for her. Discuss student responses as a class.

SOLUTION
Solutions from provided calculators:
Hire purchase: (215.32 * 60) + 2000 = $14,919.20
Bank: (237.90 * 60) = $14,274.00

You can find out more about balloon payments at

https://www.strattonfinance.com.au/car-finance/learn/articles/understanding-
residual-values-balloon-payments.aspx.
There are several factors that may help students with their considerations. Should Hannah
use the entire $14,000 for the purchase of the car or should she keep some money
towards the running costs of the vehicle? Should she just purchase what she can afford
under $4,000 and not borrow any money at all?
Ensure you have students consider these details for the State or Territory that you live in,
as registration costs, as well as CTP options and other costs vary (sometimes significantly)
throughout Australia.

(b) Reflective learning.

• Students complete a Think – Pair - Share to work individually and then collaborate
together to decide on the best deal available for Hannah.
• Think: Students investigate a range of bank lenders, rates and timelines for Hannah’s
$10,000 loan and provide a recommendation on the best combination of:
– lender
– repayment frequency
– loan term
– interest rate
– total amount to be paid
Students should justify final choices and recommendations.

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 Module 4
Purchasing a car Activity
Topic 4.84.1

• Pair: Have students pair up and compare their final choice for Hannah, making

Teacher Notes
any adjustments they decide to until the pair has what they consider to be the best
option available.
• Share: Come together as a class with each pair to share what they consider to
be the best deal available. Teacher suggestion: Add the pair’s decision to a central
version of the table below, so that at the end of the activity the whole class can see
the available options.

Once every pair has shared information, consider the options as a class and decide on
what the best option available to Hannah is. Encourage students to debate the pros and
cons of each option to come up with an agreed class response. If class cannot reach
consensus, a show of hands or a secret ballot may be required to decide on the final
winner.
Information to complete this table should be available from lender calculators such as
https://www.nab.com.au/personal/loans/personal-loans/personal-loan-calculators/
car-loan-repayment-calculator.

133
 TOTAL
LENDER LOAN LOAN INTEREST TOTAL REPAYMENT REPAYMENT
AMOUNT PAID
NAME PRINCIPAL TERM RATE INTEREST FREQUENCY AMOUNT
OVERALL
1. $10,000 4 years

2. $10,000 5 years
Purchasing a car

3. $10,000 6 years

4. __years

5. __years

6. __years
Topic
Activity
4.84.1

134
Module 4

Teacher Notes
 Module 4
Purchasing a car Activity
Topic 4.84.1

Hannah has saved $4,000 towards the purchase of her first car. She is still undecided as

Research my ride
Worksheet 18
to whether to purchase a car under $4,000 from the money she has already saved, or to
borrow money to purchase a more expensive car. It will be your task to help Hannah gather
the information she requires to make an informed choice about financing her car purchase.
From a variety of sources, make a list of cars that suit her initial purchasing budget of $4,000,
including the make, age, model and price. Include this information in the table below.
Useful internet sites include:
• www.carsales.com.au
• www.tradingpost.com.au
• www.carsguide.com.au
• www.carpoint.com.au
• www.redbook.com.au
• www.drive.com.au
• Local car dealership websites

1. Help Hannah to buy a car within her budget. Provide a range of options for her.

MAKE MODEL AGE/KMS PRICE

2. Put the cars in rank order of choice based upon your own personal preferences and
criteria. [(a) - most preferred]

(a) ________________________________________________________________________

(b) ________________________________________________________________________

(c) ________________________________________________________________________

(d) ________________________________________________________________________

(e) ________________________________________________________________________

135
 Module 4
Purchasing a car Activity
Topic 4.84.1

3. The reason for the top choice is:

Research my ride
Worksheet 18
4. Hannah is also considering borrowing $10,000 to combine with her $4,000 and purchase
a car up to the value of $14,000.
Using the resources provided in Question 1, help Hannah to buy a car within her $14,000
budget. Provide a range of options for her, as you did in Question 1.

MAKE MODEL AGE/KMS PRICE

5. Put the cars in rank order of choice. [(a) - most preferred]

(a) ________________________________________________________________________

(b) ________________________________________________________________________

(c) ________________________________________________________________________

(d) ________________________________________________________________________

(e) ________________________________________________________________________

136
 Module 4
Purchasing a car Activity
Topic 4.84.1

6. The reason for the top choice is:

Research my ride
Worksheet 18
7. What other costs are involved in car ownership? The following sites will assist you in
identifying these costs:
www.mynrma.com.au > Motoring section > Operating costs
https://www.racq.com.au > Cars & Driving > Cars > Owning & maintaining a car >
Car running costs
https://rac.com.au > Car & motoring > Hidden costs of running your car
www.mynrma.com.au > Motoring Services > Safety & Advice > Buying & Selling >
Buying advice > Car Operating Costs > Car Operating Costs Calculator
https://www.racq.com.au > Cars & Driving > Cars > Owning & maintaining a car >
Car running costs
http://www.raa.com.au > Motoring & Road Safety
http://www.ract.com.au > Products & Services > Motoring Services
http://www.aant.com.au/ > Motoring
https://www.racv.com.au/ > On the road > Buying a car

COST EXPENSE
e.g. Petrol $30 per week

137
 Module 4
Purchasing a car Activity
Topic 4.84.1

8. As previously mentioned, Hannah is considering whether to buy a car for $4000,

Research my ride
Worksheet 18
borrow $10,000 from the bank giving a potential $14,000, or take out a hire purchase
agreement to purchase a more expensive car up to the value of $14,000.
Conduct online research to clarify the differences between a personal loan and a hire
purchase arrangement. List the advantages and disadvantages for each option.

BANK HIRE PURCHASE

Advantages Advantages

Disadvantages Disadvantages

9. After careful consideration, Hannah decides to borrow $10,000, giving her a total of
$14,000 to purchase a car. She is still unsure as to which loan method to utilise and
requires further assistance.
Using the information and resources provided below, calculate Hannah’s total cost for
both Hire Purchase and Bank Loan. You will note that Hire Purchase often include a
‘balloon payment’, which is a lump sum payment you don’t pay interest on throughout
the course of the loan, but that you have to pay to the lender at the end of your loan
period.
The table below has been partially filled out with the research Hannah has completed to
date. She has decided on a 5 year term for her $10,000 personal loan, repaid monthly.
The best interest rate she has been able to find for her loan is 15%.

138
 Module 4
Purchasing a car Activity
Topic 4.84.1

BANK CALCULATION:

Research my ride
Worksheet 18
Calculator available from -
https://www.nab.com.au/personal/loans/personal-loans/personal-loan-calculators/
car-loan-repayment-calculator (NAB personal loan calculator)

HIRE PURCHASE CALCULATION:
Calculator available from -
https://www.strattonfinance.com.au/car-finance/loan-calculator/hire-purchase-
calculator.aspx
(Stratton finance hire purchase calculator)

Lending details:

TOTAL COST (LOAN +

LOAN MONTHLY BALOON LENGTH
LENDER INTEREST (MONTHLY PAYMENT *
AMOUNT REPAYMENT PAYMENT (YEARS)
60) + BALLOON PAYMENT
Bank 10000 15% 0.00 5

Hire 10000 15% 2000.00 5

Purchase

10. Which method of lending do you recommend to Hannah? Explain your reasons.

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 Module 4
Purchasing a car Activity
Topic 4.84.1

11. Considering all the data you have found by assisting Hannah through this process, should

Research my ride
Worksheet 18
she go ahead with borrowing money to purchase a more expensive car, or stick with
buying a car within her original $4000 cash budget? Which car and at what cost should
Hannah purchase? Provide detailed reasons for your recommendation.

140
 Module 4
Getting around with insurance Activity 4.9

Teacher Notes
Classroom activity:
Suggested time: 1 - 2 lessons

Student worksheets:
Worksheet 19: Insure my ride

Resources:
https://www.moneysmart.gov.au/insurance/car-insurance
Money Smart summary of key car insurance concepts
https://www.youtube.com/watch?v=_gAJbaTKBGo
Suncorp guide to buying & insuring a car
https://www.carsguide.com.au/
Online car sales in Australia
http://www.carpoint.com.au/
Online car sales in Australia
https://www.suncorp.com.au/insurance/car/comprehensive/comparison.html
Suncorp car insurance policies compared
https://www.gio.com.au/car-insurance/comparison.html
GIO car insurance policies compared
https://www.aami.com.au/car-insurance/comparison.html
AAMI car insurance policies compared
https://www.carsguide.com.au/features/allianz/car-insurance-the-basics-29525
Carsguide car insurance basics
http://www.infochoice.com.au/compare-car-insurance-quotes/guide-to-different-types-
of-car-insurance/
Infochoice car insurance summary
https://www.canva.com/create/comic-strips/
Comic strip website
https://www.storyboardthat.com/storyboard-creator
Free comic strip creation website with no account required
https://www.pixton.com
Online comic strip creator
http://www.financialbasics.org.au/uploads/media/documents/essi-money-v20/
Finance%20Weekly%20content.pdf >
Week 23 ‘LOVE YOUR RIDE (motor vehicle insurance)’ Car insurance support materials
http://financialbasics.org.au/essi-money/about-register.aspx
ESSI Money online financial literacy game

141
 Module 4
Getting around with insurance Activity 4.9

Teacher Notes
This activity introduces students to some of the key concepts involved with insuring what
for most people is their primary mode of transport, their car. It provides students with the
knowledge and confidence to make wise choices when it comes to car insurance options,
types of cover and premiums. The key message for students is to consider all insurance options
and to shop around for cover and cost.

(a) To introduce this activity watch Suncorp’s short guide to buying and insuring a car
https://www.youtube.com/watch?v=_gAJbaTKBGo (1:14).
Materials and resources that may assist in connecting core concepts of this topic together,
or explore them further can be found in the ESSI Money game. Instructions on how to
access this can be found at http://financialbasics.org.au/essi-money/about-register.
aspx. Pause students at Week 23 of the game to read and discuss the in-game article,
Week 23 ‘LOVE YOUR RIDE (motor vehicle insurance)’.
Alternatively, a downloadable version of article can be found by accessing
http://www.financialbasics.org.au/uploads/media/documents/essi-money-v20/
Finance%20Weekly%20content.pdf > Week 23 ‘LOVE YOUR RIDE (motor vehicle
insurance)’.
Ask the class to make a list of five cars that they would really like to own, that are
currently for sale online. Have them include a range of makes, ages and prices (under
$40,000), both new and used. Carsguide and Carpoint are both useful resources for this
search. The number of cars may be reduced if time is limited.

(b) Distribute Worksheet 19 – Insure my ride. Prior to starting the worksheet, the teacher may
choose to explain the concept of varying levels of insurance cover to students.

(c) Once students have completed the insurance summary table, discuss with students:
Would all insurance options be necessary for all cars and all car owners? Note that
variations and extensions of third party insurance differs in name and cover from state to
state and company to company. This may need to be made clear to students.

142
 Module 4
Getting around with insurance Activity 4.9

Teacher Notes
(d) Before starting Question 2, ask students to identify the factors the insurance company
would consider when assessing the risk of insuring the car. These could include factors
such as:
• The age of the insured
• The accident record of the insured
• Whether the car is to be used for commercial or private use
• Whether the car is purchased with cash or is under finance
• Whether the car is to be garaged, parked on the street, kept in the city or the
country etc.
• The make and model and age of the car
• Insured value (agreed value Vs. market value)
• The driver(s) of the car
• Whether the car has been modified
Discuss with the class the impact these factors would have on the cost of the insurance
policy and why an insurance company would take them into account.

(e) Question 4(c) – if completing this activity electronically, there are several online resources
available to you.

The example provided on the student worksheet comes from www.pixton.com, and is
one of their pre-built templates. Accounts are available on a free trial basis. Instructions on
how to use the program can be loaded (including an instructional video) from
www.pixton.com > Help.

Other online comic strip websites:

• https://www.canva.com/create/comic-strips/ - free website that requires account
creation (at the time of writing)
• https://www.storyboardthat.com/storyboard-creator - free website & no account
creation required (at the time of writing)

If completing activity by hand, ensure you have adequate supplies of paper and materials
available to students.

(f) Reflective learning

Students individually draft an email memo to be sent to the year 11 and 12 students at
their school, providing a summary on the importance of insuring their car and how to go
about getting the most appropriate insurance at the best price. This could be extended
further by engaging in a class discussion to create a single memo to be sent to all year 11
and 12 students by the teacher on behalf of the entire class.
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 Module 4
Getting around with insurance Activity 4.9

Worksheet 19
Insure my ride
1. Add the name and details of the car you intend to use in completing this worksheet. Once
this is done, complete the remainder of Questions 1 and 2 and write the name of the
insurer and insurance policy you think is best to take out on this car at the bottom of the
‘My ride’ table below.

MY RIDE

CATEGORY DETAILS

New or used:

Make:

Model:

Year:

Kilometres travelled:

Number of cylinders:

Engine (cylinders/litres)

Colour:

Extras (e.g. body kit, turbo,

spoiler, head unit, etc.)

Insurance policy & reason for

choice (to be added at the
completion of Question 2)

144
 Module 4
Getting around with insurance Activity 4.9

Worksheet 19
Insure my ride
Before continuing further, complete the table below with your own summary of the most
common types of insurance using the sources listed:
• https://www.carsguide.com.au/features/allianz/car-insurance-the-basics-29525
• http://www.infochoice.com.au/compare-car-insurance-quotes/guide-to-
different-types-of-car-insurance/

INSURANCE TYPE SINGLE SENTENCE SUMMARY

Compulsory Third Party

(often known as CTP)

Third Party Property

(Property, Fire, Theft,
etc.)

Third Party Fire and

Theft

Comprehensive

2. Use the links below to select the most suitable insurance policy for your car. Add this to
the ‘My ride’ table. Include in your response the main reason for your choice.
• Suncorp car insurance policies compared -
https://www.suncorp.com.au/insurance/car/comprehensive/comparison.html
• GIO car insurance policies compared -
https://www.gio.com.au/car-insurance/comparison.html
• AAMI car insurance policies compared -
https://www.aami.com.au/car-insurance/comparison.html

145
 Module 4
Getting around with insurance Activity 4.9

Worksheet 19
Insure my ride
3. Read the case study below, and then complete the following activity. Add the details of
your car as well as the details of your preferred insurer and insurance policy in the spaces
provided.

Danesh (DOB 18/06/1997) is a university student who lives in a share house close to
the university campus. His car is stored in an open carport, which has a roof, no walls
and is not lockable.
He has just purchased a

car, and is intending to insure it with

taking out a

insurance policy.
Before doing so he is going to compare some quotes online to ensure he is getting the
best insurance and the best deal. Danesh saved up for his car and purchased it with
cash. He will be primarily using the car for private use, driving approximately 15,000km
per year. Danesh has a completely clean driving record, never having committed any
driving violations or had any accidents. He will not be permitting anyone else to
drive his car.

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 Module 4
Getting around with insurance Activity 4.9

Worksheet 19
Insure my ride
4. Provide anonymous details online to two insurance companies to receive quotes for
Danesh. You need to complete a quote for the insurance policy you selected in Question
1, as well as for a second insurer and policy of your choosing.
Policy 1 company and insurance name:

POLICY DETAILS NOTES

Yearly cost of the

policy

Features and benefits

Excess

Exclusions or special
considerations

Were you asked about, or did your policy mention any of the following items?
Tick and provide details on all that apply:

n Insurer’s age

n Insurer’s driving
history

n Private or
business use

n Kilometres
travelled per year

n Address where
the car will be
located

n Details on the
price, make and
model of the car

n Drivers of the car

147
 Module 4
Getting around with insurance Activity 4.9

Worksheet 19
Insure my ride
Policy 2 company and insurance name:

POLICY DETAILS NOTES

Yearly cost of the

policy

Features and benefits

Excess

Exclusions or special
considerations

Were you asked about, or did your policy mention any of the following items?
Tick and provide details on all that apply:

n Insurer’s age

n Insurer’s driving
history

n Private or
business use

n Kilometres
travelled per year

n Address where
the car will be
located

n Details on the
price, make and
model of the car

n Drivers of the car

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 Module 4
Getting around with insurance Activity 4.9

Worksheet 19
Insure my ride
5. In order to provide a quote for the cost of insuring a car, insurance companies gather a
lot of information from the applicant. Some of the most common elements are in the tick
boxes for the last activity. Why do you think insurance companies gather information such
as this prior to quoting on the cost to insure a car?

After completing your investigation into two insurance companies, reflect on the policy
you chose back at the start with little to no research or shopping around. Was that
original policy you chose in Question 2 without much research the best option for
yourself? What did you learn from conducting some research and gathering quotes?

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 Module 4
Getting around with insurance Activity 4.9

Worksheet 19
Insure my ride
6. From what you have learned so far, let’s create a comic strip! The story is based around
one of your friends buying their first car. Your comic strip should show a conversation
between you and your friend talking about insuring the car. What would you say to
them? Complete this as a comic strip, either online or by hand. When completed, hand a
copy of this comic strip to your teacher.
Useful online resources:
• https://www.canva.com/create/comic-strips/
• https://www.storyboardthat.com/storyboard-creator
• https://www.pixton.com

See below for an example comic strip interaction titled ‘Landing a job’ from
www.pixton.com (online comic strip creator):

Source: www.pixton.com ‘Landing a Job’ template.

150
 Module Five
Credit - Making it work for you

In partnership with
 Module 5
Credit – making it work for you

OVERVIEW

Teacher Notes
Module Overview and Curriculum Mapping
Module 5 aims to guide students through the purposes, processes, and consequences of
acquiring and using credit.

ENDURING UNDERSTANDINGS
• Borrowing (use of someone else’s savings) in one form or another is universal
• Credit needs to be affordable as credit costs are future costs.
• Credit can be convenient and gives individuals the opportunity for immediate access to
goods and services
• Credit use demands willingness and the ability to meet payments on a regular basis as
debts do not disappear.
• Credit is a contractual relationship and a person’s credit reputation and credit history are
important.

LEARNING OUTCOMES
Students:
• Define credit as the power to obtain goods and services with an obligation on the
borrower of future payment to the source of credit
• Understand that the finance rate, not interest rates, measures the cost of credit
• Understand the importance of establishing a good credit history
• Make informed decisions about the use of credit
• Become aware of risks and costs of alternate forms of credit
• Recognise the responsibilities and obligations associated with debts
• Understand that credit imposes an opportunity cost on borrowers and lenders
• Recognise that laws protect credit arrangements

POWER WORDS Page 2

CURRICULUM MAPPING 3

LIST OF TOPICS
5.1 All about credit 5
5.2 Using credit 12
5.3 Borrowing – a life cycle perspective 14
5.4 Applying for credit 17
5.5 Consumer rights 27
5.6 Why the interest in interest? 30

1
 Module 5
Credit – making it work for you

POWER WORDS

Teacher Notes
Module Overview and Curriculum Mapping
As students work through each topic in this module they will encounter words that may be new
to them, crucial to understanding and completing the worksheets, and/or difficult to spell. In
addition, students may simply find some of this vocabulary interesting, planning to use it in the
future. Understanding and being able to use these words will provide students with more power
to make future financial decisions.
There are several approaches to using this “glossary”. The intention is for students to investigate
and find the meanings. They could be given the complete list before they start the module, or
they could set up a table and add new words as they progress through the activities. There are
also specific POWER WORD activities in some topics.
This list is not exhaustive.

Additional Card Holder Interest, compound

Annual Fee Interest, simple
Authorised User Lien
Balance Transfer Linked Transfer Account
Cash Advance Loyalty Program
Collateral Mortgage
Co-Signer Overdraft
Credit History Reward Programs
Credit Inquiry Payday Lender
Credit Rating Personal Loan
Credit Limit Preapproval
Cycle Billing Principal
Debt Consolidation Promotion Rate
Discharge Fee Retail Credit
Establishment Fee Revert Rate
Financial Institution Revolving Line Of Credit
Impulse Buying Security
Insurance Statement
Interest free Store Card
Interest free period Void

2
 Module 5

CURRICULUM MAPPING

Teacher Notes
Module Overview and Curriculum Mapping
ENGLISH MATHEMATICS GENERAL CAPABILITIES
LITERACY YEAR 9 NUMBER & LITERACY
Interacting with ALGEBRA YR 10 Comprehending texts through listening, reading and viewing
others Money & financial Navigate, read and view learning area texts
• plan, rehearse mathematics • Navigate, read and view a wide range of more demanding subject-
and deliver • Connect the specific texts with an extensive range of graphic representations
presentations, compound Composing texts through speaking, writing and creating
selecting and interest formula
Compose spoken, written, visual and multimodal learning area texts
sequencing to repeated
appropriate content applications • Compose and edit longer and more complex learning area texts
and multimodal of simple (AC ELY1756)
elements for interest using Use language to interact with others
aesthetic and appropriate digital • Use pair, group and class discussions and formal and informal
playful purposes technologies debates as learning tools to explore ideas, compare solutions,
(ACELY1741) (ACMNA229) evaluate information and ideas, refine opinions and arguments in
Interpreting, STATISTICS & preparation for creating texts (ACMSP253)
analysing, PROBABILITY NUMERACY
evaluating YR 9
Interpreting statistical information
• Interpret, analyse Data
and evaluate representation & Interpret data displays
how different interpretation • Evaluate media statistics and trends by linking claims to data
perspectives of displays, statistics and representative data (ACMSP253)
• Identify everyday
issue, event, questions and INFORMATION & COMMUNICATION TECHNOLOGY
situation, issues involving CAPABILITY
individuals or at least one
groups are Investigating with ICT
numerical and
constructed to Define & plan information searches
at least one
serve specific categorical • Select and use a range of ICT independently and collaboratively,
purposes in texts variable, and analyse information to frame questions and plan search strategies
(ACELY1742) collect data or data generation
Creating texts directly and from CRITICAL & CREATIVE THINKING
• Create imaginative, secondary sources
Inquiring – identifying exploring & organising information &
informative and (ACMSP228)
ideas
persuasive texts
Pose questions
that present
appoint of view • Pose questions to critically analyse complex issues and abstract
and advance ideas (ACELT1812, ACMSP228)
or illustrate Reflecting on thinking and processes
arguments, Think about thinking (metacognition)
including texts • Give reasons to support their thinking, and address opposing
that integrate viewpoints and possible weaknesses in their own positions
visual, print and/ (ACELT1640, ACMSP247)
or audio features
(ACELY1746) PERSONAL & SOCIAL CAPABILITY
• Use a range of Self-Management
software, include Work independently & show initiative
word processing • Establish personal priorities, manage resources effectively and
programs, flexibly demonstrate initiative to achieve personal goals and learning
and imaginatively outcomes (ACELY1756)
to publish texts Become confident, resilient and adaptable
(ACELY1748) • Evaluate, rethink and refine approaches to tasks to take account
of unexpected or difficult situations and safety considerations
(ACELY1757)
Social Management
Make decisions
• Develop and apply criteria to evaluate the outcomes of individual
and group decisions and analyse the consequences of their decision
making (ACMNA229)

3
 Module 5

CURRICULUM MAPPING

Teacher Notes
Module Overview and Curriculum Mapping
NCFLF DIMENSIONS
Knowledge & Understanding
• Identify and explain strategies to manage personal finances
• Explain how over-reliance on credit can impact on future choices

Competence
• Investigate the financial decisions required at significant life-stage events
• Accurately complete and explain the purpose of a range of financial forms, including for online
transactions
• Discuss the differences between ‘good’ and ‘bad’ debt, including manageability of debt and its long-
term impact
• Analyse relevant information to make informed choices when purchasing goods or services and/or to
resolve consumer choices
• Compare overall ‘value’ of a range of goods and services using IT tools and comparison websites as
appropriate
• Evaluate marketing claims, for example in advertising and in social media, to influence consumers to
purchase a range of goods and services

Responsibility & Enterprise

• Explore the economic cost of individual and collective consumer decisions of the broader community
and the environment
• Apply informed and assertive consumer decision-making in a range of ‘real-life’ contexts
• Research and discuss the legal and ethical rights and responsibilities of business in providing goods
and services to consumers
• Appreciate that there is often no one right answer in making financial decisions because these
depend on individual circumstances, preferences and values
• Understand and explain the legal responsibilities of taking on debt, including the consequences of
not paying
• Explain the role of banks and other deposit-taking institutions (such as building societies and credit
unions) in collecting deposits, pooling savings and lending them to individuals and business
• Demonstrate awareness that family, community and socio-cultural values and customs can influence
consumer behaviour and financial decision-making

4
 Module 5
All About credit Topic 5.1

Teacher Notes
Classroom activity:
Suggested time: 1 – 2 lessons

Resources
On line catalogues or sales brochures for Electrical Goods or other items where offers are made for
immediate credit,new credit cards, balance transfer offers, offers of other forms of credit, etc.
Household debt statistics - www.abs.gov.au

Student worksheets
Worksheet 1 Meet the Crawfords
Worksheet 2 The language of credit
Worksheet 3 What is credit?
Worksheet 4 How much credit do we actually have?
In this topic the basic concepts and language of credit are introduced. Students are given the
opportunity to start examining their understanding of and personal attitudes towards credit.
(a) Defining credit
To check current understanding, ask students if they have used an adult’s card to buy
something on credit. What information was required? Was this online, or in a shop? Did
the adult sign or authorize? Why can’t children have credit cards?
Consider the Worksheet 1 case study. Coordinate a class discussion on the key credit
concepts introduced in the case study. Students can record key concepts on the worksheet
page, under the case study.
For example:
• Credit is easily available and takes many forms.
• Credit is using someone else’s money to pay for goods or services.
• Credit is convenient and gives immediate access to goods.
• Credit must be paid for.
• Repayment for extended credit involves the cost of the purchase plus interest.
• Credit repayments are a legal obligation.
• A person’s credit reputation and history are important.
Students form into groups to analyse the catalogues and. Students read through this
material and highlight any places where credit is offered. Issues to consider are:
• contractual conditions of credit offers
• Benefits of the offers
• Visual appeal of advertisement of product as compared with credit offers
• implications and true costs of the offers.
(b) Credit terms: Use Worksheet 2 – the language of credit.
Module 5 Power Words could be introduced before starting this worksheet. For example
the teacher could run a brainstorming activity on definitions or students could work
individually to find their own.
The worksheet introduces students to some basic credit terms by matching terms with
definitions. The worksheet can be completed individually, or alternatively each student
5
 Module 5
All About credit Topic 5.1

Teacher Notes
could be given a card with a credit term or definition on it. The next step is to locate
the person holding the card with the appropriated definition. Students could add to
or modify their Power Word list. Alternatively the teacher could display the terms/
definitions, and have the class suggest correct matches.
It would be interesting at this point (before introducing worksheet 3) to ask students if
they have a different ‘emotional’ reaction to the terms ‘credit’ and ‘borrowing’ and also
between ‘credit’ and ‘debt’. Students brainstorm what they understand by the terms
"creditor" and "debtor".
(c) Attitudes towards credit
The following activity extends this analysis of attitudes to credit. It can be used to help
students clarify their feelings and attitude towards credit.
● Distribute Worksheet 3 – What is credit? This presents the class with a range of
statements. Working individually students respond to the statements about credit.
Students could suggest additional attitude statements for themselves. It would be useful
to lead a class discussion on opinions and reasoning behind these.
Additionally, students could:
• position themselves on an ‘agree/disagree attitudes continuum’ for each attitude, as
a group lining themselves up along a classroom wall.
• adopt one point of view and argue the case.
(d) Distribute Worksheet 4 – How much credit do we actually have?
Using the information provided on the worksheet students graph the statistics on
credit and charge card usage and analyse the incidence of credit card debt in Australia.
Statistics are current at the time of print.
Go to http://www.rba.gov.au/statistics/by-subject.html > Credit and Charge Card Statistics
(e) REFLECTIVE LEARNING
• Students consider a range of value statements about credit, such as the types of
goods and services that can be purchased on credit. Suggest two items that you
would definitely want to purchase for cash and two that you believe would be
difficult to purchase without access to credit.
• Discuss the consequences to society if all credit opportunities were withdrawn.
For example, lower sales for shops, people would lose jobs, some people may lose
access to essentials for a safe life.

6
 Module 5
All About credit Topic 5.1

Meet the Crawfords

Worksheet 1
Case study – Meet the Crawfords
Craig and Chris Crawford have recently moved into a new house near
the beach. They had previously sold their first house, and organised a
mortgage with Southside Bank. The bank lent them the amount they
needed because of their excellent credit history and secure employment
positions. Craig and Chris carefully considered their combined income
and potential payments before entering into the loan agreement. They
wanted to be sure they could meet the monthly loan repayments, even if
emergencies occurred.
Christie, their 18 year daughter works in the fashion industry. She loves
keeping up with the latest fashion styles and trends. Her credit card is at
the limit and she can only make the minimum repayment each month.
She is paid monthly and always short of money for living expenses by the
last week of the month. Last year, Christie wanted a new computer for
her freelance design work. She decided on an interest free deal (with no
interest or payments required for 12 months) from Southside Electronics,
and purchased a computer, printer and software. Christie didn’t make
any payments within the 12 month period, and has just noticed on her
monthly statement that she is now being charged 30% interest.
Craig’s mother is a widow, owns her own home, and is able to put money
aside each payday for her approaching retirement. This money is invested
in a superannuation fund with Southside Investment Corp. The account
currently totals over $150,000. Mrs Crawford senior has a credit card
which she uses for her day to day purchases as she does not like to carry
a lot of cash. She always pays the full amount owing on the card at the
end of the month.
Cameron is the son of Craig and Chris. He is in the final year of his
electrical apprenticeship. Cam does well with managing his money, but,
as he shares a house with a few mates he doesn’t have a lot of cash to
spare. Cam drives a second hand ute which is starting to give him some
trouble. His mechanic has said the van needs a new motor immediately,
but that the rest of the van is in reasonable condition. Cam decides to
have the motor replaced and to pay for it with his credit card. It will take
him most of the year to clear the card.
Key credit concepts:
●

7
 Module 5
All About credit Topic 5.1

The language of credit

Worksheet 2
Choose and position the correct term for these definitions.
Credit , Creditors , Credit card , Credit limit , Savings, Pay day loan, Interest , Debt, Loan,
Wealth, Income, Mortgage,
The difference between what a person earns and what they spend over
a period of time
Allows us to buy now and pay later
An amount of money that is owed to somebody else
The total amount a person earns from all sources over a set period of
time
Gives us a set amount of credit which can be used to make purchases.
Some or all of the money must be repaid at the end of the month
An amount of money lent by a bank which must be repaid by the
borrower under agreed conditions
The difference between the value of what you own and the amount
you owe.
The amount that a borrower pays for the use of the lender’s money
The maximum amount a person can spend using their credit card
A person who is owed money by another person
A loan that is used to buy a house or other real estate
A short term loan between pay days, often charging a very high
interest rate

1 Write a brief description of what you believe CREDIT means for individual consumers.

2 List as many types of credit (with examples) as you can. Undertake a web search to build
your list.

8
 Module 5
All About credit Topic 5.1

Different people have different attitudes towards credit. Use the code shown below to

What is credit?
Worksheet 3
indicate your position on these statements.
There are no correct or incorrect answers.
SA Strongly agree
A Agree
D Disagree
SD Strongly disagree

SA A D SD
It’s ok to use credit to buy some things, but not others.
You should only use credit for expensive items.
A credit card is useful because it saves you from carrying cash.
A credit card is useful for getting a cash advance if you run out
of money before your next payday.
Credit is a good servant, but a bad master.
Interest rates on credit cards shouldn’t be so high. Not everyone
can pay the total amount off every month.
If an opportunity to go overseas on a holiday with my friend
suddenly occurred, I would be happy to use a credit card to pay
for it.
It’s always best to save for something you need. If I can’t afford
to pay cash, I won’t buy it.
I like to be able to buy what I want, when I need it. If this means
using my credit card because I don’t have the cash, then so be it.
It’s best to have a credit card that has a decent rewards program
and use it for everything so that you can get free travel.
It’s important to have a credit card so that I can shop online.
Credit cards should ALWAYS be paid off in full every month
WITHOUT FAIL.

9
 Module 5
All About credit Topic 5.1

How much credit do we actually have?

Worksheet 4
Australian credit and charge card debt
Total
purchases Balances
on credit owing Total
No of credit Cash & charge accruing balances
and charge advances* cards** interest*** owing***
Date accounts $m $m $m $m
June 1996 7.14m 438 1,759 6909
June 2000 9.24m 824 5,999 13,880
June 2004 11.25m 947 12,387 27,747
June 2008 14.01m 1,148 17,233 44,709
June 2009 14.35 999 19418 32812 44891
June 2010 14.63 965 20493 35221 47994
June 2011 14.88m 870 21096 36574 49528
June 2012 15.04m 827 21488 36618 50649
Source: Reserve Bank of Australia Credit and Charge Card Statistics
* Cash advances records a loan from a credit card account with interest being charged
from the date of the advance
** Total purchases records the total amount spent on goods and services using a credit card
or charge card
*** Total net amount owed by card holders.

1. Use MS Excel to graph the statistics for each item for the years 1996, 2000, 2004, 2008,
and 2012.
Add a column between cash advances and total purchases and calculate the amounts for
credit purchases.
2. Work out the average balance for each account.
(Divide balances owing by number of accounts).
3. How does “Balances owing accruing interest” differ from “Total balances owing”?.
What is the significance of the difference in these figures?
4. Considering your graph, and figures supplied, what observations can you make about the
use of credit and charge cards in Australia? Are there any anomalies in the growth trends
of credit card usage?
5. Australian individuals and households have other debt in addition to credit card debt.
Name four additional types of debt that a household or person might have.
a)
b)
c)
d)

10
 Module 5
All About credit Topic 5.1

How much credit do we actually have?

Worksheet 4
6. What do you think the term ‘credit card debt trap’ means?
One way to avoid the credit card debt trap is to think carefully about the types of goods
that you purchase for cash and the types of goods that you purchase on credit.
7. Are there instances where the only way of purchasing something is to use a credit card?
Are there any valid reasons for using a credit card when you have cash to make the
purchase>
8. Create a promotional strategy (poster, advertisement, multi media presentation, etc) to
warn people about the ‘credit card debt trap’.
9. Using the chart below, list the items that you think should be purchased for cash and the
items that you think would be difficult to purchase without credit. What’s the difference
between “good debt” and “bad debt”?

Items that should be purchased for cash Items difficult to purchase without credit

10. What would happen to our economy if there were no credit cards, and the only way to
buy goods and services was to use cash?

11
 Module 5
Using credit Topic 5.2

Teacher Notes
Community/classroom activity
Suggested time: 1 lesson

Student worksheets
Worksheet 5 Credit products

Resources: Types of Credit – www.bankers.asn.au>Financial Literacy

Program>Booklets>Smarter Banking “Make Credit Work for You”

On line information, emailed and postal offers from credit providers,

newspapers, magazines, etc,
The following activity can be used to identify the range of credit options available. Students
can also identify the credit needs of people at different stages of their life cycle. Worksheet 5
can be used to record data about different types of credit.
(a) (a) Divide students into groups and have them:
• use the resources to identify a range of credit options offered (store cards, 6 months
interest free, personal overdraft, credit card, balance transfer, mortgage, etc).
• record the products and services suggested for the different credit alternatives. Also
undertake research to determine credit terms and interest rates.
• Visit www.bankers.asn.au and search under “Smarter Banking - Make Credit Work
For You” for the link to “different types of credit and credit providers”. A brief
description of types of credit is provided as well as an outline of the pros and cons of
each.
(b) Groups could use multi media (or even create a poster) to compare or evaluate a range
of credit alternatives available for a product of their choice.
(c) Brainstorm with the class the following issues:
• purposes for which people use credit (goods and services), length of loan, frequency
of payments, etc for different types of credit
Extension Activity
• Groups report to the class the results of their credit options analysis and the payment
options.
• Each group prepares a multi media presentation or poster on its investigation of
credit. For example a comparison of a range of credit alternatives or an evaluation of
a specific credit product could be presented.
(e) Reflective learning
Have students consider whether:
• results were in line with expectations
• results were different from expectations
• this activity had any impact on the student’s perception of credit and borrowing and
decision-making

12
 Module 5
Using credit Topic 5.2

Credit products
Worksheet 5
CREDIT USED TO LENGTH INTEREST
ALTERNATIVE PURCHASE: OF LOAN RATE
1

13
 Module 5
Borrowing – a life cycle perspective Topic 5.3

Teacher Notes
Classroom activity:
Suggested time: 1 lesson

Resources: Large sheets of paper

Student Worksheets:
Worksheet 6 A Life of Credit
Worksheet 7 Give me credit!

The following activities can be used to alert students to the impact of stages in their life cycle
on their decision to borrow. They may recognise that a decision to borrow at one stage may
prevent further borrowing at subsequent stages. The need for planning is highlighted.

(a) For Worksheet 6, students could work in pairs to consider the likely credit needs of life cycle
stages:
15 20 30 40 50 60 70 YEARS
Students will need to conduct some research around costs of events, eg real estate, car, etc.
(b) Brainstorm and record the financial or planning decisions that they would need to make if
they were going to manage each event well.
(c) Have each group report to the class on the reasons for borrowing at the stage of the life
cycle they considered.
• Each group explains the credit alternatives available for the product of their choice.
• Students report identifying reasons for borrowing at different stages of the life cycle.
(d) Students use software of physical resources to create a credit cycle.
Position the lifecycle events along the life cycle line.
Students should recognise that some events:
• can occur more than once (How many cars will you buy during your life?)
• may not occur at all
• may not be relevant for everyone
(e) Following a class discussion, position the cards to reflect the consensus of decisions.
(f) Distribute Worksheet 7– Give me credit!
Students prepare their own version of a life cycle borrowing time line.
• just left school
• in early employment
• mid-employment (30 - 50 year olds)
• 50+ years to retirement.
In the middle column, students identify the purpose of the credit required. They may also like to
estimate the amount of the loan. Record the projected length of the loan in the last column.

14
 Module 5
Borrowing – a life cycle perspective Topic 5.3

Work in pairs to create a life cycle line from age 15 to 80. Use software or physical resources

A life of credit
Worksheet 6
to place the following lifecycle events on the line. You may need to research and come to a
mutual agreement to complete the details for each event. (Some events may occur more than
once.)

Tertiary education Overseas holiday

Amount: Amount:
Loan length: Loan length:
Smartphone Computer (desktop/laptop/tablet)
Amount: Amount:
Loan length: Loan length:
Investment - shares Bedroom furniture for first rental apartment
Amount: Amount:
Loan length: Loan length:
Home loan: Motor vehicle/motor bike
Amount: Amount:
Loan length: Loan length:
Gift to child on marriage Home renovation
Amount: Amount:
Loan length: Loan length:
Reverse mortgage Swimming pool
Swimming pool: Amount:
Loan length: Loan length:

Complete the following statements:

People mostly borrow money because:

I think that people should use credit when:

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 Module 5
Borrowing – a life cycle perspective Topic 5.3

Give me credit!
Worksheet 7
During a life cycle many purchases of goods or services may require the use of credit. This
may be because:
• some events are unexpected (e.g. family emergency).
• some events are expected (e.g. property purchase).
Whatever the reason, planning is an essential part of the process, as the decision to borrow at
any one stage may reduce the opportunity to borrow further at subsequent stages.
On the table below, place your own projected needs for credit on your personal life cycle line.
As a guide, use the events on the life cycle cards used in the class activity from activity 1.3.
However, it is important to recognise that for you, some events may:
• not take place at all
• happen more than once
• may require a long time to repay the amount borrowed.

My life cycle line – Give me credit

LIFE CYCLE STAGE BORROWED TO PAY FOR REPAYMENT TIME

(e.g. education) (e.g. ten years)
Just left school

In early employment

Mid employment
30–50 age group

50+ and retirement

16
 Module 5
Applying for credit Topic 5.4

Teacher Notes
Community/classroom activity:
Suggested time: 1 – 2 lessons

Resources: www.canstar.com.au
www.infochoice.com.au
www.moneybuddy.com.au
Online and hard copy information and applications for credit cards
from:
• banks
• department stores
• other credit providers
Current press information about credit options
The following activity can be used to alert students to the
importance of their credit history. The variety of credit options for
the purchase of consumer goods is also explored.

Student worksheets:
Worksheet 8 Applying for credit
Worksheet 9 What does credit cost?
Worksheet 10 Give them credit!

(a) Distribute Worksheet 8 – Applying for credit. For this activity students will need access
to credit application forms (downloadable or hardcopy). In pairs, students compare
application forms for personal credit such as bank credit cards or store credit.
Students examine:
• the nature of information requested and draw up a comparative list for
each credit type.
• the reasons why these questions are asked.
• the differences between different types of credit
Students report on their findings to the class.

17
 Module 5
Applying for credit Topic 5.4

Teacher Notes
(b) students compare the financial impact of different forms of credit.
Distribute Worksheet 9 – What does credit cost?
• Students compare two credit cards, investigating all conditions and costs for each.
They could also use this information to calculate the impact of interest relating to
credit arrangements on the total cost of a given item.
• Students research a range of in depth issues around the hidden costs of credit cards
• students to investigate the following issues related to credit cards and interest
➢ – choosing a credit card
➢ – transferring a credit balance
➢ – Interest rates and cash advances
➢ – Rewards programs and fees
• Students use www.canstar.com to examine the different conditions of credit cards
best suited to different types of users
• Students calculate the effective interest rate and total cost of a range of credit
options. A variety of credit options for the purchase of consumer goods is also
explored.
• Students calculate the COST OF CREDIT for 3 types of credit.

(c) The activity in Worksheet 10 – Give them credit can be used to highlight the importance
of a person’s credit history. Working in small groups, students make decisions about
credit history, risk, and status for each of the case studies. A class discussion could follow.

(d) Extension Activity

Make a list of unfamiliar terms or terms which have a specific meaning in this context
and add to your POWER WORD list.

18
 Module 5
Applying for credit Topic 5.4

Applying for credit

Worksheet 8
Organisations that provide credit want to know if you are likely to be
a credit risk. Their application forms request personal information to
enable them to assess this risk. Work with a partner to complete these
tasks.
1. Look at the application forms for a range of credit cards or store
charge cards. Your teacher may distribute sample application forms
or you can obtain this information from the Internet.
(a.) In the first column list some of the questions that are asked
on the application forms. In the brackets, identify the source
of credit (eg BOQ visa card, St George Vertigo MasterCard,
American Express platinum card, David Jones American Express
Platinum Card, etc) and tick in the column if that question is
asked.

QUESTION REASON ASKED FORM 1 FORM 2 FORM 3

() () ()

(b) Some of the terms in these application forms may be unfamiliar or have a specific
meaning in this context. Add any new terms you may have found to your POWER
WORD list.

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 Module 5
Applying for credit Topic 5.4

What does credit cost?

Worksheet 9
1. Select one credit card and one store charge card. Complete the following chart
comparing these two forms of credit.

FEATURES Credit Card: Store Card:

Purchase Rate

Cash Advance Rate

Annual Fee ($)

Interest free days

Interest rate

Balance transfer rate

On line access

Rewards program

Complimentary travel
insurance

2. Are all credit cards the same?

20
 Module 5
Applying for credit Topic 5.4

What does credit cost?

Worksheet 9
3. Search these web sites to answer the following questions.
www.canstar.com.au
www.infochoice.com.au
www.moneybuddy.com.au

How is credit card interest calculated?

What is the advantage of having a card with a rewards program?

What is the disadvantage of having a card with a rewards program?

Is there any reason to avoid store cards?

Find the meanings of these different types of credit card interest.

• Purchase interest
• Interest on cash
• Special interest
• Balance transfer interest

Why do banks offer low balance transfer interest rates?

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 Module 5
Applying for credit Topic 5.4

Why would someone take advantage of a balance transfer offer?

What does credit cost?

Worksheet 9
Why should you be aware of the “revert” rate?

How are repayments on balance transfer accounts allocated?

Why should you avoid having too many credit cards?

What are the characteristics of the following types of spenders?

• Habitual spender

• Impulse spender

• Big spender

• Everyday spender

Go to www.canstar.com >Credit Cards >compare credit card rates

1. Find 2 cards which have application fees.
2. Find 5 cards which would suit habitual and impulse spenders.
3. Find 5 cards which would be ideal for big spenders.
4. Find 3 cards which would suit you personally, assuming that you’re an everyday
spender.

22
 Module 5
Applying for credit Topic 5.4

What does credit cost?

Worksheet 9
NAME OF CARD APP FEE
1
1
CARDS SUITABLE FOR HABITUAL AND IMPUSLE SPENDERS
NAME OF CARD INT RATE ANNUAL FEE REWARD PRO INT FREE DAYS
1
2
3
4
5
CARDS SUITABLE FOR BIG SPENDERS
NAME OF CARD INT RATE ANNUAL FEE REWARD PRO INT FREE DAYS
1
2
3
4
5
CARDS SUITABLE FOR ME – EVERYDAY SPENDER
NAME OF CARD INT RATE ANNUAL FEE REWARD PRO INT FREE DAYS
1
2
3

What factors would you take into account when selecting a credit card?

23
 Module 5
Applying for credit Topic 5.4

Calculate the cost of credit for each of the following:

What does credit cost?

Worksheet 9
TYPE OF INTEREST TOTAL TOTAL COST MONTHLY
CREDIT RATE INTEREST REPAYMENT
PAYABLE
Usha borrows 1 YR 2
$1600 at 15% for YRS
a new laptop
SIMPLE
Jace borrows 1 YR 3½
INTEREST
$4000 at 17.5% YRS
to buy his
brother’s car.
Baz needs $180
urgently to pay
his mobile phone
PAYDAY bill until payday in
LOAN one week’s time.
25% per Harriet borrows
week $250 to pay the
electricity bill. She
can repay in a
fortnight.
Georgia buys a
$600 Smartphone
on credit, paying
$40 per month
over 2 years.
RETAIL Jorge buys new
CREDIT motor cycle
leathers – cash
price $450 - on
no deposit terms
over 5 months at
$35 per week.

24
 Module 5
Applying for credit Topic 5.4

Give them credit

Worksheet 10
Would you extend credit to these people?
a) Kate
Kate has her own clothing business. She is successful, single, and has no children. She is
paying off the mortgage on a town house close to the city, and owes just over $3000 on
her car. She wants to buy a home theatre system. Should credit be available to her?
What questions would you ask Kate?

(b) Mr Beam
Mr Beam has just lost his job. He wants to buy a large screen 3D Smart TV. His only
source of income at the moment is the Newstart Allowance.
Can he expect to get access to credit?

c) Mr and Mrs Tori

Mr and Mrs Tori have not lived in Australia very long, but both are working, and currently
rent their home. They need new furniture and have seen some advertised on interest free
terms for six months.
As the store credit controller, what details would you need to know about this couple?

d) Joshua
Joshua is a year 12 student. He earns $70 a week at his part-time job after school. He
wants to buy a new phone.
Do you think he should have credit?

25
 Module 5
Applying for credit Topic 5.4

Give them credit

Worksheet 10
Record the outcome of your group’s discussion below.

CREDIT APPROVED?
APPLICANT COMMENTS
Yes/No

26
 Module 5
Consumer rights Topic 5.5

Teacher Notes
Research activity:
Suggested time: 2 lessons (The suggested extension activities for this topic would
involve a considerable allocation of time)

Resources:
The following internet resources support this activity. If students
do not have computer access, the website fact sheets can be
downloaded from these sites to distribute to groups.
www.fairtrading(your state).gov.au or
www.consumer.(your state).gov.au
www.law4u.com.au
www.moneysmart.gov.au
www.moneystuff.net.au
www.mycreditfile.com.au
Student Worksheets:
Worksheet 11 What are my rights??

The following activity is designed to alert students to the laws applying to credit arrangements. The
Consumer Credit Code is an important piece of legislation in this area. Information on this Code
is readily available and students can access it in a variety of ways. The teacher will need to decide
how far to venture into consumer law in general as distinct from law relating to credit in particular.
(a) Distribute Worksheet 11 – What are my rights??. In this activity students research a
range of consumer laws.
www.law4u.com.au .Go to your state or www.law4u.com.au territory and select ‘Loans
and Credit’. There is a significant amount of current information on this site. (In addition,
the top 10 questions section may be useful for activity (c) below.)
www.moneysmart.gov.au >Borrowing and credit > Consumer credit regulation
www.moneystuff.net.au >Just the facts>Credit
(b) Brainstorm with the class the importance of securing and maintaining a good credit
rating. The Veda website (http://www.mycreditfile.com.au/) provides information about
managing your credit reputation. Six guidelines are provided for consumers. This site also
includes information about guarding against identity theft in relation to credit cards etc.
(c) Secondly, students investigate the actions that can be taken if a person runs into financial
difficulties. The MoneySmart website contains material students could use to publish a
brochure or other fact sheet explaining what a person can do in these circumstances.
(d) Students design a frequently asked questions page for a consumer rights organisation
on the rights of consumers when dealing with credit. It is to be limited to 10 questions.
Students need to decide the ten most important questions to include.

27
 Module 5
Consumer rights Topic 5.5

Teacher Notes
(e) Extension Activities
• Students work in groups to create a game which helps students to learn about
credit. (It’s quite possible that some students may not be familiar with these games.)
For example:
– Snakes and ladders game, where the players ascend the ladders for complying
with the law and descend the snakes when they show ignorance or lack of
compliance with the law.
– The ‘Fish’ game. Prepare a two-colour set of cards, one card with a situation on
it, the other card with the "rule or regulation" that governs it. Students then
work in pairs matching up the cards, from an up-side-down pool of cards.
– Alternatively, use the cards for silent swapping. Students match up their
situation and rule and drop out of the "silent circle" when they have a pair.
– A team competition based on the Trivial Pursuit format.
– Another option is to create a multi media presentation (such as a short movie)
to demonstrate a credit concept.
(f) Reflective learning
• Students consider the
– aspects of the Consumer Credit Code that protect the supplier
– aspects of the Consumer Credit Code that protect the consumer
– ways in which the Consumer Credit Code does not seem fair
• Discuss the fact that a person’s credit rating can change during a lifetime

28
 Module 5
Consumer rights Topic 5.5

What are my rights?

Worksheet 11
Find out more about the laws on credit. Use the following internet sites or materials
distributed by your teacher.
www.fairtrading (your state).gov.au or www.consumer.(your state).gov.au
www.law4u.com.au
www.moneysmart.gov.au
www.moneystuff.net.au
www.mycreditfile.com.au

1. Did you know that when you apply for credit, information about your credit history is
available to the credit provider? If you have outstanding debts, or have a history of being
late with payments, your credit rating will be downgraded.
Go to the Veda website (http://www.mycreditfile.com.au/) and locate the information
about managing your credit reputation. List the six guidelines are provided for consumers.
What information can you find about guarding against identity theft in relation to credit
cards etc?
2. What do you do if you run into money problems?
Go to https://www.moneysmart.gov.au/>Managing my money>Manage debts>
Some people get into financial difficulty in repaying credit cards and other loans.
Investigate this page, and produce a pamphlet, or write a ‘How to’ article listing the main
steps to be followed for people who find themselves in financial difficulty.
3. Many internet sites include a ‘frequently asked questions’ section giving answers to
questions that people often ask. You have been asked to design a frequently asked
questions page for a consumer rights organisation on the rights of consumers when
dealing with credit. You have been told that the page is to be limited to 10 questions.
What do you think are the ten most important questions to include? Prepare 10 questions
and answers to them
4. Prepare a game to help others to learn the Credit Code (consumer rights, managing your
credit file, protecting yourself from identity theft, etc).
For example your game might be:
• Snakes and Ladders game, where the players ascend the ladders for
complying with the law and descend the snakes when they show
ignorance or lack of compliance with the law.
• The ‘Fish’ game. Prepare a two-colour set of cards, one card with a situation on it,
the other card with the "rule or regulation" that governs it. Students then work in
pairs matching up the cards, from an up-side-down pool of cards.
• Alternatively, use the cards for silent swapping. Students match up their situation
and rule and drop out of the "silent circle" when they have their pair.
• 3A team competition based on the Trivial Pursuit format.
5. A multi media presentation (such as a short movie) to demonstrate an important credit
concept

29
 Module 5
Why the interest in interest? Topic 5.6

Teacher Notes
Investigation
Suggested time: 2 lessons

Resources www.moneysmart.gov.au > Borrowing and Credit > Managing debts

www.moneysmart.gov.au > Calculators > Credit card
In this activity students investigate the implications of interest
attached to credit. The effects of compound interest are explored.

Student worksheets
Worksheet 12 Understanding minimimum payments
Worksheet 13 Dear moneybags

a) For Worksheet 12, students use an online calculator to reveal the impact of compounding
interest on outstanding credit card balances. As an extension activity, students can create
their own spreadsheet calculator to perform this function.
b) Worksheet 13 requires students to assume the role of financial journalist, and provide
practical research based solutions to readers’ problems around interest on credit.
(c) Reflective learning

Facilitate a discussion on what students have learnt about managing a credit card – what to
look out for, and ways of overcoming problems.

30
 Module 5
Why the interest in interest? Topic 5.6

Understanding minimum payments

Worksheet 12
1. It is important to understand the consequences of only paying the minimum monthly
amount on your credit card. Go to https://www.moneysmart.gov.au/>calculator>more
calculators>credit card calculator and use the information below to find the difference in
payment time and total interest paid.

Account balance: $5,000

Interest rate: 18%p.a
Minimum Payment: 3% ($150)
Higher payment made $170

Minimum payment only Higher monthly payment

Time to pay off
Amount of Interest paid

Account balance: $5,000

Interest rate: 18%p.a
Minimum Payment: 3% ($150)
Higher payment made $200

Minimum payment only Higher monthly payment

Time to pay off
Amount of Interest paid

Account balance: $5,000

Interest rate: 18%p.a
Minimum Payment: 3% ($150)
Higher payment made $500

Minimum payment only Higher monthly payment

Time to pay off
Amount of Interest paid

3. Create your own spreadsheet calculator to provide this information.

4. Outline the potential problems for a credit card holder who repays only the minimum
payment each month?

31
 Module 5
Why the interest in interest? Topic 5.6

Dear moneybags
Worksheet 13
You are 22, and working as a trainee Journalist for Wealth
Wise – a magazine providing advice about a range of
financial topics. The magazine wants to broaden its appeal
by introducing a section on credit aimed at people aged
between18-24. You have been offered the position of editor
of this new section “DEAR MONEYBAGS” where you provide
answers to questions emailed in by readers. The following
letters are to be answered in the first edition:

Letter 1
I have just recently started working full time and my bank has offered me a credit card.
There is a choice of 2– one with 55 interest-free days and the other one has ‘no interest
free’ days. Could you advise me which card would be most suitable for me?
Sam from Sydney City

Letter 2
My credit card charges no interest for 45 days. I recently used my card a number of
times to get cash when I away on my holiday in Bali. When I got my next card statement
I found they had charged me interest on each withdrawal. They didn’t give me 45
interest free days. Is it worth me complaining?
Wei from Windsor

Letter 3
I notice that my credit card charges an interest rate of 22%. My friend has a credit card
from EZI Finance which only charges 15% p.a. I’m thinking of taking out a new card with
them as they will transfer my existing card balance and only charge me 10% interest for
the first 6 months. What should I look at before I transfer?
Jamie from Jacana

Letter 4
I am thinking of signing up for a credit card. I know I should look at the interest rates
charged, but a friend told me to get a card with good reward points and not to worry
about the fees. What exactly is a rewards program? What fees should I look out for?
Sophie from Syndal

32
 Module Six
Taxation – everyone pays

In partnership with
 Module 6
Taxation – everyone pays

OVERVIEW

Teacher Notes
Module Overview and Curriculum Mapping
Module 6 aims to develop students’ understanding of taxation issues and responsibilities.

ENDURING UNDERSTANDINGS
• Payment of taxes on income and spending is a legal requirement in Australia.
• Income tax is only one aspect of a citizen’s taxation commitment.
• The Australian Taxation Office (ATO) administers government taxation policies.
• A key component of the assessment process is the completion and lodgement of an
income tax return.
• A TFN (tax file number) is a unique number issued to individuals by the ATO.
• There are strict rules governing what is considered assessable income and what may be
allowable deductions to reduce assessable income.
• Study at university may incur a HELP (Higher Education Loan Program) liability that will
need to be repaid through the taxation system at a later date.
• Governments redistribute income received from tax.

LEARNING OUTCOMES
Students:
• Identify their taxation rights and obligations as Australian citizens or residents
• Appreciate the purpose of taxation
• Recognise different forms and rates of taxation
• Consider the effect the Goods and Services Tax (GST) has on consumers
• Understand how the Higher Education Loan Program (HELP) operates and whom it affects.

POWER WORDS Page 2

CURRICULUM MAPPING 3

LIST OF TOPICS
6.1 Tax language 5
6.2 Taxing the community 11
6.3 How to pay income tax 20
6.4 Higher Education Loan Program (HELP) - the role of the ATO 42
6.5 Understanding Australia’s Goods and Services Tax (GST) 52
6.6 A life cycle approach to taxation 59
6.7 Advice from the professionals 62
6.8 The impact of marginal tax rates 65

1
 Module 6
Taxation – everyone pays

Power Words

Teacher Notes
Module Overview and Curriculum Mapping
As students work through each topic in this module they will encounter words that may be
new to them, crucial to understanding and completing the worksheets, and/or difficult to spell.
In addition, students may simply find some of this vocabulary interesting, planning to use it in
the future. Understanding and being able to use these words will provide students with more
power to make future financial decisions.
There are several approaches to using this “glossary”. The intention is for students to
investigate and find the meanings. They could be given the complete list before they start
the module, or they could set up a table and add new words as they progress through the
activities. There are also specific POWER WORD activities in some topics.
This list is not exhaustive.

assessable income legitimate

ATO marginal tax rate
audit medicare levy
avoidance offset
BAS pay – gross
beneficiary pay - net
capital gains tax PAYG
commonwealth government PAYG payment summary
consumer penalty
clarify postgraduate
deduction progressive tax
elaboration profit
employee qualification
employer refund
exempt self-assessment
federal government substantiate
financial year superannuation
flat taxation rate tax evasion
FBT tax file number
graduate tax free threshold
GST tax invoice
HECS tax offset
HECS-HELP tax return
HELP taxation
income tertiary
income – earned TFN
income – passive transfer payment
Individual Tax Return Instructions Supplement undergraduate
legal

2
 Module 6
Taxation – everyone pays

CURRICULUM MAPPING

Teacher Notes
Module Overview and Curriculum Mapping
NCFLF DIMENSIONS ENGLISH MATHEMATICS
Knowledge & Understanding LITERACY YEAR 9 NUMBER & ALGEBRA YR 9
• Identify and explain strategies Interacting with others Real numbers
to manage personal finances • use interaction skills to • Solve problems involving
• Explain the different ways present and discuss an idea direct proportion. Explore the
in which people are paid and to influence and engage relationship between graphs
including wages, salaries, an audience by selecting and equations corresponding
commissions, self-employment persuasive language, varying to simple rate problems
and government benefits voice tone, pitch, and pace, (ACMN211)
• Discuss why some goods and using elements such
and services are provided by as music and sound effects
(ACELY1811) STATISTICS & PROBABILITY
Government for community YR 9
benefit and how these are • plan, rehearse and deliver
funded presentations, selecting and Data representation &
sequencing appropriate content interpretation
Competence
and multimodal elements for • Identify everyday questions
• Investigate the financial and issues involving at least
aesthetic and playful purposes
decisions required at significant one numerical and at least
(ACELY1741)
life-stage events one categorical variable, and
Interpreting, analysing,
• Accurately complete and collect data directly and from
evaluating
explain the purpose of a range secondary sources (ACMSP228)
of financial forms, including for • Interpret, analyse and evaluate
online transactions how different perspectives
of issue, event, situation,
Responsibility & Enterprise
individuals or groups are
• Explore the economic cost constructed to serve specific
of individual and collective purposes in texts (ACELY1742)
consumer decisions of the
Creating texts
broader community and the
environment • Create imaginative, informative
and persuasive texts that
• Understand and explain
present a point of view
the legal responsibilities of
and advance or illustrate
taking on debt, including the
arguments, including texts that
consequences of not paying
integrate visual, print and/or
• Explain how, as financially audio features (ACELY1746
active citizens, they fit into the
• Use a range of software,
broader economy and society
include word processing
through:
programs, flexibly and
- Generating income and imaginatively to publish texts
paying taxes (ACELY1748)
- Saving
- Spending
- Donating, and
- Investing

• Explain the role played by

governments and the voluntary
sector in the community to
help those in financial need
and explore the cost benefit to
the economy

3
 Module 6
Taxation – everyone pays

CURRICULUM MAPPING

Teacher Notes
Module Overview and Curriculum Mapping
GENERAL CAPABILITIES
LITERACY
Comprehending texts through listening, reading and viewing
Navigate, read and view learning area texts
• Navigate, read and view a wide range of more demanding subject-specific texts with an extensive range
of graphic representations
Composing texts through speaking, writing and creating
Compose spoken, written, visual and multimodal learning area texts
• Compose and edit longer and more complex learning area texts (AC ELY1756)
Use language to interact with others
• Use pair, group and class discussions and formal and informal debates as learning tools to explore ideas,
compare solutions, evaluate information and ideas, refine opinions and arguments in preparation for
creating texts (ACMSP253)
NUMERACY
Recognise & use patterns & relationships
Recognise & use patterns & relationships
• Explain how the practical application of patterns can be used to identify trends
Interpreting statistical information
Interpret data displays
• Evaluate media statistics and trends by linking claims to data displays, statistics and representative data
(ACMSP253)
INFORMATION & COMMUNICATION TECHNOLOGY CAPABILITY
Investigating with ICT
Define & plan information searches
• Select and use a range of ICT independently and collaboratively, analyse information to frame questions
and plan search strategies or data generation
Creating with ICT
Generate ideas, plans & processes
• Select and use ICT to articulate ideas and concepts, and plan the development of complex solutions
(ACELY1751)
CRITICAL & CREATIVE THINKING
Inquiring – identifying exploring & organising information & ideas
Pose questions
• Pose questions to critically analyse complex issues and abstract ideas (ACELT1812, ACMSP228)
Reflecting on thinking and processes
Think about thinking (metacognition)
• Give reasons to support their thinking, and address opposing viewpoints and possible weaknesses in
their own positions (ACELT1640, ACMSP247)
PERSONAL & SOCIAL CAPABILITY
Self-management
Work independently & show initiative
• Establish personal priorities, manage resources effectively and demonstrate initiative to achieve personal
goals and learning outcomes (ACELY1756)
Become confident, resilient and adaptable
• Evaluate, rethink and refine approaches to tasks to take account of unexpected or difficult situations and
safety considerations (ACELY1757)
Social management
Make decisions
• Develop and apply criteria to evaluate the outcomes of individual and group decisions and analyse the
consequences of their decision making (ACMNA229)
INTERCULTURAL UNDERSTANDING
Interacting and empathising with others
Consider and develop multiple perspectives
• Present a balanced view on issues where conflicting views cannot easily be resolved (ACELT1643,
ACMSP227) 4
 Module 6
Tax language Topic 6.1

Teacher Notes
Classroom activity:
Suggested time: 1 lesson
Student worksheets
Worksheet 1: Tax words
Worksheet 2: Introducing income
Resources: www.ato.gov.au
www.taxsuperandyou.gov.au
www.moneysmart.gov.au

This activity introduces students to some important tax terminology as well as considering
some important tax concepts. As an introduction, ask students to brainstorm things that
governments pay for: defence, schools, road, hospitals, etc. Where do governments get the
money to pay for these things?
www.taxsuperandyou.gov.au is a useful resource for teachers and can be used for research,
and to supplement to worksheet activities throughout this module.

1 Distribute worksheet 1: Tax words. This can be used as a POWER WORDS activity.
Students can access the glossary facility available on the ATO web site (search for
'definitions') or, alternatively check the Individual Tax Return Instructions Supplement to
locate meanings of the words.
2 The class brainstorms a list of different taxes currently in existence in Australia. If
students are unfamiliar with the types of taxes, the teacher can direct them to internet
research in order to familarise themselves with some of the more common taxes.
3 Conclude with the tax terminology word search. A class discussion clarifying the
meanings of the word search vocabulary should be undertaken.

5
 Module 6
Tax language Topic 6.1

Teacher Notes
TAX TERMINOLOGY WORD SEARCH SOLUTION

6
 Module 6
Tax language Topic 6.1

Teacher Notes
4 The Worksheet 2 task introduces students to some basic principles of personal income tax
and general terminology through research at www.taxsuperandyou.gov.au. Students
should access the preview course, and then go to the pages in YOUR TAX.

5 Discuss the concepts investigated and implications for individual taxpayers.

6 Extension activity
Students investigate and consider the legal ways to reduce taxable income.

7 Reflective learning
Encourage further discussion on the difference between tax avoidance and tax
minimization? Teachers could ask the questions:
• 'Why might a big business find it easier to minimise tax ' (Possible answer: Big
business (and indeed individuals) can pay for accountants to work out profit legally
but using accounting rules to minimise the profit; the bigger the business the more
options there are with to minimize tax).
• 'Which of these could lead to a prosecution: tax minimization or tax avoidance'?

7
 Module 6
Tax language Topic 6.1

PART A

Student Worksheet 1
Tax words
Go to The Australian Taxation Office web site www.ato.gov.au Click
on definitions at the bottom of the home page to go to the A-Z listing
of taxation terms. Start adding definitions to your POWER WORDS LIST.
If you don’t understand a term ask your teacher for assistance. You
may not find definitions for all of these words on this site.
If you find any other words you think may be relevant to tax, add them
to this list of power words.

assessable income
ATO
audit
avoidance
BAS
beneficiary
capital gains tax
deduction
exempt
financial year
fringe benefits tax
graduate
GST
HECS-HELP
income
marginal tax rate
medicare levy
offset
PAYG
PAYG payment summary
postgraduate
profit
qualification
self assessment
superannuation
tax evasion
tax file number
tax free threshold
tax invoice
tax return
tertiary
TFN
undergraduate

8
 Module 6
Tax language Topic 6.1

PART B

Student Worksheet 1
Tax words
TAX WORDS WORD SEARCH

9
 Module 6
Tax language Topic 6.1

Go to https://www.taxsuperandyou.gov.au/mod/page/view.php?id=56669

Student Worksheet 2
Introducing income tax
and complete this overview of income tax for individuals.

CONCEPT YOUR RESPONSE

The Australian income tax system
relies on taxpayers self-assessing.
What does this mean?

What is assessable income?

List some examples.

What is not assessable income?

What is taxable income?

What are tax offsets?

Explain the difference between

tax minimisation and
tax evasion.

What is Capital Gains Tax?

What options are offered by the

ATO if you have problems with
meeting your tax obligations?

What are the consequences of

not having a Tax File Number
(TFN)?

10
 Module 6
Taxing the community Topic 6.2

Teacher Notes
Classroom activity:
Suggested time: 2 – 3 lessons
Student worksheets
Worksheet 3 Tax terminology detective
Worksheet 4 Why do I have to pay tax?
Worksheet 5 How do I really feel about tax?
Worksheet 6 Talk back radio announcer for a day
Resources: www.taxsuperandyou.gov.au
Students can access preview pages of the site, or teachers can register
for official school access.
www.ato.gov.au
(for information on government revenue and expenses)
www.budget.gov.au
an official government web site with current information on
government revenue and expenditure

The focus of this topic is on the principle of tax as redistribution of wealth and Australia's
current taxation policies. This leads into an activity where students examine their own attitudes
towards tax.

a) Distribute Worksheet 3: Tax terminology detective. Some clues have already been provided
to help students to determine each of the terms.
SOLUTION
A B C D E F G H I J K L M
25 16 5 18 24 6 4 26 9 13 8 7 1
N O P Q R S T U V W X Y Z
20 17 11 21 14 12 10 19 15 3 2 23 22

1. AUDIT
2. CAPITAL GAINS TAX
3. DEDUCTIONS
4. GOODS AND SERVICES TAX
5. INCOME
6. MARGINAL TAX RATE
7. MEDICARE LEVY
8. TAX FILE NUMBER
9. HOME OFFICE EXPENSES
10. WORK RELATED EXPENSES
11. ZONE REBATE
12. LIQUIDATION
13. ADJUSTMENT 11
 Module 6
Taxing the community Topic 6.2

Teacher Notes
b) Introduce the concept of “redistribution of wealth”. Worksheet 4: Why do I have to
pay tax? requires students to investigate the practical workings of the tax process, ie,
redistribution of wealth. Some initial discussion and guidance on taxation relevant to
different levels of government will be necessary. Students will need to brainstorm and
research (www.budget.gov.au) to answer the worksheet questions.

c) Students record their opinions on a range of controversial tax issues listed in Worksheet 5:
How do I really feel about tax?. The teacher may wish to add more statements to the list
of issues. The ATO web site provides specific information on several of the tax processes
listed. The meaning of GST may have to be clarified before students complete this task.

d) Distribute Worksheet 6: Talk back radio announcer for a day. This is a creative exercise.
Working in small groups, students research, script and record a talk back program. The
presenter of the program responds to a number of callers. Issues raised include:
• The Australian income tax system
• Explanation of some of the taxes collected by governments
• Taxes collected by local and state governments
• Tax evasion

If time is limited, reduce the number of issues to be researched and discussed.

e) Extension activities
• For additional radio program content, students could compare Australian income tax
rates with other countries.
• Students investigate the taxation policies of different political parties.
• Students create a range of tables and graphs using Government revenue and
expenditure data over the last three years. Undertake an analysis of this information.

12
 Module 6
Taxing the community Topic 6.2

Teacher Notes
f) Reflective learning
• Information collected for the worksheet 4 task is compared and discussed by the
class. Have students’ attitudes changed after discussing the issues and hearing
others’ points of view?
• Debrief the talk back announcer presentations.
• Consider the fact: You can’t disagree with the necessity of community services, but
how do we pay for these services? The community has to decide on spending, just as
individuals do. How is the budget balanced? How are the funds available distributed,
when our wants are greater than our resources? Should spending in some areas be
reduced, or even abolished (eg, current controversial topics such as benefits for retired
politicians)? The community has to agree on how much money (or proceeds from
taxes collected) it will contribute.
• Discuss and prioritise the following areas of government spending
– Caring for people with disabilities
– Education
– Health
– Age pension
– Police/security
• Consider the opportunity cost of taxation income for the individual citizen and for
the whole country. If taxes were lowered, what would you (as an individual taxpayer)
spend the extra money on? What should be cut from the federal government’s
budget?

13
 Module 6
Taxing the community Topic 6.2

Student Worksheet 3
A B C D E F G H I J K L M

Tax terminology detective

25 24 9
N O P Q R S T U V W X Y Z
10

The letters in the tax words below have been replaced by numbers. Your job as a Tax
Terminology Detective is to crack the code and solve the mystery words
Four clues have been provided – for A, E, I and T. Once you solve a word, add the numbers for
any new letters you detect to the table above. The more words you solve, the easier it will be
to discover more letters.
Here’s a hint. If you have any trouble solving a word, refer to your POWER WORDS list. Good
luck!

Tax Term 1 (1 word)

25 19 18 9 10

Tax Term 2 (3 words)

5 25 11 9 10 25 7 4 25 9 20 12 10 25 2

Tax Term 3 (1 word)

18 24 18 19 5 10 9 17 20 12

Tax Term 4 (4 words)

4 17 17 18 12 25 20 18 12 24 14 15 9 5 24 12 10 25 2

Tax Term 5 (1 word)

9 20 5 17 1 24

Tax Term 6 (3 words)

1 25 14 4 9 20 25 7 10 25 2 14 25 10 24
14
 Module 6
Taxing the community Topic 6.2

Tax Term 7 (2 words)

Student Worksheet 3
Tax terminology detective
1 24 18 9 5 25 14 24 7 24 15 23

Tax Term 8 (3 words)

10 25 2 6 9 7 24 20 19 1 16 24 14

Tax Term 9 (3 words)

26 17 1 24 17 6 6 9 5 24 24 2 11 24 20 12 24 12

Tax Term 10 (3 words)

3 17 14 8 14 24 7 25 10 24 18 24 2 11 24 20 12 24 12

Tax Term 11 (2 words)

22 17 20 24 14 24 16 25 10 24

Tax Term 12 (2 words)

7 9 21 19 9 18 25 10 9 17 20

Tax Term 13 (1 word)

25 18 13 19 12 10 1 24 20 10

15
 Module 6
Taxing the community Topic 6.2

WHY DO I HAVE TO PAY TAX?

Student Worksheet 4
Tax terminology detective
Working with a partner, research (You may find www.budget.gov.au a useful site.) and
answer the following questions.
1. Why do people pay taxes?

2. How many different types of tax payable in Australia can you find?

FEDERAL GOVERNMENT STATE GOVERNMENT LOCAL GOVERNMENT

TAXES TAXES TAXES

16
 Module 6
Taxing the community Topic 6.2

3. What do governments do with the tax revenue raised?

Student Worksheet 4
Tax terminology detective

17
 Module 6
Taxing the community Topic 6.2

HOW DO I REALLY FEEL ABOUT TAX?

Student Worksheet 5
How do I really feel about tax?
Taxation can be viewed as a method of redistributing income
and wealth. In Australia the more you earn, the more tax you
pay. This is called redistributing wealth. However, our personal
values affect our attitude to some aspects of taxation. Use
the code shown below to indicate your position on these
statements.
sa Strongly agree
a Agree
d Disagree
sd Strongly disagree

sa a d sd
People on low income should not have to pay income tax.
People on low income should not have to pay GST (tax payable when
you buy goods and services).
High income earners should pay a HIGHER PROPORTION of their income
in tax.
The current GST rate is too high.
Lotto and scratch card winnings should be taxed.
Inheritances should be taxed.
Capital gains on selling shares and investments should not be taxed.
People who deliberately avoid paying their fair share of tax cheat the
community and disadvantage Australians who do the right thing.
Goods and Services Tax (GST) affects all people equally.
The amount of income tax we have to pay is too high.
The taxation system in Australia is a fair method of redistributing income
and wealth.
If you work hard, and have a high income, you should be rewarded for
your efforts by paying less tax.
Large companies who hire clever people to advise on how to minimise
tax are not acting in a fair way.

In one brief sentence, describe your attitude to taxation.

18
 Module 6
Taxing the community Topic 6.2

Sam Singh, an accountant, has been approached by Stephanie

Student Worksheet 6
Talk back radio announcer for a day!
Martin, the station manager of the local radio station to be a
guest presenter on the afternoon talk back show. The reason
Sam has been invited to do this is because Stephanie has heard
about Sam’s interest and expertise in the tax area. As tax is
an issue of importance to everybody this session has been
programmed for the 5.00 pm timeslot when many people are
listening on their way home from work.
Work in groups to prepare and present a ten minute talk back program. Decide on the best
way to record the program. Allocate roles to be played by each group member. These include
Sam, Arkie Johanssen the radio presenter, and five callers.
The callers and their areas of concern are:

NAME OF CALLER AREA OF TAX CONCERN THEY WILL RAISE:

Jessica What is income tax and why do we need this in Australia?
Guillermo Can you explain the difference between assessable income and
taxable income?
Yvette What is capital gains tax?
Ali Why do I have to pay the Medicare Levy?
Nick What happens to those people who try to avoid paying their fair
share of taxes?

Your task:
Refer to your responses on Worksheet 2 - Introducing income tax - to get started. To complete
the task successfully the group must undertake further research on the issues that the callers
raise. After you have completed the research and taken notes, record your program. The
callers will ask a question and Sam will respond appropriately. Your group has complete artistic
control over the way the program is presented.

Some tips:
• Speak clearly and not too fast so that listeners can understand what is being said.
• Make sure that the caller’s question has been answered clearly and in sufficient detail.
• Sam should talk about the issue in a simple but knowledgeable way. This should be easy
to do if the issues have been adequately researched.

Resources:
The official website of the Australian Government Taxation Office is a good starting point to
find information. There are also suggested links on this site.
Go to www.ato.gov.au and www.taxsuperandyou.gov.au

19
 Module 6
How to pay income tax Topic 6.3

Teacher Notes
Classroom activity:
Suggested time: 3 – 4 lessons
Student worksheets
Worksheet 7 Why do we need a tax file number (TFN)?
Worksheet 8 Assessable income
Worksheet 9 Preparing to lodge a tax return
Resources: www.ato.gov.au
www.taxsuperandyou.gov.au

Students examine the processes involved in applying for a Tax File Number. The issues of what
constitute assessable income and allowable work deductions are also covered.

a) Students complete Worksheet 7: Why do we need a tax file number (TFN)? - which
examines the reasons behind applying for a Tax File Number. Students should refer to
www.ato.gov.au to find the answers.

SOLUTION

1 How many digits is the 9 digits

tax file number?
2 List six reasons why • lodge a tax return
you might need a TFN. • ask about your tax affairs
• apply for income assistance or support payments,
such as pensions or benefits from either Department
of Human Services (Centrelink) or the Department of
Veterans’ Affairs (DVA)
• claim family tax benefit (FTB) – your FTB tax claim
cannot be processed without one
• make or receive payments under the pay as you go
(PAYG) withholding system
• start work or change jobs
• submit a Tax file number declaration (NAT 3092) or a
Withholding declaration (NAT 3093) form
• have savings accounts or investments that earn
income
• receive payments under the Higher Education Loan
Program
• join a super fund
• keep track of your super
• want to receive a super co-contribution (if you are
eligible)
• have an active Child Support Agency case.

20
 Module 6
How to pay income tax Topic 6.3

Teacher Notes
3 Is it compulsory to no
have a TFN?
4 If you get a job and do If you don’t have a TFN you could have more tax
not quote the TFN to withheld from your pay, or be unable to receive the
your employer what government benefits you are entitled to.
could happen?
5 Why would banks Your TFN is an important part of establishing your
and other investment identity when open bank accounts. Tax is payable on
bodies want to know interest and dividends earned.
your TFN when you Dividends (income from shares) are income for tax
open an account with purposes. There are also other tax implications in
them? obtaining, owning and disposing of shares, including
shares in employee share schemes (ESS).
6 If you enrol in a So that you will receive payments under the Higher
university course you Education Loan Program.
are required to provide
your TFN. For what
purpose does the
university require your
TFN?
7 Describe two different If you are able to attend an interview at a participating
ways to apply for a Australia Post retail outlet, you can apply for a TFN on
TFN. the web. Otherwise, you will need to complete the
paper application form Tax file number – application or
enquiry for individuals form (NAT 1432) and provide the
necessary proof of identity documents.

b) Worksheet 8 looks at what is assessable income. The formula Taxable income =

assessable income – allowable deductions is an important one to reinforce. Students
examine practical examples of what is considered income and what is not considered
assessable income (eg, gifts, gambling wins, etc).
Suggested responses for worksheet 8 follow.

1 Examples of assessable income include:

• Employment (wages and salaries)
• Tips (eg hospitality workers, taxi drivers)
• Rent received from an investment property
• Interest received on investments
• Capital gains on assets (property and investments) sold
• Pensions, annuities and government welfare payments
• Other allowances from employers (meal and travel allowances)
• Business, partnership and trust income
• Foreign income
21
 Module 6
How to pay income tax Topic 6.3

Teacher Notes
2 Examples of income not subject to income tax
The ATO categories are:
• exempt income
• non-assessable non-exempt income (for example first home saver account
government contributions)
• other amounts that you do not pay tax on.

Also included are:

• Gifts, such as money from a relative
• Inheritances
• Lottery winnings
• Winnings from other gambling on sports, horse racing, etc

3 An allowable work related deduction must:

• be personally paid by the income earner
• not have been reimbursed by the employer
• be an expense necessary for the individual to complete duties for the employer.

4 Travelling to and from work IS NOT AN ALLOWABLE DEDUCTION. However if you

travelled from work to a second job or from work to a conference that your employer
approved you can claim some travel costs in these circumstances.

(Other non-work related deductions include gifts and donations, and interest,
dividend and investment deductions.)

The basic rules for claiming a deduction are that the taxpayer:
• must claim the deduction in the same income year that the purchase was made
• can't claim an expense that has, or will be, reimbursed
• may have to substantiate claims with written evidence

5. If you donate money to an approved charity this is an allowable deduction.

22
 Module 6
How to pay income tax Topic 6.3

Teacher Notes
6. Tax offsets

NAME OF TAX OFFSET DESCRIPTION OF WHO IS ELIGIBLE FOR TAX OFFSET

Health insurance The private health insurance offset is a percentage of
the premium you pay to a registered health insurer for a
complying private health insurance policy.
Benefit recipients The beneficiary tax offset is available to taxpayers who
receive certain Department of Human Services benefits
and Commonwealth education allowances. Generally,
you pay no tax if your only income is a qualifying benefit
or allowance. If you are not in receipt of the full amount
of any qualifying benefits and allowances or have other
taxable income you may be eligible for a partial offset.
Medical expenses You can claim a tax offset of 20% of your net medical
expenses over a certain limit. There is no upper limit on
the amount you can claim. Net medical expenses are the
eligible medical expenses you've paid, less any available
refunds from Medicare or a private health insurer.

c) Students access the ATO website to answer the PART A and PART B questions on
Worksheet 9: Preparing to lodge a tax return. Students will investigate in detail, the
conditions around claiming work deductions.

23
 Module 6
How to pay income tax Topic 6.3

Teacher Notes
SOLUTION TO PART A
(ATO website, October 2014)

What is a work related A work related expense is one which is directly related to
expense? earning your income. The expense must not be a private,
domestic or capital expense. If the expense was both work-
related and private or domestic, you can only claim a deduction
for the work-related portion.
What are the rules for To make a deductions claim, you must have made the purchase
substantiating (having in the course of earning your assessable (taxable) income, and
proof of) your deductions? it must not be a private, domestic or capital expense.
What car expenses can be You can claim vehicle and other travel expenses directly
claimed? connected with your work, but you can't claim for normal trips
between home and work – this is considered private travel.
What kind of clothing • Occupation-specific clothing
can you claim as a work- You can claim for clothing that is specific to your occupation,
related expense? is not everyday in nature and allows the public to easily
recognise your occupation - such as the checked pants a chef
wears.
• Protective clothing
You can claim for clothing and footwear that you wear to
protect yourself from the risk of illness or injury posed by
your income-earning activities or the environment in which
you are required to carry them out.
• Work uniforms
You can claim for a uniform, either compulsory or non-
compulsory, that is unique and distinctive to the organisation
you work for.
• Cleaning of work clothing
You can claim the costs of washing, drying and ironing
eligible work clothes, or having them dry-cleaned.
What are the conditions You may be able to claim a deduction for self-education
you must meet to expenses if your study is work-related or if you receive a
claim work-related self- taxable bonded scholarship. In some circumstances, you have
education expenses? to reduce the amount of your claim by $250
Find at least two other You may be able to claim a deduction for your costs if you are
examples of work-related an employee who:
expenses. • Is required to use your computer, phone or other electronic
device for work purposes
• needs to transport bulky tools and equipment between home
and work
• travels for work and stays away overnight

24
 Module 6
How to pay income tax Topic 6.3

Teacher Notes
SOLUTION TO PART B
(ATO website, October 2014)

DEDUCTION IS THE DEDUCTION ALLOWABLE?

EXPLAIN YOUR RESPONSE.
Georgie’s boss expects all employees NO
to wear smart attire suitable for the You can claim for a uniform, either compulsory or
office. However, Georgie prefers non-compulsory, that is unique and distinctive to
a corporate appearance and has the organisation you work for.
purchased 5 uniforms from the local
Work Uniform and Safety Gear Outlet. Clothing is unique if it has been designed and
Is she entitled to claim the cost made only for the employer. Clothing is distinctive
if it has the employer's logo permanently attached
and the clothing is not available to the public.
You can't claim the cost of purchasing or cleaning
a plain uniform.
Nahom’s boss prefers all employees to YES FOR THE SHIRT, NO FOR THE PANTS
wear navy and light blue professional You can claim for a uniform, either compulsory or
attire with the company logo. It is non-compulsory, that is unique and distinctive to
the responsibility of the employees the organisation you work for.
to provide the pants and shirt if they
wish to wear these. Clothing is unique if it has been designed and
made only for the employer. Clothing is distinctive
Is Nahom entitled to claim the cost of if it has the employer's logo permanently attached
these? and the clothing is not available to the public.
Is Nahom entitled to claim for You can't claim the cost of purchasing or cleaning
cleaning of the shirt and pants? a plain uniform.
Aliya travels by bus from home each NO
morning to her place of work in You can claim vehicle and other travel expenses
the city. She prefers to use public directly connected with your work but you can't
transport rather than drive as it’s claim for normal trips between home and work,
better for the environment. Is she which are considered private travel.
entitled to claim her travel costs?
Laurie has two part time jobs. Can YES
a deduction be claimed for travel While normal trips between home and work are
expenses incurred when going from considered private travel, you can claim deductions
one workplace to the other on the in some circumstances, as well as for some travel
same day? When he finishes for the between two workplaces.
day can he claim travel expenses from
this job to his home? Explain. You can claim the cost of travelling:
• directly between two separate workplaces - for
example, when you have a second job
• from your normal workplace to an alternative
workplace - for example, a client's premises
- while still on duty and back to your normal
workplace or directly home

25
 Module 6
How to pay income tax Topic 6.3

Teacher Notes
DEDUCTION IS THE DEDUCTION ALLOWABLE?
EXPLAIN YOUR RESPONSE.
Tomor is a nurse and is currently YES
undertaking a medical related part Work-related self-education expenses are expenses
time course to help his promotion you incur when you undertake a course to obtain
prospects. Can he claim the costs of a formal qualification from a school, college,
this course? university or other place of education that is
relevant for your current employment
Martina works as a shop assistant in NO
a clothing store. As she is bored with You cannot claim a deduction for self-education
her job she is studying a degree in expenses for a course that does not have a
psychology at night. She wants to sufficient connection to your current employment
know if she can claim the costs of this even though it might be generally related to it, or
enables you to get new employment.
course as a tax deduction.
Peter works as a science teacher at YES
a local high school. He purchases a If you buy tools, equipment or other assets to help
science dictionary that he wishes to earn your income, you can claim a deduction for
use in the classroom. Peter paid for some or all of the cost.
it on his credit card and will not be
reimbursed for this by his employer.

The next component of the worksheet requires students to determine whether or not a list of
deductions is allowable.

d) For PART C students investigate and make recommendations of methods of lodging a tax
return.
• on-line using e-tax
• by mail using a paper return
• using a registered tax agent or accountant

e) For PART D, students calculate gross income, allowable deductions, annual taxable income
and the Medicare Levy payable for two case studies.

26
 Module 6
How to pay income tax Topic 6.3

Taxes are needed to pay for a whole range of government

Student Worksheet 7
Why do we need a tax file number (TFN)?
services such as providing schools, hospitals and building roads.
The Australian Taxation Office (ATO) is responsible for collecting
Federal (or Commonwealth) Government taxes.
The ATO must be able to identify all individuals to ensure that
everyone pays their fair share of taxes. This is where the Tax File
Number (TFN) comes in. You must apply to the ATO in order to
receive a tax file number. No two people in Australia will have
the same Tax File Number.

Refer to the ATO website to answer the following questions.

1 How many digits is the tax file number?

2 List six reasons why you might need a TFN.

3 Is it compulsory to have a TFN?

27
 Module 6
How to pay income tax Topic 6.3

5 If you get a job and do not

Student Worksheet 7
Why do we need a tax file number (TFN)?
quote the TFN to your
employer what could happen?

6 Why would banks and other investment bodies want to know your TFN when you open
an account with them?

7 If you enrol in a university course you are required to provide your TFN. For what purpose
does the university require your TFN?

8 Describe two different ways to apply for a TFN.

28
 Module 6
How to pay income tax Topic 6.3

To work out the amount of income payable by an individual, the Australian Taxation Office

Student Worksheet 8
Assessable income
uses a specific formula:
Taxable income = assessable income – allowable deductions.

Firstly make sure that you understand 'assessable income'.

For example, if you won a $5000 gold lotto prize it would not be
considered assessable income. You would not have to pay tax on it.
If you won $25 000 on a game show like "Hot Seat" you are not
liable to pay tax on this amount as this game is considered one of
chance. However, if you won $100 000 as the winner of a long
running reality TV show like “Master Chef” you would probably be
liable to pay tax on this amount. The reason is that the Australian
Taxation Office considers the winner has performed in a television
show over a 3 month period similar to an actor on a drama serial
and therefore should pay tax on this amount. Another factor which
could contribute to your winnings being assessable would be if you
appeared on more than one show, and earned prizes for both.

At the end of each financial year, income earners are required to submit their annual tax
return. All assessable income must be declared for the financial year. In Australia the financial
year runs from July 1 through to June 30 each year.

1. Find seven examples of what the Income Tax Assessment Act considers to be assessable
income:

29
 Module 6
How to pay income tax Topic 6.3

2. There are other sources of income which are not subject to income tax. Find four

Student Worksheet 8
Assessable income
examples:

Now check your understanding of 'allowable work related deductions’

A legal way to decrease the amount of tax an individual is liable to pay is through
claiming a tax deduction. The taxpayer should ask 'Did I have to pay for this expense so
that I could do my job?' That is, if the expense was incurred in order to earn the income
declared, then a tax deduction MAY be allowable.

3. What are three conditions for an allowable deduction?

4. Is travelling from home to work each day an allowable deduction? Are there any
exceptions?

5. If you donate money to an approved charity is this an allowable deduction?

30
 Module 6
How to pay income tax Topic 6.3

TAX OFFSETS

Student Worksheet 8
Assessable income
This is another method of reducing tax. To encourage taxpayers to pay for something which
might help the government, the government provides 'tax offsets'. If you are eligible for a
tax offset, the amount of tax you pay is reduced. A tax offset (sometimes referred to as a tax
rebate) is subtracted from the gross tax payable on your income in order to calculate the net
tax payable.
Not everyone is entitled to receive tax offsets.

6. Use the ATO website to find out:

• What each of these offsets actually is
• Who can claim these offsets

NAME OF TAX OFFSET DESCRIPTION OF WHO IS ELIGIBLE FOR TAX OFFSET

Health insurance

Benefit recipients

Medical expenses

31
 Module 6
How to pay income tax Topic 6.3

PREPARING TO LODGE A TAX RETURN

Student Worksheet 9
Preparing to lodge a tax return
To complete this activity go to the site
http://www.ato.gov.au >Individuals>Tax
topics A-Z>Deductions
Alternatively use the Individual Tax Return
Instructions Supplement to examine the detailed information about claiming various work
deductions.

PART A
Search for this information on the website and complete the questions in the table below.

What is a work related

expense?

What are the rules for

substantiating (having
proof of) your deductions?

What car expenses can be

claimed?

What kind of clothing

can you claim as a work-
related expense?

What are the conditions

you must meet to claim
work-related self-education
expenses?

Find at least two other

examples of work-related
expenses.
32
 Module 6
How to pay income tax Topic 6.3

PART B

Student Worksheet 9
Preparing to lodge a tax return
You work for a tax accountant and these clients are submitting the following deductions. State
whether each is allowable and explain why or why not.

DEDUCTION IS THE DEDUCTION ALLOWABLE? PROVIDE

A REASON FOR YOUR RESPONSE.
Georgie’s boss expects all employees to wear
smart attire suitable for the office. However,
Georgie prefers a corporate appearance and
has purchased 5 uniforms from the local
Work Uniform and Safety Gear Outlet. Is she
entitled to claim the cost?
Nahom’s boss prefers all employees to wear
navy and light blue professional attire with
the company logo. It is the responsibility of
the employees to provide the pants and shirt
if they wish to wear these. Is Nahom entitled
to claim the cost of these? Is Nahom entitled
to claim for cleaning of the shirt and pants?

Aliya travels by bus from home each morning

to her place of work in the city. She prefers
to use public transport rather than drive as
it’s better for the environment. Is she entitled
to claim her travel costs?

33
 Module 6
How to pay income tax Topic 6.3

Student Worksheet 9
Preparing to lodge a tax return
DEDUCTION IS THE DEDUCTION ALLOWABLE? PROVIDE
A REASON FOR YOUR RESPONSE.
Laurie has two part time jobs. Can a
deduction be claimed for travel expenses
incurred when going from one workplace to
the other on the same day? When he finishes
for the day can he claim travel expenses from
this job to his home? Explain.
Tomor is a nurse and is currently undertaking
a medical related part time course to help his
promotion prospects. Can he claim the costs
of this course?

Martina works as a shop assistant in a

clothing store. As she is bored with her job
she is studying a degree in Psychology at
night. She wants to know if she can claim
the costs of this course as a tax deduction.

Peter works as a science teacher at a

local high school. He purchases a science
dictionary that he wishes to use in the
classroom. Peter paid for it on his credit card
and will not be reimbursed for this by his
employer.

34
 Module 6
How to pay income tax Topic 6.3

PART C

Student Worksheet 9
Preparing to lodge a tax return
Go to www.ato.gov.au >Individuals>Lodgeyourtaxreturn
List three ways an individual can lodge a tax return.

What is the last date on which you can lodge your tax return without the possibility of
attracting a penalty (being fined)?

Who is required to lodge a tax return?

For each of the following tax payers suggest with a reason which method of lodgement you
would recommend for them.
• Lainey has been working for full time for six months. She is submitting her first tax return
since starting full time employment. Her employer has deducted tax at a higher rate than
needed, so Lainey is expecting to get a good sized refund. She only has a few deductions
– work clothes and some donations – and she has receipts for them all. She is short of
money due to needing some emergency car repairs, and would like to get her refund as
soon as possible.

SUGGESTED METHOD OF TAX RETURN FOR LAINEY

REASON

35
 Module 6
How to pay income tax Topic 6.3

• Gus has three investment properties he rents out. He also has some share holdings for

Student Worksheet 9
Preparing to lodge a tax return
which he receives dividends. He has had quite a bit of maintenance work done on his
rental properties. Unfortunately Gus has had a bad year health wise, spending some time
in hospital which resulted in high medical bills. He sold one house early in the financial
year and made a capital gain on the same. Gus and his partner have a self-managed
superannuation fund to which they make regular contributions.

SUGGESTED METHOD OF TAX RETURN FOR GUS

REASON

• Rosie works in an office as a personal assistant. She is very organised and keeps records
for all receipts and payments. She is saving up for a holiday so most of her spare money is
going into her travel bank account. She has no shares or other assets which earn income.

SUGGESTED METHOD OF TAX RETURN FOR ROSIE

REASON

36
 Module 6
How to pay income tax Topic 6.3

• Roy is nearing retirement. He prefers to keep hard copy paper records of his financial

Student Worksheet 9
Preparing to lodge a tax return
information, and has set up his home filing system to simplify the tax return process. He
lives in a country town: the nearest accountant is in the large city 40 kilometres away.
He feels quite comfortable doing paper work, and is not in a hurry for the tax refund he
expects to get.

SUGGESTED METHOD OF TAX RETURN FOR ROY

REASON

37
 Module 6
How to pay income tax Topic 6.3

CASE STUDIES

Student Worksheet 9
Case studies
Read the two case studies below. You will need to refer to http://www.ato.gov.au/ and
Worksheet 8: Assessable income – to answer the case study questions.

BRAD
Brad works full-time as an airline steward with Holiday
Airlines. He mainly works on the Sydney to Melbourne
route and does a variety of tasks such as showing
customers to their seats, serving meals and providing
flight safety information to customers.
Brad is seeking your assistance in preparing his annual tax
return. He has kept all receipts and has provided you with
the following information from his detailed records. He
would like you to answer the questions that follow.
Brad has earned a gross salary from Holiday Airlines of
$4200 per month. He has also earned $5000 in allowances over the course of the year. As
Brad is popular with customers he has also received $400 in tips over the last year.
Brad has also made a number of payments over the past 12 months. He has paid $570 for his
uniform (with the official logo) that all Holiday Airline employees must wear on every flight. His
dry cleaning of this uniform has also cost him $500. Brad is a member of the Airline Stewards
Union and has paid $350 in membership fees this year. Brad is currently studying a customer
service course at night (as he is hoping for a promotion) with his fees for this course totalling
$700 over the last 12 months. His stationery expenses were $100. Brad’s motor vehicle
expenses covering his travel from home to his place of work (the airport) were $600. Although
Brad lives in Melbourne, when he has some spare time he likes to do some sightseeing of the
tourist attractions in Sydney. Brad has spent $250 on sightseeing activities.

1. What is Brad’s gross annual income? (Show working below.)

38
 Module 6
How to pay income tax Topic 6.3

2. What is the total amount of deductions that Brad can claim this year? Show the items you

Student Worksheet 9
Case studies
have included below. Remember not all items Brad has listed will be allowable.

3 What is Brad’s annual taxable income? (Show working below.)

4 What is the amount of tax that Brad will have to pay on his annual taxable income?
(Show working below. Make sure you take into account the Medicare Levy.)

39
 Module 6
How to pay income tax Topic 6.3

VIVIAN

Student Worksheet 9
Case studies
Vivian works full-time as a primary school teacher for
a government school. She has kept records, including
receipts for all payments, and has asked you to help her
with her tax return.
She earns a gross salary of $6000 per month. Vivian
marks external exams for the Education Department and
receives $1500 per year for doing this. She also likes to
buy a weekly Lotto ticket and won a small jackpot of
$500 last month.
Vivian has also made a number of payments over the
last 12 months. She has spent $1050 on her clothes
specifically for work. Vivian likes to dress professionally for
work but does not wear the uniform recommended by
the school. Vivian has bought educational textbooks worth $400 over the last year and spent a
further $220 on stationery and photocopying school work. Vivian is a member of the Teachers
Union and has paid $580 in membership fees this year.
She also spent $200 of her own money going to a conference for primary school teachers.
As Vivian is considering a career change she has spent $1100 on a nursing course she is
completing two nights a week. Other expenses Vivian has incurred over the last year are $600
in travelling from home to school each day and $30 for a calculator that she uses in her maths
classes.

1. What is Vivian’s gross annual income? (Show working below.)

40
 Module 6
How to pay income tax Topic 6.3

2. What is the total amount of deductions that Vivian can claim this year? Show the items

Student Worksheet 9
Case studies
you have included below. Remember not all items Vivian has listed will be allowable.

3 What is Vivian’s annual taxable income? (Show working below.)

4 What is the amount of tax that Vivian will have to pay on his annual taxable income?
(Show working below. Make sure you take into account the Medicare Levy.)

41
Higher Education Loan Program (HELP) Module 6
– The role of the ATO Topic 6.4

Teacher Notes
Classroom activity:
Suggested time: 1 - 2 lessons
Student worksheet
Worksheet 10 HELP!!
Resources: HELP Information from www.ato.gov.au

Students examine the processes involved in applying for a Tax File Number. The issues of what
constitute assessable income and allowable work deductions are also covered.

This topic would be useful for students who are planning to continue with tertiary education.
Whilst the information and activities may not be suitable for all middle school learners, the
topic has been included for use in classes where such an interest or need exists.

a) BACKGROUND INFORMATION (current May, 2014)

On 1 January 1989 the Higher Education Contributions Scheme (HECS) was introduced in
Australia by the Federal Government. HECS was introduced by the Federal Government
so that students contributed to the cost of their education. Under this scheme all students
paid the same amount of HECS regardless of what course they studied. In 1996 changes
were made and three different rates were charged depending on the courses students
studied. For example the HECS for a Law degree was more expensive than an Arts degree.
On 1 January 2005 further changes were introduced to the HECS and Postgraduate
Education Loan Scheme (PALS).

At the undergraduate level there are two types of places for domestic students.
1. Commonwealth Supported place (Previously known as a HECS place)
2. Fee paying place (Non Commonwealth supported).

A student with a Commonwealth Supported place makes a contribution to the cost

of their education while the Australian Government contributes the majority of the
cost. A fee paying student pays tuition fees which are not subsidised by the Australian
Government.

42
Higher Education Loan Program (HELP) Module 6
– The role of the ATO Topic 6.4

Teacher Notes
There are four ways of paying for studies with HELP loans.
1. HECS - HELP.
This is a loan available to cover eligible students enrolled in government supported
places. The loan will cover all or part of the student contribution amount. This debt is
recorded for each person with the ATO against their tax file number.

2. FEE HELP.
This is a loan given to cover eligible fee paying students you help pay part or all of
their tuition fees.

3. OS – HELP
This is for eligible Commonwealth supported students who wish to undertake study
overseas

4. VET FEE-HELP
This is for eligible, full fee-paying students who are undertaking VET accredited
courses with an approved VET provider.

Teachers can access updated information on this topic at http://www.ato.gov.au/

Individuals/Studying-and-student-debt/In-detail/HELP/

b) The activities in Worksheet 10: HELP!! encourage students to explore the ways in which
eligible students in a “Commonwealth supported place” are assisted. The HELP (Higher
Education Loan Program) replaced the HECS (Higher Education Contribution Scheme)
in 2005. Students investigate the five higher education loans schemes (assisting tertiary
students with the cost of their tuition) administered by the government.

c) It may be helpful to provide students with the following information before starting this
worksheet.
Whilst the cost of higher education for most Australian students is heavily subsidised by
the federal government, students must contribute to the cost of their education through
the HECS (Higher Education Contributions Scheme) system. This system is complex, and
worth investigating before you start making decisions about your options after school.
Most undergraduate students studying at university are enrolled in Commonwealth
supported places. A student with a Commonwealth Supported place is required to make
a contribution to the cost of their education with the Australian Government contributing
the majority of the cost. A fee paying student pays tuition fees which are not subsidized
by the Australian Government.

43
Higher Education Loan Program (HELP) Module 6
– The role of the ATO Topic 6.4

Teacher Notes
The Government administers five HELP (Higher Education Loan Program) options to
assist students with the cost of their tuition. The type of loan depends on circumstances,
eligibility and the higher education provider.
For more information on this topic go to www.ato.gov.au >Individuals>Your
situation>Youth Home Page>Your situation>Are you studying>Tertiary Students>Higher
Education Loan Schemes Essentials>Basic Topics>HELP

d) Distribute worksheet 10: HELP!!

Students begin this activity by researching some of the information to be found on the
website: www.studyassist.gov.au >HELP Paying My Fees and completing 10 true/false
questions.
SOLUTION
Question 1: False
Question 2: False
Question 3: True
Question 4: False
Question 5: True
Question 6: True
Question 7: True
Question 8: False
Question 9: False
Question 10: False

e) Students complete the HELP Terminology word scramble to identify important HELP related
words.
SOLUTION
• repayment
• university
• degree
• band
• qualification
• graduate

44
Higher Education Loan Program (HELP) Module 6
– The role of the ATO Topic 6.4

Teacher Notes
f) Students should access www.studyassist.gov.au to complete the remaining investigations.
SOLUTIONS

LIST OF HELP LOAN SCHEMES DEFINITION

1 HECS-HELP HECS-HELP is a loan scheme to help eligible
Commonwealth supported students to pay their
student contribution amounts through a loan or upfront
discounts. Before 2005, this was known as ‘HECS’.
2 FEE-HELP FEE-HELP is a loan to help eligible fee paying students to
pay their tuition fees.
3 SA-HELP SA-HELP is a loan that assists eligible students to pay for
all or part of their student services and amenities fee.
4 OS-HELP OS-HELP is a loan to help eligible Commonwealth
supported students pay their overseas study expenses.
5 VET FEE-HELP VET FEE-HELP is a loan to help eligible students enrolled
in higher-level vocational education and training courses
at approved VET providers to pay their tuition fees.

Table 1: 2015 Student contribution bands and ranges

2015 STUDENT
STUDENT CONTRIBUTION BAND CONTRIBUTION RANGE
(PER EFTSL)
Band 3: Law, accounting, administration, economics,
$0 – $10266
commerce, dentistry, medicine, veterinary science
Band 2: Mathematics, statistics, computing, built
environment, other health, allied health, science, $0 – $8468
engineering, surveying, agriculture
Band 1: Humanities, behavioural science, social studies,
education (see Notes), clinical psychology, foreign $0 – $6052
languages, visual and performing arts, nursing

g) Finally, students investigate two case studies. For this activity, they are required to work out
how much HELP two individuals will have to pay through the tax system and should access
www.studyassist.gov.au and www.ato.gov.au to calculate the amounts.
A point worth making to students would be the assumption that for these activities students
are not REPEATING any subjects during their course. A look at careers information will show
how many students need to repeat subjects at University.

h) Reflective learning
Students could consider the implications of finishing University or TAFE with a large
HECS debt.

45
Higher Education Loan Program (HELP) Module 6
– The role of the ATO Topic 6.4

Go to studyassist.gov.au >HELP paying my fees.

Student Worksheet 10
HELP!!
Use the information here to answer the following questions.
More detailed information can be found under the topic 'Commonwealth supported place'

Question Statement: Read the statement below carefully TRUE FALSE

Number to determine whether it is true or false. (Circle correct (Circle correct
response) response)
1 If you fail a unit of study, you are not liable for HECS True False
on that unit cost.
2 The student contribution band for a Nursing course True False
is the same as it is to study Medicine.
3 Your income or financial situation does not affect True False
your eligibility for HECS HELP.
4 If you withdraw from a unit of study after census True False
date, you are only liable for HECS if you’ve paid up
front
5 If you never earn above the threshold, you will never True False
have to repay your debt.
6 You will need a tax file number when you enrol in True False
a university course and want to study under the
Higher Education Loan program (HELP).
7 If you make an up front payment while studying a True False
university course you are eligible for a discount.
8 You can only get a HELP loan for one course at a True False
time.
9 Interest is charged on HELP debts. True False
10 HELP loans are only available for full time courses. True False

Unscramble the HELP related words below.

SCRAMBLED WORD ANSWER

etnemyrap

ivtynusier

eregde

danb

notcluiiaiqfa

regtdaua

46
Higher Education Loan Program (HELP) Module 6
– The role of the ATO Topic 6.4

The Australian government administers five HELP loans schemes to assist students with

Student Worksheet 10
HELP!!
the cost of their tuition. The right loan for you will depend on your circumstances,
eligibility and where you want to study. Go to www.studyassist.gov.au > HELP Paying
My Fees and complete the following table:

LIST OF HELP LOAN SCHEMES DEFINITION

1 HECS-HELP

2 FEE-HELP

3 SA-HELP

4 OS-HELP

5 VET FEE-HELP

If you are offered a COMMONWEALTH SUPPORTED PLACE, your fees are substantially
subsidised by the Australian Government. Complete the following table with information
about the four bands of university fees – www.studyassist.gov.au > HELP Paying My Fees >
Commonwealth Supported Places > Student Contribution Amounts

STUDENT
STUDENT
CONTRIBUTION
AREAS OF STUDY CONTRIBUTION
BAND CURRENT RANGE
YEAR -
Band 3

Band 2

Band 1

47
Higher Education Loan Program (HELP) Module 6
– The role of the ATO Topic 6.4

Should tertiary education be provided at a lower cost (or even free of charge?) Or do

Student Worksheet 10
HELP!!
you think that students should pay more for their degree? Explain your point of view.

Why would the courses in Band 3 have the highest contribution rates?

Select an approved university course –

www.studyassist.gov.au > My Tertiary Study Options
> Providers that offer Commonwealth Assistance. Name
and calculate the total cost for the course you select.

Select an approved course in a different band at another university and calculate the
total cost for the course.

48
Higher Education Loan Program (HELP) Module 6
– The role of the ATO Topic 6.4

What are the advantages and disadvantages of paying higher education fees up front

Student Worksheet 10
HELP!!
instead of taking out a student loan?

ADVANTAGES DISADVANTAGES

How much can you earn per year before you are required to start repaying your HELP
liability? How are the repayments calculated?

49
Higher Education Loan Program (HELP) Module 6
– The role of the ATO Topic 6.4

For this activity you are required to investigate the HELP liability associated with two

Student Worksheet 10
HELP!! Case Studies
different degrees. Go to www.ato.gov.au > Calculators and tools >More calculators
and tools>Studying> HELP repayment
Practical HELP Calculations:
1. Assume the current maximum student contribution rates, and repayment thresholds.
2. Assume the student does not need to repeat any subjects.
3. Assume that there is no entitlement to a reduction in the Medicare levy.

Case study #1:

Raymond intends to study a 3 year nursing degree.
• What would his HELP liability be at the end of the 3 year course?

• If Raymond decided to pay the total amount of HELP up front at the

beginning of each year what would be the total amount of discount
he would receive?

• Assuming Raymond earns $55 080 for his first year in the work force ($4 590 gross per
month), how much would be taken out of his monthly salary to pay off the HELP liability?

50
Higher Education Loan Program (HELP) Module 6
– The role of the ATO Topic 6.4

Case study #2:

Student Worksheet 10
HELP!! Case Studies
Mary intends to study a combined Science/Business degree that is going to take 4 years
to complete.

• What would her HELP liability be at the end of the 4 year course?

• If Mary decided to pay the total amount of HELP up front at the beginning of each year
what would be the total amount of discount she would receive?

• Assuming Mary earns $60,000 for her first year in the work force ($5000 gross per
month), how much HELP would be taken out of her monthly salary to pay off the HELP
liability?

51
Understanding Australia’s Goods and Module 6
Services Tax (GST) Topic 6.5

Teacher Notes
Classroom activity:
Suggested time: 2 lessons
Student worksheets
Worksheet 11: GST and you
Worksheet 12: Explaining GST
Worksheet 13: Let’s go shopping
Resources: http://www.ato.gov.au
Information sheet 'What Goods and Services does the GST apply
to?' - See the GST Facts Sheet below (January 2014) or check the
Australian Taxation Office website for updates.
http://www.ato.gov.au/Business/GST/When-to-charge-GST-(and-
when-not-to)/

Students examine the Goods and Services Tax (GST) and how it operates in Australia. They
investigate the impact of GST on individual consumers, and ways to minimise GST by shopping
smartly. Use the GST Facts Sheet below which identifies a list of items that the GST applies to.

a) Students complete the true and false GST pre-test (Worksheet 11: GST and you). The
results from this can form the basis of a class discussion. Students then read through
the information list of what items GST applies to so that they can complete the table for
Kirsty’s shopping list.
Check the Australian Taxation Office web site for up to date information on items
included/excluded from GST.

b) Distribute Worksheet 12: Explaining GST. For this activity students use technology to
reinforce the content covered in Worksheet 11: GST and you.
The focus of the debate topic is equity. This is a challenging concept and may not be
suitable for use in some classes. Another topic which could be considered is whether or
not the rate of GST should be increased.

c) For Worksheet 13: Lets’ go shopping students review a tax invoice and calculate the GST
payable on applicable items.

52
Understanding Australia’s Goods and Module 6
Services Tax (GST) Topic 6.5

Teacher Notes
d) Extension activities

Topics for research and/or discussion

• Is there an alternative system to the existing one that the Government could use to raise
tax revenue?
• What terms for goods and services tax are used in other countries?
• Many countries who have introduced a GST have increased the rate of GST over time.
Given the current debate around the viability of the current rate of 10% GST in Australia
what are the chances of the Federal Government increasing this rate in the future? What
would be the impact of an increase?

e) Reflective learning
Consider the impact of GST on different groups in Australian society.

GST FACTS (accessed January 2014)

WHAT GOODS AND SERVICES DOES GST APPLY TO?
Not every sale that falls within one of the categories below will be GST-free. While doctors'
services will be GST-free, bandages, dressings and medicine that are not sold in the course of a
doctor's service will not be GST-free. The general categories of GST-free goods and services are:
• Some items of food (See table following to clarify what food is GST free)
• Health (medical services if provided by a practitioner e.g. doctor or dietitian)
• Hospitals and nursing homes (and includes all services and goods used in the course of
care will be exempt – but not non care items e.g. TV)
• Medical appliances and aids
• Drugs and medicines
• Education (including accommodation at boarding schools)
• Child care ( if a registered provider)
• Exports (must be physically exported from Australia or services provided overseas, including
goods purchased under the Tourist Refund Scheme)
• Religious services (and can claim input tax credit)
• Non commercial activities of charitable institutions
• Water and sewerage
• Farm land
• Cars for use by disabled persons

53
Understanding Australia’s Goods and Module 6
Services Tax (GST) Topic 6.5

Teacher Notes
FOOD TABLE: WHAT FOOD IS GST FREE AND WHAT IS TAXABLE?

GST- FREE FOOD TAXABLE FOOD

Bread and bread rolls without a sweet Bakery products such as cakes, pastries, pies,
coating (such as icing) or filling. A glaze is sausage rolls (but not including bread and
not considered a sweet coating bread rolls)
Cooking ingredients, such as flour, sugar, pre- Biscuits, crispbreads, crackers, cookies,
mixes and cake mixes pretzels, cones and wafers
Fats and oils for cooking Savoury snacks, confectionery, ice-cream and
similar products
Unflavoured milk, cream, cheese and eggs Carbonated and flavoured beverages
(including flavoured milk) unless 100% fruit
or vegetable juice
Spices, sauces and condiments
Bottled drinking water, or fruit or vegetable All food and beverages sold in restaurants or
juice (of at least 90% by volume) for consumption on the premises
Tea and coffee (unless ready-to-drink)
Baby food and infant formula Hot food (takeaway)
All meats for human consumption (except Food marketed as prepared meals and some
prepared meals or savoury snacks) prepared food, including platters
Fruit, vegetables, fish, and soup (fresh, frozen Any food not for human consumption
dried, canned or packaged)
Spreads for bread (such as honey, jam and Pet food or any food labeled or specified for
peanut butter) animals
Breakfast cereals

Grocery items that are clearly not food (such as cleaning and paper products) are TAXABLE.

54
Understanding Australia’s Goods and Module 6
Services Tax (GST) Topic 6.5

Understanding GST and what it applies to is an important part of managing personal

Student Worksheet 11
GST and you
finances and being a wise consumer. Answer these questions:
1 What is GST?

2 When is GST paid?

3 Who pays it?

GST Pre-Test: Answer the true and false questions below to find out how much you
know about the GST.
Check the answers with your teacher.

STATEMENT True (T) False (F)

1. The rate of the GST is 10%.

2. Takeaway food is not subject to the GST.

3. You can calculate the amount of GST on fully taxable goods and
services by dividing the sale price by 10.

4. The GST was introduced in Australia on July 1 2002.

5. It is a legal requirement for businesses to state the amount of GST

payable on the tax invoice.

6. The rate of GST will vary depending on which item you buy.

7. You would pay GST if you bought a movie ticket.

8. GST is not included on the marked price of goods but rather you pay
an extra amount at the cash register on top of the marked price.

55
Understanding Australia’s Goods and Module 6
Services Tax (GST) Topic 6.5

Kirsty has decided to host a special weekend breakfast for her

Student Worksheet 11
GST and you
close friends. She was wondering how GST actually works and
seeks your assistance in determining whether she will pay GST
on her shopping list. Consult the ATO website (www.ato.gov.au
>Businesses>Tax Topics A-Z>Goods & services tax) to determine
which items are subject to GST.

KIRSTY’S SHOPPING LIST

ITEM DOES THE GST APPLY? (YES OR NO)

Doughnuts

Unflavoured milk

Eggs

Corn Flakes

Pepsi Cola

Loaf of white bread

Fresh bananas

Frozen hash
browns
Paper plates

Make a list of goods and services consumed/accessed within your home which are GST
free. (Check the table of contents under GST Overview on the ATO website).

56
Understanding Australia’s Goods and Module 6
Services Tax (GST) Topic 6.5

1. Work with a partner and use technology to research and create an interesting

Student Worksheet 12
Explaining GST
presentation which includes a short oral component for each presenter to address these
questions:
• What is GST?
• What is the rate of GST in Australia?
• Mathematically, how is the amount of GST payable calculated on cost price?
• What does the retailer do with the GST collected from sales?
• Who ultimately bears the cost of GST?
• As a consumer how would you calculate the GST component of the selling price?
• What goods and services does GST apply to? (It would be useful to include
illustrations.)
• What goods and services are exempt from GST? (Again, illustrations would be useful.)
• What is the impact of GST on the final prices paid by consumers?

Rehearse and present to the class.

2. GST Debate
The topic for the debate is "With the introduction of
GST, consumers and businesses are better off, with
everyone paying their fair share of tax." To complete a
debate you need to form groups of 6 students. There
will be two sides- a positive and negative side. Each
side has three students per side.
Each presenter should speak for at least 90 seconds.
To debate this topic effectively you will need to do some research.

57
Understanding Australia’s Goods and Module 6
Services Tax (GST) Topic 6.5

Now that you’ve investigated how GST is applied to various food items, It’s time to put your

Student Worksheet 13
Let’s go shopping
knowledge to the test.
Julie has just finished doing the weekly grocery shopping at her local supermarket. She
presents you with the tax invoice below which lists the items she has purchased this week and
the price she has paid for each grocery.
Use the information on this tax invoice to complete the following tasks:

SAVEWISE
AUSTRALIA'S PREMIER SUPERMARKET
Wellside Phone: 74390044
TAX INVOICE
ABN: 88 006 754 223

Your store manager is: Sovann

Served by: Oliver
Pestrid Camphor 2 pk 2.25
Spring Onion 1.25
Lime Loose 0.173 kg @$2.98/kg 0.52 1 Create a spreadsheet to enter the
information on this tax invoice.
Milano Dried Pasta 500g 2.73
Add a column to the right for GST
Barnes Real Stock Chicken 250ml 1.49
2 Enter a formula which calculates
Atlantic Salmon Fillets 12.64 GST on taxable items. Does your
Happy Cow Yoghurt 1.99 total for GST paid agree with the
amount on the tax invoice?
Kitty Chow Salmon 85g [email protected] ea 2.70
Kitty Chow Tuna 85g [email protected] ea 2.70
Dog Dinner Gravy Plus 100g 2 @ 1.07 ea 2.14
Dynamic Power Laundry Powder 2kg 9.49
Swiss Maid Chocolates 150g 5.75
Paragon Dinner Plates [email protected] ea 16.60
3 Do you think Julie is paying too
Dynamic Kitchen Scourers 4pk 2.30 much or too little GST for her
Pacific Tuna 210g 2.79 shopping? Explain.
Crispy Crunch Potato Chips 500g 5.79

22 items
TOTAL $73.13

GST on taxable items $4.52

TOTAL PROMOTIONAL SAVINGS $24.54

58
 Module 6
A life cycle approach to taxation Topic 6.6

Teacher Notes
Classroom activity:
Suggested time: 1 lesson
Student worksheet
Worksheet 14: Taxation life cycle for Chris
Resources: Life cycle cards – Employment and tax possibilities (on next page)

This activity examines the tax obligations and implications affecting people at different stages
in a life cycle.
(a) Students create a life cycle continuum (manually or using technology) by positioning the
given events at appropriate stages.
Students may recognise that some events
• can occur more than once - even yearly
• may not occur at all
• may occur intermittently
• may be group-specific events
• may change in nature over the life cycle.
It may be helpful to revisit Power Words to address some of the vocabulary in the
worksheet before students start the activity.

(b) Reflective learning

• Students could discuss how to prepare for the many changes that they are likely to
face in their lifetime and how this preparation could impact on their tax obligations.
At what stage and age of their life can students expect to be paying the most
amount of tax? Are there any strategies that can be employed to reduce taxable
income?
• Students create a personal life cycle continuum.

59
 Module 6
A life cycle approach to taxation Topic 6.6

A person’s circumstances will change throughout a lifetime. Whether income is earned,

Student Worksheet 14
Taxation life cycle for Chris
passive or received from transfer payments, tax obligations need to be met. Some personal
circumstances allow tax offsets and reductions. As Australia operates a progressive tax
system, tax rates change at certain levels of income. The tax rates and the income levels are
determined by government and can change.

Create a TAXATION LIFE CYCLE FOR CHRIS using all or some of the following events.
Be aware that:
• Some events in a life cycle can be unexpected such as a large drop in income or needing
to access a welfare benefit.
• Some events can occur more than once.
• Some events are expected or planned for such as starting a new job.
• ALL situations need to be regularly assessed to check that individual circumstances and tax
obligations have not changed.

LIFE CYCLE OF CHRIS

• Buys investment property and earn rental income
• Works part time while studying
• Becomes a single parent
• Buys a home
• Starts full-time employment
• Takes leave from work to care for children
• Finds casual summer employment picking fruit interstate
• Receives pocket money from parents
• Becomes an employer
• Buys a business
• Goes overseas on a working holiday
• Obtains an ABN
• Accesses superannuation funds
• Starts full-time employment and repays HELP
• Takes on a second job to help meet mortgage payments
• Receives an age pension
• Applies for a Youth Allowance
• Earns income from dividends
• Works full time and accesses child care

60
 Module 6
A life cycle approach to taxation Topic 6.6

CHRIS’S TAXATION LIFE CYCLE

Student Worksheet 14
Taxation life cycle for Chris
AGE EVENTS TAX IMPLICATIONS
75

65

55

45

35

25

15

61
 Module 6
Advice from the professionals Topic 6.7

Teacher Notes
Community/mentor activity:
Suggested time: 1 lesson
Student worksheet
Worksheet 15: Talking tax
Resources: CPA Australia member. To find your local CPA go to
www.cpaaustralia.com.au >About us
Australian Taxation Office www.ato.gov.au

As highlighted in the previous topic, taxpayers need to be aware of their obligations, and
consequently, of potential situations which could cause problems concerning taxation. The
Australian Taxation Office implements measures to ensure that obligations are met in an
efficient manner. The penalty regime has tightened and taxpayers need to be very vigilant
about tax obligations and dates.

(a) As people's situations change, their taxation obligations may also need to change. Invite
a taxation accountant to the classroom to discuss the ATO's function within Australia’s
taxation system.
Before the visit have students:
• estimate the likely results/penalty of not complying, either knowingly or unknowingly,
with their obligations
• prepare two specific questions on tax obligations to ask the professional
• submit two taxation situations where someone finds themselves in difficulty

After the visit have students:

• thank the visitor in person, and follow up with an email
• consider what measures could be taken to reduce the possibility of potential tax
problems occurring
• reflect on how the content of the presentation correlated with their knowledge and
understanding, predictions, and expectations of taxpayer obligations.

(b) Reflective learning

Students compare their expectations or predictions with the discussion by the visitor.

62
 Module 6
Advice from the professionals Topic 6.7

Student Worksheet 15
Talking tax
What do you think are the legal obligations you have with regard to paying tax?

What do you think could happen if you didn’t meet your tax obligations?

You have invited a special guest to your classroom to talk about your responsibilities
as a taxpayer. So that you’re ready to talk:

• Prepare two questions about tax obligations, penalties, legal issues, etc to ask the guest.

• Think of two specific situations where taxpayers might find themselves in trouble, and ask
for advice and comments.

63
 Module 6
Advice from the professionals Topic 6.7

Finally, after the presentation has finished, answer the debriefing questions.

Student Worksheet 15
Talking tax
TAX QUESTION ANSWER

TAX SITUATION RESPONSE

64
 Module 6
Advice from the professionals Topic 6.7

DEBRIEFING

Student Worksheet 15
Advice from the professionals
How can difficult taxation related situations be minimized or avoided?

What I learned today about tax obligations, and the consequences of not meeting them.

65
 Module 6
The Impact of marginal tax rates Topic 6.8

Teacher Notes
Classroom activity:
Suggested time: 2 lessons
Student worksheets
Worksheet 16: Tax rates in Australia
Worksheet 17: Design a tax ruler
Worksheet 18: Marginal tax rates case studies
Worksheet 19: Tax trivia time
Resources: Tax rate data from the tax tables available at www.ato.gov.au

This activity requires students to work out the impact of tax rate thresholds on changes in
income. Students could also create a spreadsheet to calculate the tax payable for a wide range
of income levels.
TAX RATES 2014 – 2015 (residents of Australia)

TAXABLE INCOME TAX ON THIS INCOME

0 - $18,200 Nil
$18,201 - $37,000 19c for each $1 over $18,200
$37,001 - $80,000 $3,572 plus 32.5c for each $1 over $37,000
$80,001 - $180,000 $17,547 plus 37c for each $1 over $80,000
$180,001 and over $54,547 plus 45c for each $1 over $180,000
The above rates do not include the Medicare Levy of 1.5%.

This table can be updated on the Australian Taxation Office Website www.ato.gov.au>
Individuals>What do you want to do?>Find a rate or calculator>Income tax rates.

(a) Using the rates in the above table, students manually calculate the tax payable on a range
of income levels as set out on Worksheet 16: Tax rates in Australia. Students can then
check by accessing the "simple calculator" available on the ATO web site to calculate tax
payable for a range of income levels.

(b) For Worksheet 17: Design a tax ruler - the task is to for students to create their own
calculator by using the information in the tax rate tables and design a spreadsheet.

(c) On Worksheet 18: Marginal tax rates case studies - students use the information in the
case studies to identify the impact of tax payable on changing levels of income.

(d) To complete the module and as a revision activity, distribute Worksheet 19: Tax trivia time.
Students will need to consider all topics covered in this module to answer the questions.

66
 Module 6
The Impact of marginal tax rates Topic 6.8

Teacher Notes
SOLUTION TO WORKSHEET 19

1. Individuals need a Tax File Number to get an ABN. True False

2. It is compulsory to provide your employer with your tax file number. True False
3. Real estate other than your family home is subject to Capital Gains Tax. True False
4. Companies pay the same rate of tax, no matter what the annual profit. True False
5. All taxpayers are required to pay the Medicare levy of 1.5%. True False
6. Degrees in Agriculture and Education attract the same Student True False
contribution charge.
7. To find out the amount of GST to charge on an item the business True False
divides the price by 11.
8. GST is charged on frozen TV dinners, but not frozen vegetables. True False
9. Hospitality workers must declare all tips received as income. True False
10. The ATO will give you more time to lodge your return or pay your tax True False
debts if you have been involved in a natural disaster.
11. An Accountant studying a tax course part-time during the evening True False
could claim the cost of this course as a tax deduction.
12. If you claim an item as a tax deduction you must keep the written True False
evidence for a period of 10 years.
13. If you lodge your tax return electronically, expect your refund to be True False
paid within 14 days.
14. If you work casually for three different employers you would receive True False
three PAYG Payment Summaries at the end of the financial year.
15. If you won $15 000 in a lotto draw this would be regarded as True False
assessable income.
16. The Australian Taxation Office charges an administrative fee when True False
lodging your tax return.
17. All Australian taxes are collected by the federal government. True False
18. Travelling from home to work each day is an allowable tax deduction. True False
19. Taxable income =Assessable income – Allowable Deductions. True False
20. Australian residents are not required to declare income when employed True False
overseas.

67
 Module 6
The Impact of marginal tax rates Topic 6.8

Whilst GST is taxed at a flat rate, in Australia, a taxpayer's income is taxed progressively.

Student Worksheet 16
Tax rates in Australia
Basically, this means that as you earn more income your average tax rate increases. Therefore
those earning a higher income will be required to pay a higher rate of income tax than those
on a lower income. Go to http:www.ato.gov.au >Individuals>What do you want to do>Work
out your tax>Income tax rates, and complete this table for the current financial year.

TAX RATES (Current Financial Year July 1, 20__ to June 30, 20__)

TAXABLE INCOME TAX ON THIS INCOME

$0 –$ Nil
$ –$
$ –$
$ –$
Over $

The above rates do not include the Medicare Levy of 1.5%.

Who is exempt or entitled to a reduction on the Medicare levy?

Practical Exercise:
Using the personal tax rates shown in the previous table, calculate the amount of tax that
would be payable on the following taxable incomes. Show your workings.
$7,500

$28,900

$88,600

68
 Module 6
The Impact of marginal tax rates Topic 6.8

An alternative and faster way of calculating the amount of tax payable on given amounts is to

Student Worksheet 16
Tax rates in Australia
use the calculator on the Australian Tax Office website.
To access this go to www.ato.gov.au > Individuals>Find a rate or calculator>List all rates and
calculators>Calculators>Income Tax>Simple tax calculator. You can now enter in the amounts
below to get an estimate of how much tax is payable for the current financial year.

$19,500

$33,200

$128,700

(These amounts do not include the Medicare Levy which is an additional tax of 1.5% of
taxable income).

69
 Module 6
The Impact of marginal tax rates Topic 6.8

Use the tax rates table from worksheet 16 to create a spreadsheet which calculates and clearly

Student Worksheet 17
Design a tax ruler
displays tax payable on taxable income. Include and display separately the Medicare levy.

Use the spreadsheet to calculate how much tax is payable by the following three people:

1 Sally has a taxable income of $25,000 per year. tax payable would be: $__________

2 Tom has a taxable income of $50,000 per year. tax payable would be: $__________

3 Xue has a taxable income of $120,000 per year. tax payable would be: $__________

Use this spreadsheet to create graphs

which clearly demonstrate the principle
of progressive taxation

70
 Module 6
The Impact of marginal tax rates Topic 6.8

Australia has a progressive income tax system for individual

Student Worksheet 18
Marginal tax rates cases
salary and wage earners. This means that the higher the
income, the higher the rate of tax payable. As income
earned moves through from one tax bracket to another,
the amount of tax deducted from the last dollar earned
increases. Some income earners may even feel that the
increased workload and responsibility does not justify the
increase in NET PAY resulting from a promotion.
What are your thoughts on this issue??
For the following case studies, go to ato.gov.
au>Businesses>Pay staff>How much tax to withhold>Tax
withheld calculator>Tax withheld calculator>(current
version)>Labour hire calculator.. For each case study assume
the default options on the calculator, ie you only need to
enter the gross earnings. It may also be helpful to use the
tax ruler you created for worksheet 17 to complete this
activity.

CASE STUDIES
Olivia gets a promotion
Olivia is a travel agent. She is currently earning a salary of
$36,000 a year. She has been offered the opportunity to
become the manager of her branch, which would mean a
rise in salary to $46,000 a year. The requirements of the
promotion will mean that she has to work an extra 10 hours a
week beyond the normal office hours.

• Calculate her weekly gross pay for $36,000 a year.

$ __________

• Use the calculator to determine her weekly net pay and annual net pay.

$__________ $__________

• Calculate her weekly gross pay for $46,000 a year. $__________

• Use the calculator to determine her weekly net pay and annual net pay. $__________

• Determine the extra net pay (weekly and annually) Olivia will receive for the extra
workload and responsibility.

$__________

71
 Module 6
The Impact of marginal tax rates Topic 6.8

Wendy has a holiday job

Student Worksheet 18
Marginal tax rates cases
Wendy is a secondary school student who has a holiday job during the Christmas break at the
local store. She is paid $12 per hour and works an average of 35 hours a week for 6 weeks.
She does not work during any other holiday during the year.
• Calculate her gross pay for an average week. $ __________

• What is Wendy’s total gross and total tax paid for the six weeks she works.

Total gross $ __________

Total tax paid $ __________

• Use the resources on the ATO website to determine whether or not Wendy will receive a
refund when she completes her tax return in June.

Alex gets a pay rise

Alex has specialist skills in high demand in the pharmaceutical industry. To encourage him to
stay in Australia, his employers have given him a pay rise from $75,000 to $100,000 a year.
• Calculate Alex’s weekly gross pay on his current salary of $75,000. Use the calculator to
determine his annual tax payable. $
• Now calculate the total tax payable for the year on the new salary of $100,000. $
• How much extra income does Alex earn per year?
i. gross $ __________
ii. net $ __________

• How much extra tax in dollars does he pay as a result of his $25,000 salary increase?
$ __________
• Explain the tax impact on his salary increase.

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 Module 6
The Impact of marginal tax rates Topic 6.8

PART A

Student Worksheet 19
Tax Trivia time
TRUE OR FALSE?

1. Individuals need a Tax File Number to get an ABN. True False

2. It is compulsory to provide your employer with your tax file number. True False
3. Real estate other than your family home is subject to Capital Gains Tax. True False
4. Companies pay the same rate of tax, no matter what the annual profit. True False
5. All taxpayers are required to pay the Medicare levy of 1.5%. True False
6. Degrees in Agriculture and Education attract the same Student True False
contribution charge.
7. To find out the amount of GST to charge on an item the business True False
divides the price by 11.
8. GST is charged on frozen TV dinners, but not frozen vegetables. True False
9. Hospitality workers must declare all tips received as income. True False
10. The ATO will give you more time to lodge your return or pay your tax True False
debts if you have been involved in a natural disaster.
11. An Accountant studying a tax course part-time during the evening True False
could claim the cost of this course as a tax deduction.
12. If you claim an item as a tax deduction you must keep the written True False
evidence for a period of 10 years.
13. If you lodge your tax return electronically, expect your refund to be True False
paid within 14 days.
14. If you work casually for three different employers you would receive True False
three PAYG Payment Summaries at the end of the financial year.
15. If you won $15 000 in a lotto draw this would be regarded as True False
assessable income.
16. The Australian Taxation Office charges an administrative fee when True False
lodging your tax return.
17. All Australian taxes are collected by the federal government. True False
18. Travelling from home to work each day is an allowable tax deduction. True False
19. Taxable income =Assessable income – Allowable Deductions. True False
20. Australian residents are not required to declare income when employed True False
overseas.

73
 Module 6
The Impact of marginal tax rates Topic 6.8

PART B

Student Worksheet 19
Tax Trivia time
PERSONAL RECORD OF LEARNING
Goal setting and reviewing
1. What are the key points I have learned about:
• my personal responsibility to and involvement in the taxation system (Some examples
might be: Taxes I pay contribute towards goods and services provided by the
Australian Government. I am legally required to pay taxes on income.)

• taxation: (Some examples might be: Taxation varies with the level of income. Taxation

obligations may change over my lifetime.)

2 How has this module influenced me to consider my options for the future?

3 How has speaking to other people influenced me to consider my options for the future?

74
 Module 6
The Impact of marginal tax rates Topic 6.8

4 Taxation: Major principles. Complete the following statements:

Student Worksheet 19
Tax Trivia time
• Payment of taxes on income and spending is a legal
requirement in Australia. Because of this, I need to make
sure that I:

• Income tax is only one aspect of a citizen’s taxation commitment. I need to consider:

• Governments redistribute income through taxes.

I can influence government decisions by:

• The Australian Taxation Office (ATO) administers government taxation policies.

Changes that may/will affect me in the future are:

75
 Module 6
The Impact of marginal tax rates Topic 6.8

5. Participation in tertiary study at university incurs obligations towards the Australian

Student Worksheet 19
Tax Trivia time
Taxation Office in the form of a HELP debt. I need to be aware of:

NAME

SIGNATURE DATE / /

76
 Module Seven
Banking – how does it all work?

In partnership with
 Module 7
Banking –– how does it all work?

OVERVIEW

Teacher Notes
Module Overview and Curriculum Mapping
Module 7 aims to equip students with the skills to select and make effective use of appropriate
banking products.

ENDURING UNDERSTANDINGS
• Banks offer a range of services including loan and deposit services.
• Interest is charged for borrowing and is usually paid on deposit accounts.
• Technology has improved the way we bank.
• Customers choose from a broad range of money management services.

LEARNING OUTCOMES
Students:
• Identify services offered by banks
• Make informed financial decisions based on their needs
• Evaluate costs and benefits of the services offered
• Recognise trends in banking resulting from technological development
• Identify the range of providers of financial services
• Appreciate and apply cost benefit analysis in determining best choice in financial provider
or financial service

POWER WORDS Page 2

CURRICULUM MAPPING 3

LIST OF TOPICS
7.1 Opening the vault - what do banks do? 5
7.2 Decisions! Decisions! Help! 18
7.3 Location! Location! Location! 25
7.4 Compare the market 30
7.5 Opening my bank account 37
7.6 Show me the money! 45
7.7 A visit from a Professional 57

1
 Module 7
Banking –– how does it all work?

POWER WORDS

Teacher Notes
Module Overview and Curriculum Mapping
As students work through each topic in this module they will encounter words that may be new
to them, crucial to understanding and completing the worksheets, and/or difficult to spell. In
addition, students may simply find some of this vocabulary interesting and want to use it in the
future. Understanding and being able to use these words in the right context equips students
with increased power to make informed financial decisions.
There are several approaches to using this “glossary”. The intention is for students to investigate
and find the meanings. They could be given the complete list before they start the module, or
they could set up a table and add new words as they progress through the activities. There are
also specific POWER WORD activities in some topics.
This list is not exhaustive and students are encouraged to add to this list.

100 point check Password

ADI Pay pal
ASIC payWave
At Call Funds Personal Cheque
ATM Personal loan
Bank cheque PIN
BPay® Principal
Building society Repayment
Compound interest Risk
Credit card Safe custody
Credit limit Savings account
Credit union Secured loan
Debit card Security
Debt Statement
Deposit Street frontage
Direct credit Store card
Direct debit Superannuation
EFTPOS Tax File Number
Electronic banking Teller
Financial Institution Term deposit
Fixed interest rate Transaction account
Interest Travel card
Mortgage Transaction
Mutual bank Unsecured loan
Mobile Apps Variable interest rate
Offset accounts Withdrawal
Over the counter transaction

2
 Module 7
Banking –– how does it all work?

CURRICULUM MAPPING

Teacher Notes
Module Overview and Curriculum Mapping
ECONOMICS GENERAL
ENGLISH MATHEMATICS
AND BUSINESS CAPABILITIES
LITERACY NUMBER & ALGEBRA ECONOMICS AND INFORMATION &
YEAR 9 YR 9 BUSINESS SKILLS YEAR 9 COMMUNICATION
Interacting with others Money & financial Economic reasoning, TECHNOLOGY
mathematics decision-making and CAPABILITY
• Listen to spoken texts
constructed for different • Solve problems application Communicating with ICT
purposes, for example involving simple interest • Generate a range Managing & operating ICT
to entertain and to (ACMN211) of viable options in • Independently select
persuade, and analyse NUMBER & ALGEBRA response to an economic and operate a range
how language features YR 10 or business issue or of devices by adjusting
of these texts position event, use cost-benefit relevant software
Money & financial analysis and appropriate
listeners to respond functions to suit
mathematics criteria to recommend
in particular ways specific tasks, and
(ACELY1740) • Connect the compound and justify a course of independently use
interest formula to action and predict the common troubleshooting
Creating texts
repeated applications potential consequences procedures to solve
• Create imaginative, of simple interest of the proposed action routine malfunctions
informative and using appropriate (ACHES046) (ACELY1738)
persuasive texts that digital technologies Communication and
present a point of view (ACMNA229) reflection CRITICAL & CREATIVE
and advance or illustrate
NUMERACY • Reflect on the intended THINKING
arguments, including
texts that integrate Using fractions, and unintended Reflecting on thinking
visual, print and/or audio decimals, percentages consequences of and processes
features (ACELY1746) ratios & rates economic and business
Think about thinking
• Interpret proportional decisions (ACHES049)
• Use a range of software, (metacognition)
include word processing reasoning
• Give reasons to support
programs, flexibly and • Illustrate and order their thinking, and
imaginatively to publish relationships for fractions, address opposing
texts (ACELY1748) decimals, percentages, viewpoints and possible
rations and rates weaknesses in their own
(ACMNA208) positions (ACELT1640,
ACMSP247)

3
 Module 7
Banking –– how does it all work?
CURRICULUM MAPPING

Teacher Notes
Module Overview and Curriculum Mapping
NCFLF DIMENSIONS

Knowledge & understanding

• Identify and explain strategies to manage personal finances
• Explain how over-reliance on credit can impact on future choices
• Analyse and explain the range of factors affecting consumer choices

Competence
• Use a range of methods and tools to keep financial records in ‘real-life’ contexts
• Investigate the financial decisions required at significant life-stage events
• Accurately complete and explain the purpose of a range of financial forms, including for online
transactions
• Analyse relevant information to make informed choices when purchasing goods and services and/or to
resolve consumer choices
• Compare overall ‘value’ of a range of goods and services using IT tools and comparison websites as
appropriate
• Explain the range of payment options for goods and services such as: cash, debit card, credit card, direct
debit, PayPal, BPay®, payWave,, pre-pay options, phone and electronic funds transfer across a variety of
‘real-life’ contexts

Responsibility & Enterprise

• Apply informed and assertive consumer decision-making in a range of ‘real-life’ contexts
• Appreciate that there is often no one right answer in making financial decisions because these depend
on individual circumstances, preferences and values
• Explain how, as financially active citizens, they fit into the broader economy and society through:
– Generating income and paying taxes
– Saving;
– Spending;
– Donating; and investing
• Explain the role of banks and other deposit-taking institutions (such as building societies and credit
unions) in collecting deposits, pooling savings and lending them to individuals and business

4
 Module 7
Opening the vault – what do banks do? Topic 7.1

Teacher Notes
Classroom activity:
Suggested time: 1-2 Lessons

Student worksheets:
Worksheet 1: Banks! What do I know?
Worksheet 2: To bank or not to bank?
Resources: Websites:
https://youtu.be/CqD3hnjZBTM What is a Bank?
https://youtu.be/fTTGALaRZoc Banking Explained
http://www.bankers.asn.au Australian Bankers Association
http://www.rba.gov.au/fin-stability/fin-inst/main-types-of-financial-institutions.html
https://www.moneysmart.gov.au/media/344175/banking.pdf
https://www.moneysmart.gov.au/managing-your-money/banking/savings-accounts#how
Savings accounts
http://accountingexplained.com/misc/tvm/simple-compound-interest Calculating simple
and compound interest
http://www.financialbasics.org.au/flip.aspx
https://www.ato.gov.au/Individuals/

By completing this activity, students develop a familiarity with the different Authorised Deposit-
taking Institutions (ADIs) in Australia. ADIs are one type of financial institution. Students will also
recognise the potential for savings and interest, in enabling them to reach their financial goals.

(a) Establish with the class what purposes ADIs serve and what services they should provide.
Organise a brainstorming session and then list their ideas on the board.
Students can use Worksheet 1: Banks! What do I know?
• to search for definitions of the different types of financial institutions
• to identify some of the types of accounts they offer customers (such as savings
accounts, transaction accounts, term deposits and cash management accounts)
• to understand how customers access their money (over the counter service, ATMs, EFTPOS,
telephone banking, Internet banking).

(b) Distribute Worksheet 1: Banks! What do I know?

Students complete Question 1. This is a timed activity. Set timer for 10 minutes. Have students
fill the bubbles with as much information as they already know about banks. Write or project
the sheet onto the board and students take turns to add their thoughts. Use these to stimulate
a whole class discussion around what they already know. Have students add any words that
they are not familiar with to their Power Words list. The Australian Bankers Association website
is a great resource for more information.

5
 Module 7
Opening the vault – what do banks do? Topic 7.1

Teacher Notes
(c) Play the YouTube video https://youtu.be/CqD3hnjZBTM What is a Bank? and have
students complete Question 2 in Worksheet 1, using their own example to explain the
concept.

SOLUTION
Person A earns a salary and puts some of it into a savings account. The bank then stores
that money with a promise to return it, whenever Person A needs its, with some extra
funds that is called interest. The bank loans that money to a family who needed it to
buy a house. This family must repay this money to the bank over time as it is a Home
Loan. The bank also charges the family interest for the benefit of allowing the family to
borrow the bank’s funds. The interest earned by the Bank from the loan can be used to
pay interest on the deposits held by the Bank for Person A. Any left-over interest or fees
accrued contribute to the Bank’s revenue. Students can share their stories.

(d) Question 3 Worksheet 1 requires students to research the RBA to find the differences
between banks and non-bank financial institutions. Students appreciate that there are
many options for their financial needs.

6
 Module 7
Opening the vault – what do banks do? Topic 7.1

Teacher Notes
(e) Students find definitions for the following words.
SOLUTION:
WORD DEFINITION
ACCOUNT A dollar amount summarising the effect of all the transactions on
BALANCE your account and any fees charged or interest paid over a given
period.
ASIC The Australian Securities and Investments Commission (ASIC) is
the independent Australian government body that enforces and
regulates company and financial services laws in Australia to
protect consumers, investors and creditors/lenders.
ATM An abbreviation for Automatic Teller Machine. ATMs allow you
to withdraw money from your account, providing you have ATM
access, without having to go into a bank. Many ATMs also allow
you to deposit money, check your account balance and change
your Debit Card PIN number.
BANK In Australia, banks are financial institutions that are authorised
under the Banking Act 1959.
BANK ACCOUNT A product offered by banks that provides a secure facility for
depositing and withdrawing money and making other financial
transactions.
BPAY® BPAY® is a service via which Australians can pay their bills. BPAY®
is linked to over 16000 billers.
BRANCH An outlet which banks operate to assist customers with banking
and financial services. Branches are open for business during
normal business hours.
DEPOSIT To put money into your account, for example, when your pay goes
into your account, or when you pay cash or cheques into your
account.
DIRECT DEBIT A regular payment that you authorise to be debited (withdrawn)
directly from your bank account. Sometimes called periodical
payments (e.g. monthly gym membership payment).
ELECTRONIC Accessing your bank accounts electronically, such as ATMs,
BANKING EFTPOS terminals, internet and telephone banking. It includes
Mobile Apps.
INTEREST Interest can be paid by you or paid to you. Interest income is
earned on funds in a savings account. Interest is paid by you when
you take out a loan. For example, when you borrow money from
a bank in the form of a loan, the bank will charge you interest for
the use of that money.

7
 Module 7
Opening the vault – what do banks do? Topic 7.1

Teacher Notes
(f) Saving money is an important step toward financial well-being. Worksheet 2 shows
students the purpose of savings accounts, how to make deposits and withdrawals, and
how to manage a savings account.

(g) Remind the class about the illustration and video on how money left in the bank gains
interest while we pay interest on money borrowed from the bank. Create a discussion
around the idea that, although money is relatively safe in our piggy banks or under the
mattress, it is not earning more money!

(h) Introduce the concept of interest – simple interest and compound interest. For further
instruction on how to calculate simple and compound interest, visit the Financial Basics
Foundation website and download the MONEY MAGIC FLIP.
(http://www.financialbasics.org.au/flip.aspx).

(i) Introduce the concept of Tax File Number. Encourage students to think about how interest
is considered an income, and how this can be taxed. A helpful hint for students is to
remind them to provide the bank with their Tax File Number. Without this number, banks
are required to withhold interest to the highest marginal tax rate. A good site to refer
students is https://www.ato.gov.au/Individuals/

Simple interest is determined by multiplying the daily interest rate by the principal by the
number of days that elapse between payments.
Example:
Suppose $1,000 were invested at 10% simple interest rate for 5 years. Calculate the total
simple interest on the amount.

SOLUTION
We have,
Principal P = $1,000
Interest Rate i = 10% per year (in decimal it will be 0.1)
Time t = 5 years
Simple Interest Is = $1,000 × 0.1 × 5 = $500

8
 Module 7
Opening the vault – what do banks do? Topic 7.1

Teacher Notes
Compound interest is interest calculated on the initial principal and also on the
accumulated interest of previous periods of a deposit or loan.
Example:
Suppose $1,000 were invested at 10% simple interest rate for 5 years. Calculate the total
compound interest on the amount.

SOLUTION
We have,
Principal P = $1,000
Interest Rate i = 10% per year (0.1 in decimal)
No. of Periods n =5
Compound Interest Ic = $1,000 × ( 1 + 0.1 )5 − $1,000
= $1,000 × 1.15 − $1,000
= $1,000 × 1.61051 − $1,000
= $610.51

(j) Distribute Worksheet 2: To Bank or not to Bank! Students practise calculating simple and
compound interest.

SOLUTIONS
Simple interest:
$3, $6.50, $73.50, $120, $97.50

Compound Interest:
$517.65, $344.26, $524.32, $238.50, $6026.91

Debriefing – Reflective Learning

Have students consider:

• The positives and negatives of a savings account.
• What are the main differences between saving and investing.
• How do you feel about saving money? Do you find it easy or hard to save money?

9
 Module 7
Opening the vault – what do banks do? Topic 7.1

Banks! What do I know?

Worksheet 1
1. Fill in the thought bubbles as much as you can

List the names of as many banks

as you can.
In your own words, describe what
you think banks actually do.

What influences you to choose a

bank? E.g. funny ads

BANKS
List as many different types of Make a list of all the methods
bank accounts as you can. you know of both depositing and
withdrawing money from a bank
account.

List the items needed to open a

bank account.

10
 Module 7
Opening the vault – what do banks do? Topic 7.1

Banks! What do I know?

Worksheet 1
2. Having watched the video “What is a Bank?” label the diagram below and describe in
your own words what banks do with the money that you deposit.

LOANS

11
 Module 7
Opening the vault – what do banks do? Topic 7.1

Banks! What do I know?

Worksheet 1
3. Research online to complete the following table. (Hint: Try searching on the Reserve Bank
of Australia website).

Table: Types of Financial Institutions in Australia

TYPE OF WHEN WOULD I

INSTITUTION DEFINITION EXAMPLE USE THIS?

BANKS

BUILDING
SOCIETIES

CREDIT UNIONS

LIFE INSURERS

FINANCE
COMPANIES

SUPERANNUATION

12
 Module 7
Opening the vault – what do banks do? Topic 7.1

Banks! What do I know?

Worksheet 1
4. Find the definitions for the following terms:

Power Word Definitions

WORD DEFINITION

ACCOUNT
BALANCE

ASIC

ATM

BANK

BANK ACCOUNT

BPAY®

BRANCH

DEPOSIT

DIRECT DEBIT

ELECTRONIC
BANKING

INTEREST

13
 Module 7
Opening the vault – what do banks do? Topic 7.1

To bank or not to bank?

Worksheet 2
1. List two (2) advantages and two (2) disadvantages of having a savings account.
Advantages:

Disadvantages:

2. Calculate the following simple interest problems.

Example:
Suppose $1,000 were invested at 10% simple interest rate for 5 years. Calculate the total
simple interest on the amount.
We have,
Principal P = $1,000
Interest Rate i = 10% per year (in decimal it will be 0.1)
Time t = 5 years
Simple Interest Is = $1,000 × 0.1 × 5 = $500

Now calculate the following:

(a) $300 is deposited in a bank paying 0.50% simple interest per annum. How much
interest will have been earned after 2 years?

14
 Module 7
Opening the vault – what do banks do? Topic 7.1

To bank or not to bank?

Worksheet 2
(b) $1300 is deposited in a bank paying 0.25% simple interest per annum. How much
interest will have been earned after 2 years?

(c) $300 is deposited in a bank paying 3.50% simple interest per annum. How much
interest will have been earned after 7 years?

(d) $300 is deposited in a bank paying 8.00% simple interest per annum. How much
interest will have been earned after 5 years?

(e) $2600 is deposited in a bank paying 1.25% simple interest per annum. How much
interest will have been earned after 3 years?

15
 Module 7
Opening the vault – what do banks do? Topic 7.1

To bank or not to bank?

Worksheet 2
3. Calculate the following compound interest problems.
Example:
Suppose $1,000 were invested at 10% simple interest rate for 5 years. Calculate the total
compound interest on the amount.
We have,
Principal P = $1,000
Interest Rate i = 10% per year (0.1 in decimal)
No. of Periods n =5
Compound Interest Ic = $1,000 × ( 1 + 0.1 )5 − $1,000
= $1,000 × 1.15 − $1,000
= $1,000 × 1.61051 − $1,000
= $610.51??

(a) $500 is deposited in a bank paying 1.75% compound interest per annum. What is
the balance after 2 years?

(b) $300 is deposited in a bank paying 3.50% compound interest per annum. What is
the balance after 4 years?

(c) $400 is deposited in a bank paying 7.00% compound interest per annum. What is
the balance after 4 years?

16
 Module 7
Opening the vault – what do banks do? Topic 7.1

To bank or not to bank?

Worksheet 2
(d) $200 is deposited in a bank paying 4.50% compound interest per annum. What is
the balance after 4 years?

(e) $3700 is deposited in a bank paying 5.00% compound interest per annum. What is
the balance after 10 years?

4. In your own words, explain how compound interest differs from simple interest?

5. Which type of interest would suit you best? Why?

17
 Module 7
Decisions! Decisions! Help! Topic 7.2

Teacher Notes
Research and classroom activity
Suggested time: 2 lessons

Student worksheets:
Worksheet 3: Who's who in this financial zoo?
Worksheet 4: Does advertising influence our banking decisions?
Resources: A sharp eye and a good memory
Bank Adverts:
https://youtu.be/AFtSYe8VvgM Suncorp Bank
https://youtu.be/i6B8EPp1B2c ING Direct
https://youtu.be/D0OS6WVe0xw ANZ Bank
https://youtu.be/5h1M203e0xM Heritage Bank
http://www.youtube.com/watch?v=-wK-
quoG1FY&feature=fvwp&NR=1 – Barbara Bank Ads

These activities highlight how bank branding including logos and slogans, location and
services offered can impact on choice. Students need to understand how these factors can
actually influence their decisions to choose a financial institution.

(a) Distribute Worksheet 3 – Who's who in this financial zoo? Students identify as many
financial institution logos as they can then access the Internet to fill any gaps.

18
 Module 7
Decisions! Decisions! Help! Topic 7.2

Teacher Notes
SOLUTION:
LOGO NAME OF TYPE OF SLOGAN
INSTITUTION INSTITUTION
Suncorp Bank Bank The genuine alternative

CBA Bank CAN

Westpac Bank AUSTRALIA proudly

supported by WestPac

NAB Bank More give, less take

ANZ Bank Your world, your way

St George Bank Start something

Bendigo Bank At the Bendigo it starts

with U

ING Bank Your future. Made easier

QSuper Superannuation Growing your super

Fund together

Credit Union Credit Union Life rich banking

Australia

19
 Module 7
Decisions! Decisions! Help! Topic 7.2

Teacher Notes
(b) Have students identify what makes them choose a certain brand over the others. Create a
class discussion around this to determine if colour, symbols or even slogan affect financial
institution choice? Students will then have an opportunity to use this knowledge to create
and design a logo and slogan for a new hypothetical bank called “Financial Basics Bank”.

(c) Distribute Worksheet 4 – Does advertising influence our banking decisions? Ask students
if they prefer a funny advertisement or a serious advertisement? Then put these into
context – banks are serious business, they deal with our money. Should they have
humour in their advertising? Once students have contributed their opinions, play the Barb
YouTube clips.

(d) Students write a newsletter article on effective ads and their impact on attracting
customers to choose a bank or account.

Debriefing – Reflective learning

Have students:
• Display their logos and slogans to the class. Have students vote on the best logo and
slogan for the new Financial Basics Bank.
• Consider the impact of advertising on choice of bank and if their future banking
might be influenced by an advertisement.

20
 Module 7
Decisions! Decisions! Help! Topic 7.2

Who's who in this financial zoo?

Worksheet 3
1. Can you identify which financial institutions these logos belong to? Fill in as much of this
table as you can, then check online for the missing information. After you have identified as
many as you can on your own/by yourself, go online and look up any outstanding slogans.

LOGO NAME OF TYPE OF SLOGAN

INSTITUTION INSTITUTION

21
 Module 7
Decisions! Decisions! Help! Topic 7.2

2. Which of these financial institutions appeals to you the most and why?

Who's who in this financial zoo?

Worksheet 3
3. Now that you have looked at different financial institutions’ logos and slogans, it’s time
to put your creativity to the test. Imagine you have just been appointed as the Advertising
Executive for a new bank that is about to launch to the Australian market. The name of the
new bank is “Financial Basics Bank”. The bank’s theme reflects a no fuss, back to basics
banking experience. Your task is to create customer awareness for this great new bank.

You are now required to:

• design a logo that will grab people’s attention
• develop a catchy slogan for Financial Basics Bank (remember it has to be original and
can’t be a slogan that is already being used)

(a) My Financial Basics Bank logo is:

(b) My Financial Basics Bank slogan is:

22
 Module 7
Decisions! Decisions! Help! Topic 7.2

Does advertising influence our banking decisions?

Worksheet 4
1. Australian bank advertisements
(a) Search on YouTube for the following advertisements and complete the table.

BANK PRODUCT/PRODUCTS CORE MESSAGE

FEATURED
Suncorp Bank

ING Direct

ANZ Bank

Heritage Bank

(b) Watch the “Barbara Lives in Bank World” ads. Complete the table below.
http://www.youtube.com/watch?v=-wK-quoG1FY&feature=fvwp&NR=1

AD # BANKING ISSUE FEATURED ALTERNATIVE SERVICE

DEPICTED
1

(c) What emotions do these ads target?

23
 Module 7
Decisions! Decisions! Help! Topic 7.2

Does advertising influence our banking decisions?

Worksheet 4
(d) Give examples of words which were used in these ads to evoke emotions.

(e) Identify the catchy jingles or euphemisms used in these advertisements?

2. What advice would you give to financial institutions about promoting their products?
Write an article for the school newsletter informing banks about what appeals to your
demographic of customers, i.e. young people. You could include in your article some of
these points:

• Do you think that there is a place for humour in the promotion of banking products?
• What makes an effective ad for a financial institution?
• What potential do banks have to influence our banking habits?
• Do you think that any of these ads encourage undesirable financial habits (such as
overspending on your credit card)?
• Should banks be held to a code of conduct to promote only best financial practice?
• Is the content of advertisements regulated by any laws to include statements such as
terms and conditions and/ or disclaimers? Why is this important?

24
 Module 7
Location! Location! Location! Topic 7.3

Teacher Notes
Research and classroom activity:
Suggested time: 1-2 lessons

Student worksheets:
Worksheet 5: Let’s map it out!
Worksheet 6: Ways to bank
Resources: A creative mind
http://www.bankers.asn.au/Consumers/Security-and-Fraud-
Prevention
Access to Internet; computer

(a) The following activities can be used to identify bank locations and where banking services
such as ATMs can be found.
In pairs, students brainstorm the names of as many Australian financial institutions with a
physical presence in the community.
Distribute Worksheet 5 – Let’s Map it out! Students locate and download a map of their
local area. Local council websites or Google Maps should have an updated map. The
maps should be formatted and printed so that students can then mark off the locations
of:
• Any financial institution branches
• ATMs

(b) Write the following statement on the board “Customers do not need to go to a bank
branch anymore. Therefore bank branches should not even exist.” Students will need to
decide whether they agree with this statement or not. Then break into groups of 3-4 to
brainstorm and research more about their opinion. They can deliver this as a PowerPoint
presentation or a speech. To assist them with their delivery and presentation, they could
consider the following points:
• Security
• Times of access
• Assistance
• Ease of use
• Customer demographics
• Cashless withdrawals – what are these and how do they occur?
• EFTPOS withdrawals without purchase
• Using ATMs to deposit cash and cheques
• Do you have to go to a branch to open an account?

25
 Module 7
Location! Location! Location! Topic 7.3

Teacher Notes
(a) Distribute Worksheet 6 – Ways to Bank. Students identify the different methods available
to access their money/do their banking. Students then work in pairs to create a role play
to demonstrate their knowledge and understanding of how to set up an internet or
mobile app for a savings account. Act out their role play for the class.
(b) Question 4 in Worksheet 6, requires students to research the risks associated with mobile
banking. This is a critical issue as the majority of users are mobile bankers with apps
on their mobile devices. Create a discussion around this. Then have students create a
brochure with meaningful information for mobile app users.

Debriefing – Reflective learning

Students should consider:
• The future of physical bank locations.
• How technology has impacted on the way we bank and access our money.
• Any risks associated with the other ways we bank.

26
 Module 7
Location! Location! Location! Topic 7.3

Let’s map it out!

Worksheet 5
1. Work with a classmate, to make a list of all the financial institutions physically located
in your community. Research online to locate financial institution names and addresses
within a 10km radius.
Create a table with MS WORD, and label it "Financial Institutions List". Use the headings
as listed below.

Name of Institution Physical Address

e.g SUNCORP BANK 555 Financial Drive, Springfield, Melbourne

2. Print a map of your local area (check the local council

website for downloadable maps of your area). Mark
on the map with coloured pen the locations of the
following:
• Bank branches
• ATMs

3. Not all financial institutions have a physical address or

can be found in your community
(a) Why do you think this is so?

(b) Customers do not need to go to a bank anymore. Therefore bank branches should
not even exist.

• Do you agree or disagree with this statement?

• Create a short PowerPoint presentation or speech that illustrates your viewpoint.
• To assist you with your presentation, consider these points:
– Security
– Times of access
– Assistance
– Ease of use
– Customer demographics

27
 Module 7
Location! Location! Location! Topic 7.3

Worksheet 6
Ways to bank
1. Over the years, the ways to bank have changed and become more efficient. We do not
have to physically go into a bank to open accounts, transfer money or even change
accounts.

(a) How do you access your money if the bank does not have a branch in your
community? List as many methods of accessing bank accounts as you can.

2. Now create a table exactly like the one on the next page in a Word Document and label
it “Ways to Bank”.
You will need to do some research to be able to fill in the table (some websites are listed
below).
www.anz.com/personal/ways-bank
www.nab.com.au/personal/help-and-guidance/ways-to-bank
https://www.ingdirect.com.au/ways-to-bank.html

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 Module 7
Location! Location! Location! Topic 7.3

Worksheet 6
Ways to bank
Choose your top 3 ways to bank from your research and then fill in the table below.
WAYS TO BANK

WHAT DO I NEED
HOW DO I DO THIS? WOULD I USE THIS
TO SET THIS UP?
WAYS TO BANK (Explain the METHOD?
(i.e. phone,
procedure) YES or NO
password etc)

3. In pairs, create a telephone script for a role play. One person will be the bank
representative and the other will be the bank customer. Here is the scenario:

Bank Customer: You are so excited that you opened your very first savings account. You
have decided that you want to set up your mobile app/internet bank access. You call
customer service to ask for assistance.
Bank representative: You have received a call from a new bank customer who just
opened up a new savings account and would like to know how to set up their mobile
app/Internet banking. You will need to take them through the steps of setting this up.

Once you have scripted the play, you must be prepared to present your role play to
the class.

4. Your Mobile App has now been set up on your device. You are very excited to be able to
do your banking on your device but you were warned by the bank representative to take
some precautions to ensure your account is not hacked.

Access the following website http://www.bankers.asn.au/Consumers/Security-and-

Fraud-Prevention. Now create a brochure for FINANCIAL BASICS BANK, that informs all
mobile users of how to stay safe while using their mobile app. You can be as creative as
you want in your design.

29
 Module 7
Compare the Market Topic 7.4

Teacher Notes
Research and classroom activity
Suggested time: 1 - 2 lessons

Student worksheets:
Worksheet 7: What’s on offer?
Worksheet 8: What do I need?

Resources: Access to Internet; computer

The following activities can be used by students to:

• investigate the different types of bank accounts available to customers
• establish their priorities in banking needs
• compare banking needs of people at varying stages of their life

(a) To introduce this activity, have students discuss the importance of “considered choice”
and why it is important to know what is available. First ask students to describe an
event in their lives when they made a spur of the moment decision that led to regret.
A spur of the moment versus considered choice: purchasing a pair of shoes with the
money received as a birthday present. Spur of the moment is going to the shops after
immediately getting the money and then purchasing the first pair you see in the first
shop you pass. Considered choice would be taking the time to research and compare all
the different shoe choices available and then the price choices – some may be cheaper
and some more expensive. It may come down to comparing very similar shoes at very
similar prices. The same should be considered when choosing bank accounts.

(b) Distribute Worksheet 7 – What's on offer? Students go online and look up the different
types of accounts available. Students could also identify which banks have instant access,
allow instant transfers, and provide withdrawal options at venues other than bank
branches.

(c) What is important to me? Students should brainstorm in groups what they need from an
account. They should consider the following key points in their discussion but can also
include other factors:
• their age
• how often they are likely to use an ATM or mobile app
• do they have a job or regular income
• cost of the account

30
 Module 7
Compare the Market Topic 7.4

Teacher Notes
(d) Distribute Worksheet 8 – What do I need? Students examine their own “most important”
needs compared to people at different stages of their lives and consider which account
fulfils those needs.

Debriefing – Reflective Learning

Have students consider:
• Were they surprised by the results?
• Were there situations when it was likely that banking activities would be split over 2
or more banks?
• What impact did this activity have on their perception of banking needs and decision
making?

31
 Module 7
Compare the Market Topic 7.4

Worksheet 7
What’s on offer?
1. Most banks offer a range of products to help you manage your money on a day-to-day
basis and save a little along the way. Before you can decide which bank account is right
for you, first you need to know what’s on offer. Research the following types of accounts
and fill in the table as comprehensively as you can. The following websites below are
great places to compare accounts at different banks.

www.canstar.com.au
www.ratecity.com.au
www.infochoice.com.au
http://www.bankers.asn.au/Consumers/Financial-Literacy-Program/Booklets/
Smarter-Banking

32
 Module 7
Compare the Market Topic 7.4

Worksheet 7
What’s on offer?
Select two other types of accounts and add these to the table in addition to the ones included.

Table 1a: What’s on offer?

TRANSACTION SAVINGS TERM

TYPE OF ACCOUNT
ACCOUNT ACCOUNT DEPOSIT

NAME OF
ACCOUNT AND
DESCRIPTION

PROS

CONS

INTERNET
BANKING

ATM
WITHDRAWAL

TELEPHONE
BANKING

DOES THIS
ACCOUNT HAVE
CARD ACCESS?

HOW MUCH
INTERST DOES
THIS ACCOUNT
EARN?

33
 Module 7
Compare the Market Topic 7.4

Worksheet 7
What’s on offer?
2. Look at the type of account and then describe personal circumstances for which this type
of account would be suitable. An example is provided.

TYPE OF ACCOUNT DESCRIPTION OF ACCOUNT HOLDER

Term Deposit Simon is saving for a new car. Some of the

features he wants:
• Guaranteed higher rate of interest, but
knows that if his circumstances change
he may not be able to access his money
easily or at all.
• Doesn’t need flexibility to conduct
everyday banking.
• Doesn’t need to access his money via
an ATM, EFTPOS terminal, telephone or
Internet banking.

Transaction Account

Savings Account

Source: http://www.bankers.asn.au/Consumers/Financial-Literacy-Program/Booklets/
Smarter-Banking

34
 Module 7
Compare the Market Topic 7.4

What do I need?
Worksheet 8
1. Create a profile of banking needs for yourself at different stages of your life. Rate each of the
services listed from 1 to 3 with 1 being very important, 2 somewhat important and 3 not important.

Me Now Me As A Full Me Employed Me Retired

Time Student Full Time With (70)
I need to (20) a Young Family
(35)
STAGE 1 STAGE 2 STAGE 3 STAGE 4

access cash at any time and

have somewhere safe to put
my money

save/invest with a good

interest rate

borrow money for personal

purchases like car etc

borrow money to buy a

house

get a credit card

use the Internet to bank

have mobile banking

have telephone banking

be able to access a physical

branch for personal
assistance when needed

have an easy to find website

have an account that offers

debit cards

have a credit card with low

interest

have a credit card with extra

benefits and rewards

be able to make payments

via BPAY or transfers

35
 Module 7
Compare the Market Topic 7.4

What do I need?
Worksheet 8
2. Fill in the criteria column in the table below with the NEEDS that you rated as 1 and
2 from question 1 – those services that you consider very important and somewhat
important for your banking needs.
The next step requires you to research one of the online banks to determine which
accounts match the descriptors provided. Place a cross in the box. Here are some bank
websites to assist:
http://www.suncorpbank.com.au/bank-accounts
http://www.anz.com/personal
https://www.commbank.com.au/personal
https://www.nab.com.au/personal

Which type of bank account might be most suitable to you RIGHT NOW?

IMPORTANT STAGE OF TRANSACTION SAVINGS TERM PERSONAL HOME

CRITERIA LIFE ACCOUNT ACCOUNT DEPOSIT LOAN LOAN

36
 Module 7
Opening my bank account Topic 7.5

Teacher Notes
Research and classroom activity
Suggested time: 1-2 lessons

Student worksheets:
Worksheet 9: Fees and charges
Worksheet 10: Over to you – fill in that form!

Resources: Access to Internet; computer, calculator

The following activity can be used to alert students to the various costs of opening and
maintaining bank accounts. Students should also consider their own money management
habits with regards to income, savings and spending. This can then lead into a discussion
about the type of account that will enable them to make effective decisions about the
management of their money. This activity helps prepare students to know what banks require
when opening accounts.

(a) Distribute Worksheet 9 – Fees and charges. Create discussion around what students
understand fees and charges to be. Brainstorm what services banks charge for and
why they do this. Guide students around the websites for the banks that they choose
to ensure that they find the right information for each bank account. Engage students
in cost-benefit analysis as there will be many times that they come across two similar
products but have to make a choice. Why would they choose Bank 1 over Bank 2? Are
there other factors that come into play when making such a decision? Remind students
that they need to be able to work out costs and look at fine print to be able to make
financially savvy decisions – every dollar saved on costs goes into savings.

(b) Distribute Worksheet 10 – Over to you – fill in that form! Create discussion around the
100 points of identity needed to open a bank account. Why is it needed? Is it necessary?
Students should understand the different types of ID typically accessible during each
stage of life – a teenager at school versus a working adult. What different types of ID
might each have? A good website to refer students to is www.suncorpbank.com.au/
personal-identification-requirements. Students should be able to distinguish between
when they need to be identified in branch (such as for their signature to be captured or
to be identified in person vs when they can provide all their details online to open an
account. This could also form part of discussion about security and what information you
would never be asked for (e.g. a bank will never ask for personal details via email, or to
reply directly to an email.)
Students can fill in this form so that they are clear about what details they need to
provide to open a bank account in addition to checking if they actually have 100 points
of ID.

37
 Module 7
Opening my bank account Topic 7.5

Teacher Notes
(c) If students have completed their tasks, they can go on to this extension activity:
Imagine you are the Bank Manager at the Financial Basics Bank. You have been
approached by a number of teachers from the local high school wanting to educate
their students about the fees and charges that banks impose. You have decided to
write a blog highlighting the important points. Your blog should include the following
information:
• Fees charged by banks for certain accounts. Are there fee waives available?
• What restrictions apply to particular accounts?
• Using ATMS – the fees that can be applied for using ATMs.
• What happens if an account is overdrawn.
• Types of fees – periodic; event or fee counters.

Debrief – Reflective Learning

Have students consider what they might do if they do not meet the 100 point credit
check.

38
 Module 7
Opening my bank account Topic 7.5

Fees and charges

Worksheet 9
Banks have tools and information on their websites to help you to compare the accounts
they have on offer so that you can select an account that best suits your needs. Some banks
have tools on their websites to help you easily compare the different features of each bank
account, such as comparison tables with details about interest rate, monthly service fees, the
number of free transactions, and any minimum balance required.

1. To help you understand the different types of fees, find definitions or descriptions of the
following:

ACCOUNT SERVICE FEE

TRANSACTION FEE

OTHER (AUSTRALIAN) ATM

TRANSACTIONS

PERIODIC FEE

EARLY WITHDRAWAL FEE

DISHONOUR FEE

OVERDRAWN ACCOUNT FEE

MONTHLY FEE

OVER THE COUNTER WITHDRAWAL FEE

PHONE BANKING FEE

INTERNET BANKING FEE

MOBILE BANKING FEE

ATM CHARGES

EFTPOS CHARGES

SWEEP FEE

BANK CHEQUE FEE

BPAY® FEE

39
 Module 7
Opening my bank account Topic 7.5

Fees and charges

Worksheet 9
2. Examine the website of three financial institutions to find out the costs of banking. Focus
on everyday transaction accounts. (You can choose from those provided below or select
your own. You must, however ensure you include a comparison between a bank and a
credit union).
• Suncorp Bank (www.suncorpbank.com.au)
• BOQ (www.boq.com.au)
• Bendigo Bank (www.bendigobank.com.au)
• Credit Union Australia (www.cua.com.au)

Table 1a: Comparison of costs

EVERYDAY TRANSACTION ACCOUNT

NAMES OF FINANCIAL
INSTITUTIONS

MONTHLY FEE

OVER THE COUNTER

WITHDRAWAL FEE

PHONE BANKING FEES

INTERNET BANKING FEES

MOBILE BANKING

ATM CHARGES

EFTPOS CHARGES

OTHER ATM CHARGES

NUMBER OF ATM
WITHDRAWALS

BANK CHEQUE FEE

BPAY FEES

SWEEP FEES

40
 Module 7
Opening my bank account Topic 7.5

Fees and charges

Worksheet 9
3. Consider the scenarios below. Using the table of comparisons, examine each person’s
banking habits and then make a recommendation from the banking products you
investigated as to which account is most suitable for each of them. Include justification
for your recommendations.

CASE 1: AMELIE
A typical month of banking transactions
• Withdraws from the ATM 7 times
• Uses EFTPOS facilities on 6 occasions
• Frequently overdraws on her account
• Makes no over the counter banking transactions
• Makes 3 internet banking transactions
• Makes 1 telephone banking transaction
• Needs to use 1 bank cheque

CASE 2: ETHAN
A typical month of banking transactions
• Withdraws from the ATM 2 times
• Uses EFTPOS facilities on 4 occasions
• Prefers making over the counter banking transactions
• Makes no internet banking transactions

CASE 3: CHIN
A typical month of banking transactions
• Withdraws from the ATM 2 times
• Uses EFTPOS facilities on 9 occasions
• Makes 1 over the counter banking transaction
• Makes 6 internet banking transactions
• Makes 3 telephone banking transaction
• Does not use bank cheques

41
 Module 7
Opening my bank account Topic 7.5

Fees and charges

Worksheet 9
Your recommendation:
Use the information provided in the table to determine which financial institutions Amelie,
Ethan and Chin should use for their everyday banking needs. Don't forget to provide
justification for your recommendation.

(a) Amelie should use

(b) Ethan should use

(c) Chin should use

42
 Module 7
Opening my bank account Topic 7.5

Over to you – fill in that form!

Worksheet 10
1. When you apply to open a new bank account (either for the first time, or with a new bank
or financial institution), you must provide the bank with some information. Banks won’t
approve accounts without certain information to prove you’re who you say you are.

Have a look at these websites (or choose others).

http://www.suncorpbank.com.au/personal-identification-requirements
http://www.nab.com.au/vgnmedia/images/Personal_Finance/Probity_100_pt_id.pdf
https://www.instantchecks.com.au/100points.aspx

Which documents/evidence do you have to use towards establishing your 100 point ID
check? Can you reach the 100 points?

2. Now consider these scenarios and think about what documents these people will need to
meet the 100 point ID check:
i. A person who just moved to Australia from South Africa on a permanent visa.

ii. An unemployed 22 year old who does not have a licence.

43
 Module 7
Opening my bank account Topic 7.5

Over to you – fill in that form!

Worksheet 10
iii. A teenager, who still attends school but who lives independently.

iv. What is the difference in the type of ID required for an under 18 year old for an in
branch identification check versus online check?

3. Now that you have passed the 100 point ID check, it is time to practise filling in an
application form. This form is a practice template to assist you in getting to know your
way around filling in official bank documents.
Go to http://www.suncorpbank.com.au/sites/default/files/fm/product_documents/
Account%20Opening/Acc_Open_App_Form.pdf to access the form. You can fill this in
online and print, or just print and write in the details. Remember, if you make a mistake
you have to cross out neatly and initial - no liquid paper allowed!

44
 Module 7
Show me the money! Topic 7.6

Teacher Notes
Research and classroom activity:
Suggested time: 1-2 lessons

Student worksheets:
Worksheet 11: Life is plastic, it's fantastic.
Worksheet 12: Money makes the world go around!
Resources: Access to Internet; computer, calculator
https://youtu.be/XbtSftL6dbY (credit vs debit cards video)

The focus of this topic is credit and credit ratings. Students should be aware of and understand
that personal responsibility is a key issue when considering taking out credit with a financial
institution, despite the institutions own obligations.
Introduce students to the concept of credit, loans and borrowing. The different types of credit
considered are credit cards, personal and home loans.
Credit cards allow you to purchase goods/services and pay for them later. Many people carry
credit cards instead of cash. Each card holder has a limit to the value of goods and services that
can be purchased using the credit card. Every month the card holder will receive a statement,
detailing the transactions for the month and identifying the total amount owed. All or part of
the total amount owed can be paid by the date specified on the statement. There is a minimum
amount which must be paid. Bank credit cards also allow the holder to withdraw cash at ATMs
provided a PIN is allocated to the card. Cash withdrawals usually attract interest charges from
the time of withdrawal. Unpaid amounts on the credit card also attract interest charges.
(a) Distribute Worksheet 11 – Life is plastic, it’s fantastic! The following activities are included:
Complete the table of definitions. Solution below:

POWER WORD DEFINITION

Credit Borrowing money that is paid back over time with an extra charge
(either interest or fees).
Credit Provider These are banks, building societies, credit unions, finance companies
and other businesses that offer to lend you money.
Interest Payable to the credit provider for letting you borrow money. Interest
(debit interest) is usually charged as a percentage of what you borrow.
Annual Fee Yearly charge that some financial institutions charge the cardholder
simply for owning a card.
Minimum The lowest amount of money you are required to pay back to the
Payment financial institution based on the amount you used that month.
Credit Limit The maximum amount of credit you are allowed to spend.
Balance The amount of money you need to pay in total in order to reimburse
the charges you put on your card. It’s the total amount you owe.
Member The perks and bonuses card holders receive when they sign up for a
rewards credit card.

45
 Module 7
Show me the money! Topic 7.6

(b) Research activity. The students research and compare different credit cards on offer and

Teacher Notes
then complete the table. An example is provided.

(c) Case study. Students read the case study and answer the questions that follow. Discuss
with students how credit card interest is charged on the full amount and not only on
unpaid balance. What are some consequences?

SOLUTION:

JANUARY
purchases 235.00
- minimum payment 30.00
= unpaid balance $205.00
FEBRUARY
purchases 157.00
+ previous balance 205.00
= total before interest 362.00
+ interest 5.43
= new balance 367.43
- minimum payment 30.00
= unpaid balance 337.43
MARCH
purchases 760.00
+ previous balance 337.43
= total before interest 1097.43
+ interest 16.46
= total owed 1113.89
- minimum payment 30.00
= unpaid balance 1083.89
TOTAL PURCHASES FOR 3 MONTHS 1152.00
TOTAL AMOUNT OWING AFTER 3 MONTHS 1083.89
TOTAL INTEREST PAID TO END OF MARCH 21.89

(d) Distribute Worksheet 12 – Money makes the world go around! Create discussion around
personal loans and home loans. Personal loans - People borrow a lump sum for a set
period of time e.g. two years. Students complete the case study on Sean and his personal
loan.

46
 Module 7
Show me the money! Topic 7.6

Teacher Notes
Mortgages (also called home loans) - Mortgages are specific loans for borrowing to buy
property. The length of time for the mortgage to be repaid can vary. Mortgages can
have an interest rate fixed or an interest that varies (variable rate) over the term of the
mortgage. (Usually the maximum term of a mortgage is 30 years). A mortgage can be
split so part is variable and part is fixed. Students complete the case study on a home
loan. Reference what LVR (loan to value ratio) is and how banks determine lending and
borrowing capacity. Refer students to this blog that has some handy notes on LVR:
http://www.suncorpbank.com.au/blog/home-property/what-is-lvr
As an interesting side note, you can provide as a point of discussion the concept of
“offset” accounts. These allow you to have access to your funds but they will still be
included in the calculation of your home loan balance. You don’t earn interest on the
funds, but they will reduce the interest you would otherwise be charged on your loan.

Debrief – Reflective Learning

Encourage students to consider:
• how interest can affect their purchases and add more to the amount to be repaid.
• the importance of staying on top of loan repayments.

47
 Module 7
Show me the money! Topic 7.6

Life is plastic, it’s fantastic!

Worksheet 11
1. Complete the table by adding the definitions to these Power Words. You can access the
following website to assist you.
https://www.moneysmart.gov.au/media/400663/credit-loans-and-debt.pdf
http://www.suncorpbank.com.au

POWER WORD DEFINITION

CREDIT

CREDIT PROVIDER

INTEREST

ANNUAL FEE

MINIMUM PAYMENT

CREDIT LIMIT

BALANCE

MEMBER REWARDS

48
 Module 7
Show me the money! Topic 7.6

Life is plastic, it’s fantastic!

Worksheet 11
2. Did you know that credit cards are available from retail stores as well as from banks and
other ADIs? Different cards have different names, fees, penalties, conditions, rewards,
etc. Research and compare different credit cards on offer from 2 banks, 2 stores and 1
non-bank financial institution. Complete the table below.

TYPE OF ANNUAL
CREDIT APR % OTHER FEES REWARDS
FEE
CARD

Late
payment fee:
5% Qantas
EXAMPLE MasterCard 18% $349 Cash frequent
withdrawal flyer points
fee: $25 per
withdrawal

Credit Card 1:
NAME:

Credit Card 2:
NAME:

Store Card 1:
NAME:

Store Card 2:
NAME:

NBFI:
NAME:

49
 Module 7
Show me the money! Topic 7.6

Life is plastic, it’s fantastic!

Worksheet 11
3. Read the following case study about Sami. Create a spreadsheet like the one on the next
page. Fill in the table by calculating each of the required amounts and then answer the
questions that follow.

CASE STUDY – CREDIT CARD

In January Sami gets a new credit card. The credit card has an interest rate of 18% per
annum if the outstanding balance is not paid in full within 25 days of the statement
date. Otherwise the minimum payment due is whichever is the greater - 2.5% of the
outstanding balance or $30.
He immediately goes out and buys two shirts, a pair of pants, and a pair of shoes
for $235. He receives his credit card statement at the end of the month. Sami knows
he should pay his entire bill each month, but because he was short on cash, he only
made the minimum payment.
On Valentine’s Day, Sami took his girlfriend to a concert then bought the band’s
albums on iTunes for a total of $157. When his credit card statement for February
arrived, he now had even less cash, so he made only the minimum payment again.
In March Sami resolved to stop charging things on his credit card until he could pay
his entire balance. But the next day, his car broke down and the repairs came to $760.
He needed his car to get to school and work, so he charged the repairs to the credit
card.
Taken aback by his growing balance, Sami promised not to use his credit card again,
until he paid the balance off entirely. He decided to pay $55 a month for as long as it
would take to pay it off.

50
 Module 7
Show me the money! Topic 7.6

Life is plastic, it’s fantastic!

Worksheet 11
Copy the spreadsheet below and enter the information. Save the worksheet, “Sami’s
credit card bills”. The first month is done for you. Important to note that different banks
have different approaches to calculating credit card interest. For this activity it is assumed
that one month’s interest is calculated and applied on the last day of the month to all
new purchases and any outstanding balance from the previous month.

JANUARY
purchases 235.00
- minimum payment 30.00
= unpaid balance $205.00
FEBRUARY
purchases
+ previous balance
= total before interest
+ interest
= new balance
- minimum payment
= unpaid balance
MARCH
purchases
+ previous balance
= total before interest
+ interest
= total owed
- minimum payment
= unpaid balance
TOTAL PURCHASES FOR 3 MONTHS
TOTAL AMOUNT OWING AFTER 3 MONTHS
TOTAL INTEREST PAID TO END OF MARCH

51
 Module 7
Show me the money! Topic 7.6

Life is plastic, it’s fantastic!

Worksheet 11
(a) What was the total amount that Sami spent on his purchases?

(b) What was the total amount on his credit card after 3 months?

(c) What was the total interest paid so far? How much has Sami paid off his actual
purchases?

(d) Using the Money Smart credit card calculator

https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/credit-
card-calculator, calculate how long it would take Sami to pay the entire amount of
$1352.80 at $55 a month assuming no more purchases are made.

(e) Sami is paying close to the minimum each month. Identify any potential risks this might
create for him in the future.

52
 Module 7
Show me the money! Topic 7.6

Money makes the world go around!

Worksheet 12
1. Read the following case study and answer the questions that follow.

CASE STUDY – PERSONAL LOANS

Sean has been living at home and has been able to use his parent’s computer. He
has decided to move out and rent his own flat. His parents won’t let him take the
computer with him. He has a credit card, but decides to get a personal loan for the
computer he cannot do without. He has $400 in savings which he will use for the
deposit. He needs to borrow a further $3000. The interest rate is 15%.

(a) Sean decides to take the loan out for three years. Using the calculator on the
website www.infochoice.com.au, work out his monthly repayment.

(b) What is Sean’s total repayment? How much interest does Sean pay in total?

(c) If Sean had chosen to pay the loan back in two years rather than three, what would
his monthly repayment have been?

(d) What would his total repayment have been and how much interest would he have
paid in total in the two years? What is the difference in interest for a two year loan
compared with the three year loan?

53
 Module 7
Show me the money! Topic 7.6

Money makes the world go around!

Worksheet 12
2. Sean saw a comment on Facebook about it being better to save a larger deposit before
buying an asset. So he decided to see what the situation would have been if he had
waited until he had saved more money for a deposit on his computer. If he had saved a
deposit of $1400, he would have only borrowed $2000.

(a) Based on the above comment, re-calculate the monthly repayment, total repayment
and total interest amount he would have paid for borrowing $2000 for 3 years and
for 2 years.

3 YEAR CALCULATION 2 YEAR CALCULATION

Monthly Repayment

Total Repayment

Total interest

(b) Which would have been the better option for Sean? Explain why?

54
 Module 7
Show me the money! Topic 7.6

3.

Money makes the world go around!

Worksheet 12
CASE STUDY – HOME LOANS
A family has been looking for a new family home to move into. Having found the
perfect home valued at $450 000, they now need to calculate if they can afford this
property.

Go to http://www.suncorpbank.com.au/home-loans/calculators-and-tools/repayments for
the home loan calculator.

(a) How much deposit is required? (based on the 20% required in QLD)

(b) What is the mortgage amount required from the bank? (Hint: use the information
from the above questions to assist you to work out bank loan.)

55
 Module 7
Show me the money! Topic 7.6

Money makes the world go around!

Worksheet 12
(c) Use the online calculator at
http://www.suncorpbank.com.au/home-loans/calculators-and-tools/repayments
to calculate the following. Complete the table below:

VARIABLE FIXED

Monthly repayment

Fortnightly repayment

Weekly repayment

Principal and Interest

Interest Only

Total Interest Payable

(d) Often families opt to rent instead of purchasing a home. In the table below, provide
2 advantages and 2 disadvantages of renting and buying.

ADVANTAGES DISADVANTAGES

RENTING

BUYING

56
 Module 7
A visit from a Professional Topic 7.7

Teacher Notes
Classroom activity:
Suggested time: 1 lesson

Student worksheets:
Worksheet 13: Time to call in the expert!
Resources: Guest Speaker from a local financial institution

This activity allows students to reflect on what they know, what they have learned previously
and what more they want to know. This is an opportunity for them to write down their
questions and concerns and then ask an expert.
(a) Distribute Worksheet 13 – Time to call in the expert! Have students form five groups. In their
group, they brainstorm a list of questions that they would like answered about BANKING from
the expert. Some questions they could ask:
• Why do I need to have a bank account?
• What can a customer do if they have a problem with their bank?
• How do I set up an account?
• How do I know which account to choose?
• What are some of the non-core banking services (e.g. insurance and superannuation)
provided by the bank? Why should I buy these from a bank?
• What safety protocols do banks have in place with the recent spate of online scams
and threats?

Each group then selects one question from the class list (this makes a total of five questions to
ask the professional).

(b) When the bank expert/ guest speaker has left, students should take the time to reflect on what
they have learned from this visit.

Debrief – Reflective Learning

Encourage students to:
• consider the future of banking and the importance of having a bank account.
• think about what their next step would be – open a bank account, apply for a job,
set up a budget.

57
 Module 7
A visit from a Professional Topic 7.7

Time to call in the expert!

Worksheet 13
1. In a group, list the questions you would like to ask the bank expert.

QUESTIONS

58
 Module 7
A visit from a Professional Topic 7.7

Time to call in the expert!

Worksheet 13
2. Now, list the questions that have been selected from the class discussion.
Write the answers down as the speaker answers them.

QUESTIONS ANSWERS

59
 Module 7
A visit from a Professional Topic 7.7

Time to call in the expert!

Worksheet 13
3. What new information did I learn from the visit from the banking expert?

4. List 2 things that you are going to do differently when it comes to banking or you will
plan to do when you are ready to start banking?

5. Complete the personal record of learning that follows

The key points I have learned so far:

(a) Banking will help me by…..
e.g. save money for my first car by comparing savings accounts and then opening a
savings account.

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 Module 7
A visit from a Professional Topic 7.7

Time to call in the expert!

Worksheet 13
(b) Describe all the most important tips about banking you have learnt today.
e.g. compare the accounts available at the bank

(c) The bank expert has helped me to better understand…

e.g. how to open a bank account

(d) Services I expect to use:

• In the next year:

• In the next 2-5 Years:

• Beyond 5 years

61
 Module Eight
Saving and Investing

In partnership with
 Module 8
Investing – where do I start?

OVERVIEW

Teacher Notes
Module Overview and Curriculum Mapping
Module 8 aims to provide students with an understanding of the short and long term
consequences of savings and investment decisions.

ENDURING UNDERSTANDINGS
• Achieving financial independence requires a savings commitment and an understanding
of the principles of investment
• Savings is a long-term, lifetime habit.
• Successful investing requires a plan, based on knowledge.
• Security lies in diversifying investment choices.

LEARNING OUTCOMES
Students:
• Describe the role saving plays in achieving financial independence
• Make informed savings decisions based on their goals
• Identify incentives and barriers to personal saving
• Recognise the principles for achieving financial independence
• Recognise changing life cycle savings and investment opportunities
• Understand the need to diversify investment choices
• Recognise the range of investment options
• Describe the process involved in preparing a personal investment strategy
and the assistance available to achieve investment goals.

POWER WORDS Page 2

CURRICULUM MAPPING 3

LIST OF TOPICS
8.1 Identifying attitudes to savings 5
8.2 Why save? 9
8.3 Setting savings goals – the power of time and commitment 13
8.4 A personal investment approach 19
8.5 Developing investment strategies 26
8.6 Understanding investments 33
8.7 Planning to invest 38
8.8 Learning from the professionals 42
8.9 Putting it all together 46
8.10 Making saving and investment choices 48

1
 Module 8
Investing – where do I start?

POWER WORDS

Teacher Notes
Module Overview and Curriculum Mapping
As students work through each topic in this module they will encounter words that may be new
to them, crucial to understanding and completing the worksheets, and/or difficult to spell. In
addition, students may simply find some of this vocabulary interesting and want to use it in the
future. Understanding and being able to use these words will provide students with more power
to make future financial decisions.
There are several approaches to using this “glossary”. The intention is for students to investigate
and find the meanings. They could be given the complete list before they start the module, or
they could set up a table and add new words as they progress through the activities. There are
also specific POWER WORD activities in some topics.
This list is not exhaustive.

ASX Investor
Bonds Offshore
Broker Opportunity cost
Budget Portfolio
Capital growth Property trust
Commercial property Residential property
Commodity Returns
Compound interest Risk
Debt Risk profile
Deficit Savings
Diversify Security
Dividend Shares
Domestic shares Speculation
Equities market Stockbroker
Financial planner Strategy
Hedging Superannuation
Income Surplus
Interest Term deposit
International shares Trust fund
Investment Unit price
Investment strategy Volatility

2
 Module 8
Investing – where do I start?

CURRICULUM MAPPING

Teacher Notes
Module Overview and Curriculum Mapping
ENGLISH MATHEMATICS GENERAL CAPABILITIES
LITERACY YEAR 9 NUMBER & LITERACY
Interacting with ALGEBRA YR 9 Comprehending texts through listening, reading and viewing
others Money & Navigate, read and view learning area texts
• Plan, rehearse financial • Navigate, read and view a wide range of more demanding subject-
and deliver mathematics specific texts with an extensive range of graphic representations
presentations, • Solve problems Composing texts through speaking, writing and creating
selecting and involving Use language to interact with others
sequencing simple interest • Use pair, group and class discussions and formal and informal debates
appropriate content (ACMN211) as learning tools to explore ideas, compare solutions, evaluate
and multimodal information and ideas, refine opinions and arguments in preparation
NUMBER & for creating texts (ACMSP253)
elements for ALGEBRA YR
aesthetic and Deliver presentations
10
playful purposes • Plan, research, rehearse and deliver presentations on more complex
(ACELY1741) Money & issues and learning area topics, combining visual and multimodal
financial elements creatively to present ideas and information and support
Interpreting, mathematics opinions and engage and persuade an audience
analysing,
evaluating • Connect the NUMERACY
compound Estimating & calculating with whole numbers
• Interpret, analyse interest formula
and evaluate Use money
to repeated
how different • Evaluate financial plans to support specific financial goals (ACMNA211)
applications of
perspectives of simple interest Using fractions, decimals, percentages, ratios f& rates
issue, event, using appropriate Interpret proportional reasoning
situation, digital • Illustrate and order relationships for fractions, decimals, percentages,
individuals or technologies ratios and rates (ACMNA208)
groups are (ACMNA229 Interpreting statistical information
constructed to Interpret data displays
serve specific STATISTICS &
PROBABILITY • Evaluate media statistics and trends by linking claims to data displays,
purposes in texts statistics and representative data (ACMSP253)
(ACELY1742) YR 9
Data INFORMATION & COMMUNICATION TECHNOLOGY CAPABILITY
Creating texts
representation & Investigating with ICT
• Create imaginative, interpretation Define & plan information searches
informative and
• Identify everyday • Select and use a range of ICT independently and collaboratively,
persuasive texts analyse information to frame questions and plan search strategies or
that present questions and
issues involving data generation
appoint of view Communicating with ICT
and advance at least one
numerical and Managing & operating ICT
or illustrate
arguments, at least one • Independently select and operate a range of devices by adjusting
categorical relevant software functions to suit specific tasks, and independently
including texts use common troubleshooting procedures to solve routine malfunctions
that integrate variable, and
collect data (ACELY1738)
visual, print and/
or audio features directly and CRITICAL & CREATIVE THINKING
(ACELY1746 from secondary Reflecting on thinking and processes
sources
• Use a range of Think about thinking (metacognition)
(ACMSP228)
software, include • Give reasons to support their thinking, and address opposing
word processing viewpoints and possible weaknesses in their own positions
programs, flexibly (ACELT1640, ACMSP247)
and imaginatively PERSONAL & SOCIAL CAPABILITY
to publish texts Self-management
(ACELY1748) Work independently and show initiative
• Establish personal priorities, manage resources effectively and
demonstrate initiative to achieve personal goals and learning outcomes
(ACELY1756)
Social management
Make decisions
• Develop and apply criteria to evaluate the outcomes of individual and
group decisions and analyse the consequences of their decision making
(ACMNA229)

3
 Module 8

CURRICULUM MAPPING

Teacher Notes
Module Overview and Curriculum Mapping
NCFLF DIMENSIONS
Knowledge & Understanding
• Identify and explain strategies to manage personal finances
• Explain the various factors that may impact on achieving personal financial goals
• Analyse and explain the range of factors affecting consumer choices
• Discuss and compare different sources of consumer and financial advice
• Identify types of consumer and financial risks to individuals, families and community and ways of managing them
Competence
• Use a range of methods and tools to keep financial records in ‘real-life’ contexts
• Create simple budgets and financial records to achieved specific financial goals, now and in the future
• Discuss the differences between ‘good’ and ‘bad’ debt, including manageability of debt and its long-term impact
• Analyse relevant information to make informed choices when purchasing goods and services, and/or to resolve
consumer choices
• Compare overall ‘value’ of a range of goods and services using IT tools and comparison websites as appropriate
• Evaluate marketing claims, for example in advertising and in social media, to influence consumers to purchase a
range of goods and services
Responsibility & Enterprise
• Research and identify the ethical and moral dimensions of consumer choices in specific circumstances and
consequences for themselves, their families, the broader community and/or the environment
• Explore the economic cost of individual and collective consumer decisions of the broader community and the
environment
• Apply informed and assertive consumer decision –making in a range of ‘real-life’ contexts
• Appreciate that there is often no one right answer in making financial decisions because these depend on
individual circumstances, preferences and values
• Understand and explain the legal responsibilities of taking on debt, including the consequences of not paying
• Explain how, as financially active citizens, they fit into the broader economy and society through:
– Generating income & paying taxes
– Saving;
– Spending;
– Donating; and
– Investing
• Explain the role of banks and other deposit-taking institutions (such as building societies and credit unions) in
collecting deposits, pooling savings and lending them to individuals and business
• Demonstrate awareness that family, community and socio-cultural values and customs can influence consumer
behaviour and financial decision-making

4
 Module 8
Identifying attitudes to saving Topic 8.1

Teacher Notes
Classroom activity
Suggested time: 1 lesson
Resources: A budget showing a surplus component (see
the "Budgeting" module)
Current interest rates on deposit accounts, interest rates charged on
bank credit cards, bank personal lending charges, student loans.

Student worksheets:
Worksheet 1: What saving means to me
Introduction:
(a) Brainstorm with the class students' understanding of savings. This discussion will
hopefully establish two forms of saving:
• money left over at the end of the week/month. This could also be what is left over
when you plan a budget and find income is greater than expected payments.
• A specific amount/proportion of available income set aside, generally for a specific
short or long term purpose such as saving for a formal dress or a car deposit.
Ask students for examples where friends or family are saving for a particular purpose. Possible
suggestions: Christmas club accounts, holidays or an ipod.

Create a board summary from student suggestions to the following questions.

• Where do savings come from (refraining from spending)?
• What is given up in order to save (opportunity cost of saving)?
• Why do people save (this depends on their goals)?
• Can everybody ‘save’? (a student with a part time job earning $50 a week compared
with a student with a part time job earning $150 week).

(b) Complete Worksheet 1: What saving means to me.

Students read through the case study. Ask them to decide which statements they identify
with in Chris’s situation. The teacher could get an idea of how many students:
• had more statements they identified with
• had more statements they had difficulty identifying with.

(c) Discuss the statement "If saving is such a good idea, why doesn't everybody do it?"
From the ideas offered, students draw up a list of barriers to saving. These could include:
I just don't want to.
It is difficult to think about the future.
Who cares about the future?
It's too far away to worry about.
I don't have any long term savings goals.
Spending is more fun than saving.

5
 Module 8
Identifying attitudes to saving Topic 8.1

Teacher Notes
(d) Monitoring progress and assessment
Complete Worksheet 1

(e) Debriefing
Reflective learning
Students debate the statements "The more you earn, the more you spend" and/or "The
more you earn, the more you save".
Students consider how they could best use any surplus money

6
 Module 8
Identifying attitudes to saving Topic 8.1

What saving means to me

Worksheet 1
1. CASE STUDY
Chris
"I spent my money just like water. It didn’t seem to matter and I didn’t care. I really liked
having the best brands and the newest gear. It was wasted really, just frittered away on
little things that I can’t even remember now. Don’t we all do that?" Chris, a few years
older now, says he now recognises the importance of only buying the things he really
needs. "I think twice before buying any little thing," he says.
Chris’ advice to young people is, "Only buy what you really need. We all want the feel
good factor today, but now I prefer to think about what I will need tomorrow instead of
what I would like today. I look at each day and think, how can I improve tomorrow?"

Statements I identify with:

1.

2.

3.

Statements I find difficulty identifying with:

1.

2.

3.

If saving is such a good idea, why doesn’t everybody do it?

Explain the connection between saving and the ability to create wealth in the future.

7
 Module 8
Identify attitudes to saving Topic 8.1

What saving means to me

Worksheet 1
2. Thinking a little more carefully about my spending —
What I have spent money on recently (within the last month or so)

Purchase price Absolutely Could have Could have

(enter prices here essential bought more done without
for items in the cheaply or bought
next columns) a cheaper alternative

Savings I could have made

and over a year that would add up to

3. You have been put in charge of developing a campaign to encourage young people to
save. Develop:
• a slogan for the campaign
• a theme - decide what emotions will you appeal to
• some suggested settings for the advertisements.

8
 Module 8
Why save? Topic 8.2

Teacher Notes
Community and classroom activity:
Suggested time: 1 lesson

Student worksheet:
Worksheet 2: Why save?
Resources: Newspapers/magazines for cutting out pictures

"Saving is telling your money where to go instead of wondering where it went."

From this activity, students can recognise the reasons for and benefits of saving and compare
them with the opportunity cost of spending and borrowing.
(a) Distribute Worksheet 2 – Why save? Working in twos or threes, students list possible
reasons for saving. Run a round robin with each pair/three adding items to a master list
written on the board. Students could transfer the main reasons to worksheet 2.
(b) Using newspapers and magazines students cut out pictures that represent future savings
goals. The time period of the goal also needs to be written into the table in Worksheet 2.
(c) Discuss as a class some of the savings tips suggested on Worksheet 4. Have students
consider the importance of a credit profile.
(d) Students think of examples/situations/items where the choice to buy immediately, rather
than save the full purchase price could make sense. For example:
● immediate possession which saves other costs
● anticipation of price rises
● cost of the item being too large to accumulate easily by saving
● genuinely need the item immediately.
These can be written into the table provided in Worksheet 2.
(e) Complete task 7 and 8 on Worksheet 2.
(f) Activities
Students are to complete Worksheet 2.
(g) Debriefing — Reflective learning
Have students consider these statements:
­– "We all eventually face credit limits." What does this mean for our
savings behaviour pattern?
­– What would make you want to save?
­– What mechanisms for saving could you manage?

9
 Module 8
Why save? Topic 8.2

Why save?
Worksheet 2
1. If saving is such a good idea, why doesn’t everybody do it?
List three reasons for saving:

●
●
●

It’s true - saving helps you achieve future goals such as buying an iPod or a car or going
on a holiday.
2. List 4 future goals that you would like to save for over the next 5 years:

●
●
●

●

3. Cut out pictures from newspapers/magazines that represent the goals you are saving
towards and place them in the box below. Visualising these goals can help you achieve
them sooner! Underneath each picture write approximately how long you think it will be
before you achieve the goal.

Goal 1: Goal 2:

Time period to achieve goal: Time period to achieve goal:

Goal 3: Goal 4:

Time period to achieve goal: Time period to achieve goal:

10
 Module 8
Why save? Topic 8.2

Why save?
Worksheet 2
4. Saving gives you a credit profile – this means you can present your savings history
when you need to borrow money for a car, house etc. The amount you save is not as
important as the regularity of your savings. A regular savings routine shows lenders
you are disciplined enough to repay loans and improves your chances of getting a loan
approved.
Consider this situation: Terry and Phillip are two people who wish to apply for a home
loan in the near future. Terry has saved a deposit of $25,000 through putting away a set
amount over the last 4 years. Phillip on the other hand has a deposit of $30,000 to put
towards a home loan. Phillip has always been a poor saver and achieved this $30,000
through a generous gift from his parents.
Who is more likely to have their home loan approved? Explain.
5. Savings can be made easier by:
a) Setting yourself a savings goal:
It is easier to save when you know what you are saving for.
b) Starting slowly
If you aren’t used to saving, set yourself a small, short-term goal. Set one for three
months that doesn’t require too much cash. Set aside 10% of your weekly pay in a
separate savings account/location and withdraw that amount when the three months
are up. Then set another goal and start again. It gets easier each time.
c) Drawing up a budget
It is easier to see where money goes and where major blowouts occur when you are
keeping track of your spending.
d) Paying yourself first
Have 10% of your pay deposited directly into a cash management account or internet
savings account so you don’t ever actually receive the funds. What you don’t see you
won’t miss (as much anyway!). Plan your budget on the other 90%.
6. Saving v Borrowing
Sometimes it makes more sense to borrow money for an item rather than save the whole
purchase price. Why would this be so?

Reason for borrowing rather than saving Examples of goods/services

Immediate possession saves other costs

Anticipation of price rises

Item costs too much to accumulate

easily by saving

Genuinely need the item immediately

(how genuine?)

11
 Module 8
Why save? Topic 8.2

Why save?
Worksheet 2
7. Spend or Save? Use magazines/newspapers to cut out pictures that represent items you
would buy for the sums of money listed in the table below. Stick these pictures in the
middle column. For the third column use the website www.infochoice.com.au to research
the amount of interest you could earn on a term deposit for the sum of money listed in
the first column.

For this sum I would buy (insert or earn this much

of money picture here) interest on a term
deposit in a year

$50

$500

$10,000

$100,000

$500,000

8. Complete a statement that best sums up your attitude to savings.

My attitude to savings is:

12
Setting savings goals – the power of Module 8
time and commitment Topic 8.3

Teacher Notes
Research and classroom activity:
Suggested time: 2 lessons

Student worksheets:
Worksheet 3: Start saving now!
Worksheet 4: The power of compounding
Worksheet 5: Savings terminology word scramble
Resources: www.mymoneyskills.com.au>Budgeting and Saving
www.fido.gov.au>About you>Young adults>
www.understandingmoney.gov.au>saving
www.youthcentral.vic.gov.au>Managing Money Look at the three
sections: ”Saving & spending” “Planning for the future” and “Need
some tips to help you save”.
Ladder of my savings goals (Worksheet 4)
Spreadsheet or calculator
Banks, ASIC and other websites have calculators students can use to
identify the benefits of saving specific amounts regularly.

This activity emphasizes:

• the importance of goal setting
• the value of compounding
• the importance of saving early in life.
The following activity encourages goal setting and the importance of monitoring regular
income and expenses. The four foundation stones of financial independence are time,
discipline (commitment), knowledge and strategy. Students are alerted to the two which only
they can provide — time and commitment.
(a) Students could re-visit module 1 – Setting Financial Goals or visit www.mymoneyskills.
com.au>Budgeting and saving>Goals and Planning Process. The purpose is for students
to understand how the setting of specific goals assists an individual to save.
(b) Students examine the value of compounding and the benefits of starting to save early
and regularly. This can be done in two ways:
(i) If they do not have Internet access, students use Worksheets 3 and 4. Students will
need to bring in a calculator to complete Worksheet 3 and 4. For Worksheet 4, students
have the first 20 years as examples to calculate the effect over time that compounding
has with an initial investment of $20 a week and an interest rate of 7%.
(ii) Students access www.mymoneyskills.com.au>Budgeting and saving>Principles of
Saving. This section contains resources for:
• Interest calculations (simple and compound)
• The Power of $50 a Month
• The rule of 72
• Starting saving early.
(iii) Three friends decide to save $100 per month ($3 per day) @ 10% until the age of 65.
13
Setting savings goals – the power of Module 8
time and commitment Topic 8.3

Teacher Notes
Calculate how much each person saved.
a) PRUDENT PENELOPE starts at age 25
b) SLOW SAM starts at age 26
c) SPENDTHRIFT SIMON starts at age 35
Students could use the calculator to experiment with different scenarios. They should be
trying to isolate the benefits of:
● saving regularly
● saving early in life
● savings for longer periods.
Students should write a summary of “Using the savings calculator showed me..…..
(c) Students classify some of their reasons for saving (or would like to save) into these categories:
● immediate needs
● short-term goals and emergencies
● long-term accumulation of wealth.
Students discuss "What can I do to save towards my lifestyle goal." (Take advantage
of the power of time.) Fill out the form: Ladder of my savings goals. Worksheet 4
(d) Students review terminology using Worksheet 5: Savings terminology word scramble.
Extension activity:
Students prepare a brochure/poster, PowerPoint presentation or Photostory (or equivalent)
on Tips for Young Savers. This could be completed individually or in pairs.
Resources for this task are:
www.fido.gov.au>About you>Young adults> The page headed ‘Where do I start’
contains a number of resources for this topic.
www.understandingmoney.gov.au>saving
(e) Monitoring progress and assessment
Teacher collects Worksheets 3 and 4 OR the summary students wrote about their findings
from use of the savings calculator and the completed ladder of their savings goals.
If the extension activity was undertaken, share the brochure/poster/Powerpoint/Photostory
produced by students.
Check student answers in Worksheet 5 to the scrambled words.
The correct answers are 1. bank, 2. spend, 3. interest, 4. deficit, 5. surplus, 6. budget, 7. safe.
(g) Debriefing — Reflective learning
1. Have students consider:
● the benefit of saving regularly
● the importance and power of time. Even if you can only save small amounts at a
time, if you invest for the longer term, and let the power of time take effect, you are
likely to achieve financial independence.
● that being smart is being disciplined. Anyone can be greedy and impatient, but it
takes a smart person to be disciplined.
● not to expect to get rich quickly, but rather plan to get rich slowly.
2. Debate the idea: "Overnight success often takes thirty years".

14
Setting savings goals – the power of Module 8
time and commitment Topic 8.3

Start saving now!

Worksheet 3
CASE STUDY
Two 22 year old friends, Mai and Rebekah, both earn good salaries. However, they have
different approaches towards saving. Mai is already saving a regular amount, but Rebekah
decides she wants to have a good time first before she starts restricting her spending. Mai
saves $2,000 a year for 9 years. Rebekah starts saving $2,000 at aged 30 and continues to
save that amount every year until she is 65. The interest rate is 9%.

Age Mai’s savings Rebekah’s savings

22 $2,000 0
23 $2,000 0
24 $2,000 0
25 $2,000 0
26 $2,000 0
27 $2,000 0
28 $2,000 0
29 $2,000 0
30 $2,000 (total of $18,000 saved) 0 (total of $0 saved)
31 0 $2,000
32 0 $2,000
33 0 $2,000
34 0 $2,000
35 0 $2,000
36 0 $2,000
37 0 $2,000
38 0 $2,000
39 0 $2,000
40 0 $2,000
41 0 $2,000
42 0 $2,000
43 0 $2,000
44 0 $2,000
45 0 $2,000
46 0 $2,000
47 0 $2,000
48 0 $2,000
49 0 $2,000
50 0 etc until 65 years old $2,000 etc until 65 years old
Amount available
At age 65 $579,471 $470,249

a) Who contributed the most money personally to her savings plan?

b) At aged 65, which of the friends would you rather be?

15
Setting savings goals – the power of Module 8
time and commitment Topic 8.3

Money saved on a regular basis, regardless of the amount, has the benefit of increasing

The power of compounding

Worksheet 4
significantly, if given time for the effect of compounding to take place.
Imagine if $20 was saved every week ($1040 a year) and transferred as a lump sum to a
term deposit account at the end of the year. Imagine if you did this every year for 30 years,
starting at age 20. By the time you were 50 years old, the amount would be significant.
Imagine 7% interest with the interest being added at the end of the year. The first 20 years
have been done for you. Figures are rounded to the nearest cent.
1. Work it out here and complete
Year Balance at Interest Added to term deposit Balance at year’s end
start of year $ at year’s end (Starting figure for next year) $
1 1040 1040
2 1040 72.80 1040 + interest 2152.80
3 2152.80 150.70 1040 + interest 3343.50
4 3343.50 234.05 1040 + interest 4617.55
5 4617.55 323.23 1040 + interest 5980.78
6 5980.78 418.65 1040 + interest 7439.43
7 7439.43 520.76 1040 + interest 9000.19
8 9000.19 630.01 1040 + interest 10670.29
9 10670.29 746.92 1040 + interest 12457.21
10 12457.21 872.00 1040 + interest 14369.21
11 14369.21 1005.84 1040 + interest 16415.05
12 16415.05 1149.05 1040 + interest 18604.10
13 18604.10 1302.29 1040 + interest 20946.39
14 20946.39 1466.25 1040 + interest 23452.64
15 23452.64 1641.68 1040 + interest 26134.32
16 26134.32 1829.40 1040 + interest 29003.72
17 29003.72 2030.26 1040 + interest 32073.98
18 32073.98 2245.18 1040 + interest 35359.16
19 35359.16 2475.14 1040 + interest 38874.30
20 38874.30 2721.20 1040 + interest 42635.30
21 42635.50
22
23
24
25
26
27
28
29
30
16
Setting savings goals – the power of Module 8
time and commitment Topic 8.3

The power of compounding

Worksheet 4
2. Construct a bar graph to illustrate the results of your calculations.
For each year, prepare a bar that shows the total amount in the deposit account (the
accumulating balance) and how much of that bar is your savings contribution.

3. Complete the ladder of your saving goals

Planning
decisions

Long term
savings goals

Medium
term
savings
goals

Short
term
savings
goals

17
Setting savings goals – the power of Module 8
time and commitment Topic 8.3

Savings terminology word scramble

Worksheet 5
Use the clues given to rearrange the words below into the correct term.
1.
K B N A
Clue: This is a safe place to put your money
Answer:
2.
N S E D P
Clue: If you do this with all of your money there will be none left over to save.
Answer:
3.
T E T N E S I R
Clue: This is the return paid on a term deposit
Answer:
4.
F E T C I I D
Clue: This is a budgeting term to describe a situation where your expenses are greater than your
income.
Answer:
5.
U L U S S P R
Clue: This is a budgeting term to describe a situation where your income is greater than your
expenses.
Answer:
6.
B T E D G U
Clue: This is an excellent tool to help people watch where their money is coming and going and
therefore achieve financial goals sooner.
Answer:
7.
F E S A
Clue: If you put your savings in the bank you would expect your money to be?
Answer:

Use as many of these words as you can to create a short paragraph which illustrates how saving
will assist you to have more money in the future.

18
 Module 8
A personal investment approach Topic 8.4

Teacher Notes
Classroom activity:
Suggested time: 1 lesson

Student worksheets:
Worksheet 6: Understanding investment
Worksheet 7: My investment style
Worksheet 8: Risk and return
Resources: Information Sheet: Why should I have an investment plan?
www.asic.gov.au>Publications & resources>Teacher resources>Your
money starter>Investigation 3: Informed investing-understanding
risk. This resource contains a self-contained module on investing
which teachers may find useful.
From this activity students explore their attitudes to investing. They establish their current
position and their own personal investment approach. Student attitudes to risk and return are
also evaluated.
NOTE: The vast majority of employed people over 18 are contributing to compulsory
superannuation through the Super Guarantee scheme. Remind students that they need to
consider how their super funds are invested as part of their overall investment strategy. This
is important because many students may think investment is not something that they will be
able to “afford” but in fact their super contributions make them investors.
(a) Have students read the scenarios outlined on Worksheet 6. Working in pairs, students
could consider the 5 case studies and decide whether each is an investment situation, or
not. One pair of students in turn could lead a class discussion on one of the case studies.
Class discussion could be based around the concepts of how investment differs from
gambling and speculation, and that investment can occur in a variety of assets.
(b) Brainstorm what students think/feel about investing and record on the board or
OHP. Then present to the class the following statements and have the students
place themselves on an "agree/disagree" continuum as set out in Worksheet 7 – My
investment style.
– Identifying what goals I want to achieve financially is difficult.
– It will be a long time before I have anything to invest.
– Why consider investing when I am not working full time?
– Investing is risky. I'm into security myself.
– Retirement is an age away. I'll think about it later.
– I don't know where or how to invest.
– Financial protection is part of an investment plan.
– Finding out about investments is expensive and/or time consuming.
– I don't know what an investment could do for me.
– The key to a successful plan is to start early and save regularly.
– Investment needs to be done with the head, not the heart.
– An investment plan will help me avoid fear in the bad times and greed in the good times.
– If it looks too good to be true, it probably is.
Students can add 2 of their own statements in the space provided in Worksheet 8.
Students could take one point of view and argue their case.
19
 Module 8
A personal investment approach Topic 8.4

Teacher Notes
(c) Talk to students about interest rates. Outline the current level of interest rates and how
this has changed over the last few years. Also discuss the notion that a higher return on
investments will attract a higher rate of risk. Distribute Worksheet 8 – Risk and return and
read through the four scenarios given.
(d) Monitoring progress
● Have students complete Worksheet 6: Understanding investment.
● Have students mark an appropriate spot on the continuum that relates to each of the
statements in Worksheet 7.Collate the results for the class.
● Students fill in the questions in the space provided in Worksheet 8. A class vote on
which of the alternatives students would favour could be made. This could be used to
evaluate whether students are ‘risk takers’ or ‘risk averse’.
(e) Debriefing — Reflective learning
Have students:
– review their personal investment approach and consider how best they can prepare
themselves for making wise investment decisions.
– consider what decisions need to be made now and which decisions can be left for a
few years.

20
 Module 8
A personal investment approach Topic 8.4

Understanding investment
Worksheet 6
The following scenarios involve use of the term ‘investment’. Read the scenarios and
comment on how the word investment is used in each.
a) “Invest in the winning shop and watch your money grow, grow, grow!” (From an
advertisement for the Winning Shop). Any purchaser who scratches a ticket to find
three gold crowns on one ticket wins $100,000. Any other combination of three
symbols on one ticket wins a minor prize up to $50.

b) Jane has decided to invest in a new image for herself. She watched a make-over
program and decided to copy what they had done. She signed up for a gym
course, went to a fashion advisor and purchased a complete new wardrobe and
finally had her teeth whitened. Total cost was $15,000. Her aim was to get a
promotion at work.

c) “Help the Investor” is a pay TV program which examines various investment

schemes. One on-line promotion of shares included the following statement.
“These shares are ready to go. It is the week’s hot tip – they could easily go up to
$3. Last year they were 80c, dropped to 45c and at the moment they are 50c. Get
into this investment now, before they hit $3. Some inexperienced investors thought
this sounded great and borrowed $25,000 to invest in a big parcel of these shares.

d) Chris, a carpenter and handyman, runs his own business. He is planning to retire
in 20 years time and will need money for his retirement. To fund his retirement he
has set up a self-managed superannuation fund. It has purchased 2 investment
properties which are rented out. Chris does the maintenance on the properties,
and the rent provides extra funds for the superannuation fund.

e) Micah is a 19 year old student who has saved some money from his part time
job. He is not sure when he may need the money, but he wants it to earn some
income. He is worried about investing in shares because shares can go up and
down in value. He doesn’t have enough money to buy property. He invests his
money in an on-line bank account which is paying 7.5% per annum.

Is the term ‘investing’ the correct word to describe what has taken place in each of
these cases? Justify your answer.

21
 Module 8
A personal investment approach Topic 8.4

My investment style
Worksheet 7
1. What are my current thoughts on investing?
Identifying what goals I want to achieve financially is difficult.
1 2 3 4 5
Strongly Disagree Strongly Agree

It will be a long time before I have anything to invest.

1 2 3 4 5
Strongly Disagree Strongly Agree

Why consider investing when I am not working full time?

1 2 3 4 5
Strongly Disagree Strongly Agree

Investing is risky. I'm into security myself.

1 2 3 4 5
Strongly Disagree Strongly Agree

Retirement is an age away. I'll think about it later.

I don't know where or how to invest.
1 2 3 4 5
Strongly Disagree Strongly Agree

Financial protection is part of an investment plan.

1 2 3 4 5
Strongly Disagree Strongly Agree

Finding out about investments is expensive and/or time consuming.

1 2 3 4 5
Strongly Disagree Strongly Agree

I don't know what an investment could do for me.

1 2 3 4 5
Strongly Disagree Strongly Agree

The key to a successful plan is to start early and save regularly.

1 2 3 4 5
Strongly Disagree Strongly Agree

Investment needs to be done with the head, not the heart.

1 2 3 4 5
Strongly Disagree Strongly Agree

22
 Module 8
A personal investment approach Topic 8.4

My investment style
Worksheet 7
2. Add some of your own statements here.

3. One statement I agree with in particular is.

23
 Module 8
A personal investment approach Topic 8.4

Risk and return

Worksheet 8
In the past, interest rates have tended to be higher or lower depending on what is happening
in the world economy. Nobody knows what the future holds for interest rates, but whatever
they are, we owe it to ourselves to get the highest interest rate that is safely possible. Interest
rates have a great effect on compounding and therefore our total savings. That is why many
internet savings accounts offered by companies such as ING Direct, Bank West and AMP have
become so popular because they offer their customers a higher rate of interest than everyday
banking accounts. A trade-off for customers receiving a better rate of interest is that these
accounts can only be accessed over the internet and they may not be as flexible as everyday
savings accounts.
NOTE: www.fido.gov.au>Money tips>About financial returns contains detailed information
about risk and rates of return.
1. Below are 4 different opportunities to get a higher return on your money. Read them
carefully.

Buy some shares on the stock market.

Deposit savings in a long term
No guaranteed return but you might
deposit and get 1% higher interest
increase your money

Lend your savings to the 17 year old Lend the money to the bloke in the
next door to buy a car. He promises newspaper ad who promises to
3% more than bank rates double your money in a month

a) Which option would you choose? Why?

b) Write a definition of "Return"

c) Write a definition of "Risk"

d) What types of investments pay large returns?

24
 Module 8
A personal investment approach Topic 8.4

Risk and return

Worksheet 8
e) What is the downside to this?

f) What is the relationship between Risk and Return?

25
 Module 8
Developing investment strategies Topic 8.5

Teacher Notes
Community and classroom activity:
Suggested time: 2 lessons

Student worksheets:
Worksheet 9: Matching investment terms
Worksheet 10: Life cycle approach to investment
Worksheet 11: Case studies – investment choices
Worksheet 12: Multi Media presentation
Resources: Newspapers and magazines with investment advertisements/
information
People of different age groups

From this activity students establish what people know about investment at different stages of
their life cycle. They build up an understanding of the range of investment options, and what
investments people believe match their needs and their stage of life. Students also test their
knowledge of investment related terminology.
(a) Start by distributing Worksheet 9 – Matching investment terms. Students will need to
match a variety of statements with a correct word from a given list. Discuss any words
that students are not familiar with.
(b) Students brainstorm their understanding of the term "investment". At what stage does
"saving" become "investing"? (Saving is the process of accumulating money. Investing
is structuring your savings in a way that maximises its return in a given timeframe). What
is the difference between "investing" and "speculating"?
(An investment must carry a return that is not solely related to change in value. If you
buy gold and simply hope for it to go up in value, you are speculating, not investing).
(c) Choice of activity: If your school allows student surveys complete option (i)
(i) Students complete the following survey activity using Worksheet 10: Life cycle
approach to investment
Students interview people at the following stages of their life cycle:
– just left school
– in early employment
– mid-employment (30 - 50 year olds)
– 50+ years to retirement
Record the results of the interviews on Worksheet 9. In groups, students compare
their findings and prepare a group result.

26
 Module 8
Developing investment strategies Topic 8.5

Teacher Notes
(ii) Where schools do not allow students to survey the school community, the class could
complete the following alternative activity.
Present students with the list of people shown on Worksheet 11. Students are to decide
whether each person:
– would save a lot or a little
– would place their savings into an investment
– would choose a particular type of investment.
Students could be referred to the terms/types of investment listed on
Worksheet 9: Matching investment terms.
The teacher may prefer to run this as a pairs or small group activity.
(d) Using this information, students prepare a report on the:
● differences in definitions (understandings) of investment
● range of examples in investments given
● comparative importance placed on investment at different stages of the life cycle.
(e) Distribute Worksheet 12 – Multi-media presentation. Working in pairs or small groups,
students create their own investment program using the guidelines provided. They
‘interview’ four people about their investment experiences and students have creative
control over the presentation of the program. Students could present ‘mock interviews’
based on investment scenarios found through research.
Resources:
www.fido.gov.auwww.ifsa.com.au>Information Area>Consumer Information and Fact
Sheets>Specialist topics>”Making the most of your money – Investment Basics”
www.understandingmoney.gov.au>investment
(f) Monitoring progress and assessment
Have students:
– check that each student has recorded the correct response in the missing word table
in Worksheet 8
– read out their examples of investment types that may be appropriate at different
stages of the lifecycle/for people at different ages. Worksheet 9 or 10
– provide their program/podcast/vodcast to listen to the stories from Worksheet 12. Ask
students to report back to the class about their interview findings.
(g) Debriefing — Reflective learning
Students reflect on whether their future approaches to investment may alter given the
results of interviewing four different people about their investment experiences OR their
research into different investment possibilities.

27
 Module 8
Developing investment strategies Topic 8.5

Matching invesmtnt terms

Student Worksheet 9
Investing is a way that people can put their hard savings to work. If a person does not spend
all of the income he/she earns, this surplus money becomes savings. This money could be
put aside in a bank account and slowly built up over time. Alternatively savings could be put
to work by using this surplus money to invest in shares, real estate, superannuation or other
types of investments.
1. Below is a matching terms exercise. Read each statement carefully and select the term
from the list below that relates to the statement. Once you have found the correct word,
fill in the table and cross that word off from the list.
Terms
● Safe
● Spend
● Mortgage
● Shares
● Location
● Car
● Term deposit
● Return
● Interest
● Investing

Statement Matching Word

1. The first major purchase a young person is lilely to make to
give them freedom to travel where they want to go.
2. If the investment was more risky you would expect a higher...?
3. When you put any surplus income to work to earn income
you are doing this.
4. When you buy a house and borrow money from a bank you
will have to make these type of regular repayments.
5. If you place your money into a savings account at the
bank you can expect that your money is...
6. If you do this with all the money and income you receive
you will not be able to invest.
7. This type of investment means that you gain ownership
of a certain percentage of that company.
8. This is one of the lowest risk investments available.
9. When investing in real estate, you should always choose
this carefully to maximise your long-term returns.
10. When taking your surplus money to the bank, you should
always ask the rate of ........... that they are paying you.

28
 Module 8
Developing investment strategies Topic 8.5

Matching invesmtnt terms

Student Worksheet 9
2. Define these terms and describe the difference between each.

Savings is

Investment is

Speculation is

29
 Module 8
Developing investment strategies Topic 8.5

Life cycle approaches to investment

Worksheet 10
Life cycle approaches to investment

Life cycle My description Examples Investments I Investments I

stage of investment currently have wish I had made
just left school

in early employment

mid-employment
(30-50 years)

50+ years - retirement

30
 Module 8
Developing investment strategies Topic 8.5

Case studies – investment choices

Worksheet 11
People at different stages of the life cycle will generally have different access to resources and
different goals. Consider the people listed in the table below. Decide whether each person:
• would save a lot or a little
• would place their savings into an investment
• would choose a particular type of investment.
Refer to the investment types listed on Worksheet 8 if you need to be reminded of the variety
of types of investments available. Remember that superannuation is a form of investment so
include it where appropriate.

Case study Would they save a Saver OR Types of

lot or a little investor investment chosen
Brett is 19. He is studying full time at
university, and supports himself with
a part-time job. He has an old car he
works on in his spare time. Brett lives
at home with his parents and siblings.
Yvette is 24, a qualified accountant
and shares a rented flat with Dimi
and Carly. She has recently received
a promotion at work. She expects to
work for her company’s USA division
next year.
Slatko is 35 and is a qualified
electrician. He is married and has
twin boys who are four years old.
His wife is a nurse, and does some
agency work at weekends to keep
her skills up, and earn some extra
money. Slatko and Fran are buying
their first home, and the monthly
payments take a fair proportion of
Slatko’s wages.
Paul is 40 and single. He is a lawyer
who works for a consumer advice
bureau in his spare time. He owns a
city apartment and loves to travel.
Val is 58. She is divorced and works
as a receptionist in a doctor’s clinic.
She has paid off her town house, and
has decided she would like to retire in
five years time. Her children are adults
and are financially independent.
Fred and Sadie are retired. Their
main source of income is the age
pension, but their bank savings earn
some interest which supplements
their pension.

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 Module 8
Developing investment strategies Topic 8.5

Multi media presentation

Worksheet 12
The last few years has seen a large increase in interest in television and radio programs
relating to investment. This activity will test your creativity in making your own Podcast/DVD
that looks at investing. Students may work in small groups or pairs to complete this task.
Alternatively, you could prepare a program for radio or TV.
To complete this task successfully you will need the appropriate recording media and software.
Guidelines about what to include in the program are as follows:

● Interview and record four different people about their experiences that relate to the
investment process. You could obtain this information by researching the internet to get four
different investment "stories" and have group members role play the different scenarios.
● Choose stories and/or people who have invested in different types of assets. For example real
estate, the stock market, coins (or alternative item) and fixed deposit/bank account investments.
● Make sure you identify:
• why the investor chose their particular type of investment
• the outcome (was it positive or negative)
• would they change their investment decision based on what they know now and
• how they felt about the outcome.
● Have at least one positive and one negative story to reflect the fact that not all
investments turn out well.

The style of presentation for the program could be:

1. Narrative - where you let the person tell their story on investment, with less talking by you
2. Interview based - where you ask a range of questions and record the responses as you go
along
3. News style program - where you record the program like a current affairs program.
Introduce each story and provide your own opinions and information pieces throughout
the program
4. A factual resource for people interested in learning about investment.

Strategies for an effective program:

● speak clearly and at an appropriate pace so that the listener can understand you
● introduce each person on your program to give the listener some background
information
● make the program interesting to the listener- you might use humour or interesting stories
to achieve this
● write down what questions you are going to ask the person being interviewed before
hand so that you come across as being well prepared.

32
 Module 8
Understanding investments Topic 8.6

Teacher Notes
Community and Classroom activity:
Suggested time: 2 lessons

Student worksheet:
Worksheet 13: Comparing types of investments
Resources: www.ifsa.com.au>Information Area>Consumer Information and
Fact Sheets>Specialist topics>”Making the most of your money –
Investment Basics”
www.fido.gov.au>Money Tips>Managing your money>Starting you
personal investing
Various bank websites and money magazines with investment
information.
From this activity students develop an understanding of investment choices (types of
investments) and key factors to consider when investing.
(a) Students produce a graffiti board of any items people have invested in. Alternatively the
teacher could build up a blackboard summary of student suggestions. Once a number
of items have been listed, students could be asked to develop a way of classifying these.
Essentially the class should develop a list under the following headings:
1. Physical items such as art, wine, collectables such as stamps or coins, or sporting
memorabilia. These types of investments often result from a person’s interests and can
be regarded as requiring some expert knowledge or interest.
2. More traditional types of investments such as shares, property, fixed interest or
bonds and cash. People can specialize in subgroups of these categories. Students may
be aware of sub categories such as Australian shares/international shares, or residential/
commercial/industrial property.
(b) Following the class discussion, students could complete the first question on
Worksheet 13: Comparing types of investments.
(c) Talk to students about two very important aspects of investing that potential investors
need to consider when making decisions:
Background:
(i) What are ‘Returns from investment’? This describes the ‘gain’ (the return) an investor
receives from their investment. Returns on investments can be of two main types:
● Income returns. Examples - an investor who owns and rents out a flat will receive
rental income from the tenant. A bank account will earn interest while a share owner
may receive dividends for each share owned.
● Capital growth. Some assets increase in value over time and when the asset is sold,
the investor receives a larger amount than they paid. This is called a capital gain.
Property, gold, shares may all make a capital gain for their owner. Of course, some
assets may actually fall in value: in such a case the owner makes a capital loss.
Some investments may provide a combination of these two types of return. Purchasing
a house as an investment may earn investment income weekly and also provides a
potential capital gain if it increases in value over time.
33
 Module 8
Understanding investments Topic 8.6

Teacher Notes
(ii) Students complete the matching exercise (Question 1) on Worksheet 13.
(iii) What is meant by ‘Risk vs Returns’?
All investing involves a trade-off between risk and return – you cannot invest without
taking some risk. As investors cannot completely avoid risk, they need to understand
risk. What do we mean by the term ‘risk’? Investment risk is the risk that you might have
to sell your asset at a time when the investment is worth less than you paid for it. The
more volatile an investment, the greater the fluctuation in the return an investor receives,
from month to month or/and from year to year
Students complete Question 3 on Worksheet 13 which considers the concept of risk and
what students need to understand about risk and how it can be minimized. Students
then rank the Investment Classes (cash, commercial property, international shares,
petroleum exploration) in order from low to high risk. These can be cut out from the
worksheet and stuck onto the risk continuum provided.
Identify the relationship between risk and return for each investment class and note some
examples of each asset class. Using the newspaper or any other investment literature
available from stock brokers, financial planners and advisers, and financial organisations,
find some examples within each subclass. Pictures that represent each of the different asset
classes could be cut out and pasted in the space provided in the table in Worksheet 13.
Each group could choose an asset class and find out the expectations about:
– whether it is likely to increase in value (capital growth)
– whether it is likely to produce an income and how much
– if there are any tax advantages relating to it. Remember that these are not
permanent - governments can change these.
– the liklihood of volatility (have marked swings in value) and therefore risk
– how much skill, time and knowledge is required to investigate and monitor the
investment
– how readily the investment can be turned in to cash (liquidity)
– what are the costs associated with investing in that asset class.
Each group would report their findings to the class.
(d) Monitoring progress and assessment
Check that each student has recorded the correct response to Worksheet 13.
Group reports on each asset class.
(e) Debriefing — Reflective learning
Students can
– reflect on their own risk profile and expectations about investment returns.
– assess the advantages of investing in a mix of investment classes - Worksheet 13.
– investigate the principle of diversification. What does it mean by a "diversified
portfolio"?

34
 Module 8
Understanding investments Topic 8.6

Comparing types of investments

Worksheet 13
1 The following list contains a number of different items purchased for investment purposes.
Write each word in the appropriate column of the table below the list of words.

A house Coins Bank deposit BHP shares Online savings Australian

account government
bonds
A shop nab shares Microsoft shares US bonds A factory building Olympic torch
(Sydney 2000)
Term deposit Diamonds Property trust Stamps Toll holdings Gold bars
(shares)

Types of investments
Shares Property Cash Fixed interest Other

2 a) What is meant by the term ‘return on investment’? Explain the two main forms a
return on investment can take.

b) The following assets are being held as investments. Identify whether they would earn
income, a capital gain or both? Identify the type of income which would be earned, if any.

Asset Could earn Will earn income Name of income Possibly earn both
a capital gain income & a capital gain?

Bank deposit

House

Woolworth shares

Gold bar

Government Bond

3 All investing involves a trade-off between risk and return – you cannot invest without
taking some risk. Explain what is meant by the term ‘risk’.

35
 Module 8
Understanding investments Topic 8.6

4. Place the terms below along the continuum from highest risk to lowest risk.

Comparing types of investments

Worksheet 13
Highest Lowest
risk risk
a. Commercial property b. Residential property c. Shares in a petrol exploration company
d. Online bank account e. BHP shares f. Inner city apartment

5. Working with a partner, indicate what sort of return you would expect from each investment.

6. Did you see any relationship between the degree of risk and the level of return you
expected?

7. Use newspapers and magazines to cut out pictures that represent each of the asset classes
listed below. When you have found suitable pictures stick them in the space provided in the
table below. Write words under each of the pictures to say what they represent. (For example it
might be a picture of a high rise apartment that represents residential property investment or a
picture of an Australian company that represents Domestic (Australian) shares).

Asset class Examples

Cash

Commercial property

Domestic (Australian) shares

International shares

Residential property

Petroleum exploration company

36
 Module 8
Understanding investments Topic 8.6

8. Your teacher will allocate your group one of the assets listed in the table above. Members of

Comparing types of investments

Worksheet 13
your group should research its features according to the following criteria:
• capital growth (increase in value)
• income producing (how much)
• tax advantages
• marked swings in value (volatility)
• personal input required (time, skill, knowledge)
• ability to be converted into cash (liquidity)
• any other cost involved.

Students interested in reading further about returns and risks of investment can go to
www.fido.gov.au > Money tips > Risks and return

9. Diversification means

37
 Module 8
Planning to invest Topic 8.7

Teacher Notes
Classroom activity:
Suggested time: 2 lessons

Student worksheet:
Worksheet 14: Guidelines for investors
Resources: Golden rules for becoming financially free (Adapted from several
financial advisory sources)
Websites: www.westpac.com.au
www.commbank.com.au/personal/investment/InvestmentBonds.asp
www.amp.com.au
www.fido.asic.gov.au>scams and warnings. This section
includes a number of useful sections on scams.
www.scamwatch.gov.au This site looks at a number of
categories, including Investment scams, Money transfer requests,
Banking and online scams, mobile phone scams and many others.

From this activity students gain an awareness of some of the Australian companies that
offer assistance to people wanting to invest money. An appreciation is also gained about the
golden rules for becoming financially free.
(a) Beware of Scams. Refer students to www.asic.gov.au>scams and warnings. If internet
access is available have students read about the Pie in the Sky Award – awards made
by ASIC to increase people’s awareness of scams. If internet access is limited, print off
some examples and discuss with students why these schemes work, how they appeal to
investors and how to avoid being scammed. Complete Worksheet 14 – Guidelines for
investors.
Remind students that they need to consider how their super funds are invested as part of their
overall investment strategy. Even if students think investment is not something that they will be
able to “afford” in the near future, in fact their super contributions make them investors.
(b) Students read the section headed Golden rules for becoming financially free. In groups,
discuss what these golden rules might mean. Work through the golden rules activities in
the boxes (Worksheet 14). These different scenarios cover rules such as paying yourself
first, it’s what you get to keep that counts, the importance of getting rid of debts,
borrowing for investment purposes and regular saving makes investing easy and less risky.
(c) Monitoring progress
● Check through student notes after the internet search to see if they recorded appropriate
information on some of the different investment vehicles available in Australia (Worksheet 14)
● Discuss the answers students put to the golden rules of becoming financially free
(Worksheet 14)
(d) Debriefing — Reflective learning
Have students consider:
– How does "Paying yourself first" change the way you think about what money you have?
– Can debt be more expensive than it initially appears?
– How your marginal income taxation rate influences the total cost of debt.
38
 Module 8
Planning to invest Topic 8.7

As a journalist you have been asked to research the ways people and their money are parted

Guidelins for investors

Worksheet 14
through scams. During your research you have heard about a great money-making scheme
called ‘Electroharvest’ which will save consumers 37% off their household power bills. It is
promoted on the website, www.electroharvest.com.
1. Prepare a summary of this scheme as background for a consumer investigation.
2. For the next edition you have been asked to prepare a lead story on scams.
• prepare a snappy lead into the story
• explain some of the common types of scams
• have an interview with people who have been scammed and how it effected them
financially and their lifestyle
• try to get an interview with a scammer
• find out how a person can protect themselves and report them

Go to www.fido.gov.au >Scams and warnings to research your information.

Another source of recent scams is the Australian Securities and Investment Commission
(ASIC) ‘Pie in the Sky Awards’ found on the FIDO website.
State Consumer Affairs bodies have sections on scams.
ASICs website contains ‘The little black book of scams’
www.scamwatch.gov.au has a lot of information on a wide variety of scams.
3. There are many companies offering assistance to a person wanting to invest money.
Australian banks offer advice to their customers as they have a range of investment
products that they want to sell.
Below are three of them.
1. http://www.westpac.com.au
This opens at the home page. You will need to click on ‘Investment and Superannuation’.
Now select ‘Learn about investing’ and make notes on the different investment types.
Once you have completed this, select "key financial terms" and define: compound interest,
dividends, gearing, portfolio, property trust, return and shares.
Finally make notes from the section on "what can a financial planner do for me?"
2. http://www.commbank.com.au/personal/investment/InvestmentBonds.asp
Go to Investments and Superannuation. Click on and read the various types of investments
available and list and describe what is available from the Commonwealth Bank. (They are
typical of what all Australian banks will offer).
3. http://www.amp.com.au
Select Investments and then Products to view the range of investments that AMP is offering.

39
 Module 8
Planning to invest Topic 8.7

Guidelins for investors

Worksheet 14
Remember the Golden Rule, "He who has the gold, rules".Golden rules for becoming
financially free.
4. Think about the following golden rules for becoming financially free:

a) Pay yourself first

Does this mean:
1. Save some money first before you start to spend any?
2. Give yourself an hourly wage for doing the household chores?
3. Give yourself some extra spending money before you consider paying your bills?
What method could you use to make sure that you put some money away for savings
before you start spending?

Suggest where this money should be put.

b) It’s what you get to keep that counts

Does this mean:
1 It’s what you don’t spend that is important?
2 It’s the after tax returns on investment and savings that are important?
3 Avoid giving any money away if possible?
You have $1000 given to you as a gift for turning 18 on the condition you don’t spend
it. You decide to choose between:
A. tax-free investment, which will return 6.5%
B. taxable investment, which will return 8%.

What is the annual return for each investment?

40
 Module 8
Planning to invest Topic 8.7

Guidelins for investors

Worksheet 14
c) Get rid of your debts
Why should you do this:
1 All debt is a bad thing?
2 Debt is more expensive than people realise?
3 Borrowing money is money spent in the past?
All debt is not necessarily bad and debt is in fact paying in the future for past spending.
Suppose Hannah spent up to her credit card limit ($1500) and only paid off the minimum
balance each time (leaving her with no available credit allowance on her credit limit at
the end of each month). At 18% annual interest (1.5% per month), what is her annual
interest bill?

d) If you must borrow, borrow for investment

What is meant in general by this statement?
1 Borrow to put money in a different bank account?
2 Borrow to buy things that may go up in value?
3 Borrow if the interest costs are tax-deductible?
In general, if you borrow for everyday consumption, your interest costs are not tax-
deductible from your income. If your investment allows you to deduct the interest
payments from your investment income, you are paying less tax.
So, if you have a choice between buying a consumption item for $10,000 (such as an
overseas holiday) and buying an interest tax-deductible investment for $10,000, and you
must have both items, borrow the money to buy the investment item and use your own
money for the consumption item.

e) Regular saving makes investing easy and less risky

Regular saving encourages you to:
1 be more aware of what your investments are doing
2 take advantage of a small amount growing to a larger amount (time and
compounding)
3 make savings a habit, and removes the likelihood of not saving anything at all.

41
 Module 8
Learning from the professionals Topic 8.8

Teacher Notes
Community/mentor activity:
Suggested time: 1 lesson

Student worksheets:
Worksheet 15: Revisiting savings and investment concepts
Worksheet 16: A visit from the professionals
Resources: A person who is familiar with the investment industry.
Multiple pairs of scissors/glue

From this activity students will link a range of key concepts that relate to both savings and
investments. Students will also gain information from a professional in the investment industry
to gain another perspective on this complex and ever changing industry.
(a) Distribute Worksheet 15 – Revisiting savings and investment concepts. Students can
complete this task individually or in pairs. They will need to cut out the range of terms
provided and put them into the form of a ‘savings’ and ‘investing’ story. There is no right
or wrong answer so students are free to use the terms as prompts to piece their own
story together.
(b) In the previous activities, students have been alerted to the four foundation stones of
financial independence — time, discipline (commitment), knowledge and strategy. They
will have built up an understanding of the various factors which contribute to making a
personal investment decision.
The following activity requires a visit from/to an ‘expert. If this cannot be arranged,
consider changing the activity to a reflective activity which requires students to consider
these issues individually.
A useful way of getting the knowledge about the various investment sectors is to ask
someone from the industry to explain them and identify their characteristics.
Students may have a range of situations (possibly as a result of their life cycle interviews),
in order to construct questions. Distribute Worksheet 16 – A visit from the professionals
for students to look through.
(c) Before the visit of the professional
Students devise a range of questions they have from previous activities.
Ask the visitor in advance to comment on what is meant (in the industry jargon) by:
● goals
● time frame
● risk (volatility) tolerance
● level/amount of knowledge
● requirements of the investment (should it increase in value or provide income)
● amount of regular saving available for investment.
(d) Ask the visitor to give an overview of different investment classes and their characteristics.
Students prepare a range of circumstances, either potential or from the experiences of
other people, about which they would like advice and comment.
42
 Module 8
Learning from the professionals Topic 8.8

Teacher Notes
(e) After the visit
● a student thanks the visitor
● the teacher provides feedback to the visitor
● in groups, students prepare a summary on the key aspects of strategy and knowledge,
outlined by the speaker.
(f) Alternative approaches
Students arrange to visit industry personnel at their place of work to ask their questions.
(g) Monitoring progress
● Read through the investment and savings story provided by each student to ensure
that the terms have been matched correctly under the headings ‘savings’ and
‘investments’ (Worksheet 15)
● Review the list of student questions provided in the table in Worksheet 16 to view for
appropriateness
(h) Debriefing — Reflective learning
Have students:
– compare their expectations and understanding from discussion with the visitor
– consider what measures could be taken to increase their level of knowledge.

43
 Module 8
Learning from the professionals Topic 8.8

Revisiting savings and investment concepts

Worksheet 15
Below are terms that relate to saving and investing. Cut out each item and arrange in the
form of a concept map. The main headings you should use are:
● SAVING
● INVESTING

Using all the terms create a short story under the headings of "Saving" and "Investing"

SAVING RESIDENTIAL PROPERTY

INTEREST RATE SURPLUS

GOAL SETTING INVESTING

SPENDING LIFE CYCLE

CASH MONEY DIARY

DEBT RISK

SHARES DEFICIT

BUDGET DIVERSIFY

44
 Module 8
Learning from the professionals Topic 8.8

A visit from the professionals

Worksheet 16
1. Questions I would like answered about investment.

Questions Answers

Key information I learnt about

● goals
● time frame
● risk tolerance
● level/amount of knowledge
● requirements of the investment (should it increase in value or provide income)
● amount of regular saving available for investment.

What I discovered about investing.

45
 Module 8
Putting it all together Topic 8.9

Teacher Notes
Research/Classroom activity:
Suggested time: 2 lessons

Student worksheets:
Worksheet 17: Putting it all together.
Resources: Internet/ computer access – access to sites referred to throughout
the module
Newspapers (such as The Financial Review)
From this activity, students can gain an overview of investment options. In previous activities,
students have been alerted to the role of savings and investment in the process of preparing a
personal investment strategy. By identifying the general characteristics of each, students can
appreciate the choices they will need to consider when making an investment.
(a) Working individually or in small groups, students prepare a publication that gives advice
to investors. This publication could take the form of a:
Webpage/Podcast/PowerPoint Presentation/Brochure/Investor Fact Sheet/a magazine article.
Topics that could be examined include:
• the benefits of saving/tips to help you save
• how to build saving and investing into their budget
• the importance of goals and personal factors when investing
• types of investment available
• aspects of investments to be considered
(this would include aspects such as risk, time available etc)
• dangers for investors – misinformation and potential scams.
(b) Each group could present their findings to some part of the school community. It may
be possible to present their findings to their own class, other classes in the year level, at
school information nights or open nights, school newsletter or school webpage.
(c) Monitoring progress
Have students:
– assess the content and presentation of the material students have provided on their
web page (Worksheet 17)
(d) Debriefing — Reflective learning
Have students consider:
– what they have learned about saving and investing that they would try to apply in
their own lives

46
 Module 8
Putting it all together Topic 8.9

This is a creative response and requires you to create your own publication covering the

Putting it all together

Worksheet 17
following areas:
● the benefits of saving/tips to help you save
● strategies to help people save. Building saving and investing into your budget.
● the importance goal setting can play in saving and investing
● types of investment available in Australia (specifically property, shares, fixed interest and
cash)
● why people might put their savings into alternative types of investments (consider the
level of risk individuals are prepared to accept
● importance of time when investing
● dangers for investors – misinformation and potential scams
● frequently asked questions (FAQs) people have about savings and investment
● where to go for further information. (Be specific!)

Your publication is to be aimed at students OR parents OR the general community. Include

appropriate written information, colours, graphics and pictures that would be suitable and
which would appeal to your selected target audience.
Your publication can give advice to investors. Possible format for your publication includes a
Webpage/Podcast/PowerPoint Presentation/Brochure/Investor Fact Sheet/a magazine article.
Present your findings to your class. Hopefully you will also be able to present your findings to
a wider audience, such as other classes in the year level, at school information nights or open
nights, in a school newsletter or school webpage.

47
 Module 8
Making saving and investment choices Topic 8.10

Teacher Notes
Research and classroom activity:
Suggested time: 1 lesson

Student worksheets:
Worksheet 18: Making choices and getting advice
Worksheet 19: Savings and investment true/false revision quiz
Worksheet 20: Saving and investing word search
Resources: Any industry pamphlets or newspaper articles
Website: www.amp.com.au>Financial Planning>What you need
to know>Selecting a financial planner.
www.fido.gov.au>Money tips>Getting advice
www.ifpa.asn.au>Publications “How to Choose a Financial Planner”

In previous activities, students have been alerted to the role of savings and investment in the
process of preparing a personal investment strategy. This activity is designed to alert students
to the professional advice available in the community and their personal responsibility to
ensure that their decisions reflect their needs and aspirations. A review of the work completed
in this module is also conducted.
(a) Distribute Worksheet 18 – Making choices and getting advice.
Students are required to finish off a script between a financial advisor and a prospective
client. Students will need to do some prior research on the AMP website under the
section on ‘Selecting a financial planner’.
They will then have the opportunity to finish the script and perform it in front of the class.
(b) Question 2, Worksheet 18 students consider a personal situation that has arisen in their
family where a choice has been made between paying off debt, saving for the future and
investing some of the savings.
(c) As a fun way to finish off the module, students are to complete Worksheet 19 – Savings
and investment true/false revision quiz. They will need to answer 20 questions that cover
the concepts completed in this module.
(d) Monitoring progress and assessment
● Evaluate the script and performance of the script (Worksheet 18)
● Check answers to the true/false revision quiz (Worksheet 19)
Note: the answers to the quiz are included at the end of Module 8 – Teacher Notes
● Saving and investing word search (if completed).
(e) Debriefing — Reflective learning
Students are to consider whether they would consider using a financial planner or
finance expert in the future to plan important savings and investing decisions.

48
 Module 8
Making saving and investment choices Topic 8.10

Solution to Worksheet 20 word search:

Teacher Notes
Statement (Circle the correct response) True False
1. Goal setting can be used to achieve savings targets sooner True False
2. If you spend more than you earn you will end up with a surplus True False
3. People’s attitudes to savings can vary substantially depending
on their spending habits True False
4. The effect of compounding is usually very small over a long
period of time True False
5. Investing in Australian Government bonds carries a higher
risk than investing in new Australian movies True False
6. Keeping a regular money diary is one sensible strategy to
make you save better True False
7. When going for a large loan from a bank they would usually
take your savings history into account True False
8. It never makes sense to borrow money to invest – you should
always save the money instead True False
9. Many people visit a financial planner to get advice about
alternative types of investment True False
10.If you save a larger sum of money, the rate of interest
available from a bank is likely to be higher than if you only
had a smaller amount True False
11. Budgeting is a useful tool in the savings process True False
12. Commercial property investment involves buying and selling
suburban apartments and houses True False
13. The higher the risk of an investment, the higher the rate of
return that would be expected True False
14. Borrowing to invest money in Australian shares or property
carries no tax benefits True False
15. A person’s investment priorities may change depending on
where they are in their life cycle True False
16. Diversification of investments is an important strategy to
minimise risk True False
17. Investing in overseas shares is riskier than investing in
Australian shares True False
18. Once a person has established an investment portfolio
this does not need to be reviewed on a regular basis True False
19. Speculative investments should be done with caution due
to the higher risks involved True False
20. When making investment decisions you should only ever
think of investing within Australia True False

49
 Module 8
Making saving and investment choices Topic 8.10

Making choices and getting advice

Worksheet 18
References:
www.amp.com.au>Financial Planning>What you need to know>Selecting a financial planner.
www.fido.gov.au>Money tips>Getting advice
www.ifpa.asn.au>Publications “How to Choose a Financial Planner”
1. Choosing the right person to get investment advice is not as easy as it seems. People
often don’t realise that the so-called "investment expert" they are talking to may be
getting paid on commission and therefore under pressure to sell you their product
regardless of how good it may be for your investment portfolio.
Below is the beginning of a script of a person who is trying to select a suitable financial
planner. Your job is to continue on and finish off the script. To help give you ideas about
what should be included in your script you will need to read through the advice on how
to choose a financial planner that is provided on the AMP website www.amp.com.au.
Select "Financial Planning" from the main toolbar and then select "what you need to
know". You can then choose "selecting a financial planner".
The two central characters in the play are:
● Bree- a person who lacks experience in investing and saving and is therefore seeking
expert financial advice.
● Nancy- the potential financial planner that Bree has come to see.
This task should be completed in pairs.
When you have completed your script you will need to rehearse this with your partner as
you will be role-playing the situation in front of the class.

Scene 1: Reception where Bree and Nancy meet for the first time
Nancy – Good morning, you must be Bree
Bree – Hello, nice to meet you.
Nancy – Thank you for coming to meet with me today. Please come through to my office.
Bree – Thank you.
Scene 2: Inside Nancy’s office where they are getting to know each other
Nancy – Is this the first time you have been to a financial planner?
Bree – Yes it is. I was a bit unsure about coming to speak to a financial planner but as I
have little experience in investing money I thought this might be a sensible idea. Do
you mind if I ask you a few questions?
Nancy – That would be excellent Bree.
Bree – Firstly, I would like to know if you are licensed to give advice?
Nancy – Yes I am licensed by the government to provide advice and services in relation to a
range of financial products and services.
Bree - As I want to ensure that I receive unbiased advice could you please provide me
with a copy of your Financial Services Guide? I would like a written explanation
about the advice you will give me about financial products and services.
(Nancy goes into her first drawer and gets a Financial Services Guide out for Bree) 50
 Module 8
Making saving and investment choices Topic 8.10

Nancy – Here we go Bree – we always give our clients a written copy of this document. You

Making choices and getting advice

Worksheet 18
can see that I receive the same commission regardless of which investment types I
suggest to you.
Bree – It is a relief to know I will be receiving impartial advice.
Now it’s your turn to finish off the script! Be guided by the seven questions to ask your
financial planner that are available if you follow the link on the AMP website. Be creative
and make it both relevant and interesting. Good luck!
2. Personal Reflection Question: A personal situation has arisen in a family where a choice
has to be made between paying off debt, saving for the future and investing some of
the savings. Because you have done a course in Financial Literacy, your advice is sought.
What would you say and why?
Your answer:

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 Module 8
Making saving and investment choices Topic 8.10

Now it’s time to put your understanding of what you have learnt in this module into practice.

Savings and investment revision quiz

Worksheet 19
1. Read each question carefully to determine whether it is true or false. When you have
decided on the answer circle the response below.
Statement (Circle the correct response) True False
1. Goal setting can be used to achieve savings targets sooner. True False
2. If you spend more than you earn you will end up with a surplus. True False
3. People’s attitudes to savings can vary substantially depending
on their spending habits. True False
4. The effect of compounding is usually very small over a long
period of time. True False
5. Investing in Australian Government bonds carries a higher
risk than investing in new Australian movies. True False
6. Keeping a regular money diary is one sensible strategy to
make you save better. True False
7. When going for a large loan from a bank they would usually
take your savings history into account. True False
8. It never makes sense to borrow money to invest – you should
always save the money instead. True False
9. Many people visit a financial planner to get advice about
alternative types of investment. True False
10.If you save a larger sum of money, the rate of interest
available from a bank is likely to be higher than if you only
had a smaller amount. True False
11. Budgeting is a useful tool in the savings process. True False
12. Commercial property investment involves buying and selling
suburban apartments and houses. True False
13. The higher the risk of an investment, the higher the rate of
return that would be expected. True False
14. Borrowing to invest money in Australian shares or property
carries no tax benefits. True False
15. A person’s investment priorities may change depending on
where they are in their life cycle. True False
16. Diversification of investments is an important strategy to
minimise risk. True False
17. Investing in overseas shares is riskier than investing in
Australian shares. True False
18. Once a person has established an investment portfolio
this does not need to be reviewed on a regular basis. True False
19. Speculative investments should be done with caution due
to the higher risks involved. True False
20. When making investment decisions you should only ever
think of investing within Australia. True False
52
 Module 8
Making saving and investment choices Topic 8.10

Savings and investment revision quiz

Worksheet 19
2.
a) The key points I have learned so far about my own approach to savings and
investment include:
(An example might be: I am right on track overcoming any barriers to saving.)

b) The key points I have learned so far about savings and investment include:
(An example might be: I didn’t realise the powerful impact of the magic of
compounding.)

c) This module has helped me by:

d) Other people I have talked with have helped me by:

3. The major principles of savings and investing are as follows:

a) Achieving financial independence requires a savings commitment and an
understanding of the principles of investment. In order to make a savings
commitment, I need to:

53
 Module 8
Making saving and investment choices Topic 8.10

Savings and investment revision quiz

Worksheet 19
b) Savings is a long-term, lifetime habit. Current habits I will need to (re)consider are:

c) Successful investing requires a plan, based on knowledge. Planning decisions I need

to make are:
● next year

● during the next 2 - 5 years

● beyond five years

● towards retirement

d) Security lies in diversifying investment choices. Investment choices I will need to take
into consideration are:

54
 Module 8
Making saving and investment choices Topic 8.10

Savings and investment word search

Worksheet 20
As an exercise complete the word search below

B R O P U S N Y T S H C I B S
X E H T O T O A T G E N P P C
U T Z S C R I D U R C R E Z Z
R U Y C H A T I E O E N A W Y
U R E H Y T A F M F D P T H E
E N N Z J E U E O I I N O E S
G M O E O G N G N L E C L R S
A Z M I R Y N G B M I T I G P
G P Q I Z Y A L T O M O N T I
T R D I V E R S I F Y I Y J Z
R C S E S N E P X E V W G D L
O T T L P V P M O A R I S K N
M U A J N U U R S U R P L U S
D O G I T B S Q I T E G D U B
G E F A Q U V Y T D D I E Q Q

BUDGET PROPERTY
DEFICIT RETURN
DIVERSIFY RISK
EXPENSES SAVINGS
GOALS SHARES
INCOME SPENDING
INVESTMENT STRATEGY
MONEY SUPERANNUATION
MORTGAGE SURPLUS
PORTFOLIO

55
 Module Nine
Financial Planning for your Future

In partnership with
 Module 9
Financial planning – take charge of your future

OVERVIEW

Teacher Notes
Module Overview and Curriculum Mapping
Module 9 highlights the need for, and proposes strategies for short and long term financial
planning

ENDURING UNDERSTANDINGS
• Goals in your financial plan should reflect your values.
• Each financial plan should include short, medium and long term goals which specify what
you want to achieve and how.
• Financial planning is an active, evolutionary process, requiring regular monitoring.
• Only you can make your financial plan happen.

LEARNING OUTCOMES
Students:
• Describe the processes of financial planning
• Understand that time, commitment and knowledge are key factors in financial planning
• Recognise the part budgeting, risk management, debt management, and saving and
investing play in financial planning for retirement
• Match financial management with personal capabilities and living patterns
• Develop a positive approach to ensuring their personal financial independence

POWER WORDS Page 2

CURRICULUM MAPPING 3

LIST OF TOPICS
9.1 Superannuation – why do we need it? 5
9.2 The reality shock – what would I have done? 14
9.3 Funding superannuation – why should I do it? 17
9.4 Superannuation – what do I need to do? 21

1
 Module 9
Financial planning – take charge of your future

POWER WORDS

Teacher Notes
Module Overview and Curriculum Mapping
As students work through each topic in this module they will encounter words that may be new
to them, crucial to understanding and completing the worksheets, and/or difficult to spell. In
addition, students may simply find some of this vocabulary interesting and want to use it in the
future. Understanding and being able to use these words will provide students with more power
to make future financial decisions.
There are several approaches to using this “glossary”. The intention is for students to investigate
and find the meanings. They could be given the complete list before they start the module, or
they could set up a table and add new words as they progress through the activities. There are
also specific POWER WORD activities in some topics.
This list is not exhaustive.

accumulation Financial year

Administration fee Growth fund
ASIC hedging
asset index
Asset allocation inflation
ASX Investment mix
ATO Investment performance
beneficiary Investment strategy
Capital gain Life expectancy
Co-contribution lifestyle
commitment Lump sum
commodity Member benefit statement
Compulsory contribution OTE
consolidate Personal contribution
contribution preservation
CPI retirement
Defensive asset Risk management
dependant Salary sacrifice
diversification SMSF
equity spouse
estate superannuation
Dependant Tax free threshold
dividend Tax strategy
Employer contributions TFN
Financial planner

2
 Module 9
Financial planning – take charge of your future

CURRICULUM MAPPING

Teacher Notes
Module Overview and Curriculum Mapping
ENGLISH MATHEMATICS GENERAL CAPABILITIES
LITERACY YEAR 9 NUMBER & ALGEBRA LITERACY
Interacting with others YEAR 9 Comprehending texts through listening, reading
• plan, rehearse and Money & financial and viewing
deliver presentations, mathematics Navigate, read and view learning area texts
selecting and sequencing • Solve problems • Navigate, read and view a wide range of more
appropriate content and involving simple interest demanding subject-specific texts with an extensive
multimodal elements (ACMN211) range of graphic representations
for aesthetic and playful NUMBER & ALGEBRA Interpret and analyse learning area texts
purposes (ACELY1741) YR 10 • Interpret and evaluate information within and
Interpreting, analysing, Money & Financial between texts, comparing and contrasting
evaluating Mathematics information using comprehension strategies
• Interpret, analyse and • Connect the compound (ACMSP253)
evaluate how different interest formula to NUMERACY
perspectives of issue, repeated applications
event, situation, Estimating & calculating with whole numbers
of simple interest
individuals or groups Use money
using appropriate
are constructed to serve digital technologies • Evaluate financial plans to support specific financial
specific purposes in texts (ACMNA229) goals (ACMNA211)
(ACELY1742) Using fractions, decimals, percentages, ratios f&
STATISTICS &
Creating texts PROBABILITY YR 9 rates
• Create imaginative, Data representation & Interpret proportional reasoning
informative and interpretation • Illustrate and order relationships for fractions,
persuasive texts that decimals, percentages, ratios and rates (ACMNA208)
present appoint of view • Identify everyday
questions and issues Interpreting statistical information
and advance or illustrate Interpret data displays
arguments, including texts involving at least one
that integrate visual, print numerical and at least • Evaluate media statistics and trends by linking claims
and/or audio features one categorical variable, to data displays, statistics and representative data
(ACELY1746 and collect data directly (ACMSP253)
and from secondary
• Use a range of software, sources (ACMSP228) CRITICAL & CREATIVE THINKING
include word processing Inquiring – identifying, exploring & organising
programs, flexibly and information & ideas
imaginatively to publish Organise & process information
texts (ACELY1748)
• Critically analyse independently sourced information
to determine bias and reliability (ACELT1639,
ACMSP253)
Reflecting on thinking and processes
Think about thinking (metacognition)
• Give reasons to support their thinking, and address
opposing viewpoints and possible weaknesses in
their own positions (ACELT1640, ACMSP247)

PERSONAL & SOCIAL CAPABILITY

Self-management
Work independently & show initiative
• Establish personal priorities, manage resources
effectively and demonstrate initiative to achieve
personal goals and learning outcomes (ACELY1756)
Social management
Make decisions
• Develop and apply criteria to evaluate the outcomes
of individual and group decisions and analyse the
consequences of their decision making (ACMNA229)

3
 Module 9
Financial planning – take charge of your future

CURRICULUM MAPPING

Teacher Notes
Module Overview and Curriculum Mapping
NCFLF DIMENSIONS
Knowledge & Understanding
•Identify and explain strategies to manage personal finances
• Explain the various factors that may impact on achieving personal financial goals
• Analyse and explain the range of factors affecting consumer choices
Competence
• Create simple budgets and financial records to achieve specific financial goals, now and in the future
• Investigate the financial decisions required at significant life-stage events
• Analyse relevant information to make informed choices when purchasing goods and services and/or
to resolve consumer choices
• Compare overall ‘value’ of a range of goods and services using IT tools and comparison websites as
appropriate
Responsibility & Enterprise
• Explore the economic cost of individual and collective consumer decisions of the broader community
and the environment
• Apply informed and assertive consumer decision-making in a range of ‘real-life’ contexts
• Research and discuss the legal and ethical rights and responsibilities of business in providing goods
and services to consumers
• Appreciate that there is often on one right answer in making financial decisions because these
depend on individual circumstances, preferences and values
• Explain how, as financially active citizens, they fit into the broader economy and society through:
– Generating income & paying taxes
– Saving;
– Spending;
– Donating; and
– Investing
• Demonstrate awareness that family, community and socio-cultural values and customs can influence
consumer behaviour and financial decision-making

4
 Module 9
Superannuation why do we need it? Topic 9.1

Classroom Topic

Teacher Notes
Suggested time: 1 lesson

Student Worksheets:
Worksheet 1: Financial planning for the future
Worksheet 2: Meet the Scott Family
Worksheet 3: The Scott family profile

The following activity will provide students with the opportunity to examine a number of
people in different circumstances. By recognising other people’s situations, students can then
analyse their own positions.
(a) As a starting point distribute Worksheet 1 – Financial planning for the future. This
worksheet outlines the key concepts to be discussed. Conduct a class discussion to clarify
the meaning of each key concept.
It might be interesting for students to receive information on the amounts estimated
as required for retirement by Westpac Bank. In December 2007, assuming that people
owned their own home, Westpac estimated the required income at:

Estimated funds Single $ Couple $

required for
Comfortable retirement $36,607 p.a. $ 48,962
($702.04pw) ($939.00pw)
Basic lifestyle retirement $18,920pa $ 26,531
($362.85pw) ($508.82pw)

These figures can be updated at www.superannuation.asn.au>Westpac-ASFA Retirement

Standard.
To compare these amounts with the Age Pension Rates, go to www.centrelink .gov.au
and search Age Pension Rates.
At July 2008, the single pension is $546.80 per fortnight ($14,216 pa) and for a couple it
is $456.80 each per fortnight ($23,753 pa).

(b) Distribute Worksheet 2 – Meet the Scott Family.

As a class, read through the Scott Family scenario.

5
 Module 9
Superannuation why do we need it? Topic 9.1

Meet the Scott Family

Teacher Notes
Jack and Silvana are in their mid-50s and all their children have finally left home. For many
years they have been looking forward to the time when they would be ‘empty nesters’.
So far they have three grandchildren, and they enjoy looking after the children and
taking them for special outings. Silvana works full-time at the local medical surgery as a
receptionist, and Jack is working three days a week at a real estate agency, cutting back
his hours after having a mild heart attack last year. They no longer feel that they need a
big house, so they intend to sell and move to a smaller townhouse. They have recently
purchased a small cottage by the seaside where they plan to spend their weekends.
Before Jack’s heart attack they had planned to retire completely in about ten years.
However, they recognise that it may be sooner if Jack’s health doesn’t improve. In the 33
years that they’ve been married, Jack and Silvana have paid off their mortgage, put four
children through school and have managed a few holidays for the whole family. Until now
Jack and Silvana hadn’t begun saving seriously for their retirement, although both have
some superannuation. Most of their savings have been used to buy the holiday home.

John and Stephanie have been married for 10 years and have three children Julianne 7,
Lizzie 5, and Zac, 14 months. John is self-employed as a builder and enjoys spending his
time off playing golf. Before Zac was born, Stephanie worked full-time at a local dress
store and has recently returned on a part-time basis. They are keen to pay off as much of
their mortgage as quickly as possible before the three children go to secondary school.
They have put most of their extra cash into paying off the house and have no other
investments apart from Stephanie’s compulsory superannuation. John and Stephanie find
that after living expenses and paying off the mortgage there is little extra money to go
around. Over the past six months there has been a downturn in the building industry and
John’s business has struggled.

Maria is 25 and has been working for three years. She has been with her present
employer since completing her university degree. Her employer has contributed the
required super guarantee into her superannuation. This is not available to her until she
retires at 65. She is not in a permanent relationship at present and has no children. Since
starting work she has been sharing a house with two other women. She enjoys shopping,
movies with friends and eating out. She is planning to take a trip backpacking around
Europe in six month’s time. When she returns she hopes to return to university to improve
her qualifications and, sometime in the next five years, to buy a home. However she is
constantly struggling to put money aside. Her intentions are good but at the end of the
week there always seems to be an unexpected bill that needs to be paid. She has been
thinking that one way to save money may be to live with her Mum and Dad.

6
 Module 9
Superannuation why do we need it? Topic 9.1

Teacher Notes
Kim is 22 and started working in the advertising industry last year. Since starting in
advertising, Kim’s employer has been contributing the minimum 9% under the Super
Guarantee. She knows that she doesn’t earn as much as some of the people she works
with but really wants to be seen as part of the group. The advertising industry is very
trendy and Kim just loves all the glamour. She knows how important it is in this industry
to have the right look and to be seen at the right places. She puts a lot of effort into her
appearance and likes to keep up with the latest fashions. She has several credit cards and is
constantly juggling the payments so that she can afford her new lifestyle. Recently a friend
from work has suggested that they share an apartment in a trendy inner city suburb. Kim
knows that the rent is costly and that she would find it difficult to meet her living expenses
and lifestyle costs if she moves in. She is concerned that if she says ‘no’ her friend may be
offended.

Hugo, 20, is Silvana and Jack’s youngest child. He is completing a university degree and
lives with his girlfriend. When he completes his degree he would like to continue his
studies and specialise in microbiology. At the moment he has a part time job which pays
for his living expenses but has deferred the cost of his university course on HECs. Hugo
has very little in super as during university term he earns below the minimum where his
employer must deduct superannuation contributions. The small amount of super he has,
is scattered in a number of different funds with relatively high administration costs. His
relationship with his girlfriend is serious and they would eventually like to get married and
have children.

Chris is Jack’s brother. Chris is now 44, single and works as a teacher. He rents a flat not
far away from where Jack and Silvana live. Chris hasn’t bothered to think too much
about planning for the future. He contributes the minimum amount to superannuation
that the law requires. His attitude is that because he is single he only has to worry about
looking after himself. His main interest is travel and for his last trip he used his credit card
to finance the airfare. Recently he has been having trouble with his car. He isn’t sure how
he is going to replace the old car, buying a new car would mean less money to pay for his
next trip.

7
 Module 9
Superannuation why do we need it? Topic 9.1

(c) Divide students into groups. Distribute Worksheet 3 – The Scott Family Profile. Using the

Teacher Notes
scenario, have students build a profile of the family members. They should explain:
● their family situation (martial status, children, living arrangements)
● what each family member owns/owes
● any financial/retirement plans in place
● any commitments
● any goals members have
● their age and time left before retirement
● are they likely to have sufficient super to meet Wetspac’s comfortable retirement figures?
(d) Have each group report back on one of the family profiles prepared. Compare group
responses to each situation.
(e) Debriefing
Reflective Learning
Have students prepare their own profile by considering:
● Personal financial details – where am I now?
● Current and expected living arrangements (1-5 years)
● What is owned and owed?
● What needs to be checked out?
● Whether a need exists to revisit and clarify values?

In essence, students need to determine where do they want to go.

8
 Module 9
Superannuation why do we need it? Topic 9.1

Financial planning for the future

Worksheet 1
Read the following key concepts and their implications for your own future:
1. My values help set the goals in my financial plan.
2. Each financial plan should include short, medium and long term goals which specify what
I want to achieve and how.
3. Financial planning is an active, evolutionary process, requiring regular monitoring.
4. Only I can make it happen.

9
 Module 9
Superannuation why do we need it? Topic 9.1

Read the following scenario about the Scott Family. Underline key parts and/or make some

Meet the Scott Family

Worksheet 2
notes as you proceed. You will be asked using Worksheet 3 to prepare a ‘profile’ on each
family member.

Meet the Scott Family

Jack and Silvana are in their mid-50s and all their children have finally left home. For many
years they have been looking forward to the time when they would be ‘empty nesters’.
So far they have three grandchildren, and they enjoy looking after the children and
taking them for special outings. Silvana works full-time at the local medical surgery as a
receptionist, and Jack is working three days a week at a real estate agency, cutting back
his hours after having a mild heart attack last year. They no longer feel that they need a
big house, so they intend to sell and move to a smaller townhouse. They have recently
purchased a small cottage by the seaside where they plan to spend their weekends.
Before Jack’s heart attack they had planned to retire completely in about ten years.
However, they recognise that it may be sooner if Jack’s health doesn’t improve. In the 33
years that they’ve been married, Jack and Silvana have paid off their mortgage, put four
children through school and have managed a few holidays for the whole family. Until now
Jack and Silvana hadn’t begun saving seriously for their retirement, although both have
some superannuation. Most of their savings have been used to buy the holiday home.

John and Stephanie have been married for 10 years and have three children Julianne 7,
Lizzie 5, and Zac, 14 months. John is self-employed as a builder and enjoys spending
his time off playing golf. Before Zac was born, Stephanie worked full-time at a local
dress store and has recently returned on a part-time basis. They are keen to pay off as
much of their mortgage as quickly as possible before the three children go to secondary
school. They have put most of their extra cash into paying off the house and have no
other investments apart from Stephanie’s compulsory superannuation. However, John and
Stephanie find that after living expenses and paying off the mortgage there is little extra
money to go around. Over the past six months there has been a downturn in the building
industry and John’s business has struggled.

Maria is 25 and has been working for three years. She has been with her present
employer since completing her university degree. Her employer has contributed the
required super guarantee into her superannuation. This is not available to her until she
retires at 65. She is not in a permanent relationship at present and has no children. Since
starting work she has been sharing a house with two other women. She enjoys shopping,
movies with friends and eating out. She is planning to take a trip backpacking around
Europe in six month’s time. When she returns she hopes to return to university to improve
her qualifications and, sometime in the next five years, to buy a home. However she is
constantly struggling to put money aside. Her intentions are good but at the end of the
week there always seems to be an unexpected bill that needs to be paid. She has been
thinking that one way to save money may be to live with Mum and Dad.

10
 Module 9
Superannuation why do we need it? Topic 9.1

Kim is 22 and started working in the advertising industry last year. Since starting in

Meet the Scott Family

Worksheet 2
advertising, Kim’s employer has been contributing the minimum 9% under the Super
Guarantee. She knows that she doesn’t earn as much as some of the people she works
with but really wants to be seen as part of the group. The advertising industry is very
trendy and Kim just loves all the glamour. She knows how important it is in this industry
to have the right look and to be seen at the right places. She puts a lot of effort into her
appearance and likes to keep up with the latest fashions. She has several credit cards and is
constantly juggling the payments so that she can afford her new lifestyle. Recently a friend
from work has suggested that they share an apartment in a trendy inner city suburb. Kim
knows that the rent is costly and that she would find it difficult to meet her living expenses
and lifestyle costs if she moves in. However she is concerned that if she says ‘no’ her friend
may be offended.

Hugo, 20, is Silvana and Jack’s youngest child. He is completing a university degree and
lives with his girlfriend. When he completes his degree he would like to continue his
studies and specialise in microbiology. At the moment he has a part time job which pays
for his living expenses but has deferred the cost of his university course on HECs. Hugo
has very little in super as during university term he earns below the minimum where his
employer must deduct superannuation contributions. The small amount of super he has,
is scattered in a number of different funds with relatively high administration costs. His
relationship with his girlfriend is serious and they would eventually like to get married and
have children.

Chris is Jack’s brother. Chris is now 44, single and works as a teacher. He rents a flat not
far away from where Jack and Silvana live. Chris hasn’t bothered to think too much
about planning for the future. He contributes the minimum amount to superannuation
that the law requires. His attitude is that because he is single he only has to worry about
looking after himself. His main interest is travel and for his last trip he used his credit card
to finance the airfare. Recently he has been having trouble with his car. He isn’t sure how
he is going to replace the old car, buying a new car would mean less money to pay for his
next trip.

11
 Module 9
Superannuation why do we need it? Topic 9.1

The Scott Family profile

Worksheet 3
Construct a profile on each member or family group in the Scott family.
1. Include in your profile an explanation about:
● their family situation (marital status, children, living arrangements etc.)
● what each family group owns and owes
● commitments and goals of any member
● age and/or time left before retirement
● financial/retirement plans put in place
● whether they are likely to have sufficient super to meet Wetspac’s comfortable
retirement figures.

Name/s:

Priorities considered/sacrifices made

Values reflected

Name/s:

Priorities considered/sacrifices made

Values reflected

12
 Module 9
Superannuation why do we need it? Topic 9.1

The Scott Family profile

Worksheet 3
A personal plan
2. Financial planning for the future requires:
● a starting point
● a goal
● an action plan

Answer the following questions to start your financial planning:

(a) My starting point

Personal financial details – where am I now?
Current and expected living arrangements (1-5 years)
What I own and owe
What I need to check out
Do I need to revisit and clarify my values?

(b) Where do I want to go financially?

13
 Module 9
The reality shock – what would I have done? Topic 9.2

Classroom activity:

Teacher Notes
Suggested time: 1 lesson

Student Worksheet:
Worksheet 4: Risks and Consequences

The following activity can be used by students to establish where they want to go and
how they want to get there. The family profiles in the previous activity can be used as
a springboard to identify future problems that might prevent the achievement of goals.
Students can also provide advice and recommendations for the Scott family members, based
on their knowledge gained to date.
(a) Distribute Worksheet 4 - Risks and consequences. Then have students either in pairs or
groups:
● choose one person/couple in the Scott family whose decisions or actions will
strengthen their long-term financial position. For example what:
– did they do to strengthen their position?
– other choices could they have made?
● Select one person/couple in the Scott family whose decisions/actions have weakened
their long-term financial independence. For example what:
– did they do to weaken their financial position?
– other choices they could have made?
● report on their findings. Summarise the findings of the groups on the board to form
a class list.
(b) Have students return to their groups and using the list of possible choices collated on
the board, suggest what advice could be given to each member of the family. Then
have students prepare a profile page for each person discussed by their group including
suggestions for possible action.
(c) Discuss with the students the risks faced by individuals that may alter financial plans.
Working as a whole group ask students to suggest risks that the family members could
face in the future. Possible risks could include:
– Unemployment
– Decisions taken by another person
– Accidents causing permanent or temporary changes in lifestyle
– Illness of the income earning or non-income earning family members
– Pregnancy (planned or unplanned)
– Relocation of one partner’s place of work
– Death
(d) Students return to their groups to complete question 4 & 5 on Worksheet 4. Compare
student response and collate a class list of strategies to deal with each risk.

14
 Module 9
The reality shock — what would I have done? Topic 9.2

Unforeseen problems in the future can prevent a goal being achieved. Our current actions

Risks and consequences

Worksheet 4
can either strengthen or weaken long term financial independence. To reduce the prospect
of failing to achieve our goals, we can look carefully at our current lifestyle and pass a reality
check over it. Look at the Scott’s and see how they pass the reality check.
1. Select one person/couple in the Scott family whose decisions or actions will strengthen
their long-term financial position.
Family grouping chosen: ______________________________________
(a) What choices did they make to strengthen their long-term financial independence?

(b) What other choices could they have made?

2. Select one person/couple in the Scott family whose decisions or actions weakened their
long-term financial position.

Family grouping chosen: ______________________________________

(a) What choices did they make which weakened their long-term financial
independence?

(b) What other choices could they have made?

3. As a financial planning consultant, what would your advice be:

15
 Module 9
The reality shock — what would I have done? Topic 9.2

4. Risks are related to one's time horizon. Risks can be managed and planned for

Risks and consequences

Worksheet 4
even if they cannot be totally avoided. Suggest ways in which you can plan for the
following risks.

Possible risks: Planning that can be done in advance:

Unemployment

Decisions taken by
another person

Accidents (permanent or
temporary changes to
lifestyle)

Illness of the income

earning or non-income
earning family members

Pregnancy (planned/
unplanned)

Relocation of one
partner's place of work

Death

Other? (state)

16
 Module 9
Funding Superannuation why should I do it? Topic 9.3

Classroom activity:

Teacher Notes
Suggested time: 1 lesson

Student Worksheet:
Worksheet 5: What's in it for me?
Resources www.superannuation.asn.au>Super Guru>consumer
www.fido.gov.au>about financial products>retirement income

Students should realise that funding their retirement is their personal responsibility.
This activity provides data on changes in:
● demographic levels
● life expectancy
● the retirement income needs that have contributed to the shift in government thinking
relating to the provision of superannuation income.
(a) Divide the class into small groups and distribute Worksheet 5 – What's in it for me?
In this exercise students look at changes in Australia’s demographic levels (population
proportions), life expectancy and retirement income needs that have contributed to shifts
in government thinking about the provision of state funded superannuation income for
Australians. Data presented here will allow students to build up a picture of the key
messages to take on board for their future decision-making.
(b) Working in groups students complete questions 1 and 2. Discuss student responses to
questions as a group. Using student responses compile a class list of why we need to
know about superannuation on the board.
(c) Working individually students consider the ‘Interesting idea’ (see below) on Student
Worksheet 5. Compare student responses to the question.

Interesting idea
Some people think that sometime next century life expectancy will reach 120 years.
Imagine the living and working arrangements that will need to be organised for a
world where a 120-year-old may have a 90-year-old son/daughter and 60 year old
grandchildren. Who will live with whom and who will be working?

(d) Working individually students prepare a poster ‘Why you should think about retirement’
(e) How will all this affect me?
● on the board, record student responses to why we need to know about superannuation.
● students prepare a poster on why they should think about retirement.

17
 Module 9
Funding Superannuation why should I do it? Topic 9.3

What's in it for me?

Worksheet 5
Data presented here will allow you to build up a picture of the key messages to take on board
for your future decision-making.
1. The Ageing of Australia’s Population structure
Read the pages of Smarter Super
www.bankers.asn.au>Financial Literacy>Booklets>Smarter Super.
(a) What do you consider to be the most important changes occurring in the average
age of the population?

(b) What are the consequences of these changes for our community?

(c) The key message from this for my retirement is:

18
 Module 9
Funding Superannuation why should I do it? Topic 9.3

2. Refer to www.superannuation.asn.au>Super Guru>Westpac-ASFA Retirement Standard.

What's in it for me?

Worksheet 5
“How much do you need to spend to have a comfortable standard of living in retirement?”
(a) List what the article indicates you could have for each of the two lifestyles. Use the
following chart to summarise your findings.

Important Elements Comfortable lifestyle Modest lifestyle

of Lifestyle
Enjoyment

Comfort

Style

Health

Holidays

Participate in modern
society

Refer to: www.superannuation.asn.au>Super Guru>Retirement Standard>detailed budget

breakdowns for comfortable and modest lifestyles.
(b) If your income in retirement proves to be inadequate, what are some of the
expenditures that you might have to cut back on? What does this tell you about
your need to save for retirement?

19
 Module 9
Funding Superannuation why should I do it? Topic 9.3

3. Consider the following:

What's in it for me?

Worksheet 5
Interesting idea
Some people think that sometime next century life expectancy will reach 120 years.
Imagine the living and working arrangements that will need to be organised for a
world where a 120-year-old may have a 90-year-old son/daughter and 60 year old
grandchildren. Who will live with whom and who will be working?

Make a note about the above statement that summarises your thoughts. Be prepared to share
your ideas with other members of the class.

20
 Module 9
Superannuation – What do I need to do? Topic 9.4

Classroom activity:

Teacher Notes
Suggested time: 3 lessons

Student Worksheet:
Worksheet 6: Read all about it.
Resources http://www.fido.asic.gov.au/fido/fido.nsf
Go to ‘Superannuation’, go to ‘Essential facts about superannuation’
and ‘Superannuation decision’.
www.bankers.asn.au>Financial Literacy>Booklets.
Select Smarter Super booklet.

If students do not have access to the Internet, download fact sheets for student use.
This activity aims to provide students with an overview of the superannuation guarantee. The
primary resource for this exercise is http://www.fido.asic.gov.au/fido/fido.nsf.
(a) Introduce students to the concept of superannuation. If students do not have access to the
Internet, download the information from the Internet for students to use as information
sheets. Distribute Worksheet 6 – Read all about it. In this exercise students will work
individually on Part One of the worksheet to gain a basic understanding of superannuation.
Working as a whole class check student responses to the following:
● What is the superannuation guarantee?
● Briefly outline the responsibilities of employers in relation to superannuation?
● "Your superannuation will grow’. What evidence is presented to support this statement?
● What is meant by ‘Choice of funds?'
● In the Scott family Jack and Sylvana are in their mid-50"s. Are they allowed to use
their superannuation? Explain.
● There are four types of superannuation funds. Summarise the four types of
superannuation funds.
(b) Divide students into 4-5 groups to complete Part Two of the worksheet. Students prepare
a class presentation for the specific questions set for their group.
Group 1 – Choosing a fund
Group 2 – Making an investment choice
Group 3 – Changing funds
Group 4 – Keeping track of super and changing jobs
Group 5 – Adding to your super (topping up or time out)
(c) Students present their research on specific questions on superannuation. During these
presentations the class should summarise key points in the space allowed in Part Three of
the worksheet.

21
 Module 9
Superannuation – What do I need to do? Topic 9.4

(d) Monitoring progress

Teacher Notes
Have students produce a check list – My super – my future!
Students should note how and where they check on the following aspects of their super.
How can you check:
• your employer is paying super for you
• you have records of the name of your fund, and the amounts paid to it in super
• your super fund has all the information it needs to keep in touch with you
• where all your super is, and that as much as possible it is consolidated into one/a few funds
• you have selected the right investment option for you
• on your fund’s fee costs and performance
• where to go if you have complaints or problems about your super?
Students should be encouraged to retain this sheet for use when they leave school and
enter the workforce.

22
 Module 9
Superannuation – What do I need to do? Topic 9.4

Read all about it

Worksheet 6
Part one: Essential facts about superannuation
Nearly every employed person must join a superannuation fund. If you are self employed you
can decide if you want to contribute to a fund. In this exercise you will find out more about
how superannuation works.
Working individually:
Go to: http://www.fido.asic.gov.au> >About Financial Products>Superannuation
’Essential facts about superannuation’. If you do not have access to the Internet, your teacher
will download fact sheets for you to use. Read the essential facts about superannuation and
answer the following questions.
1. What is the superannuation guarantee?

2. Briefly outline the responsibilities of employers in relation to superannuation?

3. "Your superannuation will grow". What evidence is presented to support this statement?

4. In the Scott family Jack and Silvana are in their mid-50"s. Are they allowed to use their
superannuation now? Explain.

23
 Module 9
Superannuation – What do I need to do? Topic 9.4

Read all about it

Worksheet 6
5. There are four types of superannuation funds. Complete the following chart to
summarise the four types of superannuation funds.

Type of fund Explanation

Employer/Corporate

Industry

Retail

Self Managed

Part two: superannuation decisions

Working in small groups research one of the following topics. (Your teacher will allocate a
topic for each group to investigate. Prepare a class presentation on your issue). To complete
this task you will need to look at one of the information sheets from http://www.fido.gov.
au>About Financial products>Superannuation. If you do not have access to the Internet, your
teacher will download fact sheets for you to use.

24
 Module 9
Superannuation – What do I need to do? Topic 9.4

Read all about it

Worksheet 6
Group 1 – Choosing a fund
Read the information on choosing a fund and answer the following questions:
1. What factors should an individual take into account in deciding on a superannuation
fund?

2. What are the differences between an accumulated fund and a defined fund?

Group 2 – Making an investment choice

Read the information on making an investment choice and answer the following questions:
1. A number of different investment strategies are used by superannuation funds.
What are the differences between these investment strategies?

2. What factors should you take into account in deciding on an investment strategy?
Suggest reasons why you would select each strategy.

25
 Module 9
Superannuation – What do I need to do? Topic 9.4

Group 3 – Changing funds

Read all about it

Worksheet 6
Read the information on changing funds and answer the following questions:
1. For what reasons might a person change to another superannuation fund?

2. If a person was a member of a number of super funds, what advantages would there be
in merging them all into one fund?

3. Outline any disadvantages that might result if you moved superannuation funds?

Group 4 – Keeping track of super and changing jobs

Read the information on keeping track of super and changing jobs and answer the following
questions:
1. If you don’t have a permanent job or work part time, do you still have
superannuation?
Explain

26
 Module 9
Superannuation – What do I need to do? Topic 9.4

2 How can you keep track of your superannuation contributions? Is this important?

Read all about it

Worksheet 6
Explain.

Group 5 – Adding to your super - topping up or time out

Read the information on when it appropriate to contribute additional funds to super, and
answer the following questions:
1. What happens to your super when you take time out of the workfoce – to study, travel
or for family reasons?

2. Under what circulstances should an individual consider topping up their super? Consider
examples such as the government co-contribution scheme, or salary sacrifice.

3. My super, my future!
Now you have a good understanding of superannuation, produce a check list called ‘My
super - my future!’. Retain this sheet for use when you leave school and enter the workforce.
Check on whether:
• your employer is paying super for you
• you have records of the name of your fund, and the amounts paid to it in super
• your super fund has all the information it needs to keep in touch with you
• you know where all your super is, and as much as possible it is consolidated into one/
a few funds
• you have selected the right investment option for you
• you know your fund’s fee charges and performance
• you know where to go if you have complaints or problems about your super?

27
 Module Ten
Mobile phones - being a wise consumer

In partnership with
 Module 10
Mobile phones: Being a wise consumer

OVERVIEW

Teacher Notes
Module Overview and Curriculum Mapping
Module 10 aims to provide students with an overview of all aspects involved in being a
responsible mobile phone user.

ENDURING UNDERSTANDINGS
• There is a wide range of mobile phones with various features to choose from.
• Choosing the best mobile phone plan for your call patterns can save money.
• There are serious consequences for consumers who experience high mobile phone debt.
• Advertising and marketing are used to encourage consumers to spend more on their
phones.
• Consumers need to be wary of scams that can be very costly.
• Mobile phone security is an important issue.

LEARNING OUTCOMES
Students:
• Identify the range of charges associated with the ownership of a mobile phone
• Make informed decisions when selecting a phone
• Make informed decision when opting for a prepaid or post-paid method of payment
• Understand the implications of entering into a mobile phone contract
• Understand the implications of mobile phone debt and strategies to address this
• Analyse marketing approaches to mobile phone ownership and selection of
mobile carriers
• Understand the potential for scams and security issues associated with mobile
phone ownership

POWER WORDS Page 2

CURRICULUM MAPPING 3

LIST OF TOPICS
10.1 It's about being mobile 5
10.2 Choosing a plan 12
10.3. Scams and traps 22
10.4. Stay safe 28
10.5. Mobile phone security 35
10.6. Mobile phone social issues 37

1
 Module 10
Mobile phones: Being a wise consumer

POWER WORDS

Teacher Notes
Module Overview and Curriculum Mapping
As students work through each topic in this module they will encounter words that may be
new to them, crucial to understanding and completing the worksheets, and/or difficult to
spell. In addition, students may simply find some of this vocabulary interesting and want to
use it in the future. Understanding and being able to use these words will provide students
with more power to make future financial decisions.
There are several approaches to using this “glossary”. The intention is for students to
investigate and find the meanings. They could be given the complete list before they start
the module, or they could set up a table and add new words as they progress through the
activities. There are also specific POWER WORD activities in some topics.
This list is not exhaustive.

1G digital
2G flagfall
3G Global roaming
4G GPS
analogue GAN
airtime insurance
ADSL java
AGPS landline
android MMS
Bandwidth platform
Billing increment prepaid
Blue tooth PUK
Call barring Service provider
cap SIM
Carrier SMS
cellular Telco
contract TIO
Connection fee WAP
coverage

2
 Module 10
Mobile phones: Being a wise consumer

MAPPING TO AUSTRALIAN CURRICULUM

Teacher Notes
Module Overview and Curriculum Mapping
ENGLISH MATHEMATICS GENERAL CAPABILITIES
LITERACY YEAR 9 STATISTICS & LITERACY
PROBABILITY YEAR 9 Comprehending texts through listening, reading
Interacting with
others Data representation & and viewing
interpretation Navigate, read and view learning area texts
• plan, rehearse and
• Navigate, read and view a wide range of more
deliver presentations, • Identify everyday
demanding subject-specific texts with an extensive
selecting and questions and issues
range of graphic representations
sequencing involving at least one
appropriate content numerical and at least Interpret and analyse learning area texts
and multimodal one categorical variable, • Interpret and evaluate information within and between
elements for aesthetic and collect data directly texts, comparing and contrasting information using
and playful purposes and from secondary comprehension strategies (ACMSP253)
(ACELY1741) sources (ACMSP228) NUMERACY
Interpreting, Estimating & calculating with whole numbers
analysing, evaluating Use money
• Interpret, analyse and • Evaluate financial plans to support specific financial
evaluate how different goals (ACMNA211)
perspectives of issue, Recognising & using patterns & relationships
event, situation, Recognise & use patterns & relationships
individuals or groups
• Explain how the practical application of patterns can
are constructed to
be used to identify trends
serve specific purposes
in texts (ACELY1742) Interpreting statistical information
Interpret data displays
Creating texts
• Evaluate media statistics and trends by linking claims
• Create imaginative, to data displays, statistics and representative data
informative and (ACMSP253)
persuasive texts that INFORMATION & COMMUNICATION TECHNOLOGY
present appoint of CAPABILITY
view and advance or
illustrate arguments, INVESTIGATING WITH ICT
including texts that Define & plan information searches
integrate visual, print • Select and use a range of ICT independently and
and/or audio features collaboratively, analyse information to frame questions
(ACELY1746 and plan search strategies or data generation
• Use a range of Select & evaluate data and information
software, include • Develop and use criteria systematically to evaluate the
word processing quality, suitability and credibility of located data or
programs, flexibly and information and sources (ACMMSP239)
imaginatively to publish COMMUNICATING WITH ICT
texts (ACELY1748) Managing & operating ICT
• Independently select and operate a range of devices
by adjusting relevant software functions to suit specific
tasks, and independently use common troubleshooting
procedures to solve routine malfunctions (ACELY1738)
CRITICAL & CREATIVE THINKING
Inquiring – identifying, exploring & organising
information & ideas
Organise & process information
• Critically analyse independently sourced information to
determine bias and reliability (ACELT1639, ACMSP253)
Reflecting on thinking and processes
Think about thinking (metacognition)
• Give reasons to support their thinking, and address
opposing viewpoints and possible weaknesses in their
own positions (ACELT1640, ACMSP247)

3
 Module 10
Mobile phones: Being a wise consumer

MAPPING TO AUSTRALIAN CURRICULUM

Teacher Notes
Module Overview and Curriculum Mapping
NCFLF DIMENSIONS
Knowledge & Understanding
•Identify and explain strategies to manage personal finances
• Analyse and explain the range of factors affecting consumer choices
• Discuss and compare different sources of consumer and financial advice
Competence
• Analyse relevant information to make informed choices when purchasing goods and services and/or
to resolve consumer choices
• Compare overall ‘value’ of a range of goods and services using IT tools and comparison websites as
appropriate
• Explain the procedures for resolving consumer disputes relating to a range of goods and services
Responsibility & Enterprise
Apply informed and assertive consumer decision-making in a range of ‘real-life’ contexts
• Practise safe, ethical and responsible behaviour in online and digital consumer and financial contexts
• Understand and explain the legal responsibilities of taking on debt, including the consequences of
not paying

4
 Module 10
It's about being mobile Topic 10.1

Teacher Notes
Classroom activity:
Suggested time: 2 lessons

Student worksheets:
Worksheet 1: Choosing a phone
Worksheet 2: Mobile language

Resources: A collection of mobile phone brochures.

(These can be downloaded from the web if necessary)

By completing this activity, students have the opportunity of understanding some of the
typical features of a mobile phone as well as giving consideration to whether they really need
a mobile phone. A range of important mobile phone terminology is also introduced.
(a) Introduce the unit on mobile phones by discussing Australia's reliance on mobile phones.
By late 2007 there are more than 21.1million mobile phones in Australia. This is more
than the Australian population. Roy Morgan research indicates 23% of children 6-13
years own a mobile phone. 55% of boys and 65% of girls aged 12-13 own a mobile
phone. 82% of people 14-17 have a mobile phone, increasing to 94% for people
18-24 years of age. Do a survey of the class to find out the percentage of students who
currently own a mobile phone.
(b) Have students consider mobile phones and some of the typical features that they can
expect to use on a mobile phone. Write a list of these on the board and have students
try to give as many examples as they can. Suggested answers may cover video calling,
camera capacity, mobile television, MP3 player, built-in radio, memory card, games and
game downloads, voice calls, text messaging (SMS) and Multimedia Messaging (MMS)
features and email and internet access. For homework ask students to research some
of the different types of mobile phones on the market, for example, 3G video phones.
Students should bring in at least three brochures of different mobile phones on the
market. They are to prepare a summary of the phone's features, all relevant fees and
charges and any contract terms (if applicable). The class survey could be extended to
establish which of these features are found on student phones.
Students can use Worksheet 1 – Choosing a phone to make a list of the advantages and
disadvantages of owning a mobile phone and consider whether they would use a public
telephone as an alternative.
(c) Establish with the class the purpose that a mobile phone serves in society today. Create
a brainstorm session and list reasons to own a mobile phone. Students can then read
the scenarios on Felipe and Mariana (See Worksheet 1) to decide whether each of these
people should buy a mobile, given their individual circumstances. Some possible reasons
for owning a mobile phone are:
● Makes it easier to keep in contact with friends
● Peer group pressure
● Security (particularly for parents who may buy mobile phones for their children to
keep in contact)
5
 Module 10
It's about being mobile Topic 10.1

Teacher Notes
● Research for school work (where phone has internet connection)
● Communication with family and employers (for older students)

Using the guidelines on Worksheet 1, students can then do a weekly budget of

their income and expenses to determine how much they are prepared to spend on a
mobile phone. Once this has been determined they need to complete the survey on
what features they expect and are willing to pay for on a mobile phone.
(d) Have students cut out and match each of the mobile phone related terms contained
on Worksheet 2 - Mobile language. When this is complete and the answers have been
checked, students could then create a glossary of a further five terms that relate to
mobile phones.
(e) At this early stage it would be appropriate to go into more detail about two of these
important glossary terms (students should make a copy of these notes):
(i) Fixed term contract: These contracts vary in length but are usually 1-2 years long.
There are a range of fees and charges which come with these contracts which can
include connection charges, contract termination fees, monthly access fees, the cost of
the handset and the actual call costs.
(ii) Prepaid (this means you pay in advance): For a prepaid service to work the consumer
needs to buy a SIM (subscriber identity module) card. The SIM card allows the mobile
phone to be connected to a mobile phone network (e.g. Telstra, Virgin or other
companies) and make calls up to the value of the card. A consumer can buy a new
handset or use an old mobile phone with the SIM card. To use the prepaid mobile
phone you must make sure there is still credit left on the card. When this expires, the
consumer will then need to recharge their credit. While there won't be monthly access
fees, it's important to closely monitor the call costs with each prepaid plan.
(f) Monitoring progress
Have students:
● fill out the answers to the questions provided on Worksheet 1
● match the terms in the mobile phone terminology exercise (Worksheet 2)
● create a table from the brochures they collected that summarises the different
features and costs of the mobile phones they selected.
(g) Debriefing- Reflective learning
Students having considered what mobile phones are and their role in society, now review
whether their attitudes towards owning and using a mobile phone are likely to change.
Have students consider these statements:
● On average, about 66% of parents pay their child's mobile phone bills. Should parents
pay the mobile phone bill for teenager?
● Is going into debt to pay to use a service such as a mobile phone a wise decision?

6
 Module 10
It's about being mobile Activity 10.1

Choosing a phone
Worksheet 1
1. One of the first questions you need to ask is whether you really need to have a mobile
phone. There are a variety of reasons for people wanting to own a phone. It may be
because of convenience, safety, social reasons or for work purposes. If you are buying
a phone because all of your friends have one, you need to be aware of all the costs
involved in owning a mobile phone. Your friends can sometimes have a strong influence
on how you behave. Peer pressure can sometimes influence you to make unwise
decisions or behave in a negative way. It can also influence what you buy. For example,
how many of your friends own mobile phones? Is there anyone in your peer group that
doesn’t? If you, or one of your friends doesn’t have a mobile phone, do you/they feel left
out and think that it’s necessary to own one? Why?
Make a list of 4 advantages of owning a mobile phone:

Now state 4 disadvantages of owning a mobile phone:

Looking at this list of advantages and disadvantages, do you really need a mobile phone?
Explain. An alternative to owning a mobile phone is using a public phone. How would
you feel about this option?

7
 Module 10
It's about being mobile Activity 10.1

Choosing a phone
Worksheet 1
2. Read each scenario below and give reasons for each person to own a mobile phone
based on their individual circumstances:

Scenario 1: Felipe
Felipe is 17 years old and currently completing Year 12. He lives a busy lifestyle with
school, weekend sport and more recently a casual after school job. He is considering
getting a mobile phone as the manager of the shop where Felipe works likes to get in
contact with him to offer additional shifts when other workers call in sick.

Scenario 1: Felipe should

Scenario 2: Mariana
Mariana is 10 years old and in Year 5 at primary school. She has noticed most of her
friends getting mobile phones recently and feels left out. Mariana would also love to buy
a mobile phone so she can download the latest ring tones of her favourite songs and
vote regularly for her favourite contestants on the reality television shows she watches.

Scenario 2: Mariana should

8
 Module 10
It's about being mobile Activity 10.1

Choosing a phone
Worksheet 1
3. Setting a budget
While all mobile phones have the ability to make and receive calls, text message and
access voice mail, there are many more optional extras available with a mobile phone -
at a cost!
Mobile phone technology has progressed rapidly in recent years. There are now a
wide range of extra features available when buying a mobile phone. These include
video calling, cameras, stereo capability, email and internet access. As well as these
features, mobile phone retailers will also try to tempt you to buy additional mobile
phone accessories such as carry cases, accessory packs and hands-free equipment.
But of course, all these extra features cost money! You must carefully weigh up what
features you really need in light of your budget.
Budget: Prepare a budget that lists your weekly income (the money you receive for
example, from pocket money or from a part-time job), and all your expenses (the money
going out on items such as buying your lunch, snacks, clothes, school or going out).
How much money do you have left over per week? $
How much of this would you be willing to spend on a mobile? $
By preparing a budget you are able to get an idea of the type of mobile phone and
features you can afford.

4. What features do you expect on a mobile phone?

The table below lists a range of additional features available when purchasing a
mobile phone. For each of the options listed below, tick the column that best applies
to you and then justify how important each of the features listed below is when
buying a mobile phone.

Option/Feature Not Somewhat Very Justification/

important important important explanation

Video calling/messaging

Mobile television/games

MP3 player

Digital camera

Alarm clock

AM/FM radio

Internet and email access

Large colour screen

9
 Module 10
It's about being mobile Activity 10.1

Before you start shopping around for a mobile phone, it’s important to be aware of some of

Worksheet 2
Mobile language
the key terminology you may come across when buying a phone.
Below you will find a number of boxes. Each box in Group A contains a different mobile
phone term, while Group B contains the definitions to the terms in Group A.
Cut out each box and match the correct mobile phone term (from Group A) with its correct
definition (from Group B)

GROUP A: Mobile phone terms

Mobile phone Prepaid

Fixed-term contract Camera phone

Telecommunications Industry
SMS
Ombudsman

Flagfall Mobile phone portability

Contract Recharge

Call plan MP3 player

Mobile phone coverage

10
 Module 10
It's about being mobile Activity 10.1

Group B: Definitions

Worksheet 2
Mobile language
The ability to keep your existing mobile phone number if you transfer across to
another mobile phone company.

Short Message Service: This allows text messages of up to 160 characters to be sent
and received from a mobile phone.

The ability to create CD quality sound using this device on a mobile phone.

An independent body that can be used as a last resort to solve disputes between a
consumer and the mobile phone provider.

A term used to describe topping up the credit on a prepaid mobile phone so more
calls can be made.

A legally binding agreement between a consumer and mobile phone service

provider. Breaking a contract early will result in various fees and charges.

The geographical area a mobile phone works in. It's usually shown by a coverage
map. This can vary between mobile phone companies.

An electronic handset used to make and receive telephone calls. To work, it must be
connected to a mobile phone network.

Using a mobile phone to take pictures of people and/or places.

A pay in advance approach to owning a mobile phone. A prepaid card with a

specified amount of credit is used. When this credit expires, further credit can be
purchased. No monthly access charges apply.

A schedule of all fees and charges for using a particular mobile phone service.

These are mobile phone contracts for a specific length of time (such as 12 months).
Penalties apply for breaking the contract early. The cost of the handset is usually
included in the contract.

A one-off fixed charge incurred each time a call is made. It’s in addition to
the charge for call time and is charged by many mobile phone companies.

11
 Module 10
Choosing a plan Topic 10.2

Teacher Notes
Research and classroom activity:
Suggested time: 2 lessons

Student worksheets:
Worksheet 3: Which one?
Worksheet 4: How much?
Worksheet 5: Let's go shopping for a mobile phone
Resources:
Websites:
www.amta.com.au>Consumer Tips> Buying a Mobile Phone
www.phonechoice.com.au
www.telstra.com.au
www.optus.com.au
www.vodafone.com.au
www.understandingmoney.gov.au> Life happens>Buying a mobile phone
www.dodo.com.au
A copy of a mobile phone contract

The following activity can be used to identify the types of mobile phone plans offered on the
market and how these vary between prepaid and postpaid mobile phone plans. Students will
then use information given in a range of scenarios to find the best plan for each consumer
based on their call patterns.
(a) Explain to students that the decision to buy a mobile phone has significant implications.
For those under 18 years of age a prepaid phone is the normal way to go (unless a
parent signs a contract on the teenager's behalf). However upon reaching 18 years of
age, a person becomes eligible to enter a legal contract allowing them to buy a mobile
phone on a fixed term contract. This is a credit arrangement and must therefore be taken
seriously to avoid running into debt.
Students need to consider:
• what they can afford
• types of plans available
• phone features
• insurance
• flexibility.
Resources for this topic can be found at the understanding money website and the amta
website listed above.
It would be a good learning tool to bring in a copy of a mobile phone contract to show
students what it looks like and the importance of reading everything on it. Explain to students
if they decide when aged 18 (or with their parents help) to get a fixed term contract they
must closely look at the fine print. Many young people get into serious debt by not reading
the contract properly. When entering into a contract a consumer must consider:
● all fees and charges
● penalties for ending the contract early
● the cost of the handset
● how long the contract lasts
12
 Module 10
Choosing a plan Topic 10.2

Teacher Notes
(b) Distribute Worksheet 3 – Which one? Students commence this activity by going into
www.phonechoice.com.au. This is an independent website that provides information
and unbiased advice about mobile plans, mobile phones, dealers, network coverage and
repairs. Students complete the table on Worksheet 3. When this is complete they need to
script a conversation between themselves (as a prospective purchaser of a mobile phone)
and a mobile phone salesperson. In this conversation a range of suitable questions should
be covered, such as, how much will this contract cost? Students can then perform their
script as a play in front of the class.
(c) With hundreds of different mobile phone plans to choose from, buying a mobile
phone can be very confusing for students. To overcome this problem a class discussion
of strategies students can use to get the best value for money should be made. The
PhoneChoice bill calculator will locate the best mobile phone plan based on different
call patterns. It's important for students to remember that different phone plans will suit
different people. After the discussion, students can complete the table in Worksheet 3 to
find the best deal for Kim, Grace and Sunil based on their call patterns.
(d) Distribute Worksheet 4 – How much? and read through the four scenarios given as a
class. Put students into pairs to complete this activity. Using the knowledge gained in
this unit, students are to complete an action card (See Worksheet 4 for format) for each
scenario to help solve the problems they are presented with.
This is an excellent opportunity to use these four scenarios as a stimulus to have a class
discussion on these important points:
● excessive text messaging can be costly and socially inappropriate/rude
● always read the fine print of a contract to avoid nasty surprises
● be wary of entering competitions and voting on reality television shows as it can
become expensive very quickly
● beware of the higher charges for premium services calls.

(e) Students are to complete the second part of Worksheet 4 that requires them to read
a number of statements relating to their use and attitude towards mobile phones. By
completing this survey, they will get an idea of how mobile phone savvy they are. At
the completion of this activity, group the students in the class into the three different
classifications. Provide each of the three groups with an overhead transparency sheet and
ask each group to come up with practical strategies that the class can use to become
more mobile phone savvy. Each group should present their ideas to the class.

(f) Distribute Worksheet 5 - Let's go shopping for a mobile phone to students. Using the
background information, students will need to visit the websites of the four different
phone companies so that they can advise Aunty Joan on the best prepaid mobile phone
for her needs. Refer to www.amta.org.au>Info for Young people (str8 tlk)>Money. Click
on the link Buying a mobile.

13
 Module 10
Choosing a plan Topic 10.2

Teacher Notes
(g) Monitoring progress
Have students:
● use the Phonechoice calculator and the scenarios provided in Worksheet 3 to find
the best phone deals for three different consumers and then complete a report
based on their findings
● fill in the table using the space provided in Worksheet 3. The teacher is to collect the
worksheet to check for accuracy
● script a role play using the guidelines suggested in Worksheet 3. This should be
performed in front of the class
● hand in their action cards for each of the four scenarios for checking by the teacher
(Worksheet 4)
● move into their appropriate group after completing the survey on Worksheet 4 to
work on the overhead transparency
● research the four different mobile phone company websites to advise Aunty Joan
(Worksheet 5) on the most suitable prepaid phone. The teacher is to check each
students suggestions.
(h) Debriefing- Reflective learning
Students could use the information they have gained from using the Phonechoice
calculator to suggest alternative mobile phone plans for family and friends that will best
serve their call patterns and save then money.

14
 Module 10
Choosing a plan Activity 10.2

Which one?
Worksheet 3
1. Go into www.phonechoice.com.au. This is an independent website that will provide
you with information and unbiased advice about mobile plans, mobile phones, dealers,
network coverage and repairs. Now select “Glossary/Jargon” from the options on the
left-hand side and use this to define the important terms below:

Mobile Phone Glossary Term Meaning

Contract term

PrePaid

Flagfall

Postpaid

2. So many questions………
Before choosing a mobile phone, a wise consumer will ask many questions of their
dealer before selecting a suitable phone. These questions could cover: What is the best
phone or plan for my circumstances? Where do I go if there are problems? Are there any
cancellation fees for breaking a contract early? What are the total costs of the mobile
phone plan?
Activity: Script a conversation between you (a person who is looking to buy a mobile
phone for the first time) and a salesperson at a mobile phone shop. In your script, be
sure to include dialogue that covers questions you are going to ask the salesperson as
well as the outcome of the conversation (e.g. did you buy the phone?). This task should
be completed in pairs and then performed in front of the class. Your script should include
at least 10 questions that you will ask the salesperson.

3. Getting the best mobile phone plan

With hundreds of different mobile phone plans to choose from, buying a mobile phone
can be very confusing for the consumer. To overcome this problem use the Phonechoice
bill calculator (select Mobile, click on Bill calculator) this will locate the best mobile phone
plan based on your call patterns. Enter the information from the table below into the bill
calculator to find the best plan for each person below. After you have done this, enter in
the types of calls you usually make to find the mobile phone plan recommended for you.

15
 Module 10
Choosing a plan Activity 10.2

Which one?
Worksheet 3
Note: all figures in the table below are monthly
Kim – Wants a new phone for personal use (monthly contract) and would consider the
following network types.
Grace – Wants a new phone for personal use (prepaid only) and would consider all
network types.
Sunil – Wants a new phone for business use and would consider all network types.

Name
Local Long Mobile to Mobile to Voicemail SMS
calls distance Mobile rates mobile rates
calls (same network) (other network)
Kim 9 2 26 15 8 50
Grace 5 0 29 21 4 33
Sunil 40 15 7 35 8 12

Conclusions
Write a 1 page report that provides advice to Kim, Grace and Sunil about the mobile
phone plan best suited to their needs. Were there any surprise findings in your results?
Why do you think there are such wide variations? Describe the mobile phone plan. How
could independent websites such as Phonechoice be of value to consumers shopping
around for a mobile phone?

16
 Module 10
Choosing a plan Activity 10.2

How much?
Worksheet 4
Using a mobile phone costs money. How much it costs will depend on how many calls are
made and what additional services are used. Services such as SMS, downloading ring tones,
voting for your favourite reality television contestant and using voicemail are all additional
expenses.

1. Read each of the four common scenarios below.

Scenario 2
Scenario 1
Alan is heavily into the music scene
Juanita has sore fingers as she
and regularly watches shows like
continually texts friends to give
Video Hits and Australian Idol.
them updates on how her day has
Passionate about his favourite
gone. She was shocked to see
contestants, he votes at least
the phone bill that showed she
20 times a week for his favourite
had sent more than 250 text
idol and regularly changes the
messages last month.
download ring on his phone.

Scenario 3 Scenario 4
Jing is one of those people who Daniel signed up for a $5 per month
owns a mobile phone but hardly plan that offered $10 worth of free
ever has it on! When she does calls a month. It seemed like a great
switch on the phone each day she idea at the time, but Daniel didn't
usually finds three or four read the fine print in the contract
voicemails. Although Jing hardly which stated that once the free
ever makes phone calls, she was credit is used, calls are charged
shocked by last months $80 at $1.20 per minute. Now Daniel is
mobile phone bill. faced with a massive phone bill.

17
 Module 10
Choosing a plan Activity 10.2

How much?
Worksheet 4
Now that you have read each scenario, prepare an action card (see below) for each scenario
that provides advice and recommendations to each person.

ACTION CARD
Scenario number:
Diagnosis of the problem:

Recommendations:

2. How mobile phone smart are you? Read each statement in the table and circle
the response that most applies to you.

Personal Statement Always Sometimes Never

I know exactly how much it costs to make calls
from my mobile phone and use other services
such as SMS and voicemail only when it's
really needed. Always Sometimes Never
If I receive a mobile phone bill I would check it
closely to ensure that I'm only being charged for
the calls I have actually made. Always Sometimes Never
When I see advertising on television offering free
ring tones or other gimmicks I am not tempted to
reply to such offers. Always Sometimes Never
I am fully aware of the importance of paying
mobile phone bills on time to avoid getting a bad
credit rating. Always Sometimes Never
I use my mobile phone only when it's necessary
and would prefer to use cheaper alternatives
such as email or the home phone if possible. Always Sometimes Never
When choosing a new mobile phone contract I
would always look closely at the fine print in order
to be fully informed about all costs and charges. Always Sometimes Never
I always know the cost of a premium service
call before I make one. Always Sometimes Never
I would never use my mobile phone to vote during
television shows or enter competitions as I am wary
of the cost and potential for spam messages. Always Sometimes Never
I take the issue of mobile phone security seriously
by locking the phone with a PIN and keeping the
phone out of sight from potential thieves. Always Sometimes Never
18
 Module 10
Choosing a plan Activity 10.2

How much?
Worksheet 4
Mostly always
Congratulations - you are very mobile phone savvy! You understand all the fees and charges
associated with owing a mobile phone, like to shop around for the best deal, take mobile
phone security seriously and use the phone only when it's necessary to avoid running up a
large debt.
Mostly sometimes
Good - you are on the right track, though there are areas for improvement needed before
you are a fully savvy mobile phone user. Though you sometimes look at how much the phone
is costing you, it's essential to always read the fine print carefully, avoid any “free” ring tone
offers and take the issue of mobile phone security seriously.
Mostly never
Poor - You have a lot of work to do before you are considered a savvy mobile phone user. You
must take the time to look around for the best mobile phone offer, understand the call costs
with the phone, use the phone only when necessary and avoid entering competitions and
voting on reality television shows.

19
 Module 10
Choosing a plan Activity 10.2

Let's go shopping
Worksheet 5
Once you have decided to buy a mobile phone, decide what features you desire and the best
call plan offering you the best value for money based on your call patterns.
Buying a mobile phone is a big decision and one that requires a lot of background research to
ensure you get a phone that best meets your needs and budget. You need to find out about
the different offers, how each call is charged (by the second? blocks of 30 seconds? etc.), the
flagfall charge, coverage and any special offers.
A good approach to buying a mobile phone is to prepare a checklist that covers some
necessary considerations before buying a mobile phone.
1. For this activity assume you have been asked by your Aunty Joan in Brisbane to
recommend a prepaid mobile phone. She has never owned a mobile phone before so she
needs a handset as well. She will rarely use the mobile as she expects to make about 4
calls per month to other mobile phones for a couple of minutes each.
She wants you to find her a good value phone from one of the four companies below:
1. Telstra (www.telstra.com.au)
2. Optus (www.optus.com.au)
3. Vodafone (www.vodafone.com.au)
4. Dodo (www.dodo.com.au)
Look at each of the company websites above (noting prices and models of phones) and
complete the checklist below for one prepaid phone from each company. Based on your
research recommend a prepaid phone that offers good value for Aunty Joan.

­Mobile phone checklist item Comments (how does the mobile phone you selected measure up?)
The upfront costs of buying this mobile
phone as well as all the call, SMS and
voicemail charges are clearly spelt out
and easy to understand
The mobile phone handset has useful
features that are affordable and
represent good value for money
The coverage (where the mobile phone
works) of this phone is adequate for
the areas it will be used in
This prepaid phone offers a special such
as cheaper call rates in off-peak times
or discount calls to people with the
same mobile phone company
In comparison to other prepaid mobile
phones on offer, this plan is competitive
and is cheaper

20
 Module 10
Choosing a plan Activity 10.2

Let's go shopping
Worksheet 5
Now that you have completed this checklist, why have you recommended this mobile phone?
Does it meet all the criteria on the checklist?

21
 Module 10
Scams and traps Topic 10.3

Teacher Notes
Research and classroom activity:
Suggested time: 2 lessons

Student worksheets:
Worksheet 6: Ethics and marketing in the mobile phone industry
Worksheet 7: Beware the Scam!

Resources:
Newspapers and magazines to analyse mobile phone advertising
www.amta.org.au >Consumer Tips > Scam and Spam
www.scamwatch.gov.au>mobile phone scams.
This activity focuses on how marketing is used in the mobile phone industry to encourage
consumers to spend money. Students analyse whether some of the marketing is ethical.
Students are also introduced to some of the different scams that are currently being used to
lure younger mobile phone users into spending more on their mobile phones.
(a) Distribute Worksheet 6 – Ethics and marketing in the mobile phone industry. Explain
to students that they will need to collect 5 advertisements relating to mobile phones.
They then need to complete the table on this worksheet noting the brand of the mobile
phone, the source of the advertisement and whether high pressure tactics are used to
influence the consumer.
Define the term 'Ethical' to students – good business ethics means that a business knows and
applies in their business practices the difference between what is morally right and wrong.
(b) Students are to look at the hypothetical advertisement on Worksheet 6 for a new club
that offers consumers the opportunity to download various ring tones. If there is time,
students could collect/download advertisements for ringtones. Students need to evaluate
the costs and pitfalls in the offer on Worksheet 6 (or their own advertisements). A class
discussion can be had asking for students to share their experiences regarding buying
additional services such as ring tones, screen images etc. Have these purchases been
positive or negative? What type of advertising do companies use to encourage young
consumers to sign up for these additional and costly services? This is particularly relevant
in light of the fact Australians are now spending more than $130 million per year on
mobile phone services such as ring tones and voting on reality shows.
(c) Students continue on with Worksheet 6 and complete the practical exercise that requires
them to design an advertisement for a proposed new telephone for Happy Phone Co.
that caters to children under 10 years of age. The advertisement can either be print based
or a television commercial. In addition to the advertisement, students need to think from
the advertiser's perspective and attach arguments outlining why it is ethical to market
mobile phones to children.
(d) Distribute Worksheet 7 – Beware the Scam! As a class read through the three examples
of typical scams involving mobile phones. Keep an eye out in major newspapers for
articles on the latest mobile phone scams that could be used in the classroom. For
example early in 2006 many people were being fooled into paying for the annoying calls

22
 Module 10
Scams and traps Topic 10.3

Teacher Notes
generated by telemarketers, as mobile phones become the latest target for spam mail.
Consumers would receive a missed call to a mobile, which prompts them to return the
call before realizing it is unsolicited spam mail telling them they have won a prize. The
catch was that they then had to ring an expensive 1900 number to find out the “free
gift” was in fact only a free ring tone.
For background reading on scams refer to the amta website “Scam and Spam” or
www.scamwatch.gov.au
(e) During a class discussion, ask students if they or any of their friends or family have
been scammed through their mobile phone. Make a summary on the board of any
scams students identify. When this is complete students can follow the instructions on
Worksheet 6 and design an advertisement that could appear in a teenage magazine
warning high school aged students of some of the potential scams they need to be wary
of. Once this is complete students then have to use their creativity to come up with their
own scam, using the advice provided on the hints section of Worksheet 7.
Something that will interest students greatly is the rise in the number of students who
vote in reality television shows and enter other competitions. Unfortunately many
teenagers have been caught out by the call costs involved in voting regularly. Apart from
the cost, people using their mobile phones to vote or enter competitions are also likely to
receive unsolicited “spam” messages and advertising. As a class, take a vote on who has
ever voted during a reality or other television show. Find out the reasons students vote,
how much they spend and whether they too have received spam advertising messages as
a result of their vote.
(f) Monitoring progress and assessment
● Check student answers to the table in Worksheet 5 relating to advertisements for
mobile phones.
● Have students present the advertisement they designed for a new Happy Phone Co.
mobile phone aimed at the children's market.
● Collect and mark the advertisements students have designed to warn teenagers
about potential mobile phone scams (See Worksheet 7).
● Have a class competition to devise the most creative scams that could be used to
take advantage of consumers. Make a poster of the suggestions so that students
are more alert to possible future scams. These posters could then be stuck up in the
classroom to alert other school students of potential scams.
(g) Debriefing – Reflective learning
Students interview family members to find out their opinion of mobile phones being
marketed to young children as well as whether they have been victims of any scams
while owing a mobile phone.
As a class, debate the topic “Advertising ring tones and other mobile phone services
should be banned during children's television shows”.

23
 Module 10
Scams and traps Activity 10.3

Ethics and marketing

Worksheet 6
Like all products, marketing in the mobile phone industry can vary widely in terms of quality
and style. Given the large amount of competition in the industry, the temptation is there for
some mobile phone businesses to pressure the consumer to sign up for the latest deals.

1. Collect five advertisements that promote mobile phones and complete the table below

Brand of Source of Style of Are high

mobile phone advertisement advertisement pressure sales
(e.g. humourous, tactics used?
informative)

2. Look at the advertisement below for a hypothetical new club that offers ring tones on
mobile phones. Does this offer seem like a good idea? What are the advantages and
disadvantages of this offer? Read the conditions section at the bottom carefully. Is there
anything to be wary of with this “free” offer? Do you approve of the advertising style
being used to attract the customer? Is it easy to understand the fine print? In your
opinion, is this type of advertising ethical or is it potentially misleading to consumers?

AMAZING FREE RING TONE OFFER

Are you sick of hearing the same old
ring tone on your phone?
Do you want to download your favourite ring tone
for free and be the envy of your friends?
Don't delay - You must join the exclusive “Radical Ring Tone Club”.
This fantastic club has over 200 ring tones to choose from including all
the hottest songs from your favourite artists. Join the Radical Ring tone
Club today and receive your free ring tone right now!
Simply text radical to 190 190 and you will receive
your first free ring tone- it's that simple!

Conditions: Persons using this service must be aged over 14 years and be the billholder. After receiving your free ring tone you will be sent a new ring
tone every 5 days at a cost of $5 per ring tone. To unsubscribe to this club text the word “STOP” to 190 190.

24
 Module 10
Scams and traps Activity 10.3

Ethics and marketing

Worksheet 6
3. Happy Phone Co. is developing a mobile phone aimed at children as young as four
with large buttons pre-programmed and labelled “mum”, “dad” and “home”. Assume
that you are working in the advertising department for Happy Phone Co and design an
advertisement that will appeal to the parents of young children who may potentially
buy this new phone. For example you might appeal to the parent by stressing the safety
benefits of this product. Your advertisement can either be print-based, a television
commercial filmed on video or produced using a computer software program. Attach to
your advertisement arguments to counter the views of some members of the community
who may argue that it is unethical to sell mobile phones to young children.

25
 Module 10
Scams and traps Activity 10.3

Beware the scam!

Worksheet 7
With more than 10 million mobile phone users in Australia, there are lots of opportunities for
unscrupulous people to try to scam mobile phone users as a way to generate more money.
The diagram below highlights some of the typical scams that have occurred in Australia over
the last year.

Examples of typical scams

You see a missed call

You receive a text
You see an on your mobile phone.
message from someone
advertisement offering Curious, you call the
whose name you don't
a “free” ring tone so number back and
recognise. You wonder
you decide to sign up. receive a recorded
who this message is
By taking up this offer message saying you
from so you reply by
you are automatically have won a prize. The
SMS. It turns out the
registered to receive catch is you must call
“long-lost” friend
additional ring tones, a 1900 number where
doesn't exist but is
usually at a cost of $5 calls are charged at $3
actually a scammer
each added to your per minute to claim the
who receives $4 for
mobile phone bill prize. There usually is
every time they
weekly. no prize but you end
receive a reply.
up with a large bill.

The above examples show how easy it is to be scammed with your mobile phone and the
importance of being wary at all times.
(1) Design an advertisement that could appear in a teenage magazine warning high school
aged students of some of the potential scams they need to be wary of. Use a range of
images and text to convey the importance of being alert to potential rip-offs.
(2) Voting for your favourite contestant on a reality television show can seem like a fun
idea. Unfortunately many teenagers have been caught out by the call costs involved
in voting regularly. Apart from cost, people using their mobile phones to vote or enter
competitions are also likely to receive unsolicited “spam” messages and advertising.
Prepare a table that outlines the costs involved in voting in at least four different reality
television shows. When you have completed this, prepare a 300 word submission to your
local politician calling for new laws to be introduced that will prevent companies sending
unsolicited spam messages to consumer's mobile phones.

26
 Module 10
Scams and traps Activity 10.3

Beware the scam!

Worksheet 7
(3) Use your creativity to come up with your own scam. You will need to make the scam
seem believable and attractive to the potential victim. Describe this scam to friends and
family (without letting on that it's a scam you have come up with) and gauge their
reaction. Reflect on the reaction you received to your scam. Did people believe it and
want to know more or could they tell straight away that it sounded too good to be true?

Hint: To make your scam more appealing and interesting you may find it useful to use
some of the phrases or ideas below.
● Unbelievable opportunity to make lots of money
● You're a winner!
● It's fantastic and it's free!
● Call now to learn more
● Never to be repeated offer

27
 Module 10
Stay safe Topic 10.4

Teacher Notes
Research and classroom activity:
Suggested time: 1 lesson

Student worksheets:
Worksheet 8: When things go wrong!
Worksheet 9: The consequences of mobile phone debt

Resources: Website: www.tio.com.au

www.mycreditfile.com.au

This activity focuses on assistance available to the consumer if things don't turn out as
expected with the mobile phone. An investigation into the consequences of mobile phone
debt is also made.
(a) There may be situations where a consumer experiences difficulties or problems with their
mobile phone. It could be due to reasons such as the phone not working as intended,
frequent poor mobile phone reception or being charged for calls that were never made.
Students should make a list of what they would do in this situation. It is likely that
students will suggest taking the phone back to the place of purchase. This is always a
good first step in dealing with any complaints. If this step proves to be unsuccessful,
students need to be alerted about the important role that the Telecommunications
Industry Ombudsman (TIO) can play to settle disputes relating to mobile phones. To
learn more about the TIO, students need to complete the activity on this organisation on
Worksheet 8. Protection is also offered to mobile phone users from:
● the Office of Fair Trading (in their state)
● the Australian Competition and Consumer Commission (referred to as the ACCC
who have the power to investigate cases where retailers price fix or mislead the
consumer through deceptive advertising)
● the Trade Practices Act (if the phone is faulty and not of merchantable quality).
After completing the written questions on Worksheet 8, students are to use the knowledge
they have gained about the role of the TIO to try to resolve Thomas's dilemma.
(b) Discuss with students that one of the reasons some young people prefer prepaid mobile
phones over fixed term contracts is they know they can't overspend once the credit has
run out. However, many consumers do prefer to be on a fixed contract, as the call rates
are often lower than the prepaid option and the handset can be paid off over a number
of months rather than upfront. By signing a contract with a mobile phone company a
consumer is entering a credit arrangement with a business. This means you can make
calls on your phone now and pay this back at a later date.
Ask students what they think might happen if they are unable to meet the monthly
payment on a mobile phone contract? What is a credit file and how could this impact on
a consumers' ability to get a loan in the future?

28
 Module 10
Stay safe Topic 10.4

Teacher Notes
(c) Students will need to complete the table of questions in Worksheet 9 – The
consequences of mobile phone debt to investigate the importance of keeping an
excellent credit rating with Veda Advantage. The importance of a sound credit rating
needs to be emphasised to students due to the future consequences a poor credit rating
may have when you want a car or home loan. Refer to: www.mycreditfile.com.au>FAQs
Students are also given two hypothetical scenarios on Worksheet 8 where they need
to provide advice to two people about basic financial matters relating to mobile phone
use. Using the background information they have gathered from previous activities,
students then need to design a two page tips sheet for other secondary school students
about the importance of using a mobile phone wisely. Refer students to www.amta.org.
au>Consumer Tips>Manage your mobile spend.
(d) One of the main contributing factors to mobile phone debt among young Australians
is their addiction to text messaging each other. For those who own mobile phones, ask
each student to keep a record of how many text messages they make during a one
week period. To do this, students need to create a “text log” that they maintain for
that week using the format suggested on Worksheet 8. Now ask students to reflect on
how communication methods are changing and whether young people are spending
too much money on excessive text messaging. Students then complete the remaining
activities that relate to text messaging on Worksheet 9.
(e) Monitoring progress
Have students:
● use the Telecommunications Industry Ombudsman website to answer questions on
Worksheet 7 about their role in settling disputes
● fill in the answers to the questions about credit files on Worksheet 8. The teacher is
to collect the worksheet to check for accuracy
● write out a script that shows student responses to two consumers who need advice
on basic financial matters. This could then be performed in front of the class
● maintain a text log for a period of seven days and compare their findings as a class
● use the guidelines provided in Worksheet 9 to prepare a two page tips sheet that
could be distributed to high school students to provide valuable tips on using a
mobile phone wisely.
(f) Debriefing- Reflective learning
With more than 62% of people listed on the Veda Advantage website for defaults
relating to mobile phone contracts, students consider what this might mean for their
financial future. How might a default listed on your credit file now for late or non-
payment of a small mobile phone bill impact on your ability to get a car or housing loan
in future years? Why might financial institutions be unwilling to lend to consumers with
poor credit worthiness? How could such an undesirable situation be avoided in the first
place?

29
 Module 10
Stay safe Activity 10.4

When things go wrong

Worksheet 8
There may be situations where you experience problems with your mobile phone. It could
be due to reasons such as the phone not working properly, to being charged for calls that
were never made. Whatever the problem, as a first step it is always advisable to take your
complaint to your service provider to try to resolve the problem with them first. If this is
unsuccessful, you can contact the Telecommunications Industry Ombudsman (TIO) to help
settle the dispute.

1. Go into www.tio.com.au and answer the questions that follow:

(a) Who is the Telecommunications Industry Ombudsman? Is it a free service?

(b) List the types of complaints that the TIO typically resolves.

(c) What type of decisions can the TIO make to help sort out problems between a
consumer and mobile phone service provider?

2. There's a dispute - help solve this case:

Tomas liked changing the logos shown on his mobile phone screen on a regular basis.
When he saw an advertisement in his favourite magazine offering interesting logos
at a maximum cost of $2.95 per logo, Tomas joined up. Tomas was surprised when
he started receiving new logos sent to him every hour. Unfortunately Tomas didn't
read the fine print of the advertisement closely which said that all incoming texts are
charged at $2.95 each. Now Tomas has received a monthly bill of $1,100 and doesn't
know what to do.

30
 Module 10
Stay safe Activity 10.4

When things go wrong

Worksheet 8
As Tomas wishes to solve this dispute and hasn't been able to do this with his mobile phone
company, he has decided to take his complaint to the TIO. Use the information from the TIO's
website to complete the card below.

Resolving a dispute with the TIO

How to make a complaint:
What the TIO asks of you:
What you can expect from the TIO:

What should Tomas do? Could the TIO help Tomas with this issue?

31
 Module 10
Stay safe Activity 10.4

One of the reasons some young people prefer prepaid mobile phones over fixed term

The consequences of mobile phone debt

Worksheet 9
contracts is they know they can't overspend once the credit has run out. However many
consumers prefer to be on a fixed contract as the call rates are often lower than the prepaid
option. By signing a contract with a mobile phone company you are actually going into a
credit arrangement with a business. This means that you can make calls on your phone now
and pay this back at a later date.
Unfortunately many young people under the age of 25 end up being listed as credit risks by
their mobile phone companies for failure to pay their bills on time. In fact, according to the
Australian Communications and Media Authority, 595 000 Australians were reported to credit
bureau Veda Advantage for late or non-payment of phone or internet bills.

1. Go into www.mycreditfile.com.au and complete the table below.

Question Answer
Veda Advantage is the company who
manages consumer credit files. What is
a credit file?

How do you go about checking your

credit file?

What are the steps to maintaining

credit worthiness?

What reasons could be attributed to a

consumer being denied credit due to
their credit file?

If you are the victim of identity theft

what should you do?

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 Module
Module 10
10
Stay safe Activity 10.4

2. How would you handle these scenarios?

The consequences of mobile phone debt

Worksheet 9
Assume you have recently taken up a voluntary role as a financial counsellor. This means that one
day a week you take phone calls from consumers who need advice on basic financial matters. Two
callers and their problems are listed below. Write a script of what you would say to help each caller.
Caller 1: Sophie: "I'm calling you as I have run into some financial problems. Last month I called my
new boyfriend frequently and incurred a $180 mobile phone bill. It was due 20 days ago but I don't
have enough money to pay it and I'm too scared to approach my parents as they will probably take
the mobile phone off me. I keep getting overdue notices in the mail. What should I do?"
Caller 2: Mario: "I need some advice about getting a mobile phone. I am presently on a fixed term
mobile phone contract and recently received a letter from my mobile phone company offering a
second phone in my name for only $5 a month with cheap call rates. I was thinking of taking up
this offer and giving it to my best mate Patrick who is always running low on credit. Do you think
this would make a good birthday present?"
3. The text generation
One of the main contributing factors to mobile phone debt among young Australians is their
addiction to text messaging. Rather than having a conversation face to face, many people prefer to
have conversations by text messaging. Some people have even ended relationships by text message!
With many text messages costing 20-25 cents each to send, this can quickly add up at the end of
the month. In fact it is not uncommon for new mobile phone users to run up bills for hundreds of
dollars at the end of the first month.
Create a text log
This activity requires you to keep a text log over a period of seven days. Use the table below to
classify each text message you make and receive. Note you will need a new line for each text
message that is sent/ received.

Day Number of Number of Rate the Was the incoming Could

incoming texts outgoing texts importance of /outgoing text communication
the text: from someone have taken
● Urgent you saw on place in
● Important the same day? alternative
● Trivial manner? Examples:
face-to-face,
email or
landline?
1
2
3
4
5
6
7

33
 Module 10
Stay safe Activity 10.4

The consequences of mobile phone debt

Worksheet 9
Reflection. Looking at your text log, were the number of texts you sent excessive? Are there
alternative ways you could have communicated your message? Now that you have completed
this activity, do you expect to change the amount of text messages you send? Why have text
messages become such an important communication method among teenagers?

4. Create a flyer. In recognition of some of the problems that may arise by excessive text
messaging, create a flyer that could be sent to teenagers around Australia warning them
of some of these issues. Use a style that would be appropriate to this audience. Your
message could convey the potential financial costs as well as social costs, such as people
sending text messages while eating at a restaurant.

5. Investigate the cost of premium services

6. Using a mobile phone wisely.

Design a 2 page help sheet that could be distributed to secondary school students that
provides valuable tips on using a mobile phone wisely. Some examples of the types of
topics you may wish to cover are suggested below:
● How to shop around for the best mobile phone deal.
● How sending text messages should be used sparingly as many people run up huge
mobile phone bills due to their addiction to text messaging.
● When is it better to use prepaid?
● The importance of paying your mobile phone bill on time and what can happen if
you don't.
● Discuss some of the typical scams targeted at mobile phone users.
● Assistance available if you experience difficulties with your mobile phone.
● Being wary of marketing hype surrounding mobile phones.
● How to make your mobile phone safer.

34
 Module 10
Mobile phone security Topic 10.5

Teacher Notes
Classroom activity:
Suggested time: 1 lesson

Student worksheets:
Worksheet 10: Mobile phone security

Resources: www.amta.org.au >Consumer Tips> Lost and stolen phones

This activity focuses on the importance of not becoming a victim of mobile phone theft.
Students should understand that there a range of simple measures they can take to ensure
they don't lose or have their mobile phone stolen.
(a) Brainstorm with students some commonsense strategies that could be used to reduce the
incidence of mobile phone theft. Some suggestions that may be covered include:
● mobile phones that use SIM (Subscriber Identity Module) cards mean that a range
of people are able to use the same mobile. Each SIM card has its own PIN code
so that every time the phone is switched on, the PIN code must be entered before
the phone can be operated. Hiding this PIN code will help secure the phone from
unauthorized users
● engraving your name/address on the back of the mobile phone as a way to
discourage others who steal the phone to resell it illegally
● do not leave the mobile phone in view of other people (e.g. don't leave it unattended
in the car or sitting on a table in a restaurant where it could be easily taken)
● notify your mobile phone retailer and the police as soon as you notice the phone is
missing to prevent any unauthorized calls being made on your phone that you may
then become liable to pay.
(b) Ask students to use their creativity to invent and sketch a new idea that could be used to
reduce the incidence of mobile phone theft. Each student could then present their design
to the class to explain how this new invention could be of assistance.
(c) Monitoring progress
Have students:
a. fill in the correct terms in the passage about mobile phone security contained in
Worksheet 10
b. design and describe a new invention that could be used to protect consumers from
mobile phone theft. Each student should present his or her idea to the class for
discussion.
(d) Debriefing- Reflective learning
With so many mobile phones in Australia, how can mobile phone companies better
promote the importance of taking mobile phone security more seriously? What strategies
will students use in everyday life to improve the way they look after their mobile phones?

35
 Module 10
Mobile phones security Activity 10.5

Mobile phone security

Worksheet 10
A mobile phone is a useful tool but what happens if it gets lost or stolen? In this situation it's
important to act immediately so you don’t have to pay a large bill run up by someone else.
1. Read the passage below about mobile phones and security and insert the correct term in
the space provided.

Part A: Terms (cross off each term once it has been used).
International, PIN, code, company, technology, stolen, worthless, using, thieves,
unauthorised, engraver

Part B: Insert the correct term in the spaces provided below (each term can
only be used once).
If your mobile phone is lost or ______, it is important to contact your mobile phone
_______ immediately to stop ____________ calls being made. A safety feature
available on all mobile phones is to use a ___ number as a way to stop other people
_____ your phone. That way a person will have to enter the ____ in before being able
to make any phone calls. Using an ________ to write your name and address on the
phone can also discourage _______ from stealing the phone. Restricting the types of
calls you can make to local and landline phones only is also a way to minimise the risk
of an unauthorised person running up a large bill on _____________ calls.
Fortunately there have been improvements in mobile phone __________, meaning
that once you report your mobile phone as lost or stolen, your mobile phone company
will be able to suspend your service immediately. This makes the phone _________ to
anyone who has stolen it.

2. New invention!
Use your imagination to design a new invention that could be used to protect consumers
from mobile phone theft. Sketch your design and provide a written description of how
your invention will improve mobile phone security.

36
 Module 10
Mobile phone and social issues Topic 10.6

Teacher Notes
Classroom activity:
Suggested time: 1 lesson

Student worksheets:
Worksheet 11: Mobile phones and social issues

Resources: www.amta.org.au>Consumer Tips>Mobile Phone Etiquette

www.amta.org.au>Consumer Tips>Bullying and Mobile Phones
www.amta.org.au>Consumer Tips>Camera Phone safety and Etiquette
www.cybersmartkids.com.au
www.amta.org.au>Consumer Tips>Mobile Phone Viruses

This Topic focuses on using the knowledge gained during the course of this unit to solve some
common problems faced by consumers with mobile phones.
(a) Mobile phones have had an enormous impact on all aspects of our life. Some people
would argue that mobile phones have negatively impacted on our lifestyles through
inappropriate use by some people. Teachers could consider the following issues and select
one or more for their students to discuss/debate.
1. Mobile Phole Manners
There are many situations where consumers have demonstrated poor mobile phone
etiquette, impacting on those around them. A discussion with students, highlighting some
common examples of poor mobile phone etiquette should take place. Ask students to
provide their own examples of poor mobile phone etiquette. Some examples below are:
• Leaving the mobile phone on while in the cinema, church or at the hairdresser and
then taking the call if the phone rings. Students may like to discuss if/when this has
happened to them or someone they were with and what they thought.
• A customer having a conversation on the mobile phone while being served by a sales
assistant at the same time.
• Using the mobile phone while having dinner with family and friends.
Students could design a mobile phone etiquette card that would be distributed free with
every mobile phone sold in Australia. This etiquette card could be laminated if a laminating
machine is available at school.

37
 Module 10
Mobile phone and social issues Topic 10.6

Teacher Notes
2. Bullying by mobile phone. Look at the resources listed above. Bullying and Mobile Phones
- (amta website) or cybersmartkids to gain current examples. Cyber bullying can occur on
chat lines and via mobile phones. Discuss this important issue with students to help them
develop some strategies to limit and overcome mobile phone bullying. Some points to be
considered include:
• types of bullying
• how often it occurs
• what can be done to overcome it.
Students are to complete Worksheet 11 which requires them consider this issue and
prepare a response.
For this issue students could design a help card for students confronted bullying that
would be distributed free to secondary school students. This help card could be
laminated if a laminating machine is available at school.

3. Camera phone safety and manners

Students are to undertake some background research into the current controversy
regarding using mobile phones with photo capabilities in public places such as change
rooms or at public swimming pools and beaches. It has become an issue as there have
been a few instances of people taking photos of other people in public places without
their knowledge and permission. Some of these photos have even ended up on internet
sites or being sent to other people. Some local councils are now considering banning all
camera mobile phones from beaches and swimming pools; some organisations/clubs are
even going as far as banning parents from taking photos of their own children at public
events e.g. swimming carnivals. This background research will assist students to conduct
a debate on the topic below:
As a class, debate the topic “All mobile phones with photo capability should be banned
from public swimming pools and beaches to protect everyones privacy”.

(b) Monitoring progress

Hand in action cards from Worksheet 11 for the selected issue for checking by the
teacher.

38
 Module 10
Mobile phone and social issues Topic 10.6

Teacher Notes
(c) Debriefing- Reflective learning
As the concluding activity to this unit, ask students to write a 1 page journal entry that
addresses the following questions on the mobile phone unit:
● What did you learn from the unit?
● What did you like about the course?
● What didn't you like about the course?
● After completing this unit of work, has your attitude changed towards how you
personally would use a mobile phone?
● What advice would you provide to a teenager who is buying their first mobile
phone?
Students are to design a game that can be used to test understanding of mobile phone issues.
The game can be in the format of an electronic game or alternatively a board game made out
of cardboard. At the completion of this activity, students can play the revision game with each
other to test their understanding.

39
 Module 10
Mobile phone and social issues Activity 10.6

Mobile phones and social issues

Worksheet 11
Choice 1: Mobile phone etiquette
Following a class discussion/debate about mobile phone etiquette, design a mobile phone
etiquette card (20 cms by 20cms in size) that would be distributed free with every mobile
phone sold in Australia. On the card include information on how a mobile phone should
be used in various social situations. For example:
While you're in the cinema, in class or at the doctors. Should the phone be turned off,
and if not, what should you do if the phone rings during one of these times?
You are a customer having a conversation on the mobile phone while being served by a
sales assistant at the same time.
You are using the mobile phone while having dinner with family and friends.
When should a mobile phone be turned off or are they so important that they should
never be switched off?

Choice 2: Mobile Phones and Bullying

You are a member of the Student Representative Council. At a meeting some students
have complained that they know of examples of bullying using mobile phones. The
students being bullied feel that they don’t know what to do to overcome the problem.
Prepare a help card outlining what the students and their parents could do to overcome
the problems of cyber bullying. A mobile phone company has offered to distribute a copy
of your help ‘notes’ with any mobile phone sold.
Some useful sites to look for useful material are:
www.atma.org.au
www.cybersmartkids.com.au

40
 Module Eleven
Scams – don’t be caught out

In partnership with
 Module 11
Scams – don’t be caught out

OVERVIEW

Teacher Notes
Module Overview and Curriculum Mapping
Module 11 aims to give students with an understanding of the processes and consequences of
being scammed, and to equip them with the ability to recognise scams.

ENDURING UNDERSTANDINGS
• There is a wide range of scams targeting Australian consumers.
• There are many factors that can contribute to a person becoming more vulnerable to
being a victim of scamming.
• Many scams look authentic. People can be easily tricked.
• Consumers need to be wary of scams that can be very costly.
• Consumer advice on practical strategies to prevent being scammed is freely available.
• Consumer protection is available to Australian consumers who have become victims of
scammers.
• Identity theft in Australia is on the rise and has potentially serious consequences.

LEARNING OUTCOMES
Students:
• Define key terminology associated with scamming practices
• Identify the types of scams currently operating within Australia
• Apply prudent strategies to avoid being scammed
• Are aware of the specific Australian laws designed to prevent scamming
• Understand how scams can succeed
• Are aware of what steps to take when a consumer is a victim of scamming
• Are aware of the organisations which can assist consumers who have been scammed

POWER WORDS Page 2

CURRICULUM MAPPING 3

LIST OF TOPICS
11.1 Types of scams 5
11.2 How scams work 17
11.3 Laws to protect Australian consumers against scams 29
11.4 How to avoid being a victim of a scam 38
11.5 Identity theft 44

1
 Module 11
Scams – don’t be caught out

Power Words

Teacher Notes
Module Overview and Curriculum Mapping
As students work through each topic in this module they will encounter words that may be
new to them, crucial to understanding and completing the worksheets, and/or difficult to spell.
In addition, students may simply find some of this vocabulary interesting and want to use it in
the future. Understanding and being able to use these words will provide students with more
power to make future financial decisions.
There are several approaches to using this “glossary”. The intention is for students to
investigate and find the meanings. They could be given the complete list before they start
the module, or they could set up a table and add new words as they progress through the
activities. There are also specific POWER WORD activities in some topics.
This list is not exhaustive.

ACCC
ACFT
Advance fee fraud
AIC
ASIC
Chain letter
Credit rating
Credit Report
Data destruction software
Demographic
Do Not Call Register
encrypted
Firewall
Fraudulent
Get rich quick
Identity fraud
Money transfer scheme
pfyshing
Pyramid scheme
Scam
spam
sweepstakes

2
 Module 11
Scams – don’t be caught out

CURRICULUM MAPPING

Teacher Notes
Module Overview and Curriculum Mapping
ENGLISH MATHEMATICS GENERAL CAPABILITIES
LITERACY YEAR 9 LITERACY
Comprehending texts through listening, reading
Interpreting, analysing, and viewing
evaluating
Navigate, read and view learning area texts
• Interpret, analyse and • Navigate, read and view a wide range of more
evaluate how different demanding subject-specific texts with an extensive
perspectives of issue, range of graphic representations
event, situation, Interpret and analyse learning area texts
individuals or groups • Interpret and evaluate information within and
are constructed to serve between texts, comparing and contrasting information
using comprehension strategies (ACMSP253)
specific purposes in texts
(ACELY1742) INFORMATION and COMMUNICATION
TECHNOLOGY CAPABILITY
Investigating with ICT
Select and evaluate data and information
• Develop and use criteria systematically to evaluate the
quality, suitability and credibility of located data or
information and sources (ACMMSP239)
CRITICAL and CREATIVE THINKING
Inquiring – identifying, exploring and organisation
information and ideas
Organise and process information
• Critically analyse independently sourced information to
determine bias and reliability (ACELT1639, ACMSP253)
Inquiring – identifying, exploring and organising
information and ideas
Organise and process information
• Critically analyse independently sourced information to
determine bias and reliability (ACELT1639, ACMSP253)
Reflecting on thinking and processes
Think about thinking (metacognition)
• Give reasons to support their thinking, and address
opposing viewpoints and possible weaknesses in their
own positions (ACELT1640, ACMSP247)
PERSONAL and SOCIAL CAPABILITY
Become confident, resilient and adaptable
• Evaluate, rethink and refine approaches to tasks to
take account of unexpected or difficult situations and
safety considerations (ACELY1757)
Social management
Make decisions
• Develop and apply criteria to evaluate the outcomes
of individual and group decisions and analyse the
consequences of their decision making (ACMNA229)

3
 Module 11
Scams – don’t be caught out

CURRICULUM MAPPING

Teacher Notes
Module Overview and Curriculum Mapping
NCFLF DIMENSIONS
Knowledge & Understanding
• Discuss and compare different sources of consumer and financial advice
• Identify types of consumer and financial risks to individuals, families and community and ways of
managing them
Competence
• Analyse relevant information to make informed choices when purchasing goods and services and/or to
resolve consumer choices
• Explain procedures for safe and secure online banking and shopping
• Identify and take precautions to prevent identity theft and explain what to do if this happens to them
• Evaluate marketing claims, for example in advertising and in social media, to influence consumers to
purchase a range of goods and services
Responsibility & Enterprise
• Apply informed and assertive consumer decision-making in a range of ‘real-life’ contexts
• Research and discuss the legal and ethical rights and responsibilities of business in providing goods
and services to consumers
• Practise safe, ethical and responsible behaviour in online and digital consumer and financial contexts

4
 Module 11
Types of scams Topic 11.1

Teacher Notes
Classroom activity
Suggested time: 2 lessons
Student worksheets
Worksheet 1: How many scams are there?
Worksheet 2: How likely are YOU to be scammed?
Resources: The Little Black Book of Scams.
Targeting Scams - Report of the ACCC on scam activity
(These and other publications are available free online at
www.accc.gov.au)
www.scamwatch.gov.au
http: //www.consumer.vic.gov.au/resources-and-education/
scams/avoiding-scams
http://www.moneystuff.net.au/justthefacts-scams
https://www.moneysmart.gov.au/life-events-and-you/under-25s/
online-transactions
http://www.accc.gov.au/
Examples of scams and spam emails actually received.
Current Affairs shows often highlight scams in the community.
Episodes from the ABC show, The Checkout are available on
YouTube. (Teacher preview is essential when assessing suitability of
some segments of this series for use in the classroom.)
Students investigate a range of scams currently being used by scammers in Australia.
A quiz to help determine vulnerability to being scammed is also included.
(a) Introduce this topic by using input from students to define what a scam actually is.
There are many definitions of the term scam but the class should reach a consensus on a
definition along the lines of
“A scam is an illegal and fraudulent business that is set up to trick or take money off an
unsuspecting victim.”
Follow up by asking students to brainstorm whether they or anyone they know has ever
been the victim of a scam. Make a list on the board of any scams students may have
heard about.
It may also be useful to use video resources on scams to introduce the topic. Check the
following websites
• Consumer Affairs Victoria
http://www.consumer.vic.gov.au/resources-and-ducation/scams/consumer-
scams
• Money Stuff
http://www.moneystuff.net.au/justthefacts-scams
• MoneySmart Rookie
https://www.moneysmart.gov.au/life-events-and-you/under-25s/online-
transactions
• www.youtube.com (scams in Australia) 5
 Module 11
Types of scams Topic 11.1

Teacher Notes
(b) Distribute Worksheet 1 - How many scams are there?
Students classify scam examples. 'The Little Black Book of Scams' is available either in
print or download form from www.accc.gov.au.There is a wide range of scams detailed in
this publication. Use the information on different types of scams etc. to complete parts 1
and 2 of this worksheet. Solutions follow.

Solution to Worksheet 1
Part 1

Banking and online account scams Card skimming

Credit card scams
Phoney fraud alerts
Phishing scams (requests for your account
information)
Chain letters and pyramid schemes Chain letters
Pyramid scams
Health and medical scams Fake online pharmacies
Miracle cures
Weight loss scams
Identity theft scams Dumpster diving
Phishing
Phoney fraud alerts
Bogus job opportunities
Investment scams (get rich quick) Cold calling (investment telemarketing)
Investment seminars and real estate scams
Share promotions and hot tips
Sports investment scams
Superannuation scams
Job and employment scams Business opportunity scams
Guaranteed employment/income scams
Work from home scams
Lottery and competition scams (fake prizes) Lottery and sweepstake scams
Unexpected prizes
Mobile phone scams Missed calls and text messages from unknown
numbers
Ring tone scams
SMS competition and trivia scams
Money transfer scams (Nigerian requests) Cheque overpayment scams
Inheritance scams
‘Nigerian 419’ scams
Transferring money for someone else
Up-front payment scams

6
 Module 11
Types of scams Topic 11.1

Teacher Notes
Online scams Auction and shopping scams
Domain name renewal scams
‘Free’ offers on the internet
Modem jacking
Spam (junk mail) offers
Spyware and key loggers
Personalised scams Charity scams
Classified scams
Dating and romance scams
Door-to-door and home maintenance scams
Erase your hard drive before disposing of old
computers
Grooming scam victims
‘Pharming’ scams
Psychic and clairvoyant scams
Social networking scams
Victim lists
‘Whaling’ and ‘spear phishing’ scams
Small business scams Directories and advertising (false billing)
Fax back scams
Office supply scams

7
 Module 11
Types of scams Topic 11.1

Teacher Notes
Solution to Worksheet 1
PART 2
For this activity students need to identify the type of scam for each case study.
CASE STUDY TYPE OF SCAM
Yasmine saw an advertisement for a new box of vitamins. The ad claimed that the Medical scam
vitamins would cure several types of disease, although the claims cannot be verified
by any reputable organisation.
Shan received a letter offering her an easy way to earn money by betting on horse Golden
races. All she had to do was buy a piece of software which would accurately predict opportunity and
the race winners. gambling scam
A popup message appears on Harry’s computer screen advising him of a win in Lottery and
a national competition. He is invited to collect his prize by calling a premium rate sweepstakes
phone number. scam
Dave’s Plumbing recently received an invoice for advertising in a local business trade Small business
magazine. Dave was a little disorganised when it came to keeping business records. scam
Without checking his orders, he paid the bill. In reality the magazine didn’t exist.
An email is sent to Skye asking for help to transfer a large amount of money Advance fee
from an overseas country. In exchange for her help, she is promised a share of the fraud.
money. The scammer asks for her bank account details so that transfer taxes can be
paid, and her share of the money can be deposited. When Skye next checked her
account, all of her savings had been withdrawn.
Alessandro loves to buy things on line, and recently found a site selling smart Online shopping,
phones discounted by over 50%. He used PayPal to buy a phone, but it never classifieds and
arrived. When went back to the site to complain, he realised that the seller had not auction scams
provided a phone number or physical address for further contact.
Jake received a phone call from a technology firm informing him that his computer Computer
has a serious error. The caller offers to fix the problem for a small fee by accessing hacking
his computer remotely and installing software. The scammer actually installed
spyware to collect all of Jakes’ personal details.
Heidi received an email from her bank. The message asked her to log in to her Phishing
account and verify her details via a link in the email. In reality, this was a fake site. (banking, credit
card and online
account scams)
James has an online relationship with Verushka who lives in another country. Dating and
Verushka wants to meet James very much so that they can develop their romance scam
relationship. She cannot afford to travel overseas, so convinces James to send
enough money to pay for Verushka and her mother to fly to Australia. They never
arrive.
Meryl is looking for a job and sees an ad offering excellent an excellent rate of pay Job and
and full training. When she calls the phone number to apply for the job, it takes employment
nearly five minutes for her to realise that there is no job, and she’s actually called a scam
premium rate phone number.

8
 Module 11
Types of scams Topic 11.1

Teacher Notes
(c) Establish with the class some of the common reasons that might contribute to a person
being scammed. These include being too trusting, not ensuring a website is legitimate,
not checking for a secure payment system, and taking short cuts to make money quickly.
Brainstorm with students to list possible strategies to reduce the risk of ever being
scammed. For example, always get independent advice, do background research on the
business you are dealing with and always read the fine print before signing a deal.
(d) Students can now complete Worksheet 2: How likely are YOU to be scammed?
They will need approximately ten minutes to read through the list of personal statements
before circling the response that best applies to them. Students can also take the
following quizzes for further insight on personal consumer skills.
https://www.moneysmart.gov.au/tools-and-resources/quizzes/scams-quiz
http://www.consumer.vic.gov.au/resources-and-education/scams/scams-quiz
As a class, discuss the results of the survey - ask students if they believe they are a
savvy consumer who is unlikely to be scammed or one who is more vulnerable to being
scammed. Discuss the possible reasons for this. Provide feedback on student responses
during the class discussions.
(e) Extension Activity
http://www.accc.gov.au/publications/targeting-scams-report-on-scam-activity
Access the latest edition of “Targeting Scams - Report of the ACCC on scam activity”
and discuss with students the statistics on scam types, delivery methods, reports made,
financial losses etc. These statistics can also be used by students to make comparisons
and create graphs and charts. Use the full report for an in depth activity, or the snapshot
page if time is limited.
(f) Reflective Learning
After having considered the types of scams currently popular in Australia, students now
reflect on the issue of vulnerability to being scammed.
Consider and discuss the following statements:
• Why has use of technology such as the internet made it easier for scammers around
the world?
• If people are naïve and get scammed, is it their own fault?
• Are older people more vulnerable to being scammed?

9
 Module 11
Types of scams Topic 11.1

PART 1

How many scams are there?

Worksheet 1
Classify the following scams (and any others you may have discussed in class) according to the
categories in the table which follows:

Auction and shopping scams Miracle cures,

Bogus job opportunities Missed calls and text messages from
unknown numbers
Business opportunity scams Modem jacking
Card skimming 'Nigerian 419’ scams
Chain letters Office supply scams
Charity scams ‘Pharming’ scams
Cheque overpayment scams Phishing scams
Classified scams Phoney fraud alerts
Cold calling Psychic and clairvoyant scams
Credit card scams Ring tone scams
Dating and romance scams Share promotions and hot tips
Directories and advertising (false billing) SMS competition and trivia scams
Domain name renewal scams Social networking scams
Door-to-door and home maintenance scams Spam (junk mail) offers
Accessing information from the hard drive of Sports investment scams
old computers which have been thrown out
Fake online pharmacies Spyware and key loggers
Fax back scams Superannuation scams,
‘Free’ offers on the internet Transferring money for someone else
Phishing Unexpected prizes
Grooming scam victims Up-front payment scams
Phoney fraud alerts, dumpster diving
Guaranteed employment/income scams Victim lists
Inheritance scams Weight loss scams
Investment seminars and real estate scams ‘Whaling’ and ‘spear phishing’ scams
Lottery and sweepstake scams Work from home scams

10
 Module 11
Types of scams Topic 11.1

How many scams are there?

Worksheet 1
Banking and online
account scams

Chain letters and

pyramid schemes

Health and medical

scams

Identity theft scams

Investment scams
(get rich quick)

Job and employment

scams

Lottery and
competition scams
(fake prizes)

Mobile phone scams

Money transfer scams

(Nigerian requests)

Online scams

Personalised scams

Small business scams

11
 Module 11
Types of scams Topic 11.1

PART 2

How many scams are there?

Worksheet 1
Read the following 10 case studies on the next page and classify according to this list.
• ADVANCE FEE FRAUD
• COMPUTER HACKING
• LOTTERY AND SWEEPSTAKES SCAMS
• BANKING, CREDIT CARD and ONLINE ACCOUNT SCAMS
• ONLINE SHOPPING, CLASSFIEDS and AUCTION SCAMS
• UNEXPECTED PRIZES
• SMALL BUSINESS SCAMS
• JOB AND EMPLOYMENT SCAMS
• DATING AND ROMANCE SCAMS
• GOLDEN OPPORTUNITY and GAMBLING SCAMS
• CHARITY SCAMS
• MEDICAL SCAMS

12
 Module 11
Types of scams Topic 11.1

How many scams are there?

Worksheet 1
CASE STUDY TYPE OF SCAM
Yasmine saw and advertisement for a new box of vitamins. The
ad claimed that the vitamins would cure several types of disease,
although the claims cannot be verified by any reputable organisation.
Shan received a letter offering her an easy way to earn money by betting
on horse races. All she had to do was buy a piece of software which would
accurately predict the race winners.

A popup message appears on Harry’s computer screen advising him

of a win in a national competition. He is invited to collect his prize by
calling a premium rate phone number.

Dave’s Plumbing recently received an invoice for advertising in a local business

trade magazine. Dave was a little disorganised when it came to keeping business
records. Without checking his orders, he paid the bill. In reality the magazine
didn’t exist.
An email is sent to Skye asking for help to transfer a large amount
of money from an overseas country. In exchange for her help, she
is promised a share of the money. The scammer asks for her bank
account details so that transfer taxes can be paid, and her share of
the money can be deposited. When Skye next checked her account,
all of her savings had been withdrawn.
Alessandro loves to buy things on line, and recently found a site
selling smart phones discounted by over 50%. He used PayPal to
buy a phone, but it never arrived. When went back to the site to
complain, he realised that the seller had not provided a phone
number or physical address for further contact.
Jake received a phone call from a technology firm informing him that his
computer has a serious error. The caller offers to fix the problem for a small fee
by accessing his computer remotely and installing software. The scammer actually
installed spyware to collect all of James’ personal details.
Heidi received an email from her bank. The message asked her to
log in to her account and verify her details via a link in the email. In
reality, this was a fake site.

James has an online relationship with Verushka who lives in another country.
Verushka wants to meet James very much so that they can develop their
relationship. She cannot afford to travel overseas, so convinces James to send
enough money to pay for Verushka and her mother to fly to Australia
Meryl is looking for a job and sees an ad offering excellent an
excellent rate of pay and full training. When she calls the phone
number to apply for the job, it takes nearly five minutes for her to
realise that there is not job, and she’s actually called a premium rate
phone number.

13
 Module 11
Types of scams Topic 11.1

How likely are YOU to be scammed?

Worksheet 2
PERSONAL STATEMENT TYPE OF SCAM
Whenever I get an email offering easy money or free items Always Sometimes Never
I ignore and delete it straight away
I always read any offer or contract closely to make sure I Always Sometimes Never
know exactly what I am getting myself into
I don’t think it is easy to get rich quick. I prefer not to take big risks Always Sometimes Never
in the pursuit of quick money
If I owned a credit card I wouldn’t feel comfortable giving my Always Sometimes Never
personal details and credit card number to someone over the phone
I didn’t know
Whenever I do internet banking I always go directly to the bank’s Always Sometimes Never
internet site rather than access the site through an email I may have
received
When choosing to buy from a particular business I like to do Always Sometimes Never
research first so I know exactly what I am buying
I would never hand over money unless I was confident that the Always Sometimes Never
business or person I am dealing with is reputable
If I ever got into trouble and needed help or advice I would try to Always Sometimes Never
find out the best person to contact to get advice

Mostly always
Congratulations- you are a savvy consumer who is very unlikely to be scammed. You like to
check out and research everything thoroughly before buying. You are careful when using the
internet and ignore so called “amazing” offers when they reach your inbox. You don’t believe
in get rich schemes but realise that building wealth takes hard work.

Mostly sometimes
Good- you are on the right track, but there are areas for improvement. While you don’t believe
everything you hear or read, you can sometimes be a bit too trusting. If in doubt, always seek
independent advice. Make sure you do background research first before handing over money
to any person or business you are unsure about.

Mostly never
Poor- you have a lot of work to do if you want to avoid going through
life and being scammed. It’s important that you take the time to read
the fine print of any contract closely. If an offer is too good to be true, it
usually is. Ignore any emails that you may receive when you are unsure
if it is suspicious and never share personal details over the phone.

You can also take the MoneySmart scam quiz.

https://www.moneysmart.gov.au/tools-and-resources/quizzes/scams-quiz
or the Consumer Affairs Victoria Scam quiz
http://www.consumer.vic.gov.au/resources-and-education/scams/scams-quiz

14
 Module 11
How scams work Topic 11.2

Teacher Notes
Classroom activity
Suggested time: 2 lessons
Student worksheets
Worksheet 3: Why do scams succeed?
Worksheet 4: Help – what would you do?
Resources: http://www.accc.gov.au/ www.boq.com.au
The following activities can be used to reflect on why some scams are successful in tricking
people to hand over their money. Students will look specifically at a pyramid scheme and a
banking scam. A range of case study scenarios is presented to prompt a response in the form
of advice to potential scamming victims.

(a) Explain to students that if a scam is to be successful, then it needs to look authentic.
This should alert students to the fact that it can be quite easy to be tricked by scammers.
A scammer will try to make any potential scam look as real as possible so that a
potential victim is unaware of the scam.

(b) Distribute Worksheet 3: Why do scams succeed?

Present the case study on Gemma. Students can refer to the ACCC website to help
identify an illegal pyramid scheme. It should become apparent that these schemes always
collapse. As a reflection, ask students, why, if getting rich is so easy, isn’t everybody rich?
Students could also provide advice to Gemma about the implications of joining this new
investment club.
The number of people receiving hoax emails from scammers pretending to be banks
asking the customer to verify their account details continues to increase. If the customer
follows the link from the email they will be taken to a fake internet site that looks like
the official bank website. If consumers update their personal details and account numbers
on this site, the scammer can then use this information to clean out the person’s bank
account. This leads to the final component of the worksheet which requires students to
analyse the email Selina received.
A class discussion on why Selina must not respond to this email would be useful at this
point. Discuss with students why a bank would never send emails asking a customer to
provide personal details.
Students research the BOQ (Bank of Queensland) or any other bank website to identify
current scam alerts. Discuss with students why banks are so concerned about customers
not being careful (for example inadvertently giving out personal information) when it
comes to internet banking.

15
 Module 11
How scams work Topic 11.2

Teacher Notes
For Part 4 of Worksheet 3 the letter from the Customer Service Manager could include
the following advice:
• never respond to emails requiring the customer to enter personal information
• always typing in the bank’s website address themselves (instead of following a link
from an email)
• look out for signs of hoax emails (such as poor spelling or grammatical errors, poor
art work/colours, inconsistency of font, etc)
• determine a course of action if they think they have been the victim of a scammer
(e.g. contact the bank immediately for assistance).

Finally, students select from the true/false statements relating to why scams succeed.
Solution:
1: True, 2: False, 3: True, 4: False, 5: True, 6: True, 7: True and 8: False

(c) Distribute Worksheet 4: Help – What would you do?

Students are required to analyse seven case studies. Ideally, students should work in small
groups, consider the nature of the scam, and then decide on the actions which should be
taken in response to the situation.
Once students have reviewed and commented on the case studies, the teacher could
guide a class discussion on the responses to the individual scams. Another approach is to
agree on a class consensus on the appropriate action for each case study.
There is a short scrambled word task at the end of this worksheet. Restrict student access
to an online anagram solver. The answers are:
1: chain 2: psychic 3: spyware 4: hoax 5: identification 6: legitimate and 7: advice

(d) Reflective learning

Students create an individual scam scenario (using the format in Worksheet 4) and then
ask a class peer to provide advice.
As a class debate the topic:
'If a bank customer loses money due to a scam, the bank has an obligation to refund that
customer’s money.'

16
 Module 11
How scams work Topic 11.2

1. GET RICH QUICK???

Why do scams succeed?

Worksheet 3
Gemma receives an offer too good to be true!
“I sometimes get envious of friends who seem to have more money than I do. They
buy more expensive clothes than I can afford and manage to go out all the time.
There must be an easier and faster way for me to make more money than I presently
earn as a sales assistant at a supermarket”.
“A friend of my cousin has asked me to join a new investment club that promises
to make big bucks fast. All I have to do is pay an upfront joining fee of $500, then
convince as many friends and family as possible to join this money making venture.
I’ve been told that if I can persuade enough people to join the group I can make
at least ten times as much as my initial investment. I like the sound of this as I
sometimes get bored in my job and would rather earn better money for little effort.
Should I join this new investment club?”

Identify (by internet research or check the ACCC Little Black Book of Scams) the type of
scam Gemma has been invited to participate in.
Explain how this type of scam operates.

What are the consequences of this type of scam?

If getting rich quick is so easy why isn’t everybody doing it?

17
 Module 11
How scams work Topic 11.2

2. SCAM EMAILS

Why do scams succeed?

Worksheet 3
If a scam is to be successful, then it needs to look authentic. The scammer will try to
make it look as real as possible so that the person they are trying to scam does not
suspect anything out of the ordinary.
For example, you may receive an email which looks like it is from the customer service
department at your local bank asking you to verify your account and personal details.
If you click on the link provided in the email you will be taken to a website which looks
very similar to your bank’s website. Little do you know that you are about to give away
your bank account details and personal information unwittingly. Once this scammer has
this information they will then try to clean out your bank account.

Why would a bank never send emails requesting a customer to enter personal
information, or redirect the customer to login to Internet Banking?

Hoax emails that look like they come from banks are a nuisance for banks. Naturally,
banks will try to minimise the amount of fraud and scams targeted at their customers.
Access bank websites and note any current scams being targeted at customers.
For example:
www.boq.com.au>Online banking > Internet Banking > Internet Banking Security.
18
 Module 11
How scams work Topic 11.2

3. Selina who has been a customer of the Bank of Queensland (BOQ)

Why do scams succeed?

Worksheet 3
for 10 years recently received this email.

Examine it closely, and comment on

• What factors indicate that this is not a genuine email from BOQ?
• What action Selina should take?
• How you would expect a bank to make a genuine approach to a customer?
• What would most likely happen if Selina verifies her account information on the link
provided?

From: BOQ
Sent: Friday 15 April, 2014
Subject: Verifying Account Details Immediately

Dear Customer,
In order to protect the security of our customers, BOQ is upgrading our security
systems. In order to ensure the safe and secure continuation of BOQ’s online banking
system, we are currently reviewing all our customer accounts.
We were unsuccessful in contacting you by phone during week to complete this
process, but wish to verify your account details for our important security update.
To ensure this verification is a success please verify your account information by
following This link.
If you do not verify your account details on the above link within the next three
business days, your account may be frozen.

Customer Service
BOQ

19
 Module 11
How scams work Topic 11.2

4. You are the Customer Service Manager at BOQ and have noted that a significant

Why do scams succeed?

Worksheet 3
number of customers are being scammed into giving out their bank account and
personal details by scammers setting up hoax websites.
Design a letter that you would send out to all of your customers. You should warn them
about scam emails and include some advice on how to deal with these, and how to
conduct safe internet banking.

5. Read the following statements about scams and circle true or false.
Your teacher will then discuss the answers with you.

STATEMENT True (Circle) False (Circle)

1 Scams are targeted at all types of people regardless of their age,
location or income.
2 Almost all scams fail because Australian consumers are well
educated and almost never fooled.
3 For a scam to be successful it must look authentic and real so that
the potential victim doesn’t suspect it is a scam.
4 Worrying about scams is a waste of time because all organisations
must follow strict laws in Australia and they would never scam or
rip of their customers intentionally.
5 The widespread use of the internet has made it easier for
scammers around the world to pray on victims.
6 Scammers often succeed because they seek out vulnerable people
who they manipulate to follow their instructions.
7 Successful scams often lure potential victims by offering free gifts.
8 Most scams involve promises such as monetary incentives.

20
 Module 11
How scams work Topic 11.2

Case Study 1:

Help, what would you do?

Worksheet 4
Jordan has received an email informing him that he
has won $100,000 in a lottery. Jordon found this
exciting for a moment but then thought it a bit
strange as he couldn’t recall buying a lottery ticket.
To claim the prize the email stated that Jordan
should to call the prize line phone number (which
begins with 19).

• What is it that alerts you to the fact that this is a scam, and not a genuine offer?

• What problems might Jordan face if he took up the offer?

• What advice would you provide to Jordan?

21
 Module 11
How scams work Topic 11.2

Case Study 2:

Help, what would you do?

Worksheet 4
Craig was checking through his emails when he noticed
one from a source he didn’t recognise. This one was
from Dodgy Brothers Lawyers and stated that a distant
relative had recently passed away and Craig had been
left $500,000 in the will. In order to claim this money,
Craig was asked to forward his account number and
personal details to the lawyers so the money could be
deposited into his bank account.

• What is it that alerts you to the fact that this is a scam, and not a genuine offer?

• What problems might Craig face if he took up the offer?

• What advice would you provide to Craig?

22
 Module 11
How scams work Topic 11.2

Case Study 3:

Help, what would you do?

Worksheet 4
Your Gran, who is a widow, now lives alone in the house she and your Grandfather lived in
since they were married. Recently, she answered a knock on the front door. It was a man
dressed in overalls. He said his name was Bill and that he was a roof tiler. Bill said that he had
noticed that the roof of your Gran’s house needed retiling urgently as it was in a terrible state
…. the whole house could be water damaged the next time it rained! He told her that if she
signed up today with a cash deposit of 50% he would retile the roof within a week for her for
a discounted price of $3,000.

• What is it that alerts you to the fact that this is a scam, and not a genuine offer?

• What problems might your Gran face if she took up the offer?

• What advice would you provide to Gran?

23
 Module 11
How scams work Topic 11.2

Scenario 4:

Help, what would you do?

Worksheet 4
Jing recently received a text message from a number which
was not in her contact list. The message read “Hi, hope
you’re still able to come to my party on Saturday. Everyone
will be there! See you then. Sam”. Jing did have a friend
name Sam, but this was definitely not Sam’s number.

• What is it that alerts you to the fact that this is a scam, and not a genuine offer?

• What problems might Jing face if she took up the offer?

• What advice would you provide to Jing?

24
 Module 11
How scams work Topic 11.2

Case Study 5:

Help, what would you do?

Worksheet 4
Jessie who is 19 has had a lot of trouble finding a job she
really likes. She recently noticed a poster in a shop window
offering a guaranteed income of $1,000 a week. The job
involved selling jewellery at parties. The poster encouraged
applicants to call a phone number quickly as only a limited
number of positions are available. Jessie called the number
and was told that to get started she would be required to
purchase a starter kit with a full set of the jewellery. The
cost of the kit is $750, and is used to demonstrate the
products at the parties.

• What is it that alerts you to the fact that this is a scam, and not a genuine offer?

• What problems might Jessie face if she took up the offer?

• What advice would you provide to Jessie?

25
 Module 11
How scams work Topic 11.2

Case Study 6:

Help, what would you do?

Worksheet 4
Tomas Ramos answered his phone one evening.
The caller said that she was working for a charity
collecting for families affected by the recent
flood. She mentioned that the area he lived in
was not flood affected, and she knew that most
people who escaped flood damage would want
to help those who didn’t. She said that even a
small donation would help. Tomas would not be
inconvenienced, as he could easily donate over the
phone by giving her his credit card details. Tomas felt sorry for the flood victims. He also felt
guilty as he had not contributed anything in response to the recent appeals.

• What is it that alerts you to the fact that this is a scam, and not a genuine offer?

• What problems might Tomas face if he took up the offer?

• What advice would you provide to Tomas?

26
 Module 11
How scams work Topic 11.2

Case Study 7:

Help, what would you do?

Worksheet 4
Teresa is a stay at home Mum with two young children.
She recently received an email from a business
advertising software which guaranteed to predict share
market movements. Teresa knew a little about the share
market, as she and her partner already owned some
blue chip shares. She thought that maybe this could be
a great way to earn a little extra money. Teresa could
easily buy and sell shares using the predictions from the
software. The advantage of this over a regular job would
be that she could do it from home, and not have to put
her children into childcare.
• What is it that alerts you to the fact that this is a scam, and not a genuine offer?

• What problems might Teresa face if she took up the offer?

• What advice would you provide to Teresa?

27
 Module 11
How scams work Topic 11.2

Help, what would you do?

Worksheet 4
Use the clues given to rearrange the words below into the correct term:

1. I C N A H
Clue: This type of letter is a scam and requires you to send money to people.

2. C Y S C I P H
Clue: These people may offer you winning lottery numbers or solutions to personal
problems for a fee.

3. A W E R I P S
Clue: Software which takes information from a computer without the owner’s consent.

4. A X H O
Clue: This type of email may result in unauthorised access to your bank account if you
follow through with the instructions.

5. F A C I T N I N I O T I D E
Clue: If someone approaches you for a donation to a charity be sure to ask for this..

6. T I G A L E T I M E
Clue: These types of lotteries do not require you to pay a fee to collect your winnings.

7. C V D A E I
Clue: You should always access this before investing money.

28
Laws to protect Australian consumers Module 11
against scams Topic 11.3

Teacher Notes
Classroom activity
Suggested time: 2 lessons
Student worksheets
Worksheet 5: Reporting scams
Worksheet 6: Detecting Scams
Resources: Websites:
www.moneysmart.gov.au
www.accc.gov.au
www.scamwatch.gov.au
http://www.acma.gov.au/Citizen
www.consumerlaw.gov.au
http://www.fairtrading.nsw.gov.au/
www.fairtrading.qld.gov.au
www.cbs.sa.gov.au
www.consumer.tas.gov.au
www.consumer.vic.gov.au
www.commerce.wa.gov.au/ConsumerProtection
www.consumeraffairs.nt.gov.au

The following activities focus on the protection available to Australian consumers from
scammers. Students are also made aware of the steps required to report a scam if they ever
happen to become a victim. Key organisations which devote significant resources to tackling
the issue of scams in Australia are introduced: the ACCC (Australian Competition and
Consumer Commission), State Consumer Affairs and Fair Trading departments, and ASIC
(Australian Securities and Investment Commission)
In comparison to other countries, Australia’s legal system is strict in terms of laws designed to
protect consumers from fraud and dishonesty operating from within Australia. (Unfortunately,
Australian consumers have little or no protection from overseas websites or scammers. The
legislation only applies to Australian entities and is thus limited in impact.)
However, having a well regarded legal system around the world is also important in
attracting potential investment in the Australian economy and ensuring that consumers are
confident in making informed financial decisions. Whilst no legal system can offer complete
protection from scammers, victims of scamming can seek help and advice from a number of
organisations.
For example, ASIC provides practical and current advice to consumers on its MoneySmart
website.

29
Laws to protect Australian consumers Module 11
against scams Topic 11.3

Teacher Notes
Particular reference is made to companies offering investment opportunities or loans.
Consumers should not deal with any organisation which does not hold a current Australian
Financial Services licence or Australian Credit Services Licence from ASIC.
Go to https://connectonline.asic.gov.au to check that an organisation is registered.
Alternatively consumers can also look at the list of unlicensed organisations at
https://www.moneysmart.gov.au/scams

(a) Distribute Worksheet 5: Reporting scams.

Students investigate the major players in Australian consumer protection to determine
the procedures for reporting scams. For the MoneySmart website activity, students will
need to access the “reporting scams” section. This information can be used to determine
the appropriate government agency for the scam types listed.

Solution to Worksheet 5

REPORT TO EXAMPLES OF SCAMS

Your local bank • Banking scams
• credit card scams
• Spam emails requesting banking information
Your local police station • Banking and credit card scams
• Fraud, theft and other crimes
Australian Federal Police • Fraud, theft and other crimes
Australian Taxation Office • Tax scams
• identity theft involving tax file numbers
Australian Communications • Spam emails
and Media Authority • Mobile phone scams
Australian Consumer and • Scams from overseas or interstate, including False
Competition Commission billing, chain letter scams
Australian Securities and • Financial and investment scams
Investment Commission • Superannuation
• managed funds
• financial advice
• financial products
• insurance

30
Laws to protect Australian consumers Module 11
against scams Topic 11.3

Teacher Notes
(b) Distribute Worksheet 6: Detecting scams.
Students will need internet access to research for this activity.
The second part of this activity requires students to create a SCAM DETECTIVE advertising
campaign. Use the websites listed to research content, and then create a campaign which
might include:
• Poster or print advertisement
• Fact sheet with FAQs
• Set of text messages or tweets

(c) Extension Activities

Students could
• add a further component (such as create a short video for YouTube, TV news report or
ad, facebook page or website) to the SCAM DETECTIVE campaign.
• download the free NSW Government Fair Trading Scam Buster app.
• follow Consumer Affairs Vic for scam updates @consumervic
• Visit the NSW Government Fair Trading Facebook page for more information
https://www.facebook.com/StopTravellingConMen
• Enter the Queensland 'Buy Smart' competition
http://www.fairtrading.qld.gov.au/buy-smart-competition.htm

31
Laws to protect Australian consumers Module 11
against scams Topic 11.3

Worksheet 5
Reporting Scams
Scams do not discriminate, anyone can be conned.
It may be impossible to stop all illegal scams, but
in Australia there are laws aimed at stamping out
illegal and fraudulent schemes.
Have you ever been the victim of a scam or seen
something that you think is a scam? There are
organisations in Australia ready to provide action
and advice about what to do. It’s very important
to seek help if you have been targeted for a scam
as this will help not only you but assist others from
being scammed too.

Who would you report a scam to?

Complete the table on the next page by selecting one or more organisations from the list
below. The following websites may help you with this task.
www.moneysmart.com.au
www.accc.gov.au

ORGANISATONS
ASIC – Australian Securities and Investments Commission
ATO – Australian Taxation Office
ACCC Australian Consumer and Competition Commission (SCAMwatch)
State Consumer Affairs or Fair Trading office
ACMA – Australian Communications and Media Authority www.acma.gov.au
Your bank or financial institution
Your local police

32
 Laws to protect Australian consumers Module 11
against scams Topic 11.3

Worksheet 5
Reporting Scams
TYPE OF SCAM REPORT SCAM TO
Email requesting banking information

You pay upfront cash deposit for your house to be painted, but
the painters who offered the service never arrive.

Email inviting you to participate in a pyramid

marketing scheme

Chain letter requesting money

Identity theft involving your tax file number

Financial Investment Scam guaranteeing

unbelievably high returns on your money

Online theft of money from your bank account

Zombie spammers have infected your computer with software

which spams other people

A local business (which has a shop front) fails to provide a

service for which you’ve paid.

Someone has hacked into your Facebook account and is asking

your friends for money.

Email from bank asking you to verify your password

You receive a bill demanding payment for services which you’ve

never ordered

You receive a text from a ‘19’ number

33
Laws to protect Australian consumers Module 11
against scams Topic 11.3

Go to SCAM watch (The Australian Competition and Consumer Commission)

Worksheet 5
Reporting Scams
http://www.scamwatch.gov.au/content/index.phtml/tag/Scamwatch/
and answer the following questions:
(a) The website provides information to consumers and small businesses about how to recognize,
avoid and report scams. What are the current scams on the SCAM watch radar?

(b) What is the procedure for reporting a scam?

(c) List and briefly describe the six psychological tricks used to scam people.
•

34
Laws to protect Australian consumers Module 11
against scams Topic 11.3

(d) Select two victim stories featured on this site. Briefly describe how the victims were scammed.

Worksheet 5
Reporting Scams
Story 1:

Story 2:

(e) What are the 8 golden rules for protecting yourself against scamming?
1
2
3
4
5
6
7
8

35
Laws to protect Australian consumers Module 11
against scams Topic 11.3

1. Consumer Affairs Victoria

Worksheet 6
Detecting Scams
Go to http://www.consumer.vic.gov.au/resources-and-education/scams
and take the online scam quiz.

STEVIE’S SCAM SCHOOL

Select and watch one of Stevie’s videos. How does Stevie set up the scam described?
What are his suggestions for avoiding this type of scam?

2. NSW Government Fair Trading

Go to http://www.fairtrading.nsw.gov.au/ftw/Consumers/Scams.page?
Check the interactive map for scam reports around Australia.
Choose and describe one scam from three different states.

STATE

STATE

STATE

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Laws to protect Australian consumers Module 11
against scams Topic 11.3

3. SCAM DETECTIVE

Worksheet 6
Detecting Scams
Design an advertising campaign to warn teenagers about scams. Mention three to five
scams most likely to catch people in the 14 – 16 year age bracket.

Design components:
• Poster or print advertisement
• Fact sheet with FAQs
• Set of text messages or tweets

Design guidelines:
• Your campaign should be informative and persuasive.
• The individual components should be brief and to the point.
• The individual components should be linked to each other.
• Use a key word or catch phrase such as “Say no to scams!!”
• The message should be clear and easy to remember.
• Aim for visual appeal with appropriate text, colour and illustrations (such as a picture
or graph).

Use these websites to start your research.

www.moneysmart.gov.au
www.accc.gov.au
www.scamwatch.gov.au www.consumer.vic.gov.au
www.moneysmart.gov.au
http://www.fairtrading.nsw.gov.au/

37
 Module 11
New how to avoid being the victim of a scam Topic 11.4

Teacher Notes
Research Activity
Suggested time: 2 – 4 lessons
Student worksheets
Worksheet 7: Scam Survey
Worksheet 8: Spread the Word!
Resources: Websites:
www.moneysmart.gov.au
www.scamwatch.gov.au
http://www.aic.gov.au/media_library/publications/tbp/tbp056/
tbp056.pdf (Australian Consumer Fraud Taskforce: Results of the
2012 online consumer fraud survey)

The following research tasks are designed to highlight the impact of scamming activities on
Australians. The activities on these worksheets require high literacy skills levels. It may be more
appropriate for some students to work on these tasks in groups rather than individually.

(a) Distribute Worksheet 7

Students access the AIC (Australian Institute of Criminology) website report from the
survey on consumer fraud to answer these questions. Solution to worksheet 7
1. Which three scam types were considered to be a crime?
advance fee fraud (81%), phishing (81%) and computer support scams (79%)
2. What commodity did most of the scams that took place on online shopping and
auction sites involve?
Sale of a motor vehicle (47.3%)
3. Which three states reported the highest number of scams?
NSW, QLD, VIC
4. Which age group reported the highest percentage of age victimisation?
‘35 to 44 years’ and ‘over 65 years’ (16.5% of total respondents within those
age categories
5. Which income category reported the highest percentage of victimisation?
earned $20,000 to less than $40,000 (20% of total)
6. What were the most common reasons for not reporting scams?
were ‘unsure of which agency to contact’ (40% of the total sample),
‘I didn’t think anything would be done’ (32%)
‘not worth the effort’ (29%)
7. What were the most common reasons given for reporting scams?
‘wanted to prevent others from being scammed’ (39% of the total sample),
‘knew it was the right thing to do’ (28%)
‘to assist in the investigation of an offence’ (26%)

38
 Module 11
New how to avoid being the victim of a scam Topic 11.4

Teacher Notes
8. What were the top two reasons given for not responding to scam invitations?
‘had seen/heard this was a type of scam in the media or from a public source’
(55% of the total sample of 1,576)
‘had received similar offers before and thought they were scams’ (55%)
9. Graph the data on page 8 for:
• Scam invitations received by type
• Scam by method of delivery
10. From the findings of the survey, what recommendations were made for the focus of
future campaigns?
• highlighting the use of new technologies, yet keeping people aware that
scammers are adaptive and will find new ways to use older technology, such as
the Computer Support Centre scams of 2011 and 2012
• awareness campaigns to educate members of the public around victimisation, in
particular to encourage a change in societal attitudes towards victims of scams
and online frauds; and
• continuing to raise awareness of the importance of personal information in an
age of identity crime and online transactions

39
 Module 11
New how to avoid being the victim of a scam Topic 11.4

Teacher Notes
(b) Distribute WORKSHEET 8 – Spread the Word!
Students publish an e-newsletter which will include ideas and articles about being a
wise consumer and how to avoid being scammed. Depending on the time available, this
activity can be completed in a small group, or individually.
The aim of the newsletter is to educate the public.
Students could use the Microsoft word newsletter template to publish the newsletter.
Information required:
• A name for the newsletter
• A logo
• Some images
• Reference to the key findings from the Australasian Consumer Fraud Taskforce survey
(used for worksheet 7) to source a short help article addressing the interests and
needs of one of the key demographic groups identified as more likely to be scammed
(income or age group). Take into consideration the common reasons for not reporting
a scam to encourage people to take action.
• Ideas for 4 additional relevant and interesting feature articles which will be
announced on the front page

(g) Reflective learning

After having considered other individuals’ attitudes and experiences relating to scams,
refer students to their responses from Worksheet 2 – How likely are you to be scammed?
Review personal knowledge and position of exposure to undue risks from scammers.

40
New how to avoid being the victim of a scam Module 11
Topic 11.4

In 2012 the Australasian Consumer Fraud Taskforce conducted

Worksheet 7
Scam Survey
an online survey on consumer fraud. Access the report from the
Australian Institute of Criminology:
http://www.aic.gov.au/media_library/publications/tbp/tbp056/
tbp056.pdf

Answer the following questions.

• Which three scam types were considered to be a crime?

• What commodity did most of the scams that took place on online shopping and auction
sites involve?

• Which three states reported the highest number of scams?

• Which age group reported the highest percentage of age victimisation?

41
New how to avoid being the victim of a scam Module 11
Topic 11.4

• Which income category reported the highest percentage of victimisation?

Worksheet 7
Scam Survey
• What were the most common reasons for not reporting scams?

• What were the most common reasons given for reporting scams?

• What were the top two reasons given for not responding to scam invitations?

• From the findings of the survey, what are the two recommendations made for the focus of
future campaigns?

Finally, graph the data on page 8 for:

• Scam invitations received by type
• Sam by method of delivery

42
New how to avoid being the victim of a scam Module 11
Topic 11.4

START PUBLISHING!

Worksheet 8
Spread the Word!
You are planning to edit and publish a monthly e-newsletter which will include ideas and
articles about being a wise consumer and how to avoid being scammed.
The aim of your newsletter is to educate the public.
Your task is to publish the first edition.
You will need to create:
• A name for the newsletter
• A logo
• Some images
Newsletter content
• Write a short help article which addresses the interests and needs of a key demographic
(income or age group) group most likely to be scammed. Refer to the key findings from
the Australasian Consumer Fraud Taskforce survey (used for worksheet 7). Take into
consideration the common reasons for not reporting a scam when suggesting ways to
encourage people to take action.
• Refer to the Scamwatch and MoneySmart websites, and create an interview article with a
consumer: “Victim of shocking scam speaks out!”
• Ideas for 4 additional relevant and interesting feature articles which are announced on the
front page

Select a newsletter template from Microsoft word and publish your newsletter!

43
 Module 11
Identity theft Topic 11.5

Teacher Notes
Classroom Activity
Suggested time: 2 lessons
Student worksheets
Worksheet 9: Don’t be a victim
Worksheet 10: Scam revision fun!
Resources: http://www.ag.gov.au/identitysecurity
PROTECTING YOUR IDENTITY BOOKLET
https://www.moneysmart.gov.au/scams/other-scams/identity-
fraud
http://www.scamwatch.gov.au/content/index.phtml/tag/
identitytheft#h2_41
http://www.mycreditfile.com.au/home/free-credit-file.dot

The following activities focus on the significant impact of identity theft on the Australian
community.
(a) Direct students to internet research to find a definition for identity theft.
For example: Identify theft is fraud. A thief steals important pieces of personal
information (such as driver’s licence details, bank account number etc) in order to
impersonate someone else. The thief could use the stolen information to obtain credit,
access existing bank accounts, misrepresent someone through social media or even
commit crimes.
Brainstorm with students to compile a list of possible consequences of identity theft.
Discuss the potential further consequences of identity theft such as the victim suffering
an adverse credit rating, or even a criminal record.
(b) Direct students’ research of websites (listed above) to recommend strategies to avoid
becoming the victim of identity theft. These might include:
• Keep all personal documents such as birth certificate, passport, Medicare card, drivers
licence and credit and debit cards in a safe and secure spot. If these documents are stolen
or lost take action immediately.
• When travelling, be wary of undertaking internet banking on a public computer in case a
virus has been purposely set up to gain access to your banking details.
• If you have a Facebook page, be wary of displaying personal details such as birthdates,
home and email addresses, phone number, etc.
• Check your credit file once a year to make sure that no suspicious activity shows up on
your credit file.
• Memorise banking passwords and Personal Identification Numbers (PIN) and never write
these on the cards.
• Contact the police and/or your bank immediately if you think you are the victim of
identity theft.

44
 Module 11
Identity theft Topic 11.5

Teacher Notes
• Arrange for mail redirection should you be on an extended holiday or move house to
ensure you receive all your mail including bills.
• Shred any financial documents (such as bank and credit card statements, telephone bills,
etc) before throwing away.

(c) Distribute Worksheet 9: Don’t be a victim.

This activity focuses on the consequences of identity theft. Students read through four
different case studies relating to identity theft and write their responses in the space
provided on the worksheet. A class discussion on identity theft should follow. Students
then complete part 2 of the worksheet - producing a guide for young people about the
potential dangers of social media. Guidelines have been provided for students about
what to include.

(d) Distribute Worksheet 10: Scam revision fun!

Students read the clues and then complete the crossword on scams. Reference to
previous student worksheets will be helpful. The answers for the crossword are:
Clues Across:
2: Research, 4: ASIC, 6: Scam, 7: Delete, 8: Spam, 11: Online, 12: Internet, 14: Chain,
15: ACCC, 16: Fake
Clues Down:
1: Credit, 3: SCAMwatch, 4: Authentic, 5: Phishing, 9: Money, 10: Virus, 13: Fine

Students can now complete the revision true/false quiz. The answers are:
1: True, 2: True, 3: False, 4: False, 5: False, 6: True, 7: False, 8: False, 9: True, 10: True,
11: False, 12: True, 13: True, 14: False and 15: True.

45
 Module 11
Identity theft Topic 11.5

Teacher Notes
WORDSEARCH SOLUTION

(e) Reflective learning

One of the extreme consequences of identify theft is an adverse credit rating. Even
though students wouldn’t be able to obtain their credit file, as logically, they would not
have yet accessed any credit, they could be directed to this site to see how simple it is to
check on it.
http://www.mycreditfile.com.au/home/free-credit-file.dot
With identity theft on the rise in Australia and around the world, what opportunities and
threats arise from an increasingly technological world?

46
 Module 11
Identity theft Topic 11.5

1. Many Australians have had their personal details stolen by criminals. They have become

Worksheet 9
Don't be a victim
the victims of identity theft Consider carefully each of the situations below and then
describe the impact it could have on the victim. Write your answer in the space provided

Situation 1:
Kerry throws out all her old bank and credit card
statements without shredding them. The next day
when Kerry goes to put more rubbish in her bin she
notices that some of her rubbish is gone, including the
bank and credit card statements that she threw out.

The probable impact on Kerry?

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 Module 11
Identity theft Topic 11.5

Worksheet 9
Don't be a victim
Situation 2:
Jonathon was on a flight from Sydney
to the Canberra recently. When he went
to the bathroom (leaving his wallet in
the seat pocket) he didn’t realise that
the friendly man sitting next to him had
opened his wallet and stolen Jonathon’s
driver's licence, a credit card and his
Medicare card.

The probable impact on Jonathon?

48
 Module 11
Identity theft Topic 11.5

Worksheet 9
Don't be a victim
Situation 3:
Thomas has been chatting online to a
Russian girl, Svetlana. Svetlana recently
told Thomas that she was in love with
him even though they had never met
in person. Svetlana thought it would
be romantic if she flew out to Australia
to meet Thomas. She asked Thomas to
pay for the flight, as she had very little
money.
Thomas was happy to pay for the flight as he really wanted to meet Svetlana. He gave
her his bank account details so that the money for the flight could be transferred
quickly via internet banking.

The probable impact on Thomas?

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 Module 11
Identity theft Topic 11.5

Worksheet 9
Don't be a victim
Situation 4:
Maria, who lived in a large apartment
block, has been waiting for a new
credit card from her bank. As she
arrived home from work on Thursday
afternoon she met one of her
neighbours who told her that a lot
of mail had apparently been stolen from the apartment letterboxes (which are not
secured) early in the week. Concerned, Maria called her bank and was told that the
credit card and passwords had been mailed at the end of the previous week, and that
her account had been used quite heavily over the last few days.

The probable impact on Maria?

50
 Module 11
Identity theft Topic 11.5

2. Go to http://www.ag.gov.au/RightsAndProtections/IdentitySecurity/Pages/

Worksheet 9
Don't be a victim
Protectingyouridentity.aspx and download the “Protecting Your Identity Guide - What
Everyone Needs to Know”.
Complete the Identity security checklist on page 29 of the guide.

3. Prepare an advisory guide for young people setting up a Facebook page for the first time.
In your guide, you should include the following points:
• tips for creating a safe and secure profile
• how to make your profile private
• what personal information should/shouldn’t be included
• the importance of selecting photos wisely
• the importance of being careful when posting on your own or someone else’s page
• any other points you think are relevant.

51
 Module 11
Identity theft Topic 11.5

Worksheet 10
Scam revision fun!
Clues: Across Clues: Down
2. Before buying from a business for the 1. If you have this type of card be careful
first time you should always do this about sharing the details
4. This federal commission acts against 3. This useful website will give you advice
scams involving financial products and to protect against scammers
services 4. If a scam is to be successful, then it
6. This term means a scheme designed to needs to look like this
deprive you of money 5. This term describes the situation where a
7. You should always do this to an email fake email arrives trying to trick you into
when you think the sender is seeking out handing over your bank account details
your personal details 9. Never send this to anyone you do not
8. Another word for uninvited email know or trust
11. Another word for internet shopping 10. If you get one of these on your
12. The widespread use of this has made it computer be sure to get rid of it
easier for scammers around the world to 13. You should always read this print at the
prey on victims bottom of any contract
14. This type of letter promises you money if
you forward payment to all people listed
on the letter
15. This organisation has released a little
black book on scams
16. A type of job that does not exist
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 Module 11
Identity theft Topic 11.5

Worksheet 10
Scam revision fun!
STATEMENT (TICK 3 THE CORRECT RESPONSE) TRUE FALSE
1. Providing your personal information for online family trees could
be used in identity theft.
2. The address of secure websites, such as online banking, will start
with ‘https’ or have the ‘closed padlock’ symbol displayed.
3. It is possible to win a lottery competition without having entered
the competition
4. If you update your computer you just need to delete all files
from your hardware before you dispose of it.
5. You are the only person who will ever be able to use your tax file
number.
6. Money transfer requests are sometimes referred to as the
“Nigerian scam”
7. Under no circumstances should you use a credit card to pay for
online shopping
8. You would expect that higher risk investments would offer a
lower return to investors
9. Information stored on mobile or wireless devices is at risk of
physical or electronic theft.
10. Phishing refers to a fake email arriving that tries to trick you into
handing over your bank account details
11. It’s a good idea to use the same password for your bank
accounts so that you don’t get confused.
12. data destruction software should be used before selling a
computer online.
13. It’s a good idea to always manually type a website into your
browser rather than clicking on a link.
14. Only use a public computer for banking transactions if it’s in a
public library.
15. Being a victim of a scam can have a significant emotional effect
on the victim

53
 Module 11
Identity theft Topic 11.5

WORDSEARCH

Worksheet 10
Scam revision fun!

54
 Module Twelve
SOS!!! Smart Online Shopping

In partnership with
 Module 12
SOS!!! Smart Online Shopping

OVERVIEW

Teacher Notes
Module Overview and Curriculum Mapping
Module 12 aims to build knowledge and skills when shopping online, engaging in a variety
of e-commerce transactions and identifying security issues when sharing online data. This unit
has been supported by Australia Post.

ENDURING UNDERSTANDINGS
• E-commerce is impacting on our daily financial transactions.
• Shopping online requires knowledge and skills to avoid wasting financial resources.
• Using e-commerce provides many benefits and options for consumers.
• Smart online shoppers need to be able to recognise scams and unsafe payment methods.

LEARNING OUTCOMES
Students:
• understand how e-commerce will impact on their lives as consumers, entrepreneurs or
employees
• understand the meaning of e-commerce, especially online buying, selling and paying
• develop skills in transacting safely online and within their budgets
• develop the language, literacy, numeracy and digital skills needed when buying, selling
and paying online
• set goals to ensure they are well prepared for entering the workforce and being a
responsible consumer

POWER WORDS Page 2

CURRICULUM MAPPING 3

Resources 6
Teaching Strategies 7

LIST OF TOPICS
12.1 Online shopping, E-commerce and the impact on retail 8
12.2 Australia Post - shopping online 14
12.3 Australia Post - mailing documents and parcels using online information 16
12.4 Travel and e-commerce 23
12.5 Goal setting and online shopping 28
12.6 E-Commerce, fraud and security 32
12.7 Online auctions 36

APPENDICES
1 General Information 46
2 Power word definitions 48
3 Curriculum Mapping – FSK 10213 Units of Competency 51

1
 Module 12
SOS!!! Smart Online Shopping

Power Words

Teacher Notes
Module Overview and Curriculum Mapping
As students work through each topic in this module they will encounter words that may be
new to them, crucial to understanding and completing the worksheets, and/or difficult to spell.
In addition, students may simply find some of this vocabulary interesting and want to use it in
the future. Understanding and being able to use these words will provide students with more
power to make future financial decisions.
There are several approaches to using this “glossary”. The intention is for students to
investigate and find the meanings. They could be given the complete list before they start
the module, or they could set up a table and add new words as they progress through the
activities. There are also specific POWER WORD activities in some topics.
This list is not exhaustive.
Accommodation Instagrams
Auction Insurance
Bid International goods
Blogger Invoice
Budget LinkedIn
Carbon offset fee Merchant
Carryon luggage Metropolitan area
Categories Mobile Apps
Cheque Money Order
Citizen Online shopping
COD Passport
Consumables Pay Pal
Customs Phishing
Delicious Pinterest
Dimensions Priority boarding
Domestic mail Quote
Duty free Reserve Price
e-Bay Return authority number
e-commerce Reviews
EDI Satchels
EFT Scams
Encryption Scanning
Entrepreneurs Secure online payments
Escrow Signature
e-tailing Spyware
Facebook SSL encryption
Firewalls StumbleUpon
Flickr Supporting documentation
Fraud Techno-language
GMail Technology
Google Terms and conditions
GST Tracking service
GST system Tumblr
Hackers Twitter
Hotmail url
Immigration Virtual shopping malls
Impulse buying www
Incremental Yahoo!Mail 2
 Module 12
SOS!!! Smart Online Shopping

CURRICULUM MAPPING

Teacher Notes
Module Overview and Curriculum Mapping
NCFLF Australian Curriculum
DIMENSIONS ENGLISH MATHEMATICS
Knowledge & Understanding LITERACY YEAR 9 NUMBER & ALGEBRA YR 9
• Identify and explain strategies to Interacting with others Real numbers
manage personal finances
• use interaction skills to present and • Solve problems involving direct
• Explain the various factors that discuss an idea and to influence proportion. Explore the relationship
may impact on achieving personal and engage an audience by between graphs and equations
financial goals selecting persuasive language, corresponding to simple rate
varying voice tone, pitch, and pace, problems (ACMN211)
Competence
and using elements such as music
• Accurately complete and explain
STATISTICS & PROBABILITY
and sound effects (ACELY1811)
the purpose of a range of financial
YR 9
• plan, rehearse and deliver
forms, including for online Data representation &
presentations, selecting and
transactions interpretation
sequencing appropriate content
• Compare overall ‘value’ of a range and multimodal elements for • Identify everyday questions
of goods and services using IT aesthetic and playful purposes and issues involving at least
tools and comparison websites as (ACELY1741) one numerical and at least one
appropriate. categorical variable, and collect
Interpreting, analysing,
data directly and from secondary
• Explain procedures for safe evaluating
sources (ACMSP228)
and secure online banking and
• Interpret, analyse and evaluate
shopping
how different perspectives of
Responsibility & Enterprise issue, event, situation, individuals
• Practise safe, ethical and or groups are constructed to
responsible behaviour in online serve specific purposes in texts
and digital consumer and financial (ACELY1742)
contexts Creating texts
• Create imaginative, informative
and persuasive texts that present
a point of view and advance or
illustrate arguments, including texts
that integrate visual, print and/or
audio features (ACELY1746
• Use a range of software, including
word processing programs, flexibly
and imaginatively to publish texts
(ACELY1748)

3
 Module 12
SOS!!! Smart Online Shopping

CURRICULUM MAPPING

Teacher Notes
Module Overview and Curriculum Mapping
Australian Curriculum
GENERAL CAPABILITIES
LITERACY
Comprehending texts through listening, reading and viewing
Navigate, read and view learning area texts
• Navigate, read and view a wide range of more demanding subject-specific texts with an extensive range of
graphic representations
Composing texts through speaking, writing and creating
Compose spoken, written, visual and multimodal learning area texts
• Compose and edit longer and more complex learning area texts (AC ELY1756)
Use language to interact with others
• Use pair, group and class discussions and formal and informal debates as learning tools to explore ideas, compare
solutions, evaluate information and ideas, refine opinions and arguments in preparation for creating texts
(ACMSP253)
NUMERACY
Estimating & calculating with whole numbers
Use money
• Evaluate financial plans to support specific financial goals (ACMNA211)
INFORMATION & COMMUNICATION TECHNOLOGY CAPABILITY
Recognise intellectual property
Apply personal security protocols
• Independently apply appropriate strategies to protect rights identity, privacy and emotional safety of others when
using ICT, and discriminate between protocols suitable for different communication tools when collaborating with
local and global communities
Investigating with ICT
Define & plan information searches
• Select and use a range of ICT independently and collaboratively, analyse information to frame questions and plan
search strategies or data generation
Creating with ICT
Generate ideas, plans & processes
• Select and use ICT to articulate ideas and concepts, and plan the development of complex solutions (ACELY1751)
CRITICAL & CREATIVE THINKING
Reflecting on thinking and processes
Think about thinking (metacognition)
• Give reasons to support their thinking, and address opposing viewpoints and possible weaknesses in their own
positions (ACELT1640, ACMSP247)
PERSONAL & SOCIAL CAPABILITY
Self-management
Work independently & show initiative
• Establish personal priorities, manage resources effectively and demonstrate initiative to achieve personal goals and
learning outcomes (ACELY1756)
Become confident, resilient and adaptable
• Evaluate, rethink and refine approaches to tasks to take account of unexpected or difficult situations and safety
considerations (ACELY1757)
Social management
Make decisions
• Develop and apply criteria to evaluate the outcomes of individual and group decisions and analyse the
consequences of their decision making (ACMNA229)

AUSTRALIAN CURRICULUM – ECONOMICS & BUSINESS (under development)

Knowledge and skills will relate to economics and business in local, national, regional and global
contexts. The course will encourage students to participate in the community, make sense of their
world and appreciate the interdependence of all economic and business decisions as well as the
effect of these decisions on individuals, families and others.
4
 Module 12
SOS!!! Smart Online Shopping

TRAINING PACKAGE LINKS - FSK FOUNDATION SKILLS

Teacher Notes
Module Overview and Curriculum Mapping
FSK10213 Certificate I in Skills for Vocational Pathways

AUSTRALIAN TRAINING PACKAGE LINK

Module 12 could be used by trainers and assessors of national units of competency. Module 12 activities
have been designed to meet the core competencies, elements and performance criteria in Certificate I in
Skills for Vocational Pathways which is in the new Foundation Skills Training Package.
Core Units of competency for Certificate I are listed below. Students would need to complete four more
units to gain the full qualification. By completing the module activities satisfactorily students will have
some evidence towards the qualification.

MAPPING GUIDE
Core Units of Competency. Certificate I requires an additional four (4) electives
FSKDIG02 Use digital technology for simple workplace tasks
FSKLRG08 Use simple strategies for work-related learning
FSKNUM08 Identify and use whole numbers and simple fractions, decimals and percentages for work
FSKNUM09 Identify, measure and estimate familiar quantities for work
FSKOCM03 Participate in simple spoken interactions at work
FSKRDG07 Read and respond to simple workplace information
FSKWTG06 Write simple workplace information

5
 Module 12
SOS!!! Smart Online Shopping

ONLINE ACTIVITIES, RELEVANT YOUTUBE VIDEOS, & OTHER USEFUL RESOURCES

Teacher Notes
Module Overview and Curriculum Mapping
A comprehensive list of useful links and websites can be found in the module 12 teacher notes.
These additional links may also be of value as an introduction to Smart Online Shopping, or for
general use in your classroom.

1. Interesting YouTube videos

• Internet shopping explained: in memes! This is an EXCELLENT videos which uses humour
and well known memes to explain SOS!! Smart Online Shopping.
https://www.youtube.com/watch?v=XbsjCVtjovs
• Videos on tips and safety.
https://www.youtube.com/watch?v=FhZU48VTn9c
https://www.youtube.com/watch?v=3w4t1dYCayM
https://www.youtube.com/watch?v=iBnKnMEg3vM

2. Protecting your online shopping rights

http://www.accc.gov.au/consumers/online-shopping/shopping-online

3. BUDDIE cyber security education modules

Buddie is a fun and engaging learning experience where kids play games for points, and learn
important Cyber Security and safety behaviours, whilst building their very own personalised
robot or cyborg.
Cyber security and safety topics covered in the package include advice on malware, securing
personal information online and tips for safe social networking. Each module includes a
glossary and useful background information for teachers and parents
• Text version:
https://budd-e.staysmartonline.gov.au/secondary/accessibility/transacting.html FAQs
• Media version:
https://budd-e.staysmartonline.gov.au/secondary/main.php (game, videos and FAQs on
a range of online stuff)

4. Tips to help you stay safe when you shop online

• https://www.moneysmart.gov.au/managing-your-money/banking/different-ways-to-
pay/online-shopping?utm_medium=email&utm_campaign=MoneySmart%20tips%20
-%20December%202013&utm_content=MoneySmart%20tips%20-%20December%20
2013+CID_529d42298afc30d349934287f0f94799&utm_source=CampaignMonitor&utm_
term=shop%20securely%20online
• http://gizmo.com.au/?infocenter=staying-cyber-safe-this-christmas&utm_
source=gizmo+guide&utm_campaign=1fc9f0c924-2013_Gizmo_Guide_Dec&utm_
medium=email&utm_term=0_30e930b97e-1fc9f0c924-49125021
• http://www.staysmartonline.gov.au/home_users/protect_yourself2/smart_online_
shopping
• http://go.telstra.com.au/helpandsupport/-/shop-smart-and-safe-online

6
 Module 12
SOS!!! Smart Online Shopping

SUGGESTED TEACHING STRATEGIES

Teacher Notes
Module Overview and Curriculum Mapping
1. Engaging the Learners - get them interested
Provide students with some current facts about e-commerce such as:
• In 2012, e-commerce sales topped $1 trillion for the first time in history
• Considering population, the United Kingdom has the biggest e-commerce market in
the world
• In some countries almost a quarter of everything bought and sold is transacted online
eg Czech Republic
• There are around 21.3 million people living in Australia in 2013. Compare this with
China where there are about 1.3 billion people and 384 million use the Internet
• Retail and travel are the most common reasons people use e-commerce
Adapted from information on Wikipedia June 2013

2. Ask students for some words to describe shopping online and e-commerce
Examples might be: buying and selling using the Internet or other networks; eBay
(consumer to consumer online buying and selling); electronic funds transfer (EFT);
World Wide Web; paying bills online; business to business electronic data interchange
(EDI). All these examples come under the concept of 'e-commerce'. Note additional
definitions in Appendix 1.

3. Check who uses e-commerce and their favourite sites

List some of the favourite sites used by students to buy online.
Discuss some of the +, - and interesting features of these sites.

7
Online Shopping, e-commerce and the Module 12
impact on retail Topic 12.1

Teacher Notes
Classroom and research activity:
Suggested time: 1-2 lessons

Student worksheets: Worksheet 1: Changing retail - shop till you drop, or click and spend?
Worksheet 2: Setting up an online store

Resources:
Check http://en.wikipedia.org/wiki/Social_media for useful descriptions
of social media technology.
http://www.sitesnstores.com.au
http://www.business.qld.gov.au/industry/tourism/tourism-pathways/
ecommerce
Distribute Worksheet 1: Changing retail - shop till you drop, or click and spend?
a. Students decide yes, no or unsure for each of the statements.
b. Teacher checks and records responses. Encourage discussion where there is strong disagreement
or clear uncertainty. Check that students have added words to their Power Word List.

Question 15 refers to reviewing online shopping through social media.

Be prepared to assist students in understanding these communication options.
Reviews Shoppers can comment on products and sellers can use this for
promotion.
Instagrams Instagram is online photo-sharing, video-sharing and social networking. It
allows users to take pictures and videos, apply digital filters to them, and
share them on a variety of social networking services, such as Facebook,
Twitter, Tumblr and Flickr.
Facebook Facebook is an online social networking service. 'Facebook' was the name
of the book given to students in some USA universities so students could
get to know one another. Facebook was invented by Harvard University
students. Facebook expanded to include other universities and school users.
Anyone 13 years and over can be a registered user. Once registered the user
creates a personal profile, adds other users as friends and communicates. By
September 2012, Facebook had over one billion users, of which 8.7% were
fake. According to a May 2011 Consumer Reports survey, there were 7.5
million children under 13 with accounts and 5 million under 10, violating the
site's terms of service. (Adapted from Wikipedia July 2013)
Twitter Twitter is an online social networking service and microblogging service.
Users can send and read text-based messages of up to 140 characters, known
as "tweets". Unregistered users can read tweets, and registered users can
post tweets.
Pinterest Pinterest is a pinboard-style photo-sharing website that allows users to create
and manage theme-based image collections such as events, interests, and
hobbies. Users can browse other pinboards for images, "re-pin" images to
their own pinboards, or "like" photos.

8
Online Shopping, e-commerce and the Module 12
impact on retail Topic 12.1

Teacher Notes
Mobile Apps Software Applications which are easily downloaded onto mobile phones.
Students will have many examples such as games, shops, music...
LinkedIn A social networking system for people in particular professions
GMail Gmail is a free, advertising-supported email service provided by Google.
Blogger Someone who posts a message on a 'blog' - a www space where the
messages from different people are listed in reverse chronological order
(newest first)
Google Google Inc. is a large organisation specialising in Internet services. The verb
'google' is often used for 'find' when using the Internet.
Delicious Delicious (used to be del.icio.us) is a social bookmarking web service for
storing, sharing, and discovering web bookmarks
StumbleUpon A web search engine
Tumblr A social networking service similar to Facebook
Flickr A social networking service similar to Facebook
Yahoo!Mail A free email service

c. Students should check that their career goals fit with changing workplaces because of
e-commerce and, if necessary, adjust their goals.
d. Students brainstorm and make notes about how retail shops now may be different in the
future. Some ideas for those who need help or to stimulate discussion include:
• More shops will only have 'virtual storefronts' on websites and no physical walk in
space (bricks and mortar sites). Virtual shopping is sometimes called e-tailing.
• Shopping malls might have fewer shops and many more computer stations.
• Impulse buying could become a greater risk.
Examples might include:
• Some shops already increase restrictions on 'trying on' goods free of charge given
many people try with no intention to buy in the store but rather buy online.
• Some shops do not allow customers to try on expensive items of clothing unless an
attendant is present eg preventing photographs being taken of wedding dresses.
• Some clothing shops already have a 'try on' item but won't provide the item in
different colours. This avoids having lots of stock on hand for customers to try.
• Online shoppers will need to know their own sizes and dimensions better so they
can read the online size examples when choosing a size.
• Post offices and courier services will need lots of space to store and deliver online
purchases. Some post offices now have a drive in and out service to collect
goods.
Students watch the video to gain an understanding of how 'techno-geek' might impact on
common language. YouTube 'My Blackberry is not working'
http://www.youtube.com/watch?v=kAG39jKi0lI - comedy on language use in technology.

9
Online Shopping, e-commerce and the Module 12
impact on retail Topic 12.1

Teacher Notes
Distribute Worksheet 2: Setting up an online store.
Students skim read information at a site which helps set up an online store, for example,
http://www.sitesnstores.com.au

Students note advantages and think of disadvantages to share with their group.
Advantages listed at this site include: Where to find possible disadvantages?
• lower costs and higher profits compared • Once there is an agreement to use the
with having a 'bricks and mortar' shop online service, the seller should provide
• can sell around the world - wider a contract with details of what is to be
audience; larger 'customer base' provided and for what cost.

• 24 hour trading - stays open all the time • The total cost may change once the
details of services are all listed
• don't have to store as much stock so
can have better variety • There may be additional costs if the
person buying the service does not
• keeps 'overheads' to a minimum (rent,
know how to use the online system
electricity, storage) so this means can
sell cheaper • More information could be gained by
checking customer feedback on the
• easy web store payment options
business advertising these services
• ability to track and analyse ecommerce
• More information would be available
sales to and from the web store
once information is entered to gain a
• easy web design and ecommerce quote but users need to be careful the
development process (according to this site is legitimate and secure to avoid
advertisement) phishing- releasing your contact details
• could gain ongoing support with using to others.
the 'content management system' (but
would need to check what this extra
service costs)
• assistance with marketing if using a
group like this
• an Australian company

In this space students make notes on the online store they would set up if they had the
opportunity
What would you sell? The aim is to have students realise the challenge of competing with
other similar online stores.
What costs would be involved with this type of business? Students realise that it may be
less costly to establish but important to understand the security needed for online payments

10
Online Shopping, e-commerce and the Module 12
impact on retail Topic 12.1

Changing retail – shop ‘til you drop, or click and spend?

Worksheet 1
Before you start...
On your computer, set up a table with two columns or use your notebook.
As you work through this module, in the first column list any words or phrases that you do
not understand, words that are difficult to spell, or words you haven't used before and would
like to use in the future. Call this your Module 12 Power Words List.
List the words or phrases in the first column of the table and use the second column for the
meaning. The first two should be:
• online shopping
• e-commerce
1. How has shopping changed over the last few years? Why is retailing becoming e-tailing?
The statements below may help you to answer this question. Put a tick beside the
statements you agree with, a cross beside those you disagree with or a ? for 'not sure' or
'needs more discussion'.

Changing retail - Shop till you drop or click and spend 4 or X or ?

1. There is a higher risk of being disappointed with online shopping because people
cannot inspect the goods before buying.
2. More people now pay online than by using cash.
3. There are fewer jobs now in retail.
4. Online shopping is more convenient with home or postal deliveries.
5. Online shopping convenience means people buy more.
6. With food and consumables, there is less waste as shoppers only buy what is needed.
7. It is easier to pay bills with secure online payments.
8. There is a danger of exceeding credit limits when shopping online, or spending over
budgeted amounts.
9. Impulse buying is less likely with online shopping.
10. Prices are usually cheaper if buying online.
11. There are more elderly people in shops and younger people buying online.
12. Record-keeping is more accurate and timely with online payments.
13. The Australian government should change GST on all goods bought online from
overseas.
14. If you spend more than $1,000 on an international site your goods will be stopped
by Customs and you won't get the goods until you pay the import duty.
15. It is safer to shop online now that social media allows more sharing of information
through Reviews and Blogs.
16. Online shopping means more scams: It is easier for sellers to trick customers when
purchasing online.

11
Online Shopping, e-commerce and the Module 12
impact on retail Topic 12.1

Changing retail – shop ‘til you drop, or click and spend?

Worksheet 1
2. Compare your responses with those of others in your class. Discuss why some people
disagree.
3. If you already have a job in retail, how might this information affect your goal setting for
future training or employment? If you have already set job goals, reflect on whether they
will be relevant in the future.
4. Imagine retail shopping and paying for goods and services in the future. Will there be
'walk in' retail shops? Virtual shopping malls? Online shopping only? Will there be as
many products on display? Will the social side of shopping cease to exist? Will impulse
buying be an even bigger problem? Make notes on any examples of change you have
already experienced.

5. Will technology change our shopping language? Will older people be able to keep up
with techno-language? Watch the video on You tube 'My Blackberry is not working'.
http://www.youtube.com/watch?v=kAG39jKi0lI

12
Online Shopping, e-commerce and the Module 12
impact on retail Topic 12.1

Setting up an online store

Worksheet 2
It is easier now for people to start up a business by selling on line. Skim read the information
at a site such as http://www.sitesnstores.com.au. As you read you will see many
advantages of selling online. Make a list of advantages and think of some dangers or
disadvantages. If you decided to buy the seller's online service, where might you find some
possible disadvantages of their service? They may not be online at their site so you would
need to think of somewhere else to look.
Share any stories you have heard of people who have been successful or unsuccessful when
setting up an online store.
Advantages listed at this site include: Where to find possible disadvantages?

In this space make notes on the online store you would set up if you had the opportunity
What would you sell?

What costs would be involved in having this type of business?

There are many sites to assist entrepreneurs to set up an online business. One example is
http://www.business.qld.gov.au/industry/tourism/tourism-pathways/ecommerce

13
 Module 12
Australia Post – shopping online Topic 12.2

Teacher Notes
Classroom and research activity:
Suggested time: 1 lesson

Student worksheets: Worksheet 3: Let's go shopping at Australia Post

Students investigate the Australia Post website to answer the following questions.

a. What is the best selling category according to the website? Look at the items and decide
the most popular category. Stationery
b. When you buy something online from Australia Post, who is the legal seller?
Office Max Pty Ltd
c. If you want information on how to return the goods where will you find this?
Terms and Conditions at bottom of page small print
d. As you read the terms and conditions applying to the return of goods, decide if the
following are true or false.
Paragraph 1 - a buyer can return the goods if he or she breaks them when opening the
parcel. False
Paragraph 2 - A customer buys a coffee machine using the online credit facility on 1
March and can apply for a refund on 25 March because the product never worked.
False - out of time 14 days
Paragraph 3 - A customer can return an item even though he or she has lost all of the
purchase documentation including the return authority number. False

14
 Module 12
Australia Post – shopping online Topic 12.2

Let’s go shopping at Australia Post

Worksheet 3
Did you know you can buy the following types of goods online at the Australia Post website?
Categories: Office supplies; Paper; Ink and toner; Technology; Furniture; Packaging and
Industrial; Education supplies; Art supplies; First aid and medical; Cafe and cleaning.

a. What is the best selling category according to the website? Look at the items and decide
the most popular category.

b. When you buy something online from Australia Post, who is the legal seller?

c. If you want information on how to return the goods where will you find this?

d. As you read the terms and conditions applying to the return of goods, decide if the
following are true or false.
• Paragraph 1 - a buyer can return the goods if he or she breaks them when opening
the parcel.

• Paragraph 2 - A customer buys a coffee machine using the online credit facility on 1
March and can apply for a refund on 25 March because the product never worked.

• Paragraph 3 - A customer can return an item even though he or she has lost all of
the purchase documentation including the return authority number.

15
Australia Post – Mailing documents Module 12
and parcels using online information Topic 12.3

Teacher Notes
Classroom and research activity :
Suggested time: 2-3 lessons

Student worksheets: Worksheet 4: How much does it cost?

Worksheet 5: E-mail...Snail mail...Smart Mail

Resources:
austpost.com.au/index.html
envelopes
Distribute Worksheet 4: Australia Post – Mailing documents and parcels using online
information. Students will need to work through the following questions and activities.
Answers provided below are correct as at 1 January 2014.

Provide students with an envelope.

a. Students address an envelope to themselves - start half way down and 1/3 way
across. Use block letters and have the town in all capitals. Don't forget the state
and leave the postcode blank.
b. They find and note the postcode using the postcode finder at the website
c. Students use the map reading information to find the nearest postbox
d. Students calculate postage website using the postage calculator
• a document in a C5 envelope from the Darwin delivery area to a Perth post box.
The document is 18mm thick and weights 12 g, Regular Post. $1.20
• a document from Stafford Qld to London in the United Kingdom. The document
weighs 55g. You want to use the Express Courier International Service with pick
up delivery in the metropolitan area. You need a signature on delivery and a
tracking service. $72.60
• a T shirt from Geelong, Victoria to Runaway Bay, Qld in a parcel you have wrapped
yourself. Use the sample dimensions for a T shirt. You would like the T shirt
delivered the next day. $9.55
• a parcel from Great Keppel Island to Townsville. The parcel is 15cm long, 15cm
wide and 10cm high. It weighs 2kg. You are using an Express Post Medium satchel
and want insurance to cover the value of the item $200. $20.75
• a diary or notepad you have with you now. You want to send it from New Farm,
Qld to a Hobart post box. You will need to measure and weigh the item. You
want to send Express Post and have already packed the item. Students need to
weigh and measure to calculate postage
• Provide students with a number of other items to measure how long, high and
wide each item is. Weigh each item. Calculate postage - all items to be sent by
express post, packed by sender, from New Farm to Hobart.

16
Australia Post – Mailing documents Module 12
and parcels using online information Topic 12.3

Teacher Notes
e. Students locate the Billpay code; Reference number and amount on an Invoice and check
the steps needed to pay online.
f. 2 x $52.75 - $92.35 = $13.25. Students are reminded of the need to multiply before
subtracting. Suggest providing more mathematical calculations with 4 operations
(adding, subtracting, multiplying and dividing), decimals as in currency, and percentages
as in the percentage increase of buying an item when the postage is added.
g. Students rewrite all their answers to this activity listing the numbers/amounts smallest
to largest - $1.20; $9.55; $13.25; $20.75; $72.60; and any other examples the teacher
provides.
h. Distribute Worksheet 5: Email...Snail mail...Smart mail.
Students list advantages and disadvantages of using the following types of
communication. They then use their notes and examples of jobs a Secretary might have
to do for a sporting club to prepare a short presentation.
Advantages Disadvantages
E-mail message Fast and concise More informal and not suited
to legal or official documents
E-mail with a large attachment Allows the receiver to keep an Might slow down the sending
electronic copy time
Confidential email containing No advantage - confidential Unsafe as email should never
legal information information should not be sent be considered confidential
by email
Faxing a document rather than Could be simpler for some If faxing manually (as compared
scanning and attaching to people who are comfortable to using a computer fax
email using a fax machine rather system) this can be slower
than a scanner (Scanning feeding information into a fax
allows an electronic copy to be machine. It also wastes paper
filed) when a paperless method
could be used
Mailing a letter Suits some people who like a Slow and relies on a number of
hard copy parties to ensure delivery
Using a tracking service when Allows the parties to have May cost more for the service
sending or receiving a parcel evidence of where items are in
the delivery chain
Using an Australia Express Post Convenience of using package Need to compare whether
satchel rather than wrapping cheaper or dearer
an item for postage
Using BillPay rather than Saves time. Allows an Need to ensure a secure site is
queuing at Australia Post to electronic copy to be filed being used
pay a telephone bill immediately

17
Australia Post – Mailing documents Module 12
and parcels using online information Topic 12.3

Teacher Notes
i. Students use the following examples to decide the most relevant form of communication
and prepare a short presentation. There is no one correct answer.
• Job: Sending players a list of times and venues for matches. Mode: email with an
attachment
• Job: Sending minutes of meetings to the committee. Mode: email with an
attachment
• Job: Paying the telephone bill. Mode: BillPay
• Job: Sending a document to the President to sign and return. Mode: could scan
and use an electronic signature or mail
• Job: Sending a contract which needs to be received urgently and safely. Mode:
registered mail with a tracking service
• Job: Banking the player’s fees. Mode: electronic banking
• Job: Buying team shirts online and making sure they will be received in time. Mode:
using a secure site for payment, checking delivery times and using a tracking service

j. Provide feedback to students on their presentation.

18
Australia Post – Mailing documents Module 12
and parcels using online information Topic 12.3

How much does it cost?

Worksheet 4
Most people, either as a shopper or a worker, will need to mail a document or parcel.
Answer the following questions by checking auspost.com.au/index.html

1. Write your name and mailing address ion the

envelope provided by your teacher. Leave the postcode blank.

Postcode

• Use the website to find your postcode and add this to the space above.

• Where is the nearest post box to your home if you want to post a letter?

2. Use the Postage Calculator to find the cost of posting the following articles. For
domestic mail (mail posted in Australia), start by finding the Australian postcodes
for the sender and receiver.
• a document in a C5 envelope from the Darwin delivery area to a Perth post
box. The document is 18mm thick and weights 12 g, Regular Post.

• a document from Stafford Qld to London in the United Kingdom. The

document weighs 55g. You want to use the Express Courier International
Service with pick up delivery in the metropolitan area. You need a signature
on delivery and a tracking service.

• a T shirt from Geelong, Victoria to Runaway Bay, Qld in a parcel you have
wrapped yourself. Use the sample dimensions for a T shirt. You would like
the T shirt delivered the next day.

19
Australia Post – Mailing documents Module 12
and parcels using online information Topic 12.3

How much does it cost?

Worksheet 4
• a parcel from Great Keppel Island to Townsville. The parcel is 15cm long, 15cm wide
and 10cm high. It weighs 2kg. You are using an Express Post Medium satchel and
want insurance to cover the value of the item $200.

• a diary of notepad you have with you now. You want to send it from
n New Farm, Qld
n to a Hobart post box.
You will need to measure and weigh the item. You want to use Express Post and
have you already packed the item.

• Your teacher will provide you with more items to measure and weigh, and then
calculate the postage. All the items are being wrapped by you and sent by express
post from New Farm to a Hobart post box.

3. Collect a telephone bill/invoice from home and check that you can find the information
on the invoice if you were using Post BillPay. Write down the Billpay code, reference
number and the amount. https://paypaperbills.postbillpay.com.au/postbillpay/default.
aspx
4. How many types of Express Post satchels are available at the Australia Post online shop
________________ ? How much would it cost you to buy 10 of these satchels for items
weighing up to 500g? _________. How much cheaper is it to buy 10 satchels online
in one transaction, compared with buying the 5 pack satchels at two different times?
__________________ (To find the answer you will need to multiply and subtract. Talk
with your teacher about the order for doing this - do you multiply or subtract first?)
Your teacher will provide you with more activities adding, subtracting, multiplying and
dividing, using decimals as in currency, and calculating percentages as in the percentage
increase of buying an item when the postage is added.
5. Look at all the answers for this activity so far. For those that have a numerical answer,
write the numbers from smallest to largest.

20
Australia Post – Mailing documents Module 12
and parcels using online information Topic 12.3

PART A

Worksheet 5
Email...Snail mail...Smart Mail
When you decide how to send information, either for personal reasons or as an employee,
you have a number of choices. Use the table below to make brief notes on some advantages
and disadvantages of sending a document or parcel using the following service or technology.

Advantages Disadvantages
E-mail message

E-mail with a large attachment

Confidential email containing

legal information

Faxing a document rather than

scanning and attaching to email

Mailing a letter

Using a tracking service when

sending or receiving a parcel

Using an Australia Express Post

satchel rather than wrapping an
item for postage
Using BillPay rather than
queuing at Australia Post to pay
a telephone bill

21
Australia Post – Mailing documents Module 12
and parcels using online information Topic 12.3

Worksheet 5
Email...Snail mail...Smart Mail
PART B
Imagine you are working as the Secretary of your local sporting club. You are often asked
to 'write a letter' and rarely asked to use other forms of communication. The President
has agreed that you can speak at the next meeting to describe different ways of sending
information. Prepare a two minute presentation.
You can choose how to prepare and present. Do you need to write a script or speak to
notes? Would it help to have electronic slides? Use your notes above and apply the
communication modes to some examples of jobs a sporting club Secretary might have.
For example:
• Job: Sending players a list of times and venues for matches.
Mode: email with attachment
• Job: Sending minutes of meetings to the committee.
Mode:

• Job: Paying the telephone bill.

Mode:

• Job: Sending a document to the President to sign and return.

Mode:

• Job: Sending a contract which needs to received urgently and safely. Mode:
Mode:

• Job: Banking the players fees.

Mode:

• Job: Buying team shirts online and making sure they will be received in time.
Mode:

Your teacher will provide you with feedback and discuss how you could improve your
spoken communication.

22
 Module 12
Travel and e-commerce Topic 12.4

Teacher Notes
Research and classroom activity:
Suggested time: 2 lessons

Student worksheets: Worksheet 6: Are you serious? The hidden cost of travel
Worksheet 7: Best deal

Travel and e-commerce

a. Start early! Don't leave it too late to apply for a passport.
Students explore the Department of Foreign Affairs and Trade website https://www.
passports.gov.au/Web/index.aspx applying for a passport. They may need assistance
in researching where to take the application form ie to an Australian Post office for
a personal interview and to lodge the application, together with all of the supporting
documentation listed on the application form.
b. Smart travellers
Students explore www. smarttraveller.gov.au and read stories about people who
might have been helped if they had registered. For example, Australians travelling in
Japan when the tsunami hit. Students print the travel tips and add visuals to provide
some contexts.

c. Distribute Worksheet 6: Are you serious? The hidden cost of travel.

The hidden costs of travel
Students prioritise the extra, and sometimes hidden costs when booking an airfare. The
aim is to raise awareness of additional costs and the need to prioritise to fit a budget.

d. Distribute Worksheet: 7 Best deal!

• Students use a site such as www.webjet.com.au to find the most economical fare
for the context described.
• Students use the wotif site to find accommodation. They record the name of the
hotel and the address, and the cost per night.
• Risky business. Students use the Australia Post to gain a quote for travel insurance
using the information provided. Quote at January 2014: $291.00

23
 Module 12
Travel and e-commerce Topic 12.4

Teacher Notes
e. Students use the Australia Post site to check the benefits of using a Load&Go Travel Card
when paying overseas. These include:
• Free to purchase and free to reload
• Use it anywhere Visa Cards are accepted - including ATMs that display the Visa logo
• Ability to lock in the value of currency before travelling
• Flexibility to move funds between 5 different currencies while travelling
Students use the currency converter to find out how many US dollars they would get for
$1,000 Australian on their Load&Go Travel Card. Varies daily eg $855.70 at 3rd August
2013.

f. Students read about the Tourist Refund Scheme and note the streps to take to gain a
refund for the tax (GST). http://www.customs.gov.au/site/page4263.asp
• Spend $300 (GST inclusive) or more in the one store and retain invoices.
• Have purchased the goods no more than 60 days before departure from Australia.
• Wear or carry the goods on board the aircraft or ship and present them along with the
original tax invoice, passport and international boarding pass to a Customs and Border
Protection Officer at a TRS facility.

g. Touch down home! Set up two areas in the classroom, one area with a box where the
students role play the scanning of a passport and one area where they would look up to
get their photo taken and insert the ticket. Students walk through the steps described on
the video.

24
 Module 12
Travel and e-commerce Topic 12.4

Are you serious? The hidden costs of travel

Worksheet 6
I. You are booking a flight to the USA and you notice that your airfare has gone from
$1,200 to $1,700 because you agreed to pay for the items in the table below.

Additional purchases Order of Priority

Carbon offset fee

Contribution to Save the Children fund

Having your seat selected before flying

Checking in luggage in addition to

having carry on luggage

Insurance

Seating with more leg room

Priority boarding

Paying using a credit card

If you want to reduce the total cost which of the above would you
consider non-essential? To decide this, prioritise the 8 items above
with 1 being the most important for you to have.

25
 Module 12
Travel and e-commerce Topic 12.4

Worksheet 7
Best deal!
You have decided to go to Sydney or Melbourne for a holiday. You need to leave your nearest
airport on 15 November and return home on 18 November.
1. Use a website that compares flights such as www.webjet.com.au. Choose a city
(Sydney or Melbourne) and dnecide on a flight. List all of the costs you need to add to
the basic flight costs and then find the total cost.
Airline Basic flight Additional Additional Additional
cost cost cost cost Total

2. Now use the www.wotif.com.au site to choose accommodation close to the city
centre and within your budget. You do not want to spend more than $200 per night.
Write down the cost per night. Does the cost vary according to day or date for the
accommodation you decide upon? Why would this be the case?

Hotel name and address:

Cost per night: Nov 15 $ Nov 16 $ Nov 17 $
3. Risky business: You should always purchase travel insurance to protect you while
away from home.
Gain a quote from the Australia Post travel service at
http://auspost.com.au/finance-insurance/get-travel-insurance-quote.html
Assume you are 21 years old and a single traveller going to the USA leaving 17
November and returning on 2 December. You want Comprehensive insurance
with no excess, that is, you don't want to pay anything if you have an insurance
claim. You will be doing some skiing and riding a Moped. You have no known
medical conditions at this time. How much is the insurance quote?

4. You need to take some money with you overseas but want the safest way to do this.
• Use the Australia Post site to make a list of advantages for using a Load &Go Travel
Card.

• Use the currency converter to see how much $1,000 Australian will convert to USA
currency to load on your Load&Go Card.

26
 Module 12
Travel and e-commerce Topic 12.4

Worksheet 7
Best deal!
5. Some people like to shop before leaving Australia so that they can buy the goods 'duty
free'. If you buy the goods and keep the receipt you can ask for a refund of the duty
when you leave the country. This is the Tourist Refund Scheme. Read more about it at
http://www.customs.gov.au/site/page4263.asp. What are the three main things you
must remember when using the TRS?

1.
2.
3.

6. Touch down home! You are home and need to clear immigration and customs. No one
likes long and slow queues. Be prepared for a quick exit on your return to Australia by
having an e-Passport and using it at the SmartGate. Some people still queue because
they are not sure how to use SmartGate.
Go to http://www.customs.gov.au/smartgate/default.asp and then How it Works
page. Watch the video (short version). Can you remember the steps to take when using
SmartGate? Describe the steps to someone in your class.

27
 Module 12
Goal setting and online shopping Topic 12.5

Teacher Notes
Classroom and research activity :
Suggested time: 2 lessons

Student worksheets: Worksheet 8: Online Shopping Facts Sheet

Worksheet 9: Online shopping, goal setting and budgets

a. Distribute Worksheet 8: Online Shopping Facts Sheet

Students are asked to print out the Online Shopping Fact Sheet at
http://www.bankers.asn.au/Consumers/Financial-Literacy-Program/Booklets/Smarter-
Banking---Know-your-banking-rights-and-responsibilities
Students read information on scams and online security and use three different coloured
text markers to highlight
• challenging words or phrases
• steps they do well
• steps that need attention.

b. Distribute Worksheet 9: Online shopping, goal setting and budgets

• Students use the content from Worksheet 8 to set some personal goal setting with
online shopping and budgets.
• Students then apply the skills to a work related example. Answers are based on
information on the Australia Post site at August 2013.
Suggestion to employer:
10 Calculators (cheapest at Australia Post online) $34.49 each = $344.90
Balance remaining = $450.00 - $344.90 = $105.10
Spend approximately $52 on the pens and the notebooks
Pens $52.00 / $0.42 bulk buy = 123 pens. Total 123 x $0.42 = $51.66
Notebooks $52.00 / $1.05 (if buying multiples of 10) = 50 approx.
Total$1.05 x 50 = $52.50
Total of three items $344.90 + $51.66 +$52.50 = $449.206
Within budget.
c. Extension Activity
Students create a spreadsheet to calculate mark up and selling price of stationery items

28
 Module 12
Goal setting and online shopping Topic 12.5

Online Shopping Fact Sheet

Worksheet 8
You have been buying so much online that you are now spending more than you earn in your
part time job. You are also encouraging your employer to buy online and she is concerned
about over spending. An item you received recently in the mail was not the item you needed.
This has highlighted that you need to learn more about setting goals for spending. You need
to know where to go to learn about scams, online security and wise online shopping.
Check the following site to prepare for learning and then complete the task. You will need
three different highlighters.
• Go to http://www.bankers.asn.au/Consumers/Financial-Literacy-Program/Booklets/
Smarter-Banking---Know-your-banking-rights-and-responsibilities
and print out the Online Shopping Fact Sheet
• Use one colour to highlight the words that are new to you or you do not understand.
Add these to your Power Word List and discuss the meaning with your teacher.
• Use another colour to highlight the steps that you should take now.
• Use the third colour to highlight steps you need to take in the future. Use this to
complete the next activity.

29
 Module 12
Goal setting and online shopping Topic 12.5

Set some personal and workplace goals to improve your online shopping skills.

Online shopping, goal setting and budgets

Worksheet 9
In Module 3 you learned about SMART goals.
My goal is Specific – it states exactly what I want to achieve
My goal can be Measured - a definite amount is targeted
My goal is Achievable - a small enough step to really happen
My goal is Realistic - within the realm of my capability
My goal has a Time limit - a set time is allotted

PART A
Personal Goal Setting
Imagine you earn $90 tax free each week at your part time job at the local newsagency.
You work for 40 weeks each year.
S M A R T
My specific online The amount I will The things that have My spending each month
shopping goal for spend on average priority over the next compared with my income each
the next twelve each month for twelve months - in month. My spending is highest just
months personal online priority order with before Christmas , at the end of
shopping the most important financial year sales and September
at the top. for birthday presents.
At the of this $ 1. INCOME SPENDING
year (January to
December) I aim January
to spend no more
February
than 20% of my
income while online 2. March
shopping
April

$ May

3. June

July

August

4. September

November

December

30
 Module 12
Goal setting and online shopping Topic 12.5

PART B

Online shopping, goal setting and budgets

Worksheet 9
Goal setting and planning at work
Your employer at the local newsagency wants to buy online some of the products advertised
at the Australia Post site. He is interested in
• pens but does not want to pay more than 50c
• the cheapest spiral bound notebooks 112 x 77m
• the cheapest scientific calculator

The budget for these items is $450.00. He needs 10 scientific calculators and the balance to
be split as equally as possible between the other two items.
I. Use the Australia Post site to find the prices, make a list of how much the three groups
will cost, find the total and draft an email to your employer with the information.
II. Your employer intends to sell the items with a 50% mark up. Calculate the selling price
for each item.
III. The busiest time for selling this stock is in June and the quietest time for the business
is February. When should the goods be ordered online? Think of some reasons why
employers need to buy at some times and be careful not to overspend at others. Work in
pairs to decide how you would advise your employer.

31
 Module 12
E-commerce Fraud and Security Topic 12.6

Teacher Notes
Classroom and research activity:
Suggested time: 1-3 lessons

Student worksheets: Worksheet 10: Don't get caught

Distribute Worksheet 10: Don't get caught

a. Students check understanding of some common Internet fraud situations by ticking the
True and false statements and discussing the examples. Students are reminded to add
words from the module to Power Word List

Online sellers face less theft when storing goods T Online buyers cannot physically check T
for sale. merchandise before buying.
Secure Sockets Layer (SSL) encryption provides T It is possible for hackers to break into secure T
full protection against the misuse of credit card websites.
numbers.
Identity theft is a big concern for consumers. T Firewalls and anti-virus software only protect F
large businesses.
Phishing is when consumers are tricked into T It is better to use lots of different online stores F
believing they are dealing with an honest retailer when using e-commerce.
and then provide information which could be
harmful to the seller.
Always try to find independent reviews before T It doesn't matter if there is no contact F
buying online. information about the online seller.
It is not worth checking the refund policy as it T Most sites now provide free shipping and F
is too difficult to return goods when bought handling charges.
online.
Online buyers should check if the seller has T The credit card information screen should start T
a privacy policy or be at risk of having their with https if it is protected.
private details shared with or sold to other
organisations. Spyware can secretly collect
information.
A good password is your name and date of F Always use the same password as it is easier F
birth. to remember.
A mix of lower and upper case, numbers or a T Social media and reviews of products are T
'pass phrase' such as "I buy vg and fast" makes making sellers more accountable.
for a strong password.
If an Australian legal document requires a T Secure sites have https on the address bar and T
signature, the person signing can use an a padlock symbol in the browser.
electronic signature. Check http://www.
ag.gov.au/RightsAndProtections/ECommerce/
Pages/default.aspx
PayPal, BPAY or your credit card are all secure T It is ok to email credit card details. F
payment methods.
When buying clothes online all sizes are the F When buying shoes online sizes vary in each T
same around the world (answer eg Australian country. (Answer e.g. Australian size 8 is a
12 is a US8 or an Italian 44 or a French 40 or a UK6 or a US9 or an Italian 39 or a French 40).
Danish 38).

32
 Module 12
E-commerce Fraud and Security Topic 12.6

Teacher Notes
b. Students research examples of scams or fraud and prepare a short presentation. They
could begin with www.scamwatch.gov.au for the latest scam warnings and watch
some of the videos. Start with the online shopping scam video. They could also watch
the ASIC video on Online Financial Transactions: too good to be true at
http://teaching.moneysmart.gov.au/resource-centre/moneysmart-rookie-for-educators.

c. Students complete the unit by playing some of the games, or watching videos at the
www.staysmartonline.gov.au site.

33
 Module 12
E-commerce Fraud and Security Topic 12.6

PART A

Worksheet 10
Don't get caught
Select T (True) or F (False) for each of the following statements

T/F T/F
Online sellers face less theft when storing goods Online buyers cannot physically check
for sale. merchandise before buying.
Secure Sockets Layer (SSL) encryption provides It is possible for hackers to break into secure
full protection against the misuse of credit card websites.
numbers.
Identity theft is a big concern for consumers. Firewalls and anti-virus software only protect
large businesses.
Phishing is when consumers are tricked into It is better to use lots of different online stores
believing they are dealing with an honest retailer when using e-commerce.
and then provide information which could be
harmful to the seller.
Always try to find independent reviews before It doesn't matter if there is no contact
buying online. information about the online seller.
It is not worth checking the refund policy as it Most sites now provide free shipping and
is too difficult to return goods when bought handling charges.
online.
Online buyers should check if the seller has The credit card information screen should start
a privacy policy or be at risk of having their with https if it is protected.
private details shared with or sold to other
organisations. Spyware can secretly collect
information.
A good password is your name and date of Always use the same password as it is easier
birth. to remember.
A mix of lower and upper case, numbers or a Social media and reviews of products are
'pass phrase' such as "I buy vg and fast" makes making sellers more accountable.
for a strong password.
If an Australian legal document requires a Secure sites have https on the address bar and
signature, the person signing can use an a padlock symbol in the browser.
electronic signature. Check http://www.
ag.gov.au/RightsAndProtections/ECommerce/
Pages/default.aspx
PayPal, BPAY or your credit card are all secure It is ok to email credit card details.
payment methods.
When buying clothes online all sizes are the When buying shoes online sizes vary in each
same around the world. country.

34
 Module 12
E-commerce Fraud and Security Topic 12.6

PART B

Worksheet 10
Don't get caught
1. Check www.scamwatch.gov.au for the latest scam warnings and watch some of the
videos. Start with the online shopping scam video. You could use ideas from this or other
videos the next part of this activity. Another useful resource is the ASIC video on Online
Financial Transactions: too good to be true at
http://teaching.moneysmart.gov.au/resource-centre/moneysmart-rookie-for-educators.
2. Make a short presentation to your class on an example of Internet fraud. Begin by
checking your understanding of scams, fraud and Internet security.
Discuss any terms you do not understand with your teacher and add them to your
Module 12 Power Word List.
3. After you have presented your research to the group, play some of the games, or watch
the videos at www.staysmartonline.gov.au site and
http://www.sonicwall.com/furl/phishing/phishing-quiz-question.php.

35
 Module 12
Online Auctions Topic 12.7

Teacher Notes
Classroom and research activity:
Suggested time: 1-2 lessons
Resources: How to shop on eBay
https://www.youtube.com/watch?v=unro84b0k74
(Note that this is a British clip.)
eBay help page
http://pages.ebay.com.au/help/
Australian Competition and Consumer Commission
http://www.accc.gov.au/consumers/online-shopping/online-
auctions

Student worksheet: Worksheet 11: How does eBay actually work??

Even though there are many online auction sites which by nature involve both buying and
selling, this topic focuses on SAFE buying from eBay. Whilst most students will be aware of
eBay and how it operates, they may not know it technically as a form of marketplace online
auction. As an introduction to the topic students could watch the YouTube clip on “How to
shop on eBay”.
This activity is suitable for students to complete individually.
a) To introduce the topic, students investigate the processes of and vocabulary associated
with auctions:
auction, bid, cheque, COD, encryption, escrow, fraud, incremental, merchant,
money order, PayPal, reserve price, url.
b) The principles of safe online transacting (Topic 12.6) could be revisited.
c) Distribute Worksheet 11 – How does eBay actually work? Students could check
worksheet 10 from Topic 12.6 (if this has already been completed) and search the
suggested websites for the required information.
d) The second task on the worksheet looks at methods of payment for online transactions.
It would be useful to preface this activity by checking students’ understanding of how
the operation of online payment systems such as PayPal and Paymate differs from that of
credit card payments. It would also be prudent to introduce and discuss the meaning of
the term “escrow”.
An escrow service is a licensed and regulated company that collects, holds, and sends
a buyer's money to a seller according to instructions agreed on by both the buyer and
seller. Typically, once the buyer receives and approves the item from the seller within an
agreed time frame, the escrow service then sends the payment to the seller.
http://pages.ebay.com.au/help/tp/payment-escrow.html

36
 Module 12
Online Auctions Topic 12.7

Teacher Notes
SOLUTION TO PART 1
What is an auction?
• An auction is the process of buying and selling goods and services, where the
successful buyer is the highest bidder.
From www.ebay.com.au
• How does incremental bidding work?
Everyone wants to win, but only at the right price. Although we suggest that you bid
the maximum amount that you’re willing to pay for an item, you could pay less. As the
listing proceeds, we compare your bid to those of other bidders. When you’re outbid,
we automatically bid on your behalf up to your maximum bid. We increase your bid by
increments only as much as necessary to maintain your position as highest bidder.
• What is the “reserve price”?
Some sellers specify a reserve price, which is a hidden minimum price on their item.
• Why do some sellers block bids?
Sellers can make their listings unavailable to certain bidders based on certain criteria,
such as whether or not they have a PayPal account, their country of registration, or their
buying history on eBay.

37
 Module 12
Online Auctions Topic 12.7

Teacher Notes
SOLUTION TO PART 2
STAY SAFE WHEN USING ONLINE AUCTIONS
• Shop at secure websites – look for “https” in the url
• Verify the merchant – look for a physical address and a phone number
• Verify the delivery options and return policy – read the fine print
• Protect your funds – never send credit card details by email
• Keep records – save all transaction details
• Protect your security – use up to date anti-virus and anti-spyware

Check out the reputation of the site and the seller by reading feedback provided on the site
and on other online forums.
Never agree to do business privately outside of the online auction site, for example directly
by email, as this could be a scam.
Shop around before buying to make sure you’re getting a good deal. Find out everything
about the item–ask questions and ask for extra pictures and descriptions.
Only pay using a secure system–this is shown through a padlock symbol and web address
starting with https://
In case of a later dispute, keep copies of all documents including electronic records of all
bids, item descriptions, photographs, advertisements, emails and receipts.
If you have a problem, contact the seller first and explain the issue and how you would like
it resolved. Many sellers want to resolve the problem quickly to avoid negative feedback.

38
 Module 12
Online Auctions Topic 12.7

Teacher Notes
SOLUTION TO PART 3
HOW SHOULD YOU PAY FOR YOUR ONLINE AUCTION PURCHASES??
http://pages.ebay.com.au/help/pay/methods.html

METHOD ADVANTAGES DISADVANTAGES

PayPal • Immediate and convenient
Send funds directly to a seller from • Payment is deposited directly into
a verified bank account or from a the seller's account
credit card • You can pay directly from the item
listing page
• No requirement that you use your
credit card (you can transfer money
directly from your bank account)
• Sellers don't see your credit card
number (it is safely encrypted
through PayPal's server), which
limits the risk of unauthorised use
• Automatic payment tracking
• Most items paid for with PayPal
on eBay.com.au can be eligible
for up to AU$20,000 PayPal Buyer
Protection if you don't receive the
item you paid for or it isn't what
you were expecting. Conditions
apply.

Paymate • Immediate and convenient

Send funds directly to a seller from a • Payment is deposited directly into
credit or debit card the seller's bank account
• You can pay directly from the item
listing page
• Sellers don't see your credit card
(it is safely encrypted through
Paymate's server), which limits the
risk of unauthorised use
• Automatic payment tracking
• Paymate offers its own Paymate
Buyer Protection Program for
payments made to Paymate
TrustMark sellers when goods are
not received or significantly not as
described. (Conditions apply.)

39
 Module 12
Online Auctions Topic 12.7

Teacher Notes
METHOD ADVANTAGES DISADVANTAGES
Credit Card • Immediate and convenient • When using your credit card online
• Traceable you may be giving out your private
financial details to strangers
• Credit card companies typically
provide some level of identity and • You will not be eligible for PayPal
purchase protection. Contact your Buyer Protection unless your
credit card company to learn more. Visa/MasterCard transaction is
processed by PayPal. Some credit
card purchases may be protected
by your credit card company but
you must go through your credit
card company in those cases
Pay on pick up • No registration or fee
Note: Most sellers don't accept • Immediate, in-person payment to
cheques or money orders, because the seller upon pick up of item.
if they don't clear after the buyer Payment methods can include
has picked up the item, the seller cheques, money orders, cash,
has fewer options for resolving the PayPal, or credit card
problem. • Eligible for eBay Buyer and Seller
Protection. Buyers need to pay with
an eligible payment method. Cash,
cheques and money orders are not
covered by eBay Buyer or Seller
Protection.
Personal Cheques and Bank • Traceable to a particular mailing • Sellers must wait for funds to clear
Accounts address • Extremely difficult to recover in
• Provides proof of payment cases of fraud
• Most banks offer a stop payment • Not eligible for PayPal Buyer
service if problems arise before the Protection.
cheque is cashed
Money Orders • Traceable to a particular mailing • Sellers must wait for funds to clear
address • Extremely difficult to recover in
• Provides proof of payment cases of fraud
• Some services offer the option to • Not eligible for PayPal Buyer
stop payment if problems arise Protection.
before the payment is cashed, but
you don't always have this option
Escrow • Payment is held by the escrow • There have been reports of
Although this form of payment is service until you receive and fraudulent sellers using non-
usually used for real estate, buyers approve the item existent escrow companies. Do
could consider using a reputable • For eBay transactions, you should your homework before using any
third-party escrow agent to hold only use eBay approved escrow escrow service other than eBay's
payments for valuable items until companies. recommended escrow partner.
you’ve received and accepted the
item.

40
 Module 12
Online Auctions Topic 12.7

Teacher Notes
METHOD ADVANTAGES DISADVANTAGES
Bank Deposit • Quick and easy payment method • Payment is difficult to recover or
for transactions with other cancel
Sellers make their bank account
Australians • Not eligible for PayPal Buyer
information available to buyers
through the listing process. When • Deposit directly into the seller's Protection.
the listing closes the buyer can bank account either online or at
immediately view the bank account most banks
information and deposit payment. • Minimal or no bank fees involved
Cash on Delivery (COD) • Easy to use
Australia Post will take delivery of • Australia Post offers free insurance
your item at your nearest post office for C.O.D items valued up to
and will forward the seller your AU$100 and additional insurance
payment by money order. can be purchased for C.O.D items
valued between AU$100 and
AU$5000.

41
 Module 12
Online Auctions Topic 12.7

Did you know that eBay is an example of a marketplace online auction?

How does eBay actually work??

Worksheet 11
Marketplace online auctions are a popular way of buying, with eBay being the most well-
known example. In these ‘virtual’ markets, a business (that is, eBay) sets up the website
and provides a set of rules and guidelines, but it is mostly left to the individual buyers and
sellers to deal directly with each other. In these types of auctions, the business running the
website is not necessarily directly involved in the auction process, nor is it necessarily an
agent for the seller.

1. To begin you need to find out:

• how an auction works (that is, any auction, not just an online auction)

Next, go to the eBay website and find out:

• how incremental bidding works

• the meaning of “reserve price”

• why some sellers might block bids

As well as buying on auction, eBay also gives you an option to buy immediately without
having to bid and wait for a result. eBay is consumer to consumer transacting, unlike
traditional business to consumer transacting.
So, the tips for smart online shopping on auctions sites are basically the same as for any type
of online shopping. For help with the first part of this activity, you should find some useful
information on the ACCC (Australian Competition and Consumer Commission).
http://www.accc.gov.au/consumers/online-shopping/online-auctions

42
 Module 12
Online Auctions Topic 12.7

2. STAY SAFE WHEN USING ONLINE AUCTIONS

How does eBay actually work??

Worksheet 11
Match the tips in the WHAT TO DO column with HOW TO DO IT.

WHAT TO DO HOW TO DO IT
Shop at secure websites. Look for a physical address and a phone
number.
Verify the merchant. Never send credit details by email.
Verify the delivery options and return policy. Look for “https” in the url.
Protect your funds. Save all transaction details.
Keep records. Use up to date anti-virus and anti-spyware.
Protect your security. Read the fine print.

Answer the following questions.

How can you check the reputation of the site and the seller?

Why should you never agree to do business privately outside of the online auction site?

How could you ensure that you’re getting a good deal when you buy from an eBay seller?

How can you ensure that you’re using a secure website?

What sort of records should you keep in case there is a dispute between you and the seller?

What should you do if you have a problem with your purchase?

43
 Module 12
Online Auctions Topic 12.7

3. HOW SHOULD YOU PAY FOR YOUR ONLINE AUCTION PURCHASES??

How does eBay actually work??

Worksheet 11
Go to the eBay help page and find the following information. Add a short description for each
method of payment as shown under PayPal. http://pages.ebay.com.au/help/pay/methods.html
METHOD ADVANTAGES DISADVANTAGES
PayPal
Send funds directly to a seller from
a verified bank account or from a
credit card

Recommended by eBay

Paymate

Recommended by eBay

Credit Card

Pay on pick up

Recommended by eBay

Personal Cheques and Bank

Accounts

Money Orders

44
 Module 12
Online Auctions Topic 12.7

How does eBay actually work??

Worksheet 11
METHOD ADVANTAGES DISADVANTAGES
Escrow

Bank Deposit

Cash

Not recommended by eBay

Bank Deposit Express

Cash on Delivery (COD)

Recommended by eBay

45
 Module 12
Appendices

http://searchcio.techtarget.com/definition/e-commerce

Appendix 1
General information
e-commerce (electronic commerce or EC)
E-commerce (electronic commerce or EC) is the buying and selling of goods and services
on the Internet, especially the World Wide Web. In practice, this term and a newer term,
e-business, are often used interchangably. For online retail selling, the term e-tailing is
sometimes used.
E-commerce can be divided into:
• E-tailing or "virtual storefronts" on Web sites with online catalogs, sometimes gathered
into a "virtual mall"
• The gathering and use of demographic data through Web contacts
• Electronic Data Interchange (EDI), the business-to-business exchange of data
• E-mail and fax and their use as media for reaching prospects and established customers
(for example, with newsletters)
• Business-to-business buying and selling
• The security of business transactions

E-tailing or The Virtual Storefront and the Virtual Mall

As a place for direct retail shopping, with its 24-hour availability, a global reach, the ability
to interact and provide custom information and ordering, and multimedia prospects, the
Web is rapidly becoming a multibillion dollar source of revenue for the world's businesses. A
number of businesses already report considerable success. As early as the middle of 1997, Dell
Computers reported orders of a million dollars a day. By early 1999, projected e-commerce
revenues for business were in the billions of dollars and the stocks of companies deemed
most adept at e-commerce were skyrocketing. Although many so-called dotcom retailers
disappeared in the economic shakeout of 2000, Web retailing at sites such as Amazon.com,
CDNow.com, and CompudataOnline.com continues to grow.

Market Research
In early 1999, it was widely recognized that because of the interactive nature of the Internet,
companies could gather data about prospects and customers in unprecedented amounts
-through site registration, questionnaires, and as part of taking orders. The issue of whether
data was being collected with the knowledge and permission of market subjects had been
raised. (Microsoft referred to its policy of data collection as "profiling" and a proposed
standard has been developed that allows Internet users to decide who can have what personal
information.)

Electronic Data Interchange (EDI)

EDI is the exchange of business data using an understood data format. It predates today's
Internet. EDI involves data exchange among parties that know each other well and make
arrangements for one-to-one (or point-to-point) connection, usually dial-up. EDI is expected to
be replaced by one or more standard XML formats, such as ebXML.

46
 Module 12
Appendices

Appendix 1
General information
E-Mail, Fax, and Internet Telephony
E-commerce is also conducted through the more limited electronic forms of communication
called e-mail, facsimile or fax, and the emerging use of telephone calls over the Internet. Most
of this is business-to-business, with some companies attempting to use e-mail and fax for
unsolicited ads (usually viewed as online junk mail or spam) to consumers and other business
prospects. An increasing number of business Web sites offer e-mail newsletters for subscribers.
A new trend is opt-in e-mail in which Web users voluntarily sign up to receive e-mail, usually
sponsored or containing ads, about product categories or other subjects they are interested in.

Business-to-Business Buying and Selling

Thousands of companies that sell products to other companies have discovered that the Web
provides not only a 24-hour-a-day showcase for their products but a quick way to reach the
right people in a company for more information.

The Security of Business Transactions

Security includes authenticating business transactors, controlling access to resources such
as Web pages for registered or selected users, encrypting communications, and, in general,
ensuring the privacy and effectiveness of transactions. Among the most widely-used security
technologies is the Secure Sockets Layer (SSL), which is built into both of the leading Web
browsers.

Contributor(s): Mark van Ketel and Tim D. Nelson

This was last updated in April 2005
Posted by: Margaret Rouse
http://www.investorwords.com/1637/e_commerce.html

Definition
The buying and selling of products and services by businesses and consumers through an
electronic medium, without using any paper documents. E-commerce is widely considered the
buying and selling of products over the internet, but any transaction that is completed solely
through electronic measures can be considered e-commerce. E-commerce is subdivided into
three categories: business to business or B2B (Cisco), business to consumer or B2C (Amazon),
and consumer to consumer or C2C (eBay). also called electronic commerce.
Read more: http://www.investorwords.com/1637/e_commerce.html#ixzz2fyWp5Gcm

47
 Module 12
Appendices

Appendix 2
Power Word definitions
Word or phrase Meaning
Accommodation A place to stay
Blogger Someone who posts a message, email or commentary on a 'blog'
- a www space where posts are listed in reverse chronological
order (newest first)
Budget An estimate of what should be spent to make sure spending does
not exceed earnings
Carbon offset fee A voluntary fee airline passengers can pay to help protect the
environment
Carryon luggage Luggage which is allowed inside the aircraft passenger area
Categories Groups of things
Citizen Someone who has been recognised as having rights to live in a
certain country
Consumables Goods that are 'used up' for example paper and pens
Customs The system of checking that goods coming into a country are not
prohibited goods
Delicious Delicious (used to be del.icio.us) is a social bookmarking web
service for storing, sharing, and discovering web bookmarks
Dimensions Height, length and width of an item
Domestic mail Mail sent within Australia
Duty free The reduced cost of goods which travellers may be able to claim
when leaving a country
e-Bay Popular website where consumers buy and sell to one another
through an auction process
e-commerce Many different ways of running a business using the Internet or
digital technology
e-tailing A term used to change 'retailing' to 'e-tailing' because of
e-commerce
EDI Business to business electronic data interchange
EFT Electronic funds transfer
Entrepreneurs People who have ideas and skillsto start a new business
Facebook Facebook is an online social networking service. 'Facebook' was
the name of the book given to students in some USA universities
so students could get to know one another. Facebook was
invented by Harvard University students. Facebook expanded to
include other universities and school users. Anyone 13 years and
over can be a registered user. Once registered the user creates a
personal profile, adds other users as friends and communicates.
By September 2012, Facebook had over one billion users, of
which 8.7% were fake. According to a May 2011 Consumer
Reports survey, there were 7.5 million children under 13 with
accounts and 5 million under 10, violating the site's terms of
service. (Adapted from Wikipedia July 2013)

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 Module 12
Appendices

Appendix 2
Power Word definitions
Firewalls A method of protecting computers from viruses and unauthorised
entry
Flickr A social networking service similar to Facebook
GMail Gmail is a free, advertising-supported email service provided by
Google.
Google Google Inc is a large organisation specialising in Internet services.
The verb 'google is often used for 'find' when using the Internet.
GST Goods and Services Tax - money the Australian government
collects when goods and services are bought and sold (Currently
at 1 Jnauary 2014). Does not apply when buying overseas online.
GST system Goods and Services Tax system. The government adds 10% to
most goods and services to raise revenue to run the country
Hackers People who have the expertise to breach the security of electronic
systems
Hotmail A free email service
Immigration The system of checking that people who enter and leave a
country are entitled to enter
Impulse buying Buying without carefully thinking before deciding to spend
Instagrams Instagram is online photo-sharing, video-sharing and social
networking. It allows users to take pictures and videos, apply
digital filters to them, and share them on a variety of social
networking services, such as Facebook, Twitter, Tumblr and Flickr.
Insurance A system of paying a fee to protect against loss through an
accident or damage
International goods Goods that are bought by Australian buyers from a country other
than Australia
Invoice A document that is proof of sale
LinkedIn A social networking system for people in particular professions
Metropolitan area City area
Mobile Apps Software Applications which are easily downloaded onto mobile
phones. Students will have many examples such as games, shops,
music...
Online shopping Buying, selling and paying using the Internet
Passport Official document allowing someone to enter and leave a country
Phishing Phishing is when consumers are tricked into providing personal
and banking information (such as username, password etc) by
email and SMS from scammers masquerading as trustworthy sites
Pinterest Pinterest is a pinboard-style photo-sharing website that allows
users to create and manage theme-based image collections
such as events, interests, and hobbies. Users can browse other
pinboards for images, "re-pin" images to their own pinboards, or
"like" photos.
Priority boarding The right to enter the aircraft first
Quote A price for doing something
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Appendix 2
Power Word definitions
Return authority The number that allows a buyer to return goods. It is proof that
number the goods were bought at a site
Reviews Shoppers can comment on products and sellers can use this for
promotion.
Satchels Envelopes or containers purchased at a retailer such as Australia
Post
Scams Tricks played on buyers to defraud them of their money
Scanning Taking an electronic photo or copy of a document. Can also mean
to read the main headings and key parts of a document to gain
an overview
Secure online payments Paying online using a site which has security such a PayPal system
Signature The name of someone signing - not printed but written
Spyware Spyware is a software that aids in gathering information about a
person or organization without their knowledge
SSL encryption Secure Sockets Layer (SSL) encryption provides full protection
over the misuse of credit card numbers
StumbleUpon A web search engine
Supporting Forms and documents used to prove something, such a driver
documentation licence used to identify someone
Techno-language Language used when describing software and hardware or
telecommunication
Technology Software and hardware to allow online communication
Terms and conditions The rules that apply to purchase and sale of goods or services
Tracking service An electronic service which tells the buyer and seller the location
of the goods during transit (while they are on the way for
delivery)
Tumblr A social networking service similar to Facebook
Twitter Twitter is an online social networking service and microblogging
service. Users can send and read text-based messages of up to
140 characters, known as "tweets". Unregistered users can read
tweets, and registered users can post tweets .
Virtual shopping malls Shopping centres that only exist online
www World wide web
Yahoo!Mail A free email service

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 Module 12
Appendices

Curriculum Mapping FSK 10213 Units of Competency

Appendix 3
Unit of Elements and Performance ACTIVITY:
Competency Criteria 12.1 12.2 12.3 12.4 12.5 12.6 12.7
FSKDIG02 1. Prepare to 1.1 Identify simple workplace task * * * * *
Use digital use digital 1.2 Identify appropriate digital technology for the
technology for technology task
simple workplace 1.3 Interpret simple workplace information and
tasks terminology
2. Complete simple 2.1 Interpret simple written and pictorial instructions * * * *
workplace task to access and use digital technology
2.2 Follow workplace procedures to perform a task
using technology
2.3 Review performance
FSKLRG08 1. Prepare for 1.1 Identify work-related learning goals * *
Use simple learning 1.2 Identify own learning needs
strategies for 1.3 Identify preferred approaches to learning
work-related 1.4 Identify potential barriers to own learning and
learning propose possible solutions
2. Use strategies for 2.1 Select a short-term learning goal *
learning 2.2 Locate and assess information related to the
learning goal
2.3 Identify simple learning strategies to achieve the
learning goal
2.4 Identify and access support resources
2.5 Develop a simple learning plan which includes a
learning pathway
3. Review own 3.1 Check progress against the learning plan *
learning progress 3.2 Seek feedback from an appropriate person
3.3 Identify areas for further learning and training

FSKNUM08 1. Identify and 1.1 Read and name whole numbers into the * * *
Identify and use interpret simple thousands in workplace documents and tasks
whole numbers mathematical 1.2 Identify and interpret simple fractions, decimals
and simple information and percentages
fractions, decimals 2. Undertake simple 2.1 Demonstrate understanding of place value by * * *
and percentages mathematical organising numbers from smallest to largest
for work processes 2.2 Locate required numerical information and
and apply to decide on appropriate method to solve a
workplace tasks problem
2.3 Perform a limited range of calculations using the
4 operations
2.4 Describe links between operations
3. Check and 3.1 Make estimations to check reasonableness of * * *
communicate results of problem solving process
results 3.2 Record numerical information and communicate
the result of the task using informal and some
formal language and symbolism

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 Module 12
Appendices

Curriculum Mapping FSK 10213 Units of Competency

Appendix 3
Unit of Elements and Performance ACTIVITY:
Competency Criteria 12.1 12.2 12.3 12.4 12.5 12.6 12.7
FSKNUM09 1. Identify and 1.1 Identify and interpret measurement information * * *
Identify, measure interpret simple in workplace tasks and texts
and estimate mathematical 1.2 Identify familiar units of measurement needed
familiar quantities information for tasks
for work 2. Apply simple 2.1 Estimate familiar and simple amounts * *
measurement 2.2 Select appropriate measuring equipment
strategies 2.3 Use simple measuring equipment graduated in
familiar units to measure relevant quantities
2.4 Calculate using familiar units of measurement
3. Check and 3.1 Check measurements and results against * *
communicate estimates
results 3.2 Record or report results
3.3 Communicate results relevant to the workplace
task using informal and some formal
mathematical and general language
FSKOCM03 1. Prepare to 1.1 Identify the purpose and audience of the spoken * *
Participate in participate in interaction
simple spoken simple spoken 1.2 Identify oral communication strategies for
interactions at interactions spoken interactions
work 2. Use oral 2.1 Use oral communication strategies for simple * *
communication interactions
skills to 2.2 Use appropriate grammar, vocabulary and
participate in pronunciation
simple spoken 2.3 Use appropriate non-verbal communication
exchanges
3. Review own 3.1 Seek feedback on whether exchange was * *
performance appropriate for audience and purpose
3.2 Reflect on performance to identify areas for
improvement
FSKRDG07 1. Prepare to read 1.1 Identify the text type * * *
Read and simple workplace 1.2 Identify audience and purpose
respond to texts 1.3 Identify the text features
simple workplace
2. Identify and 2.1 Use navigation skills to locate relevant * * *
information
interpret information
information in 2.2 Identify and interpret workplace terminology in
simple workplace texts
texts 2.3 Use reading strategies to identify and interpret
relevant information
2.4 Use critical reading skills to interpret information
3. Confirm 3.1 Check that information has been correctly * * *
understanding understood
and respond to 3.2 Use information to respond appropriately
simple workplace
texts

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 Module 12
Appendices

Curriculum Mapping FSK 10213 Units of Competency

Appendix 3
Unit of Elements and Performance ACTIVITY:
Competency Criteria 12.1 12.2 12.3 12.4 12.5 12.6 12.7
FSKWTG06 1. Prepare to write 1.1 Identify the audience and purpose of workplace * *
Write simple simple workplace text
workplace texts 1.2 Identify text features
information 1.3 Plan to write text
2. Use drafting 2.1 Identify drafting strategies to use when writing * *
strategies to simple workplace text
write simple 2.2 Write text using appropriate layout and
workplace texts organisation
2.3 Use appropriate grammar and vocabulary and
writing conventions
3. Review and 3.1 Check draft text * *
finalise simple 3.2 Seek advice and assistance from supervisor or
workplace texts trainer on draft where required
3.3 Finalise text

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