PERSONAL FINANCE

 Personal Finance provides members with the opportunity to demonstrate knowledge around introductory competencies in financial skills. This competitive event consists of an objective test. It aims to inspire members to learn how to manage personal finances.

Event Overview

Division: High School
Event Type: Individual
Event Category: Objective Test, 100-multiple choice questions (breakdown of question by competencies below)
Objective Test Time: 50 minutes
NACE Connections: Career & Self-Development
 

Equipment Competitor Must Provide: Sharpened pencil, Conference-provided nametag, Attire that meets the Florida FBLA Dress Code

Equipment FBLA Must Provide: Calculator

Objective Test Competencies

·         Financial Principles Related to Personal Decision Making
·         Earning a Living (Income, Taxes)
·         Managing Budgets and Finance (Planning and Money Management)
·         Saving and Investing
·         Buying Goods and Services
·         Banking and Insurance
·         Credit and Debt

District

Check with your District leadership for District-specific competition information.

State

Eligibility

·         FBLA membership dues are paid by 11:59 pm Eastern Time on December 1 (or earlier date specified by District Director) of the current program year.
·         Members may compete in an event at the State Leadership Conference (SLC) more than once if they have not previously placed in the top 10 of that event at the National Leadership Conference (NLC). If a member places in the top 10 of an event at the NLC, they are no longer eligible to compete in that event.
·         Members must be registered for the SLC and pay the state conference registration fee in order to participate in competitive events.
·         Members must stay in an official FBLA hotel to be eligible to compete.
·         Each district may be represented by participant(s) based on the Florida FBLA scaled quota system found on the Florida FBLA website.
·         Each member can only compete in one individual/team event and one chapter event (American Enterprise Project, Community Service Project, Local Chapter Annual Business Report, Partnership with Business Project).
·         If competitors are late for an objective test, they may be either disqualified or permitted to begin late with no extension of the time as scheduled.
·         Participants must adhere to the Florida FBLA dress code established by the Florida Board of Directors or they will not be permitted to participate in the competitive event.

Recognition

·         The number of competitors will determine the number of winners. The maximum number of winners for each competitive event is 5.

Event Administration

·         This event is an objective test administered at the SLC.
·         No reference or study materials may be brought to the testing site.
·         No calculators may be brought into the testing site.

Tie Breaker

·         Ties are broken by comparing the correct number of answers to the last 10 questions on the test. If a tie remains, answers to the last 20 questions on the test will be reviewed to determine the winner. If a tie remains, the competitor who completed the test in a shorter amount of time will place higher.

Americans with Disabilities Act (ADA)

·         FBLA meets the criteria specified in the Americans with Disabilities Act for all competitors with accommodations submitted through the conference registration system by the registration deadline.

Penalty Points

·         Competitors may be disqualified if they violate the Competitive Event Guidelines or the Honor Code.

Electronic Devices

·         All electronic devices such as cell phones, headphones, and watches of any type are not to be brought to the testing site.

National

Be sure to see the National guidelines at https://www.fbla.org/divisions/fbla/fbla-competitive-events/

Study Guide: Competencies and Tasks

A. Financial Principles Related to Personal Decision Making

1.            Evaluate how decisions made at one stage of your life can affect your options at other stages.

2.            Find and evaluate financial information from a variety of sources.

3.            Identify major consumer protection laws.

4.            Make financial decisions by systematically considering alternatives and consequences.

5.            Develop communication strategies for discussing financial issues.

6.            Control and secure personal information.

7.            Describe how wise financial planning can help you achieve your goals.

8.            Predict the effects of financial planning on specific situations.

9.            Define money (characteristics, role, and forms) and trace how money and resources flow through the American economic system.

10.        Define basic economic concepts (such as supply and demand; production, distribution, and consumption; labor, wages, and capital; inflation and deflation).

B. Earning a Living (Income, Taxes)

1.            Identify components and sources of personal income.

2.            Describe how the demand for certain skills helps determine the amount you will be paid.

3.            Identify the effects of employment on financial security.

4.            Relate employee benefits to disposable income.

5.            Compute gross earnings and describe factors affecting take-home pay.   

6.            Calculate mandatory and voluntary deductions to get net pay. 

7.            Compare various employee benefits and retirement programs.

8.            Identify various types of taxes that relate to income.

9.            Summarize guidelines for reporting taxes.

10.        Define exemptions, dependents, and taxable and nontaxable income.

11.        Prepare tax forms such as 1040EZ, 1040A using a W2 form and a 1099 interest form, W-4, and I-9 forms

12.        Compute taxes using a tax table and other appropriate information.

13.        Describe the differences in various types of employment.  (i.e., flextime, job sharing, telecommuting, full- and part-time, piece work)

C. Managing Budgets and Finance (Planning and Money Management)

1.            Determine short- and long-term goals.

2.            Develop and implement a personal financial plan for earning, spending, saving, and investing.

3.            Develop a system for keeping and using financial records.

4.            Track income and spending to analyze and prepare a budget and make adjustments.

5.            Describe the effect of different payment methods—cash, credit, installment loans, mortgages, debit cards, checks or online deposits, transfers, and payments on the budget and financial plan.

6.            Identify some of the serious problems that can arise when you don’t plan your finances or implement your financial plan.

7.            Use financial management software to prepare a budget, track income and expenses, and project taxes.

D. Saving and Investing

1.            Define investment terms including risk management, yields, and rate of return.

2.            Explain how investing and saving builds wealth and helps meet financial goals.

3.            Distinguish between short- and long-term savings goals.

4.            Determine saving options and the need for and the purpose of savings.

5.            Evaluate investment alternatives and sources of investment information and prepare a personal investment strategy.

6.            List types and methods of savings.

7.            Compare and choose among saving and investment options such as stocks, bonds, CDs, and 401K savings plans.

8.            Describe how to buy and sell investments.

9.            Track various stocks over a period of time.

10.        Compute the anticipated rate of return on specific investments and savings accounts using various factors such as simple or compound interest, dividends, fees, etc.

11.        Explain how taxes affect the rate of return on investments.

12.        Demonstrate how to evaluate advisors’ credentials and how to select professional advisors and their services.

13.        Investigate how agencies that regulate financial markets protect investors.

E. Buying Goods and Services

1.            Compare and contrast the advantages and disadvantages of renting versus purchasing property such as a home, auto, and equipment.

2.            Calculate costs involved in purchasing and maintaining a vehicle and a home and the methods of figuring depreciation.

3.            Determine spending patterns based on a review of financial records.

4.            Evaluate information about products and services such as warranties, clearance items, and consumer reports.

5.            Compare the advantages and disadvantages of alternative payment types—credit, cash, loans, etc.

6.            Describe the rights and responsibilities of buyers and sellers under consumer protection laws.

F. Banking and Insurance

1.            Identify common types of risks and basic risk management methods.

2.            Identify the purpose, importance, and major characteristics of property and liability insurance protection.

3.            Identify the purpose, importance, and major characteristics of health, disability, and life insurance protection.

4.            Evaluate how insurance (e.g., auto, home, life, medical, and long-term health) and other risk management strategies protect against financial loss.

5.            Compute the costs and benefits of specific insurance plans.

6.            Predict how personal factors affect insurance needs and costs.   

7.            Compare different types of banking options such as credit unions and other banks.

8.            Identify the types of banking services and their costs for meeting various needs.

9.            Write a check and prepare deposits and withdrawal slips.

10.        Maintain a check register including proper procedures for ATM and automatic payment withdrawals.

11.        Reconcile a bank statement.

12.        Explain the advantages and security issues with online banking and bill payment.

G. Credit and Debt

1.            Identify the costs, benefits, and sources of various types of credit.

2.            Give the advantages and disadvantages of using credit in specific situations.

3.            Explain the purpose of a credit record and identify borrowers’ credit report rights.

4.            Develop and use personal debt-reduction strategies to manage and avoid or correct debt problems.

5.            Identify major consumer credit laws.

6.            Reconcile a credit card statement and analyze finance charges.

7.            Evaluate the terms and conditions of credit offers and make recommendations based on the analysis.

8.            Evaluate the concept of creditworthiness as it relates to credit records, credit ratings, credit reports, and credit laws.

9.            Describe the advantages and disadvantages of bankruptcy.

10.        Compare the terms and rates of mortgage agreements.

11.        Demonstrate awareness of consumer protection and information (identify theft, phishing, scams, etc.).

12.        Complete credit forms and loan applications.

13.        Compare the costs of a purchase if paid with cash, credit cards, charge accounts, and installment loans.

14.        Evaluate various personal and economic factors that influence the availability of credit.

15.        Describe the responsibilities of the consumer to the creditor in terms of handling credit as a responsible consumer.