CRM LESSON PLAN REPORT · 2019-01-14 · CRM LESSON PLAN REPORT PERFORM PERSONAL FINANCIAL MANAGEMENT TRAINING (PFMT) 805A ... Requirements Instructor€must review lesson plan material
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CRM LESSON PLAN REPORT
PERFORM PERSONAL FINANCIAL MANAGEMENT TRAINING (PFMT)
SCOPE: None ____________________________ Distribution Restriction: Approved for public release; distribution is unlimited. Destruction Notice: None Foreign Disclosure: FD1 - This training product has been reviewed by the training developers in coordination with the SSI, FMB, Fort Jackson, SC foreign disclosure officer. This training
product can be used to instruct international military students from all approved countries without restrictions.
Test Lesson(s) Hours Lesson Number Version Lesson Title
None
2
PrerequisiteLesson(s) Hours Lesson Number Version Lesson Title
None
TrainingMaterialClassification
Security Level: This course/lesson will present information that has a Security Classification of: U - Unclassified.
ForeignDisclosureRestrictions
FD1. This training product has been reviewed by the training developers in coordination with the SSI, FMB, FortJackson, SC foreign disclosure officer. This training product can be used to instruct international military studentsfrom all approved countries without restrictions.
ReferencesNumber Title Date
TRADOC PAM 600-4 The Soldiers Blue Book 23 Jun 2017
TRADOC REG 350-6 Enlisted Initial Entry Training Policies andAdministrationhttp://www.tradoc.army.mil/tpubs/regs/TR350-6.pdf
30 Jan 2018
Student StudyAssignment All Students must review training schedule and scan for all reading assignments and all
regulations in advance.
InstructorRequirements Instructor must review lesson plan material and associated multi-media one day prior to the actual date of instruction.
Instructorr should be prepared to add relevant experience to assist in learning.
Demonstrators: All demonstrators should rehearse their demonstration one day prior to demonstrating any lesson
material. A positive, non-toxic and motivating experience should be the result of all demonstrations.
All facilitators must meet requirements below:
a. Must be of the grade authorized by the TDA series.
b. Must meet physical qualifications IAW AR 40-501.
c. Must document successful completion of a TRADOC approved Facilitator Training Course within the past five years.
d. Must provide documentary evidence of their facilitator qualification.
e. Every instructor must meet the qualification standards established in AR 350-1, AR 614-200,TR 350-70, TR 350-10
and the proponent school instructor certification program.
SupportPersonnelRequirements
Assistant Instructor: All lesson plans material must be reviewed one day prior to facilitation. AI's will be alert to the
needs of the learners and assist as necessary. Must be prepared to take over class in the event of an interruption or
emergency.
AdditionalSupportPersonnelRequirements
NameStudent
Ratio QtyMan
Hours
None
3
EquipmentRequiredfor Instruction
ID - Name StudentRatio
InstructorRatio Spt Qty Exp
3610-01-C92-5429 - Printer, ColorLaserjet: HP Color Laserjet 5550DMRemarks:
0:0 0:0 Yes 3 No
5815-01-126-7670 - VIEWINGSCREENRemarks:
0:0 0:0 Yes 2 No
5820-00-912-3248 - MONITORRemarks:
0:0 0:0 Yes 1 No
5860-01-363-8730 - Laser PointerRemarks:
0:0 0:0 Yes 1 No
5920-01-144-7878 - Surge ProtectorRemarks:
0:0 0:0 Yes 27 No
5965-01-C11-8844 - MicrophoneDynamic, w/Connector and Cable:Desktop Gooseneck ShureRemarks:
Instructional Guidance/Conduct of Lesson NOTE: Before presenting this lesson, instructors must thoroughly prepare by studying this
lesson and identified reference material.
Throughout this lesson, solicit from students the challenges they experienced in the current operational environment
(OE) and what they did to resolve them. Encourage learners to apply at least 1 of the 8 critical variables: physical
environment, political stability of the state, sociological demographics, infrastructure, military capabilities, information,
time, and economics.
Proponent LessonPlan Approvals Name Rank Position Date
Reid Bonig Not available Approver 08 Sep 2017
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SECTION II. INTRODUCTION
Method of Instruction: Discussion (Small or Large Group)
Mode of Delivery: Resident Instruction
Instr Type (I:S Ratio): Military - ICH (1:25) (Every instructor must meet the qualification standardsestablished in AR 350-1, AR 614-200,TR 350-70, TR 350-10 and theproponent school instructor certification program.)
Time of Instruction: 5 mins
MotivatorWhatever your reason for joining the Army there is one unavoidable fact: it is your duty as a Soldier to fulfill your
financial obligations and to provide for your family. The purpose of this training is to provide information that will help
you prepare for your financial readiness.
TerminalLearningObjective
NOTE. Inform the students of the following Terminal Learning Objective requirements.
At the completion of this lesson, you [the student] will:
Action: Perform Personal Financial Management TrainingConditions:
As a new Soldier in a classroom environment using doctrinal and administrative publications,
practical exercises, handouts, and discussion.
Standards:With at least 75% accuracy, students must demonstrate proficiency with:
1. Review Financial Ethics
2. Review Retirement / Thrift Savings Plan
3. Analyze Leave and Earning Statement / myPay
4. Developing a Spending Plan
5. Managing a Checking Account
6. Identify the Essentials of Credit
7. Review Consumer Awareness
8. Assess the Car Buying Process
9. Assess Your Insurance Needs
LearningDomain - Level:
Cognitive - Understanding
No JPME LearningAreas Supported: None
SafetyRequirements In a training environment, leaders must perform a risk assessment in accordance with DA PAM 385-30, Risk
Management. Leaders will complete a DD Form 2977 DELIBERATE RISK ASSESSMENT WORKSHEET during the
planning and completion of each task and sub-task by assessing mission, enemy, terrain and weather, troops and
support available-time available and civil considerations, (METT-TC). Local policies and procedures must be followed
during times of increased heat category in order to avoid heat related injury. Consider the work/rest cycles and water
Method of Instruction: Discussion (Small or Large Group)
Mode of Delivery: Resident Instruction
Instr Type (I:S Ratio): Military - ICH (1:25)(Every instructor must meet the qualificationstandards established in AR 350-1, AR 614-200,TR 350-70, TR 350-10 and the proponent school instructor certification program.)
Time of Instruction: 30 mins
Media Type: Handout / PowerPoint Presentation
Other Media: Unassigned
Security Classification: This course/lesson will present information that has a SecurityClassification of: U - Unclassified.
Method of Instruction: Discussion (Small or Large Group)
Mode of Delivery: Resident Instruction
Instr Type (I:S Ratio): Military - ICH (1:25)(Every instructor must meet the qualificationstandards established in AR 350-1, AR 614-200,TR 350-70, TR 350-10 and the proponent school instructor certification program.)
Time of Instruction: 2 hrs 20 mins
Media Type: Handout / PowerPoint Presentation
Other Media: Unassigned
Security Classification: This course/lesson will present information that has a SecurityClassification of: U - Unclassified.
SHOW SLIDE 2-1: Retirement/Thrift Savings Plan (TSP)
2. Learning Step / Activity 2: Review Retirement/Thrift Savings Plan
Method of Instruction: DSL – Discussion (Small or Large Group)
Method of Instruction: Discussion (Small or Large Group)
Mode of Delivery: Resident Instruction
Instr Type (I:S Ratio): Military - ICH (1:25)(Every instructor must meet the qualificationstandards established in AR 350-1, AR 614-200,TR 350-70, TR 350-10 and the proponent school instructor certification program.)
Time of Instruction: 30 mins
Media Type: Handout / PowerPoint Presentation
Other Media: Unassigned
Security Classification: This course/lesson will present information that has a SecurityClassification of: U - Unclassified.
SHOW SLIDE 3-1: Leave and Earning Statement/myPay Account
(8) The ADSN/DSSN is the code that identifies the finance office that maintains your pay records.
SHOW SLIDE 3-7: Pay Period
Instructor’s Note: Instructor read and discuss with students using the slide.
• PAY PERIOD
(9) The last block on the top line shows the pay period covered by the LES. Note that it is NOT the same as
your Pay Date.
**Remember: Pay Date is the day you entered into service, not the day you got paid.
SHOW SLIDE 3-8: Entitlements, Deductions, Allotments, & Summary
Instructor’s Note: Instructor read and discuss with students using the slide.
Entitlements, Deductions, Allotments, & Summary:
• The following row on the LES will probably be the first place you look.
• This is where your net pay will be displayed, along with the items used to calculate it.
• These items include:
o Entitlements
o Deductions
o Allotments
SHOW SLIDE 3-9: Entitlements
Instructor’s Note: Instructor read and discuss with students using the slide.
Note: Animated slide, click enter to reveal answers.
Entitlements:
• This block names the entitlements and allowances being paid out to you for the pay period, such as Basic
Pay, BAS, BAH, CONUS COLA, etc. This also includes any retroactive monies.
• There is space allotted for fifteen entitlements, any additional shall be listed in the “REMARKS” block.
SHOW SLIDE 3-10: Deductions
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Instructor’s Note: Instructor read and discuss with students using the slide.
Note: Animated slide, click enter to reveal answers.
Deductions:
• Includes items such as taxes, SGLI, Mid-month pay, and dependent dental plan, as well as any retroactive
deductions. There is space allocated for fifteen deductions to be listed.
• Any additional are to be printed in the “REMARKS” block.
SHOW SLIDE 3-11: Allotments
Instructor’s Note: Instructor read and discuss with students using the slide.
Note: Animated slide, click enter to reveal answers.
Allotments:
• Includes discretionary and non-discretionary allotments for savings and/or checking accounts, insurance,
bonds, etc. There is space allotted for fifteen allotments. Any additional are to be printed in the “REMARKS”
block.
• If you have more than one allotment of the same type, for instance two savings allotments, the only
differentiation may be the dollar amount.
• Some allotments, however, are prohibited, such as new allotments to purchase, lease, or rent personal
property.
Examples of prohibited allotments include:
o Vehicles (e.g., automobiles, motorcycles, boats);
o Appliances or household goods (e.g., washer, dryer, furniture);
o Electronics (e.g., laptop, iPad, cell phone, television)
SHOW SLIDE 3-12: LES Summary
Instructor’s Note: Instructor read and discuss with students using the slide.
• The next section provides a math summary that leads to the "bottom line" or your End of Month (EOM) pay.
EOM is the actual amount of the payment to be paid to the member of the End-of-Month payday.
• Summary Line 1 – Amt. FWD: The Amount Forwarded shows the amount of all unpaid pay and allowances
(if any), due to you from the prior LES. The totals found in the Entitlements, Deductions, and Allotments
blocks will appear in this summary. Make sure they are correct!
• Summary Line 2 – TOT ENT: This is the total of all entitlements and/or allowances listed, and should match
the amount found at the bottom of the “Entitlements” section of your LES.
• Summary Line 3 – TOT DED: This is the total of all deductions listed, and should match the amount found
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at the bottom of the “Deductions” section of your LES.
• Summary Line 4 – TOT ALLT: This is the total of all allotments listed, and should match the amount found
at the bottom of the “Allotments” section of your LES.
• Summary Line 5 – NET AMT: The Net Amount will be the amount of your entitlements minus your
deductions and any allotments.
• Summary Line 6 – CR FWD: Carried Forward, is the dollar value of all unpaid pay and allowances due to
reflect on the next LES as the +AMT FWD.
• Summary Line 7 – EOM PAY: The End of Month Pay shows the actual amount of the payment to be paid
to the member on End-Of-Month payday. This is the amount that should be deposited in your account!
SHOW SLIDE 3-13: DIEMS
Instructor’s Note: Instructor read and discuss with students using the slide.
DIEMS:
• This box contains the date you initially entered the military service. Please note that this date may be
different from your Pay Date if you came in on the delayed entry program.
Note: This date is SOLELY to indicate which retirement plan a member is under.
SHOW SLIDE 3-14: Retirement Plan
Instructor’s Note: Instructor read and discuss with students using the slide.
RET PLAN:
• In this box, you will find your choice of a Retirement plan. If you have less than 15 years of service, no
choice will be shown.
• If a Retirement Plan is selected, it will be either High 36 or Redux.
o High 36: Average of highest 36 months of basic pay.
o Redux: Same as the High 36 with reduction of one percentage point for each year short of 30 years of
service.
Instructor/Student Note: The High 36 calculator is also known as the High-3. Inform students if they hear
“High 36” or “High-3”, it is referring to the same thing.
SHOW SLIDE 3-15: Leave
Instructor’s Note: Instructor read and discuss with students using the slide.
Leave:
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• Now we will cover the Leave portion of your LES.
Regarding your Leave benefits:
• You earn 2.5 days per month = 30 days per year
• You may accrue (bank) up to 60 days of leave as of 1 October each year (certain special cases can accrue
more)
SHOW SLIDE 3-16: Leave Info
Instructor’s Note: Instructor read and discuss with students using the slide.
Leave Info:
• BF BAL: This is the brought forward leave balance.
• ERND: This block shows the cumulative amount of leave earned in the current fiscal year of current term of
enlistment if the member reenlisted/extended since the beginning of the fiscal year. This number increases
by 2.5 days each month.
• USED: The cumulative amount of leave used in the current fiscal year or current term of enlistment if the
member reenlisted/extended since the beginning of the fiscal year.
• CR BAL: The current leave balance as of the end of the period covered by the LES
• ETS BAL: The projected leave balance to the member’s Expiration Term of Service (ETS).
• LV LOST: The number of days of leave that have been lost
• LV PAID: The number of days of leave paid to date
• USE/LOSE: The projected number of days of leave that will be lost if not taken in the current fiscal year on
a monthly basis. The number of days of leave in this block will decrease with any leave usage.
Note: If you have a significant number of days in this block, it’s time to talk to your supervisor about when
you may be able to take some leave without adversely affecting operational readiness.
SHOW SLIDE 3-17: Federal Taxes
Instructor’s Note: Instructor read and discuss with students using the slide.
Federal Taxes:
• Just to the right of your leave information, you will find information about your Federal Income Tax
Withholding, or FITW.
• WAGE PERIOD: The amount of money earned this LES period that is subject to Federal Income Tax
Withholding (FITW).
Note: Remember that some of your entitlements are NOT taxable.
• WAGE YTD: The money earned year-to-date that is subject to FITW.
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• M/S: The marital status used to compute the FITW. NOTE: Make sure this status is accurate. An incorrect
status could result in too much money being withheld from each paycheck, or worse, not enough, leaving
you with a large tax bill at the end of the year.
• EX: The number of exemptions used to compute the FITW. Always check to make sure this number is
accurate.
• ADD’L TAX: The member specified additional dollar amount to be withheld in addition to the amount
computed by the Marital Status and Exemptions.
• TAX YTD: The cumulative total of FITW withheld throughout the calendar year to date.
Note: The number indicated in this block on your December LES could prove useful in regards to getting an
idea of what your possible tax refund, or tax liability, may be, prior to receiving your W-2 forms.
SHOW SLIDE 3-18: Social Security & Medicare
Instructor’s Note: Instructor read and discuss with students using the slide.
Social Security & Medicare:
• The section of the LES immediately below your leave information deals with Social Security and Medicare
taxes. These fall under the Federal Insurance Contributions Act, otherwise known as FICA.
• WAGE PERIOD: The amount of money earned this LES period that is subject to FICA. NOTE: This will
probably not be the same figure as the WAGE PERIOD figure for Federal Income Taxes depending on your
entitlements.
• SOC WAGE YTD: The wages earned year-to-date that are subject to FICA.
• SOC TAX YTD: Cumulative total of FICA withheld throughout the calendar year.
Note: The amount of Social Security you will draw when you become retirement eligible will be based on the
wages you made throughout your working life. Therefore, it's a good idea to keep all your end-of-December
LES’s in a secure spot to document your Social Security wages -- at least until you start to receive letters of
eligibility from the Social Security Administration.
• MED WAGE YTD: The wages earned year-to-date that are subject to Medicare.
• MED TAX YTD: Cumulative total of Medicare taxes paid year-to-date.
SHOW SLIDE 3-19: State Tax
Instructor’s Note: Instructor read and discuss with students using the slide.
State Tax:
• The area to the right of the FICA information contains information about state income taxes. It contains
much of the same information as the section relative to Federal taxes with one key addition, the “ST” block.
• ST: Contains the two-letter postal identifier of the state where you claim domicile. NOTE: As mentioned
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earlier, several states do not have a state income tax and there are legal and ethical ways to establish your
domicile in one of them.
Note: As mentioned earlier in our presentation, The Service Members Civil Relief Act (SCRA) prohibits
states from collecting state income tax on military pay of members who are stationed in that state, but
domiciled elsewhere. However, the state may collect these taxes on monies you or your spouse earns from
civilian employment.
SHOW SLIDE 3-20: Additional Info
Instructor’s Note: Instructor read and discuss with students using the slide.
Additional Info:
• The last line of your LES titled Pay Data contains information that is used to determine the rate and type of
your dependent entitlements, as well as information about your charitable deductions.
• BAQ: The Basic Allowance for Quarters, (also referred to as BAH-Basic Allowance for Housing) and BAQ
dependents blocks are used to determine the amount of money you will be paid for housing. It is your
responsibility to ensure this number is correct.
• VHA ZIP: Shows the ZIP code used to determine your housing allowance (BAH). Because your housing
allowance is designed to defray actual expenses, the amount you receive varies based on your location. For
example, you would not receive as much of an allowance being stationed in El Paso, as you would being
stationed in or around Washington, D.C.
• Rent Amt: Reflects the amount of rent paid for housing, if applicable.
• Share: Number of people with which the service member shares housing costs.
• JFTR: Stands for Joint Federal Travel Regulation. Many of the allowances you may receive during your
career will be based on comparative cost figures contained in this manual. On the LES, the JFTR code is
used to determine your eligibility for, and amount of, any Cost of Living Allowance (COLA) you may be able
to draw due to assignment, or the location of your dependents, in a high-cost area.
• BAS Type: Reflects the type of Basic Allowance for Subsistence you are receiving.
o STAND - Separate Rations
o (blank) - Rations-in-kind not available
o OFFIC - Officer Rations
• Charity YTD: The cumulative amount of any charitable contributions you made during the calendar year.
• TPC: This Block is not used for the Active Component. Army Reserves and National Guard use this field to
identify Training Program Codes.
o A - Normal pay status code for a regular service member on regular duty.
o C - Funeral Honors Duty.
o M - Annual training tours over 30 days.
o N - Death.
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o O - Training for HPSP, ROTC, and Special ADT over 30 days.
o T - ADT over 29 days. (School)
o U - Undergraduate pilot training, in-grade pilot, navigator, and advance flying training officers.
o X - Stipend Tour of HPIP participants or subsistence for ROTC participants.
o Z - Administrative and support training (exclusive of recruiting). , if there is an entry in this block, it is
reason to check the accuracy of your LES with your local finance office.
SHOW SLIDE 3-21: Thrift Savings Plan (TSP) Info
Instructor’s Note: Instructor read and discuss with students using the slide.
Thrift Savings Plan (TSP) Info:
• The TSP blocks on your LES show the percentages and amounts that have been withheld from your
various pays.
• They also give your year to date balances.
• We will discuss the Thrift Savings Plan in more detail in another lesson.
SHOW SLIDE 3-22: Remarks
Instructor’s Note: Instructor read and discuss with students using the slide.
Remarks:
• The “Remarks” section at the bottom of your LES is used to provide you with general notices from varying
levels of command, as well as the literal explanation of starts, stops, and changes to pay items in the entries
within the “ENTITLEMENTS”, “DEDUCTIONS”, and “ALLOTMENTS” fields.
• YTD ENTITLE: The cumulative total of all entitlements for the calendar year.
• YTD DEDUCT: The cumulative total of all deductions for the calendar year.
Check on Learning:SHOW SLIDE 3-23: LSA 3 Check on Learning
Note: Conduct a check on learning and summarize this portion of the
learning activity.
SHOW SLIDE 3-24: LSA 3 Check on Learning
Instructor’s Note: Conduct a check on learning with the students.
Note: Animated slide, click enter to reveal answers.
Q1. How often will you receive an LES?
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a. Every six months
b. Once a year
c. Every two weeks
d. Once a month
A1. Answer: d. Once a month
SHOW SLIDE 3-25: LSA 3 Check on Learning (Cont.)
Instructor’s Note: Continue check on learning with the students.
Note: Animated slide, click enter to reveal answers.
Q2. In what column on your LES would you find your End of Month Pay?
a. Deductions
b. Allotments
c. Entitlements
d. Summary
A2. Answer: d. Summary
SHOW SLIDE 3-26: LSA 3 Check on Learning (Cont.)
Instructor’s Note: Continue check on learning with the students.
Note: Animated slide, click enter to reveal answers.
Q3. Which of the following is true concerning the “Pay Date” shown on your
LES?
• It is the day on which you are paid
• It is the date you entered the Army for pay purposes
• It is the last day of your current enlistment
• It will always be the first day of the current month
A3. Answer: b. It is the date you entered the Army for pay purposes
Review Summary:SHOW SLIDE 3-27: LSA 3 Summary Sources Of Help
Instructor’s Note: Inform students that the Leave and Earnings Statement
is certainly a "busy" document, but the information is presented in a logical
format that will allow you to determine the accuracy of your pay and
entitlements each month.
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• Remember that it is your personal responsibility to do so. If you ever
believe that information shown on your LES is not accurate, visit your local
finance office as soon as possible to discuss your concerns.
Summary:
• During this lesson, we stressed the importance of monitoring your Leave
and Earning Statement to detect any errors in your pay and allowances.
• We discussed all of the information provided in the various sections of the
LES, and we identified where you should go for help if you believe your pay
and allowances are not accurate. I hope you will use this information to
keep your pay and allowances accurate throughout your military career.
• We also discussed myPay to include how to sign up and what options you
have.
Instructor’s Note: Prep to transition into LSA #4 titled, Developing a
Spending Plan.
TLO - LSA 4. Learning Step / Activity TLO - LSA 4. Developing a Spending Plan
Method of Instruction: Discussion (Small or Large Group)
Mode of Delivery: Resident Instruction
Instr Type (I:S Ratio): Military - ICH (1:25)(Every instructor must meet the qualificationstandards established in AR 350-1, AR 614-200,TR 350-70, TR 350-10 and the proponent school instructor certification program.)
Time of Instruction: 30 mins
Media Type: Handout / PowerPoint Presentation
Other Media: Unassigned
Security Classification: This course/lesson will present information that has a SecurityClassification of: U - Unclassified.
SHOW SLIDE 4-1: Develop a Spending Plan
4. Learning Step / Activity 4: Develop a Spending Plan
Method of Instruction: DSL – Discussion (Small or Large Group)
Instructor to Student Ratio: 1:25
Time of Instruction: 00 hrs. / 30 mins
Media: PowerPoint Presentation, Handout
Required Student Materials:
• Student Handout
• Calculator
• Pencil
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Corresponding Activities:
• Statement of Net Worth, Student Handout Page 3
• Preparing a Monthly Spending Plan, Student Handout Page 4
Method of Instruction: Discussion (Small or Large Group)
Mode of Delivery: Resident Instruction
Instr Type (I:S Ratio): Military - ICH (1:25)(Every instructor must meet the qualificationstandards established in AR 350-1, AR 614-200,TR 350-70, TR 350-10 and the proponent school instructor certification program.)
Time of Instruction: 30 mins
Media Type: Handout / PowerPoint Presentation
Other Media: Unassigned
Security Classification: This course/lesson will present information that has a SecurityClassification of: U - Unclassified.
SHOW SLIDE 5-1: Managing a Checking Account
5. Learning Step / Activity 5: Managing a Checking Account
Method of Instruction: DSL – Discussion (Small or Large Group)
• Monthly Bank Reconciliation, Student Handout Page 9
SHOW SLIDE 5-2: Dishonored Checks (1 of 2)
Instructor’s Note: Instructor read and discuss with students using the slide.
Dishonored Checks:
• Before we start our discussion of personal checks, deposit slips, and withdrawal slips, let us talk about
dishonored checks (bad checks) and what can happen to you if you write a dishonored check. By knowing
what can happen, you may take this training more seriously. If you should write a dishonored check, one or
more of the following consequences occur:
(1) Your bank and the institution to which the check was written or debit card used may each assess a
service charge, as much as $25.00 or higher.
(2) Your reputation and credit rating may be damaged. If your credit rating is damaged, it will cost you more
to get credit, if you can get it at all.
(3) You will be counseled by your chain of command, regardless of the circumstances.
(4) You may be added to the dishonored (bad check) list on post.
(5) Your check cashing/ debit card privileges may be suspended on post for six months, a year, or
indefinitely. This means you will not be able to write checks or use your debit card on post.
(6) You may be reprimanded by your supervisor or commander.
SHOW SLIDE 5-3: Dishonored Checks (2 of 2)
Instructor’s Note: Instructor read and discuss with students using the slide.
• Dishonored Checks (Cont.)
(7) You may be given a bad efficiency report.
(8) You may be reduced in rank.
(9) You may receive an Article 15 or court-martial.
(10) You may be barred from reenlistment.
(11) You may be separated from the Army.
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(12) The punishment you receive depends on how many times you have written dishonored checks. As you
can see, the Army takes writing dishonored checks seriously. This crime is punishable under the Uniform
Code of Military Justice (UCMJ), Article 123a – Making, drawing, or uttering check, draft, or order without
sufficient funds. Your loyalty to the Army, your unit, your family, and yourself requires you to manage your
finances efficiently. Any indebtedness may require administrative action, which means the involvement of
your supervisor, commander, and other Army personnel. Consequences could also include an adverse
effect on the unit’s mission as well as the Army’s reputation.
SHOW SLIDE 5-4: Writing a Personal Check
Instructor’s Note: Instructor read and discuss with students using the slide.
Note: Inform students that checks must always be filled out in ink and must be legible. *Refer students to
Page 6 of their handout to view examples of blank checks. Encourage the students to practice writing checks
using this activity.
• Most transactions you perform with your checking account can be accomplished with a debit or ATM card.
However, some transactions, such as paying rent or utility bills may require you to write a check
• First, determine the amount for the check, verify that your current account balance is enough to cover the
amount of the check and any check fees, and obtain the next available blank check.
#1: Write the current date on the check
#2: Write the full name of the payee (the person or company to whom you are writing the check)
#3: Write the money amount on the check, using figures
#4: Write the same money amount in longhand, this time using words; include both dollars and cents. Cents
are written as “XX/100” Make sure to begin writing as far to the left as possible on this line and then draw a
line after the written money amount extending to the preprinted word “Dollars.”
Note: Explain that this action is necessary for security to prevent someone else from altering the amount.
#5: Although not required, it is good practice to write a short description or key word representing the
transaction in the MEMO space
#6: Sign the check. This signature should match the one you used when you opened the account
SHOW SLIDE 5-5: Writing a Personal Check, (Cont.)
Instructor’s Note: Instructor read and discuss with students using the slide.
Please Note: If you make a mistake, you must start over; you cannot erase or cross out errors. Write “VOID”
in large letters on the incorrect check. Make a note in your checkbook register, indicating that check number
XXXX was voided and destroyed. This will help you maintain an accurate account.
A Couple More Notes on Writing Checks:
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• On occasion, you may need to deposit a check or cash to your account. Many banking institutions offer
ATM machines that you can make deposits. Therefore, you need not physically make a deposit slip for the
transaction. If you do need to make a deposit with a teller, however, follow the requirements of your banking
institution for making a deposit in person.
• You may also have to make a withdrawal from your banking institution. If you have an ATM or Debit Card,
you don’t have to fill in a withdrawal slip. If you do need to make a withdrawal with a teller, however, follow
the requirements of your banking institution for making a withdrawal in person.
SHOW SLIDE 5-6: Check Register
Instructor’s Note: Instructor read and discuss with students using the slide.
Note: Animated slide, click enter to reveal answers.
• There are five basic types of transactions that must be posted to a checkbook register:
(1) Debit card transactions.
(2) Personal checks written by you. Also, include voided check(s).
(3) All deposits to the checking account (in person, ATM, SURE PAY, etc.).
(4) Withdrawals (not by check) from the checking account (in person, through an ATM, preauthorized
transfer (PAT), etc.).
Instructor’s Note: Define PAT as recurring withdrawals automatically taken from the account. Examples:
insurance premiums, car payment, savings transfer, etc.
(5) Monthly adjustments (fees, interest, etc.).
• ATM/PAT withdrawals are often the culprits in accounts that are overdrawn or cannot be balanced.
Remember, your personal honor and integrity are at risk when you fail to properly manage your finances.
Note: Demonstrate. Have the students go to page 7 of their handout. Click the mouse on Slide 5-6 each
time you describe the following steps and have the students follow along by writing each step in their check
register in the handout:
(1) Write check number 2047 in the number column (#1). NOTE: Click mouse once.
(2) Write the date of the transaction in the date column (#2) (4/01). NOTE: Click mouse once.
(3) Write a description in the “description of” transaction column (#3) (AAFES DPP Payment).
(4) Write the money amount ($200.00) in the appropriate column (record withdrawals and/or checks in the
payment/debit column or record deposits in the deposit/credit column) (#4).
(5) Subtract or add the money amount to the balance figure (numbers in the payment/debit column are
subtracted or numbers in the deposit/credit column are added) (#5). NOTE: Click mouse once.
6) Write the new calculated balance in the checkbook register (#6).
SHOW SLIDE 5-7: Using Debit Cards
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Instructor’s Note: Instructor read and discuss with students using the slide.
What is a debit card?
• A debit card is a card that is issued by a bank allowing the holder to make transactions that pull the
necessary funds from the holder’s account immediately.
Note: Sometimes a debit card is free to use. Sometimes you will pay a fee to use the card.
Why use a debit card?
• Debit cards let you buy things without carrying cash. You can use your debit card in most stores to pay for
something. You just swipe the card and enter your PIN number on a key pad.
• Debit cards take money out of your checking account immediately. Therefore, you should always keep a
receipt when using your card so you can post it to your checkbook register. This enables you to keep track
of your debit card use and your current account balance.
• Debit cards let you get cash quickly. You can use your debit card at an automated teller machine, or ATM,
to get money from your checking account. You also can get cash back when you use a debit card to buy
something at a store.
What is a PIN?
• A “PIN” is a security code that belongs to you. PIN stands for personal identification number. A bank or
credit union gives you a PIN when you get a debit card. You can change your PIN to a number you will
remember.
• When you use your debit card, you need to enter your PIN on a keypad. This is one way the bank tries to
stop dishonest people from using your debit card to get your money. NEVER share your PIN with anyone.
Remember it. Do not keep it in your wallet or on your card.
How do debit cards work?
• When you open a checking account at a bank or credit union, you usually get a debit card. A debit card
lets you spend money from your checking account without writing a check.
o You can use your debit card to buy things in a store
o You can use it at an ATM to get cash
o When you pay with a debit card, the money comes out of your checking account immediately. There is
no bill to pay later.
SHOW SLIDE 5-8: Using Debit Cards (Cont.)
Instructor’s Note: Continue to read and discuss with students using the slide.
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How do I know where I used my debit card?
• Every time you use your debit card, you should receive a receipt, which you should keep to post to your
checkbook register. Your bank or credit union gives you a “statement” every month.
• Your statement shows:
o Where you paid with your debit card and how much you spent
o Where you used the ATM, how much you withdrew, and what fees you paid
o Who you wrote a check to and for how much
• Your statement can help you track your spending and create a budget.
Can I use my debit card to buy things online?
• Your debit card will work online. But debit cards are not a good way to pay when you shop online. Credit
cards are safer to use when you buy things online:
o You might have a problem with something you buy online. It is easier to get your money back if you use
a credit card.
o Someone might steal your credit card number online. The law says you can lose only $50 if you report it
right away.
o Someone might steal your debit card number online. The thief can take all your money out of your bank
account.
What if I use all the money in my checking account?
• You might not have enough money in your checking account. That means your debit card will be
“declined.” Some banks and credit unions might let you sign up for “overdraft protection.” That means you
can use your debit card even when you do not have enough money to pay for the things you are buying, but
you might have to pay a fee to the bank.
• Some banks might charge this fee for every purchase until you put enough money in your account to pay
for the things you are buying.
Note: Make sure to always keep track of your spending so you don’t overdraft!
SHOW SLIDE 5-9: Using Debit Cards (Cont.)
Instructor’s Note: Continue to read and discuss with students using the slide.
How do I choose a debit card?
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• A bank or credit union usually gives you a debit card when you open a checking account. Compare the
services and fees at a few banks and credit unions. Go to the website or visit in person.
• Find out what the fee is if you:
o Have a checking account
o Use a debit card
o Get cash from ATMs at other banks
o Have less money in your account than the bank requires
o Spend more money than you have in your account
• Compare the answers. Find the bank or credit union that meets your needs.
How can I protect my debit card?
• Keep your debit card number and PIN private.
• Do not use your debit card to buy things online.
• If you lose your debit card, report it to your bank or credit union right away. Ask your bank to cancel the
card and send you another card.
• Ask for account alerts by email or text message. This can let you know if your account has less money in it
than you think.
How can I keep track of my money?
• Write down how much money you spend with your debit card (keep receipts and post all transactions to
your checkbook register).
• Write down how much money you take out of the ATM. Remember to add the fees (keep receipts and post
all transactions to your checkbook register).
• Use your monthly budget to schedule payments for regular bills.
• Look at your bank statement whenever it comes. Make sure it is what you expected (balance your
checkbook register to your bank statement).
• Ask your bank or credit union to send you email or text alerts. Some banks contact you if your balance
goes below an amount you set.
SHOW SLIDE 5-10: Debit Cards vs. Credit Cards
Instructor’s Note: Instructor read and discuss with students using the slide.
How is a debit card different from a credit card?
• When you buy something with a credit card, you are borrowing money from the credit card company. The
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credit card company will send you a bill every month for the money you borrowed to buy things.
• When you use a debit card, you are using money in your checking account to buy things.
• Debit Cards
o You can get a debit card from the bank when you open a checking account
o Money comes out of your checking account when you pay with a debit card
o You don’t pay extra money in interest when you pay with a debit card
o You can use a debit card at an ATM to get money from your checking account
o You do not build a credit history using a debit card
• Credit Cards
o You apply for a credit card at a bank or store
o You get a bill once a month for everything you buy with a credit card
o You might pay extra money in interest if you don’t pay all of your credit card bill every month
o You can use a credit card as a safer way to pay for things online
o You can build a credit history using a credit card if you pay the whole bill every month when it is due
SHOW SLIDE 5-11: Bank Statement
Instructor’s Note: Instructor read and discuss with students using the slide.
Note: Refer students to page #8 of their handout to follow along with the “Bank Statement” slide.
• Your monthly bank statement is a summary of the financial transactions that have occurred over a given
period of time (usually a month), for a bank account held by a person or a business with a financial
institution.
• This slide shows a sample of a bank statement. Taking the time to review and understand your own bank
statement can help you:
o Track your receivables vs. your expenditures (make sure you are sticking to your monthly spending
plan)
o Detect errors
o Monitor any fees being accumulated such as annual service fees or overdraft charges
o Detect fraudulent charges to your account
• Use the statement received from the bank to also determine which debit card transactions, checks,
deposits, or withdrawals have been processed by the bank.
Note: Only those items appearing on the statement can be counted as processed.
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Slide 5-12: Bank Statement
Instructor’s Note: Instructor read and discuss with students using the slide.
Note: HAVE STUDENTS REFER TO THE CHECKBOOK REGISTER THEY FILLED OUT EARLIER. THEY
WILL USE IT ALONGSIDE THE BANK STATEMENT ON PAGE 8.
• Place a mark beside each item in your checkbook register only if it appears on the bank statement.
• Find the last balance in your checkbook register (where you have entered your most recent transaction)
• Draw a line in the checkbook register under the last item shown processed in your bank statement. This is
the balance you will reconcile.
Note: Explain that there may be checks, withdrawals, and/or deposits “unmarked” in the register. These will
be taken care of later in the reconciliation process).
• Add to the subtotal calculated above any interest that you earned during the month on your account
balance, if your account is an interest bearing account. Calculate a new total. This is your adjusted
checkbook register balance. Make sure to enter the amount of earned interest in your checkbook register
and check it off by placing a mark beside it.
• Using the bank statement you received, find the ending checking account balance, and write it down next
to the adjusted checkbook register balance.
• Look at your checkbook register to find the balance you underlined:
• Are there any deposits above the line that have not been marked off yet? If there are, the bank has not
processed them yet. Add the deposit amounts to the ending checking account balance shown on your bank
statement. Subtotal.
• Are there any checks which are not checked off yet that make up your underlined checkbook register
balance? If there are, subtract them from the subtotal and calculate a new adjusted statement balance.
Note: Emphasize that deposits and checks made after the underlined balance in your checkbook register
should not be used for reconciliation, whether they are marked off or not.
Slide 5-13: Bank Statement (Cont.)
Instructor’s Note: Continue to read and discuss with students using the slide.
Bank Statement (Cont.):
• Compare your adjusted checkbook register balance with your adjusted statement balance. If they match
exactly, your account is reconciled.
• If the two balances don’t match, check your calculations to make sure that you added and subtracted
correctly.
• If your calculations are correct and the two balances do not match:
• Make sure you wrote all debit card, ATM, or PAT transactions in your checkbook register.
• Make sure you added or subtracted any charges that the bank processed against your account:
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o Interest you earned on your account (add)
o Monthly service charge (subtract)
o ATM charges (subtract)
o Flat fee for each check written (subtract)
• Make sure that you did not count checks or deposits made after the underlined balance in your checkbook.
• Verify that the withdrawals, canceled checks, and/or deposit amounts listed on your bank statement exactly
match what you wrote in your checkbook register.
• Check the bank statement from last month for a check that was not cleared from last month. Some people
may hold a check for several months before they cash it.
o If you cannot find your error, have your spouse or a friend help you look for the mistake.
o If you still cannot find your error, take your statement and all receipts to your immediate supervisor for
help in reconciling your account.
o If your chain of command cannot find and resolve the error, the bank must be contacted for help in the
reconciliation of your account.
o Again, remember that your honor and integrity are to a great degree measured by your financial
trustworthiness.
o Make sure you accurately balance your accounts to avoid financial difficulty.
Note: Emphasize that this should be the last resort, since most banks charge a fee to perform the
reconciliation service. Many banks do not provide this service at all.
SHOW SLIDE 5-14: Online Banking
Instructor’s Note: Instructor read and discuss with students using the slide.
• Online banking is has become a very common way for individuals to manage their finances.
Some services offered through online banking:
o Access to accounts and transaction history
o Paying bills online
o Transferring money between accounts
o Deposit checks by scanning checks
o Automatic payments
o Paperless statements
• Many people use online banking to effectively monitor their financial transactions and even link their
accounts with financial software that helps them with budgeting.
• Remember; always safeguard your username and password. If someone were to gain access of this
information, it could have a devastating effect on your finances.
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Check on Learning:SHOW SLIDE 5-15: LSA 5 Check on Learning
Note: Conduct a check on learning and summarize this portion of the
learning activity.
SHOW SLIDE 5-16: LSA 5 Check on Learning
Instructor’s Note: Conduct a check on learning with the students.
Note: Animated slide, click enter to reveal answers.
Q1. What must you do before you write checks or use your debit card on a
new account?
A1. Answer: Verify your pay was deposited in your new account by
first reviewing your LES or checking your account online.
SHOW SLIDE 5-17: LSA 5 Check on Learning (Cont.)
Instructor’s Note: Continue check on learning with the students.
Note: Animated slide, click enter to reveal answers.
Q2. Name three consequences that could happen to you if you write a bad
check.
A2. Possible Answers Include:
• Separation
• Barred from re-enlisting
• UCMJ action
• Reduced in rank
• Bad efficiency report
• Reprimand,
• Check cashing privileges suspended
• Counseling
• Bank service charges
• Damaged reputation
• Damaged credit report
SHOW SLIDE 5-18: LSA 5 Check on Learning (Cont.)
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Instructor’s Note: Continue check on learning with the students.
Note: Animated slide, click enter to reveal answers.
Q3. What must you always verify before you write a check?
A3. Verify you have enough money in your account to cover the
amount of the check.
SHOW SLIDE 5-19: LSA 5 Check on Learning (Cont.)
Instructor’s Note: Continue check on learning with the students.
Note: Animated slide, click enter to reveal answers.
Q4. Why do you start the words of the amount of the check as far to the
left as possible and draw a line after the cents all the way to the word
“Dollars”?
A4. For security, so no one can alter the amount of the check.
SHOW SLIDE 5-20: LSA 5 Check on Learning (Cont.)
Instructor’s Note: Continue check on learning with the students.
Note: Animated slide, click enter to reveal answers.
Q5. What are the five types of transactions you must post to your check
register?
A5.
• Debit card transactions
• Personal checks written by you
• Deposits
• Withdrawals (not by check)
• Adjustments such as interest, ATM charges, etc.
SHOW SLIDE 5-21: LSA 5 Check on Learning (Cont.)
Instructor’s Note: Continue check on learning with the students.
Note: Animated slide, click enter to reveal answers.
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Q6. What is a PAT and give an example?
A6. Preauthorized transactions are reoccurring withdrawals you
arrange to be automatically deducted from your account such as car
payments, insurance payments, utility bill payments, etc.
SHOW SLIDE 5-22: LSA 5 Check on Learning (Cont.)
Instructor’s Note: Continue check on learning with the students.
Note: Animated slide, click enter to reveal answers.
Q7. Why must you keep up with posting all transactions to your checking
account?
A7. Therefore, you don’t over draw your account.
SHOW SLIDE 5-23: LSA 5 Check on Learning (Cont.)
Instructor’s Note: Continue check on learning with the students.
Note: Animated slide, click enter to reveal answers.
Q8. What is the bank form you use to reconcile your checkbook register
to?
A8. The checking account bank statement.
Review Summary:SHOW SLIDE 5-24: LSA 5 Summary
Note: Summarize this portion of the learning activity.
Summary:
• During this lesson, we discussed how to write checks, and how to
balance your checkbook. We also talked about debit cards, reconciling
your checkbook, and online banking. Keeping your finances in order is
your duty as well as your responsibility. Remember, bouncing checks is a
crime in the Army and is punishable under the UCMJ.
Instructor’s Note: Prep to transition into LSA #6 titled, Identify the
Essentials of Credit
TLO - LSA 6. Learning Step / Activity TLO - LSA 6. Identify the Essentials of Credit
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Method of Instruction: Discussion (Small or Large Group)
Mode of Delivery: Resident Instruction
Instr Type (I:S Ratio): Military - ICH (1:25)(Every instructor must meet the qualificationstandards established in AR 350-1, AR 614-200,TR 350-70, TR 350-10 and the proponent school instructor certification program.)
Time of Instruction: 40 mins
Media Type: Handout / PowerPoint Presentation
Other Media: Unassigned
Security Classification: This course/lesson will present information that has a SecurityClassification of: U - Unclassified.
SHOW SLIDE 6-1: Identify the Essentials of Credit
6. Learning Step / Activity 6: Identify the Essentials of Credit
Method of Instruction: DSL – Discussion (Small or Large Group)
Instructor to Student Ratio: 1:25
Time of Instruction: 00 hrs. / 40 mins
Media: PowerPoint Presentation, Handout
Required Student Materials:
• Calculator
• Pencil
SHOW SLIDE 6-2: The Essentials of Credit
Instructor’s Note: Instructor read and discuss with students using the slide.
• The word credit is defined as the ability of a customer to obtain goods or services before payment, based
on the trust that payment will be made in the future. If a person has good credit, opens up numerous
possibilities, including taking out a loan or receiving a credit card. Your ability to do these things, however,
are dependent on the Essentials of Credit.
o Some examples of the Essentials of Credit include:
o Credit history
o Interest rates
o Fees22
o Payment schedules – do you make your payments on time?
o Impulse buying – do you use your credit card without considering the purchase?
• This lesson will focus on the essentials of credit, as well as ways you can improve your credit
trustworthiness.
SHOW SLIDE 6-3: Types of Credit
Instructor’s Note: Instructor read and discuss with students using the slide.
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• There are three types of credit:
(1) Credit cards
(2) Short-term loans
(3) Long-term loans
SHOW SLIDE 6-4: Credit Card Facts
Instructor’s Note: Instructor read and discuss with students using the slide.
Note: Animated Slide
• Click and open hyperlink on the blank screen.
• Time of Video: 02 minutes 16 seconds
• Play video and prepare discussion.
• As we discussed in the previous lesson, a credit card is a card issued by a bank that allows the holder to
purchase goods or services with payments due at a later date.
Credit Card Facts:
• VISA International has determined that just placing a credit card in someone’s hand will cause an increase
in spending of 32%
• U.S. consumers possess over $886 million in credit card debt
• Over 26% of Americans have 4 or more credit cards (2014 FINRA Financial Capability Study).
• The average household carries $5,700 in credit card debt (March 2014 Survey of Consumer Finances by
the U.S. Federal Reserves)
• Average indebted credit card balance is $7,743 based on a June 2014 sample of credit reports from
Experian.
• Overall, credit card debt per household is down. Unfortunately, falling indebtedness is largely due to
defaults rather than repayments. CreditCards.com reported that the average annual percentage rate (APR)
on credit card balance is 15.00 percent (as of July 2015) and the Federal Reserve reported that the total
U.S. consumer debt was $3.4 trillion (as of May 2015).
SHOW SLIDE 6-5: Credit Example
Instructor’s Note: Instructor read and discuss with students using the slide.
Look at this credit example:
• Say you have a credit card with a balance of $5,000.00 at 18% interest.
• Each month, you only pay the minimum of 2% of the balance.
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• This credit card will take you 30+ years to pay off, and will end up costing you an extra $12,556.38 in
interest.
• That means you will have paid a total of $17,556.38!
SHOW SLIDE 6-6: Short-Term Loans
Instructor’s Note: Instructor read and discuss with students using the slide.
• In order to use credit to your advantage, you need to understand the differences between short-term and
long-term loans.
• First, let’s start with learning a little bit about short-term loans. A short-term loan is designed to meet short-
term financing needs.
Advantages:
• Provides you with the money you need quickly.
• Often does not put a heavy emphasis on the borrower’s credit history.
• Short-term loans usually offer a better interest rate than longer-term loans. In addition, even if rates are the
same, the short-term loan will save you money in interest over a longer loan.
Disadvantages:
• They add to the problem. Often people who take out short-term loans are short on cash. They cannot
afford to keep up with their bills, so they take out a short-term loan. However, these individuals often face the
problem of not having the money to pay back the loan once it is due. This adds to the total amount of the
loan and makes your payments higher.
• Because the term of the loan is shorter, the monthly payments are often higher.
SHOW SLIDE 6-7: Long-Term Loans
Instructor’s Note: Instructor read and discuss with students using the slide.
• For larger expenses, long-term financing is often the better option.
• Some advantages of a long-term loan include:
o Higher borrowing limit
o Longer repayment terms
o Lower monthly payments
Disadvantages:
• Higher interest paid.
• Items purchased can wear out and may need replaced before the loan is paid in full.
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SHOW SLIDE 6-8: How Credit Worthy Are You?
Instructor’s Note: Instructor read and discuss with students using the slide.
Ask yourself: Are you a good credit risk?
• Before deciding whether or not to grant you a loan, or other types of credit, and at what interest rate, a
financial institution or company will evaluate the probability that you will make required payments on time.
The three factors that weigh heavily in those decisions are:
o Character
o Capacity
o Collateral
• These three are otherwise known as your “Creditworthiness”
SHOW SLIDE 6-9: Character
Instructor’s Note: Instructor read and discuss with students using the slide.
• A lender can decide whether or not you possess the honesty and reliability to repay a debt, based on your
credit history. This is called determining your “Character”.
• Some factors that are taken into consideration include:
o Have you used credit before?
o Do you pay your bills on time?
o How long have you lived at your current address?
o How long have you been at your present job?
• If you've bounced checks, moved frequently from job to job, or have been late on your bills, it may prevent
you from obtaining credit.
SHOW SLIDE 6-10: Capacity
Instructor’s Note: Instructor read and discuss with students using the slide.
• Capacity refers to your ability to repay the debt. The lender will look to see if you have been working
regularly in an occupation that is likely to provide enough income to support your credit use. They will also
look at your current credit debt, and your ability to pay on the credit cards you already have.
• Some questions that will help the lender determine this include:
o What is your current salary?
o How many other loan payments do you have?
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o What are your current living expenses?
o What are your current debts?
o How many dependents do you have?
SHOW SLIDE 6-11: Collateral
Instructor’s Note: Instructor read and discuss with students using the slide.
• A lender will also want to know if you have valuable assets such as real estate, personal property,
investments, or savings with which to repay the debt if income is unavailable. This is otherwise known as
Collateral.
• Collateral is normally required for any large loan, such as for a home or car.
SHOW SLIDE 6-12: The ABC’s of Appropriate Credit Use
Instructor’s Note: Instructor read and discuss with students using the slide.
Appropriate uses for credit:
• The best use of credit is to purchase assets - things that will grow or increase in value over time, like your
own business or buying a home or a rental property.
• Credit is also useful for conveniences, such as being able to avoid having to carry large sums of cash, or
as a management tool.
• Wise use of credit virtually always falls into one of the following two categories: Assets or Convenience.
• Sometimes, however, the use of credit for major consumer goods (so-called "Big Ticket" items) cannot be
avoided. For example, few of us could/can afford purchase our first car without a loan. Purchasing a car with
a loan would be considered an acceptable use of credit.
SHOW SLIDE 6-13: Inappropriate Uses of Credit
Instructor’s Note: Instructor read and discuss with students using the slide.
Inappropriate:
• Credit becomes more dangerous when it is used to purchase consumables. Items such as furniture,
clothing, sporting equipment, and vacations lose much or all of their value immediately after purchase.
• Such unwise use of credit is often motivated by one of the four following factors.
o Impulse Buying
o Spending for Status
o Retaliatory Spending
o Spending to Feel Good
SHOW SLIDE 6-14: Motivations to Abuse Credit
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Instructor’s Note: Instructor read and discuss with students using the slide.
Abuse Credit:
• Impulse Buying - Availability of credit can lead to a "buy now, pay later" mentality. Impulse buying on credit
can result in your purchasing an item you would never have bought if you had to pay cash. Distinguish
between needs and wants.
• Spending for Status - Spending on credit to impress others is another common trap. An example would be
advertisements portraying people using a credit card to treat their friends. This can be a huge temptation.
Living within your means can prevent unwise decisions.
• Retaliatory Spending – A common problem in marriages is the lack of, or failure to adhere to, an agreed-
upon family spending plan. This behavior can be another cause of an unwise use of credit. Your partner
deviates from the plan, and so therefore, you feel you can do the same. These behaviors are preventable.
Communication regarding your saving plan and financial goal is the key.
• Spending to Feel Good - Believe it or not, spending to feel good can become an addictive behavior. Avoid
this trap by asking yourself if you really need the item you wish to purchase, as well as if you can afford to
pay for it.
SHOW SLIDE 6-15: Debt Warning Signs
Instructor’s Note: Instructor read and discuss with students using the slide.
Warning signs of too much debt:
• There are several signs (in addition to your debt-to-income ratio) that might hint that you are going down
the wrong road financially.
They include:
• Not paying off most of your cards every month - This could be a sign of trouble, especially if higher and
higher percentages of each month's pay go to service your debt. When you start to fall behind on payments,
and/or need loans or cash advances for daily living expenses, it's time to seek help! Try to limit the number
of credit cards you have to only one or two.
• Not having at least one month’s pay in savings.
• Being at or near the limit on all of your credit cards.
• Relying on a second job or spouse’s income to make ends meet.
Note: Remember that outside income and your spouse's employment can be impacted by an extended
deployment or Permanent Change of Station.
SHOW SLIDE 6-16: Consequences of Delinquent Accounts
Instructor’s Note: Instructor read and discuss with students using the slide.
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• Delinquency commonly refers to a situation where borrowers are late or overdue on a payment, such as
student loans, income taxes, mortgage loans or automobile loans.
• There are long-term consequences for delinquency, depending on the type of loan, and the duration and
cause of the delinquency.
Example 1:
• A Soldier takes out a loan from a bank and then becomes 90 days delinquent.
• He risks suffering the following:
o A decrease in his credit score for a considerable period (7-10 years if he applies for bankruptcy)
o Defaulting on the loan, which could cause the bank to foreclose on his home (long-term delinquency).
o Further negative effects on his credit rating, which would make it difficult for him to obtain credit cards,
mortgages, or automobile loans.
Example 2:
• Assume a recent college graduate obtained student loans throughout his stay at college. Suppose too he
fails to make his first loan payment. Consequently, his loan becomes delinquent until he repays the owed
amount.
• If his loan remains delinquent for 270 days, it goes into default and he must pay the entire balance and
fees immediately.
• The long-term effects of his delinquent account include damage his credit rating, making it harder for him to
obtain other loans, and garnishment of his wages and withholding of his tax refunds.
SHOW SLIDE 6-17: Indications of Serious Credit Problems
Instructor’s Note: Instructor read and discuss with students using the slide.
• You should acknowledge that things are critical when you start exhibiting the following behaviors:
o Skipping some bill payments
o Using credit to pay credit
o Using or even considering a debt consolidation loan
o Being denied additional credit
o Hiding bills and lying to members of your family.
SHOW SLIDE 6-18: Credit Bureaus
Instructor’s Note: Instructor read and discuss with students using the slide.
Credit Reports:
• A credit report is information about you and your credit experiences, such as:
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o Bill-paying history
o The number and type of accounts you have
o Late payments
o Collection actions
o Outstanding debt
o Age of your accounts
• A good credit report can open many doors for you, but a bad report will be a major obstacle in realizing
your future goals and aspirations.
• We'll discuss who keeps these reports, what they contain, how they are used, and what you should do to
ensure your report is accurate.
Credit Bureaus:
• Most credit reports are compiled by three major companies: Equifax; Experian; and TransUnion. The Fair
Credit Reporting Act (FCRA) requires each of these bureaus to provide you with a free copy of your credit
report, at your request, once every 12 months.
• The contact information for these companies can be found on the PFMC website.
Note: These companies are competitors, so they do not share their information, and therefore, the
information in your report with each of them may be different.
SHOW SLIDE 6-19: Report Components
Instructor’s Note: Instructor read and discuss with students using the slide.
Components of a credit report:
• Your credit report has four major components:
• Personal Information. Your name, address, former address, SSN, and estimated date of birth. You may
not want a great deal of personal information to go on file, however, if you refuse to provide it, a creditor can
deny you credit.
• Credit History. This section contains the history of all your accounts of which they have information. It
shows all of your credit information including the type of account, the date it was open, your payment history,
and the current status of the account. This information is used in evaluation of your creditworthiness. It will
also will contain your history of late or missed payments - definite adverse entries. You should ensure all
closed accounts are reflected as such, because potential credit, as well as actual debts, may be used by the
lender to compute your debt-to-income ratio. Be sure the report shows that such accounts were closed at
your request; otherwise, it is left open to question that it might have been closed for cause, which means
more potential adverse information.
• Public Records. This section will contain any judgments that have been entered against you. Any
bankruptcy information will remain on your report for 10 years from the date of filing. Unpaid tax liens may
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be reported depending on your state of residence. Paid tax liens may be reported for 7 years from date of
payment. Other judgments such as foreclosure, criminal convictions, and even some driving infractions may
be found on your credit report. You may be required to explain public record items to potential creditors.
• Inquiries. This section contains a record of all who have requested and been provided with copies of your
report. It is especially useful if correcting erroneous information - the credit bureau is required by law to
provide corrections to all who received your report within the past six months.
SHOW SLIDE 6-20: Credit Scoring System
Instructor’s Note: Instructor read and discuss with students using the slide.
Scoring System:
• Credit Scoring System.
• Creditors use the credit scoring system to determine whether or not you are a good credit risk. Points are
awarded for each factor that predicts reliability for debt repayment. Each of the 3 major credit bureaus
(Equifax, Experian & Trans Union) uses a different variation of the Classic FICO (Fair, Isaacs, and
Company) formula.
Note: The differences between each of the credit bureaus' credit scores and the Classic FICO formula are
miniscule, and they all basically share the same formula/algorithm. One difference between FICO and
Beacon scores is the scale. Classic FICO runs from 300–850, while Beacon Credit Score runs from
350–850. For this reason, your Equifax Beacon score will not be the same as your score from Experian or
Trans Union.
Credit Scores:
• The three credit bureaus charge for your credit score if you request it more than once per calendar year.
There are other places where you can receive your credit score free of charge at any time.
• FINRA Investor Education Foundation. Accessed through your local Army Community Service Center, this
not-for-profit foundation has a website (SaveAndInvest.org) that provides financial tools and information for
military families. There is a free credit score and analysis tool that enables you and your spouse to get your
FREE FICO score. To use the tool, your first step is to contact a military financial educator (sometimes
called a “PFM”) at your nearest Army Community Service or ACS equivalent). Your Financial Educator or
PFM can assist you in obtaining your free credit score. See more at:
Method of Instruction: Discussion (Small or Large Group)
Mode of Delivery: Resident Instruction
Instr Type (I:S Ratio): Military - ICH (1:25)(Every instructor must meet the qualificationstandards established in AR 350-1, AR 614-200,TR 350-70, TR 350-10 and the proponent school instructor certification program.)
Time of Instruction: 40 mins
Media Type: Handout / PowerPoint Presentation
Other Media: Unassigned
Security Classification: This course/lesson will present information that has a SecurityClassification of: U - Unclassified.
Method of Instruction: DSL – Discussion (Small or Large Group)
Instructor to Student Ratio: 1:25
Time of Instruction: 00 hrs. / 40 mins
Media: PowerPoint Presentation, Handout
Required Student Materials:
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• Calculator
• Pencil
Introduction: Unfortunately, a large percentage of our population doesn't see anything wrong with
"exaggerated product claims," or high-pressure sales tactics. Young military members and their spouses are
common targets of frauds and cons. It is impossible to cover all of the frauds, cons, and rip-offs currently in
existence, and new scams are popping up every day. Gathering accurate statistics about the number of
frauds committed is also difficult, because some people are embarrassed to admit that they've been a victim.
• During this lesson we will cover some of the most common types of fraud, cons, and rip-offs, how
marketing and advertising play a part, and where you can go to receive assistance and file a complaint.
• We will also explore what identity theft is, and how you can protect yourself from becoming a target.
SHOW SLIDE 7-2: The Psychology of Advertising
Instructor’s Note: Instructor read and discuss with students using the slide.
Psychology of Advertising:
• To better understand how a person becomes susceptible to being scammed, you must first be able to
recognize the psychology being used on the consumer. One of the most prevalent areas psychological
tactics are used to scam consumers is in advertising.
• Let's look at a few ways that advertising and marketing can influence the decisions you make.
• Types of Advertising - The goal of advertising is to get you to buy a product or service, to buy more than
you planned to buy, to spend more than you intended to spend, and, if possible, to get you to buy something
that you did not want or need in the first place. There are several common types of advertising.
(1) Personalized - Designed to make the individual think that the salesperson or advertiser wants him or her,
personally, for a customer. May include 'personalized' junk mail or phone calls. Preys on the idea that we all
want to have friends, and here is one - as long as you buy their product.
(2) Association - Uses familiar people from the entertainment and sports industry to sell the product. The
idea is that you can associate with or relate to that person on a personal level if you buy the product they
endorse.
(3) Buzz Words - Words and phrases created to catch your attention and make you think the product is
somehow special or better than the competition's version. The idea is to make you want to get rid of the
other stuff and buy this one in order to have the newest, latest, best. This is often called "baiting a sale".
Examples include "Clearance," "Sale," "Closeout," and "Liquidation.“
(4) Fear - Part of the emotional appeal approach. Plays on your fear of rejection or loss if you don't use the
favored product. This often includes the idea of personal ruin if this product is not used or purchased.
(5) Berating (Put Down) - The goal is to convince you that something is wrong with you if you don't buy their
products.
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SHOW SLIDE 7-3: Defining Deception
Instructor’s Note: Instructor read and discuss with students using the slide.
Defining Deception:
• Now that you have a little knowledge about how people influence you, let's look at some of the techniques
they use. You've seen them everywhere -- people trying to convince you that you must have or need
something. There are a number of ways that they can convince you of those needs.
• Here are the most common types of misrepresentations.
o Fraud - Fraud is a deliberate deception. It is intentional and usually relies on a twisting of the facts. For
example, individuals who convince others they are someone they really aren’t, are frauds.
o Con - A con is similar to fraud except that the manipulator, or con artist, first wins the CONfidence of the
person being defrauded. They convince the unwitting person that they are a friend, and as such, they have
their best interests in mind.
o Rip-Off - Rip-off’s are unfair acts of exploitation, but they are not necessarily illegal. Rip-off’s take
advantage of areas where there are no consumer laws to provide protection.
• Remember, the bottom line for all of these scams is to separate you from your money.
SHOW SLIDE 7-4: The Scoop on Scams
Instructor’s Note: Instructor read and discuss with students using the slide.
Scoop on Scams:
• There are a number of ways unwitting people become targets of dishonest dealings.
• Here are some of the most common scams that you should be aware of.
• We will now discuss each of these scams in further detail.
SHOW SLIDE 7-5: Auto Repair Rip-Offs
Instructor’s Note: Instructor read and discuss with students using the slide.
Auto Repair Rip-Offs:
• Auto repair rip-offs consistently rank as the number one consumer complaint throughout the nation.
• Common dishonest practices you may see with auto repair:
o Misdiagnosing -- telling you, a major repair is needed when only a minor one will do.
o Installation of a lesser quality part than what you were charged for. Request to see your old part. A
"rebuilt" part should look new. A dirty or rusty part may have been "salvaged" from a junkyard for about 10%
of the cost of a rebuilt or refurbished part.
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• Be aware that most states have laws that require auto repair facilities to give you a written estimate of what
their work will cost. If they exceed the written estimate by more than 10% without your permission, you are
not required to pay.
SHOW SLIDE 7-6: Bait and Switch
Instructor’s Note: Instructor read and discuss with students using the slide.
Bait and Switch:
• In this ruse, stores advertise fabulous bargains just to get you in the door, and then try to sell you a more
expensive product.
• More often than not, the advertised item is not available for a number of reasons: there aren't any left. . .
you can't get delivery for six months, etc.
• If you encounter a "bait and switch", leave immediately.
Note: IF IT SEEMS TOO GOOD TO BE TRUE, IT PROBABLY IS.
SHOW SLIDE 7-7: Investment Schemes
Instructor’s Note: Instructor read and discuss with students using the slide.
Investment Schemes:
• Investment schemes promise high rates of return with minimal risk.
• The most commonly known investment scheme is the Ponzi, or Pyramid Scheme. This is when money
from new investors is used to provide a return to previous investors. The problem becomes when the money
owed to the investors is greater than the money that can be raised from new ones. These schemes always
eventually collapse.
• Promoters of investment schemes often operate a particular scam for a short time, quickly spend the
money they take in, then close down before they can be detected.
• In their sales pitch, they'll say that they have high-level financial connections; that they're privy to inside
information; that they'll guarantee the investment; or that they'll buy back the investment after a certain time.
• To close the deal, they often serve up phony statistics, misrepresent the significance of a current event, or
stress the unique quality of their offering.
• These schemes are a good investment for the promoters, but not for the participants.
SHOW SLIDE 7-8: Prize Promotions
Instructor’s Note: Instructor read and discuss with students using the slide.
Prize Promotions:
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• Have you ever surfed the net and found that while you were visiting various sites, blinking boxes suddenly
appear, congratulating you on winning a fabulous prize? Most times, you are presented the offer to buy the
“prize” for an attractive price, because you have been “specially selected” for this opportunity.
• If you think this sounds fishy, you’re right.
• The idea behind this particular scam is that the unsolicited email is actually sent to thousands, sometimes
even millions, of recipients at the same time.
• If you've won a cruise, it may actually be on a tugboat, or the hotel accommodations you've won are in a
shabby motel. Then, if you want something better, you may be required to pay an additional fee.
• Remember, if you buy into this scheme, you'll get what you pay for.
SHOW SLIDE 7-9: Title Loans
Instructor’s Note: Instructor read and discuss with students using the slide.
Title Loans:
• A ‘Car Title Loan’ is a short-term loan in which the borrower’s car title is used as collateral. The borrower
must be the lien holder (i.e. own the car outright). These loans are usually less than 30 days.
• In a title loan transaction, you keep your vehicle and drive it. The lender keeps your car’s title as security
and usually, a copy of your keys.
• Say for instance you need $1,000. If you take your vehicle title to a title loan officer, he'll give you a loan
for $1,000 at an enormous interest rate--using your car as collateral. Forget to make one payment and your
car will be immediately repossessed--even if it's the last payment you owe.
• The lender will sell it, and pocket whatever money they get. They are allowed to do this, because you gave
them your title and keys when you took out the loan.
• Stay away from these loans!!
SHOW SLIDE 7-10: Title Loan Example
Instructor’s Note: Instructor read and discuss with students using the slide.
Title Loan Example:
• Take a look at this example of the amount of interest you would pay on a $1,000.00 loan.
• As discussed earlier, most conventional loans factor in an individual’s entire financial picture that includes
their income, credit, and debt, to ensure they have the ability to afford the loan payments.
• Title loans, however, do not factor in the borrower’s ability to repay the loan.
Note: Avoid These!
SHOW SLIDE 7-11: Payday Loans
Instructor’s Note: Instructor read and discuss with students using the slide.
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Payday Loans:
• Next, we will talk about payday loans. Like title loans, they can be dangerous and may land you in greater
financial trouble than before you took out the loan in the first place!
o DON’T DO IT!
o DON’T EVEN THINK ABOUT IT!
o NOT NOW!
o NOT EVER!
o NOT UNDER ANY CIRCUMSTANCES!
SHOW SLIDE 7-12: What Is A Payday Loan?
Instructor’s Note: Instructor read and discuss with students using the slide.
What Are Payday Loans?
• Payday loans (also called post-dated check loans) are small loans lent at a high interest rate upon the
agreement that it will be repaid when the borrower receives their next paycheck.
• Most of these places have you write a post-dated check for collateral. The lender holds on to the check and
cashes it on the agreed upon date (next payday).
• The typical interest for a payday loan can be as much as 500%.
Note: The Truth in Lending Act we discussed in the last lesson requires payday lenders to disclose their
finance charges.
• However, these establishments still have a bad reputation for their predatory lending practices.
SHOW SLIDE 7-13: Facts about Payday Loans
Instructor’s Note: Instructor read and discuss with students using the slide.
Facts about Payday Loans:
• Here are some interesting statistics on Payday Loans
o The typical two-week payday loan has an annual interest rate ranging from 391 to 521 percent
o Since its inception in the 1990’s, the payday lending industry has established over 22,000 locations
which generate an estimated $27 billion in annual loan volume
o The typical payday borrower remains in payday loan debt for 212 days of the year
o Studies have shown that payday borrowers are more likely to have credit card delinquency, unpaid
medical bills, overdraft fees leading to closed bank accounts, and even bankruptcy
• As you can see it is easy to get trapped with these loans, so please, try to avoid them at all cost.
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SHOW SLIDE 7-14: Charity Fraud
Instructor’s Note: Instructor read and discuss with students using the slide.
Questionable Charities:
• At some point in time, you will receive solicitations asking for donations to what may seem like worthy
causes. The problem is, how do you distinguish between the ones that are for legitimate legitimate
charitable causes and the ones that are scams?
Keep in Mind:
• Solicitors requesting donations for law enforcement or emergency services groups cannot claim that you
may receive reduced services if you fail to donate.
• Donating to a law enforcement "association" will NOT save you a possible ticket.
• Just because the charity may have the words “military families” or “veterans” in their name, doesn’t
necessarily mean that these service members or their families will benefit from the money you are donating.
• Copycat organizations may use a name similar to a well-known charity in an effort to confuse you into
giving. Beware!
• If you are sincerely interested in donating to a particular cause, request that the information be mailed to
you.
• That way, you'll have it in writing and can keep a personal record of your donation.
SHOW SLIDE 7-15: Tips on Internet Shopping
Instructor’s Note: Instructor read and discuss with students using the slide.
Internet Shopping:
• The Internet provides consumers with a wide range of information, as well as provides sellers with a new
way to promote their products "Cyber shopping," "banking online," and other conveniences allows an
increasing number of consumers to do business by computer. But crooks also recognize the potential of
cyberspace. The same scams that have been conducted by mail or phone can now be found on the Internet,
and new technologies are resulting in new ways to commit crimes against consumers. Let's look at a few
ways to protect yourself.
• Do business with companies you know and trust. Be sure you know who the company is and where it is
physically located. Businesses operating in cyberspace may be in another part of the country or in another
part of the world. Resolving problems can be more complicated in long-distance or cross-border
transactions. You can also ask consumer agencies and the Better Business Bureau about the company's
complaint record. But keep in mind that fraudulent companies can appear and disappear quickly, especially
in cyberspace.
• Understand the offer. Look carefully at the information about the products or services the company is
offering, and ask for more information, if needed. A legitimate company will be glad to provide it; a fraudulent
marketer won't. Be sure you know what is being sold, the total price, the delivery date, the return and
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cancellation policy, and the terms of any guaranty. Print out the information so that you have documentation
if you need it.
• Be careful with financial or other personal information. Don't provide bank account numbers, credit card
numbers, social security number, or other personal information unless you know the company is legitimate,
the site is secure, and the information is necessary for the transaction. Even with partial information, con
artists can make unauthorized charges, deduct money from your account, and impersonate you to get credit
in your name.
• Take your time to decide. While there may be time limits for special offers, high-pressure sales tactics are
often danger signs of fraud.
• Be aware that there are differences between private sales and sales by a business. All sorts of goods and
services are sold or traded by individuals through unsolicited e-mails, newsgroup postings, chat room
discussions, web auctions and online classified advertisements. While most people are honest, your legal
rights against the seller may not be the same as with a business, and you could have difficulty pursuing your
complaint if merchandise is misrepresented, defective or never delivered.
• You may be better off paying by credit card than with a check, cash or money order. When you use your
credit card for a purchase and there is a problem, you have the right to notify your card issuer that you are
disputing the charge, and you don't have to pay it while your dispute is being investigated.
• Don't judge reliability by how nice or flashy a website may seem. Anyone can create a website; it's
relatively easy and inexpensive. Know that people in cyberspace may not always be what they seem.
Someone sharing a "friendly" tip about a money-making scheme or great bargain may actually have a piece
of the action. "Friendly" people can turn out to be crooks!
SHOW SLIDE 7-16: Identity Theft
Instructor’s Note: Instructor read and discuss with students using the slide.
Identity Theft:
• Whenever you use a credit card, write a check, or give your name and address, you are sharing your
personal information –information that can be used by identity thieves.
• In this part of the lesson, we will learn how to protect yourself from identity theft.
SHOW SLIDE 7-17: Identity Theft – Facts
Instructor’s Note: Instructor read and discuss with students using the slide.
Identity Theft - Facts:
• A Billion records leaked. According to IBM, more than one billion records containing personally identifiable
information were leaked in 2014 alone. An identity thief only needs a few key data points like the ones found
in many data breaches to tap into your financial life.
• There Is No Anonymity. You can do everything right and still get “got.” The fraudsters out there mining the
veins of personal data for financial gain are good at what they do. However, if you assume you are going to
be a victim, then take proactive steps – including monitoring your bank and credit accounts regularly for
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signs of fraud – in many cases you can have a head start when it actually happens. (Keeping a tight rein on
your social media posts and making them private can also give fraudsters less access to you.)
• Your Medical History Can Be Compromised. With more than 2.32 million victims thus far — 500,000 last
year alone — medical identity theft is a crime on the rise. It can cause medical histories to be changed and
the use of benefits fraudulently by others, which can bar a victim from getting necessary medical treatments.
Unlike credit card fraud where liability is often zero, a recent study by the Medical Identity Theft Alliance
found that more than 60% of medical fraud victims had to pay an average of $13,500 to resolve the crime
committed against them. Your best bet is to check every medical statement that comes in, making sure the
treatments listed on your Explanation of Benefits (EOB) summary sent out by your insurer matches the care
you’ve received.
• Your Tax Refund Is Under Attack. Tax-related identity theft is a big-money crime, and the statistics prove it.
The IRS blocked 19 million suspicious tax returns last year, stopping more than $63 billion in fraudulent
refunds, Even so, a whopping $5.8 billion in tax refunds were paid out to fraudsters. In 2012, the Treasury
Inspector General for Tax Administration projected that fraudsters would net $26 billion by year 2017.
• It’s Becoming More Common For The Ones Stealing Your Identity To Be Those Closest To You. Studies
have shown that it’s becoming more common for the ones stealing your identity to be those closest to you.
One study found 32% of identity theft victims discovered a family member or relative was responsible for
stealing their identity. That same study found 18% were victimized by a friend, neighbor or in-home
employee.
SHOW SLIDE 7-18: Identity Theft - How?
Instructor’s Note: Instructor read and discuss with students using the slide.
Identity Theft - How:
• No one can steal your identity without some amount of personal information.
• Here are a few ways someone can get their hands on your personal information:
o A stolen wallet or purse,
o Bought from "inside sources,"
o Going "dumpster diving“, obtaining it from bills and receipts carelessly deposited in your garbage
o Stealing or re-directing your mail.
SHOW SLIDE 7-19: Identity Theft - What?
Instructor’s Note: Instructor read and discuss with students using the slide.
Identity Theft - What:
• Armed with enough information, a crook can open a bank account in your name and write bad checks on
it.
• They can use your credit card, or apply for a new card in your name.
• If they have diverted your bank statements, you may not be aware of what is happening to you until it is
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too late.
• They could even obtain a driver’s license in your name.
SHOW SLIDE 7-20: Preventing Identity Theft
Instructor’s Note: Instructor read and discuss with students using the slide.
Note: Animated Slide
• Click and open hyperlink on the blank screen.
• Time of Video: 01 minutes 25 seconds
• Play video and prepare discussion.
• Preventing Identity Theft
(1) One way to protect yourself from identity theft is to minimize personal information, credit cards carried.
• Use a cross-cut shredder to dispose of receipts, copies of credit applications, insurance forms, checks,
bank statements, expired charge cards, and any credit offers you get in the mail prior to discarding.
• Use strong passwords for all of your online accounts. Use at least eight characters, alpha numeric,
symbols, and upper/lower case.
(4) Read credit reports annually by going to Annualcreditreport.com for a free credit report.
SHOW SLIDE 7-21: Your Identity Stolen
Instructor’s Note: Instructor read and discuss with students using the slide.
• What to do if your identity is stolen.
• Contact the fraud department of one of the three major credit bureaus. The company you call must tell the
other companies about your fraud alert. An initial fraud alert can make it harder for an identity thief to open
more accounts in your name. When you have an alert on your report, a business must verify your identity
before it issues credit in your name, so it may try to contact you. Be sure the credit reporting companies
have your current contact information so they can get in touch with you. The initial alert stays on your report
for 90 days. It allows you to order 1 free copy of your credit report from each of the 3 credit reporting
companies. Remember that a credit report details all of your financial transactions for approximately seven
years and it can give you some indication of how much damage to your credit has been done.
• Contact your creditors, even those that have not been opened by you. Follow up with a letter.
• File a report with your local police department. Keep a copy in case your creditors need proof of the crime.
• As an identity theft victim, you have protections under federal law for ATM or debit card transactions.
Federal law also limits your liability for the unauthorized electronic transfer of funds that result from identity
theft. It’s best to act as soon as you discover a withdrawal or purchase you didn’t make or authorize. Many
card issuers have voluntarily agreed that an account holder will not owe more than $50 for transactions
made with a lost or stolen ATM or debit card. However, under the law, the amount you can lose depends on
how quickly you report the loss. If you don’t report within 60 days of the day your institution sent you the
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account statement showing the unauthorized withdrawals, you could lose all the money an identity thief took
from your account.
• An identity thief may steal your paper checks, misuse the account number from the bottom of your checks,
or open a new account in your name. If this happens, contact your bank or financial institution and ask them
to close the account as soon as possible. Federal law doesn’t limit your loss if a thief forges your signature
on your checks or uses your account number to buy something by phone, but most states hold banks
responsible for losses from those fraudulent transactions. However, banks expect their customers to take
reasonable care of their accounts. That means you might be responsible for a loss if you know about a
problem but don’t report it to your bank quickly.
• Your liability for credit card charges that you didn’t authorize is limited to $50 per card. To dispute
fraudulent charges, contact the credit card issuer within 60 days of the day the credit card issuer sends you
the bill showing the fraudulent charges. What if an identity thief changed the address on your account and
you don’t get your statement? You are responsible for keeping track of your statements. If your statement
doesn’t arrive on time, contact your credit card company.
• If you believe someone filed for bankruptcy in your name, contact the U.S. Trustee in the region where the
bankruptcy was filed. The U.S. Trustee Program refers cases of suspected bankruptcy fraud to the United
States Attorneys for possible investigation and prosecution. The U.S. Trustee can’t provide you with legal
help, so you may need to hire an attorney.
SHOW SLIDE 7-22: Protect Yourself
Instructor’s Note: Instructor read and discuss with students using the slide.
How to protect yourself:
• There are several things you can do to protect yourself from Identity Theft.
• Be a Skeptic. No one is going to give something for nothing. If somebody has a business proposition to
make thousands of dollars in your spare time, they aren't going to be selling it in a newspaper ad for $50.
• Do Research. Find out how long the company has been in business and research its past successes and
failures. Check out the person or business your dealing with. Call the Better Business Bureau or a research
the company at the local library or on the Internet.
• Get it in writing. There's an old quote that says, "A verbal promise isn't worth the paper it's written on." If
you don't have it in writing, it is your word against the salespersons.
• Use caution. Be leery when dealing with unknown businesses that are located out of state, use P.O. Box
addresses, and when buying over the Internet. It can be very difficult and expensive to recover your money
if the business is hard to locate and fraudulent companies know this. If you need to speak with a person
directly, you may be out of luck.
• Think before you buy. Analyze your needs and wants before you buy. Nothing is a bargain if you didn't
need it in the first place.
• Save your receipts. Keep your receipts and take prompt action if the product isn't what you want or doesn't
live up to advertising or the salesperson's claims.
• Remember that nothing is really free. Companies can't stay in business if they give away their
merchandise. There will ALWAYS be a hidden cost or ulterior motive.
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Check on Learning:SHOW SLIDE 7-23: LSA 7 Check on Learning
Note: Conduct a check on learning and summarize this portion of the
learning activity.
SHOW SLIDE 7-24: LSA 7 Check on Learning
Instructor’s Note: Conduct a check on learning with the students.
Note: Animated slide, click enter to reveal answers.
Q1. When should you consider getting a payday loan?
A1. Answer: d. You should never consider a payday loan.
SHOW SLIDE 7-25: LSA 7 Check on Learning (Cont.)
Instructor’s Note: Continue check on learning with the students.
Note: Animated slide, click enter to reveal answers.
Q2. True or False. A company that creates a connection between a
celebrity and a product uses ‘association’ in their advertising.
A2. Answer: True
SHOW SLIDE 7-26: LSA 7 Check on Learning (Cont.)
Instructor’s Note: Continue check on learning with the students.
Note: Animated slide, click enter to reveal answers.
Q3. What type of advertising presents “just the facts?”
A3. Answer: b. Informative
SHOW SLIDE 7-27: LSA 7 Check on Learning (Cont.)
Instructor’s Note: Continue check on learning with the students.
Note: Animated slide, click enter to reveal answers.
Q4. What is the first step you should take when your identity has been
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stolen?
A4. Answer: c. place a fraud alert with the credit bureaus
SHOW SLIDE 7-28: LSA 7 Check on Learning (Cont.)
Instructor’s Note: Continue check on learning with the students.
Note: Animated slide, click enter to reveal answers.
Q5. What does a criminal need to steal your identity?
A5. Answer: b. Your social security number
SHOW SLIDE 7-29: LSA 7 Check on Learning (Cont.)
Instructor’s Note: Continue check on learning with the students.
Note: Animated slide, click enter to reveal answers.
Q6. What is the best way to successfully wipe out excessive debt?
A6. Answer: b. Time
Review Summary:SHOW SLIDE 7-30: LSA 7 Summary
Instructor’s Note: Conduct LSA summary for this lesson.
Summary:
During this lesson we've briefly touched over on the following
subjects/topics;
• The Psychology of Advertising
• Deception
• Scams
• Rip-Offs
• Bait and Switch
• Investment Schemes
• Title and Payday Loans
• Charity Fraud
• Identity Theft
• Protecting Yourself
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• Please inquire assistance whenever possible on any of the subjects
mentioned to the listed sources displayed on the screen for further and
more in depth information and guidance.
Sources of Assistance:
• In the area of consumer awareness, as is the case in most other topics
we've covered, you are not alone. Several of the sources of assistance
shown on this slide are available only to you, the military member.
• More specific information on how to contact each of these sources is
included in your handouts. Remember, both spouses are legally and
financially liable for debt.
Instructor’s Note: Prep to transition into LSA #8 titled, Identify Car Buying.
TLO - LSA 8. Learning Step / Activity TLO - LSA 8. Assess the Car Buying Process
Method of Instruction: Discussion (Small or Large Group)
Mode of Delivery: Resident Instruction
Instr Type (I:S Ratio): Military - ICH (1:25)(Every instructor must meet the qualificationstandards established in AR 350-1, AR 614-200,TR 350-70, TR 350-10 and the proponent school instructor certification program.)
Time of Instruction: 40 mins
Media Type: Handout / PowerPoint Presentation
Other Media: Unassigned
Security Classification: This course/lesson will present information that has a SecurityClassification of: U - Unclassified.
SHOW SLIDE 8-1: Car Buying
8. Learning Step / Activity 8: Assess the Car Buying Process
Method of Instruction: DSL – Discussion (Small or Large Group)
Instructor to Student Ratio: 1:25
Time of Instruction: 00 hrs. / 40 mins
Media: PowerPoint Presentation, Handout
Required Student Materials:
• Calculator
• Pencil
SHOW SLIDE 8-2: Do Your Research
Instructor’s Note: Instructor read and discuss with students using the slide.
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• Many people begin the car-buying process by visiting a dealership, but this should be one of the last things
they do.
• Unfortunately, for the average consumer, the process often ends right there, with the purchase of a vehicle
at too high a price.
• Dealers will ask about financing and trade-ins before offering a bottom-line price. They will then use this
information to calculate their profits to your disadvantage.
• You can save yourself hundreds, if not thousands, of dollars on your next purchase by doing some
homework BEFORE you step on the lot.
• Doing your research puts YOU in control of the buying process. Let's look at some areas that warrant
attention before you set out on your journey.
SHOW SLIDE 8-3: Steps to Successful Purchases
Instructor’s Note: Instructor read and discuss with students using the slide.
• The following steps can help ensure that you are satisfied with your purchase.
o Determine how much you can afford. Refer to your spending plan.
o Determine the type of vehicle you want to buy that fits into your budget.
o Determine where you will buy the vehicle.
SHOW SLIDE 8-4: How Much Can You Afford?
Instructor’s Note: Instructor read and discuss with students using the slide.
How Much Can You Afford:
• Determine what you can reasonably pay, and then select a car and options that fall within that range.
Four factors should be considered:
• Total Cost. Shopping for a vehicle based on what you want to spend each month is one of the most
common errors consumers make. You risk paying too much for the vehicle when using this logic.
• Down Payment The more you put down, the less you have to finance. This will lower both your monthly
payments and total cost.
• Monthly Costs. Face Reality! You won’t enjoy your car very much if you don’t have enough money to put
gas in it. What will your monthly expenses be? We’ll talk about how much you should plan on spending for
monthly costs in a moment.
• Insurance Costs. This cost is considerable for Soldiers at your age. Shortly, we’ll look at a slide that
provides an example of what your insurance costs could be. Be sure to include an insurance estimate in
your budget when determining how much you can pay for a car payment.
SHOW SLIDE 8-5: Monthly Costs
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Instructor’s Note: Instructor read and discuss with students using the slide.
Monthly Costs:
• Financial advisors suggest keeping total car expenses to no more than 25% of your net (after tax) income.
• This includes car payments plus expenses, such as:
o Insurance
o Maintenance
o Operating costs (fuel, oil, etc.)
• As a general guide, you can use 15% of your net income for the car payment and 10% for associated
costs.
• You should always compute what your debt-to-income ratio would be with any loan you are contemplating.
Most financial institutions won't grant you a loan that has a high potential to get you in trouble. Beware,
however, that some dealers might do just that. Borrowing from a relative can only worsen your plight. It is
always better to live within your means.
SHOW SLIDE 8-6: Automobile Insurance Costs
Instructor’s Note: Instructor read and discuss with students using the slide.
Insurance Costs:
• As you can see by this slide, auto insurance can be a huge cost when purchasing a car.
• It is imperative that you add these costs when calculating your monthly payments.
• Otherwise, you might find yourself overextended.
SHOW SLIDE 8-7: Selecting a Car
Instructor’s Note: Instructor read and discuss with students using the slide.
Selecting a Car:
• What type of car should you consider? The vehicle you purchase must strike the right balance between
what you want, what you need, and what you can afford. Everyone has different preferences.
Factors to consider include:
• Size – (Compact, Sedan, Coupe, etc.)
• Manual or Automatic Transmission
• 2-, 4-, or all-wheel drive
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• Use (family, recreation, commuting)
• Style
• Safety
• Ownership and Operating Costs.
• Performance vs. Practicality?
SHOW SLIDE 8-8: New or Used?
Instructor’s Note: Instructor read and discuss with students using the slide.
New or Used:
• Once you have made choices about the type and style of car you would like to purchase, you have another
choice that will significantly affect the cost of ownership – should you purchase a new car or a used one.
• Both choices have positive and negative aspects. There are no absolute answers to the question of new
vs. used.
• You might consider "splitting the difference" with a "Program Car" that was a lease or rental unit and still
has a good part of the new car warranty remaining.
SHOW SLIDE 8-9: New Car Considerations
Instructor’s Note: Instructor read and discuss with students using the slide.
New Car Considerations:
• Cost - more than a used car of same make and model.
• Mechanical problems - likely fewer than a used car.
• Depreciation - The value of a new car diminishes rapidly following its purchase, anywhere from 10% to
40% in the first year. To get the full value of a new car, many consumers plan on owning it for several years
(four, five, or more).
• Warranties - New cars usually come with a 3 yr./36,000 mile warranty, which can be extended if desired,
but at a significant cost.
SHOW SLIDE 8-10: Used Car Considerations
Instructor’s Note: Instructor read and discuss with students using the slide.
Used Car Considerations:
• Cost - Often less than a new car.
• Mechanical Problems - Likely to have more than a new car. Repair costs can significantly increase the cost
of owning and operating a car.
• Depreciation - Usually less than with a new car, because much of its depreciation may have already
occurred.
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• Warranties - May or may not have any remaining. Service contracts will add significantly to the cost of the
car.
SHOW SLIDE 8-11: Where Should You Buy?
Instructor’s Note: Instructor read and discuss with students using the slide.
Where Should You Buy:
• Car buyers should research a minimum of three potential sellers before deciding on where to purchase
their car.
• There are no absolute guidelines to follow when selecting a dealer, a salesperson, or an individual from
whom to buy a car.
• If you take your time and do your homework, you should get a fair deal no matter where you buy.
• If you're looking for a new car, you'll have to go to a dealer eventually.
SHOW SLIDE 8-12: Evaluating Dealers
Instructor’s Note: Instructor read and discuss with students using the slide.
Evaluating Dealers:
• Here are some things to consider when evaluating dealerships:
• Years in business: Although being in business for a long time does not necessarily mean the dealer is
straightforward, the worst dealers (in terms of how buyers are treated) seem to go out of business fairly
quickly.
• Complaints: Check with the Office of Consumer Affairs of the (state) Attorney General, the Better Business
Bureau, and any professional associations to which the dealer belongs to, for any complaints filed against
them.
• Salesperson and mechanics: How long have they been with the company? Are the mechanics certified by
an accredited agency, such as ASE (Automotive Service Excellence)? Don't be reluctant to ask questions.
• References - Senior enlisted and some of your contemporaries that have been assigned to your duty
station for a while may have some recommendations. You can probably trust these references, but be leery
of references volunteered by a dealer.
• Professional memberships - Membership in the Better Business Bureau, National Automobile Dealers
Association, or National Independent Automobile Dealers Association doesn't guarantee you a fair deal. It
does, however, give you some reassurance that there are avenues for you to address problems that may
arise that cannot be resolved with the dealership.
SHOW SLIDE 8-13: Fair Purchase Price
Instructor’s Note: Instructor read and discuss with students using the slide.
Fair Purchase Price:
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• Auto dealers have a right to make a reasonable profit on the sale of a car. What constitutes a reasonable
profit?
• To know this you must know what fair price is.
• Fair Purchase Price – The price you should pay for a new car. This price usually falls in the middle of Fair
Market Range.
• Fair Market Range – The range of prices that Kelley Blue Book estimates most people will pay for a
specific vehicle type this week.
• This is determined by considering:
o Recent Transactions
o Supply & Demand
o Market Changes
SHOW SLIDE 8-14: Information Sources
Instructor’s Note: Instructor read and discuss with students using the slide.
Information Sources:
• All pricing components, including base and option costs at invoice, Manufacturer's Suggested Retail Price
(MSRP), and destination charges, are available from a variety of resources.
• If you price your vehicle at invoice, subtract any dealer holdback or incentives, and add a 3-5% profit, you
will have a good price goal for your vehicle. When working with a dealer who provides you with pricing
information, make sure you know the source of the pricing - it could be biased. Your best bet will be to do
price research on your own from sources you know are reliable. Some sources include:
• Public Libraries - One of the very best sources of information on car pricing is the public library. Most Army
bases have libraries as well.
• Kelley Blue Book - Lists suggested retail and loan values for specific makes and models of used cars. This
is a guideline, not a law. Factors such as mileage, options, and physical condition of the car will affect its
value. This will give a good ballpark figure. It can be found on the internet at www.kbb.com.
• IntelliChoice Car Cost Guides - Besides the dealer cost and sticker prices, this lists items such as resale
value, economic value, maintenance, costs, etc. The site www.cars.com uses IntelliChoice pricing.
• Consumer Reports/Consumer Union Price Service - Each April issue is devoted to cars and pricing, and
they offer a low cost service to provide the dealer cost for particular makes, models, and options.
• Edmund's Car Prices Buyer's Guide - Available in hard copy as well as at their internet site. Similar to
IntelliChoice guide.
• Car-Buying Services. Many organizations offer their members buying services, in which the consumer
indicates the make, model, year and exact options they want and the organization does the shopping for
Method of Instruction: Discussion (Small or Large Group)
Mode of Delivery: Resident Instruction
Instr Type (I:S Ratio): Military - ICH (1:25)(Every instructor must meet the qualificationstandards established in AR 350-1, AR 614-200,TR 350-70, TR 350-10 and the proponent school instructor certification program.)
Time of Instruction: 30 mins
Media Type: Handout / PowerPoint Presentation
Other Media: Unassigned
Security Classification: This course/lesson will present information that has a SecurityClassification of: U - Unclassified.
SHOW SLIDE 9-1: Assess Your Insurance Needs
Learning Step/Activity 9. : Meeting Your Insurance Needs
Method of Instruction: Classroom/Discussion
Instructor to Student Ratio: 1:25
Time of Instruction: 30 Min.
Media: Large Group Instruction
Required Student Materials:
• Calculator
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• Pencil
Corresponding Activities:
• Determining Your Life Insurance Needs, Student Handout Page 10
Introduction: Managing risk is a serious business and is a big part of your financial future. Insurance should
be a major part of your risk-management strategy.
• What is insurance, and how does it work?
o Insurance is the transfer of risk for a loss you cannot afford to a third party (the insurance company) in
exchange for your payment of premiums to the company.
• In this lesson, we will discuss the different types of insurance and how to define your individual insurance
needs.
• We will briefly review some of your insurance requirements, as well as identify scams, frauds, and high-
pressure tactics often associated with the insurance industry. You will also be provided guidance on where
to go for assistance when you need it.
SHOW SLIDE 9-2: Types of Insurance
Instructor’s Note: Instructor read and discuss with students using the slide.
• There are four types of insurance.
o Renter’s/Homeowners
o Automobile
o Life
o Health
SHOW SLIDE 9-3: Renter’s Insurance
Instructor’s Note: Instructor read and discuss with students using the slide.
Renter’s Insurance:
• Renter's insurance covers the loss of your possessions due to fire, theft, or storm and provides you
personal liability protection.
• Many of you will need this type of insurance when you rent an apartment, house, store your possessions in
a storage unit, or if you live in government quarters.
• You should always have your personal property insured.
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Note: This type of insurance does not cover the structure, since you don’t own the property.
SHOW SLIDE 9-4: Homeowner’s Insurance
Instructor’s Note: Instructor read and discuss with students using the slide.
Homeowner’s Insurance:
• Homeowner's insurance is a combined policy that provides coverage for fire, windstorms, or theft as well as
some level of liability protection.
• The premiums are relatively low and the policy covers a particular structure and its contents.
• It is mandatory coverage if you own a home with a mortgage. If you don't want to lose all of your savings in
a fire, tornado, or lawsuit, you will want to have this coverage.
• Certain risks like earthquake, flood, war, or nuclear accident are usually not covered. Coverage for these
risks are available, often for an additional premium.
Did you know:
• If your dog bites a neighbor, a homeowner's policy will cover the medical expenses and damages awarded
as a result of a lawsuit.
SHOW SLIDE 9-5: Automobile Insurance
Instructor’s Note: Instructor read and discuss with students using the slide.
Automobile Insurance:
• Automobile insurance provides five basic protections; Collision, Comprehensive; Liability; Medical; and
Uninsured/Underinsured Motorists. To make informed decisions about your particular needs, you must
understand what each of these does for you.
o Collision. Collision coverage pays for damage done to your car by YOU. It has a separate deductible
and premium. Collision coverage is expensive, as the probability of damage from collision is the highest risk
of car ownership. If you finance your car, the lender will require this insurance, most likely with a very low
deductible. Most deductibles are $250 to $1,000. The higher the deductible, the lower the premium. If you
have the cash, raise the deductible. Put the money you save into a savings account.
o Comprehensive. Comprehensive covers damage done by OTHERS or damage while you are not in the
car, such as vandalism, broken glass, and so forth. Like Collision coverage, Comprehensive has a separate
premium and deductible.
o Liability. This is the most important part of your coverage. It insures the damage you do to the "other
guy". Physical damage to his/her car, and any lawsuit you may encounter. Liability coverage is mandatory
for all cars in every state. Liability is less expensive than collision (unless you are under 25 or have some
traffic tickets) yet it is the most important coverage you can carry. Buy all that you can afford. A judgment
against you can follow you for the rest of your life - make sure you have enough liability coverage.
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o Medical. This portion of your policy covers you and your passengers for immediate medical treatment,
regardless of who caused the accident. Typical coverage here ranges from $1,000 to as high as $10,000. It
is very inexpensive and provides immediate help.
o Uninsured/Underinsured Motorist. You will need this coverage in the event that the person who hits you
has little or no insurance. If this happens, your insurance company will pay you. They will then sue the
uninsured/underinsured driver and try to get any assets he may have, but the important point is you don't
have to do that. If you carry this coverage, your insurance company does it for you.
SHOW SLIDE 9-6: Auto Insurance Tips
Instructor’s Note: Instructor read and discuss with students using the slide.
Here are a few additional tips on auto insurance:
• If you get traffic tickets or have several accidents, you will have to pay a much higher rate. In fact, if your
driving record is so bad that your carrier cancels your insurance, you may have to pay a very high rate for
what is called the "assigned risk pool" of bad drivers. Drive Safely!!
• Shop for insurance. There are a lot of different rates.
• If you have had drivers training, get the certificate and provide it. Most companies will reduce your
premium.
• Anti-theft systems can reduce your premium as well.
• Carry as high a deductible as your cash situation, or your lender, will allow.
• Carry as much liability as you can afford.
SHOW SLIDE 9-7: Life Insurance
Instructor’s Note: Instructor read and discuss with students using the slide.
Life Insurance:
• Life Insurance pays out a sum of money either on the death of the insured person of after a set period of
time. Simply put, it insures protection against the loss of your future income, in the event that you should
pass away. It also ensures protection for your family members. If you don't have anyone depending on you
for their financial wellbeing, then you don't need life insurance. If you do, then you need to understand it and
know how to calculate how much and what type you need.
Determining your life insurance needs:
• Over the next 2-3 years, many of you will marry, and many of you will start families. So listen up. The goal
of life insurance is to provide a measure of financial stability for your family after you die. Those who do not
purchase a life insurance policy risk subjecting their family members to great suffering, as they may be
unable to maintain their standard of living without it.
Note: Refer students to page 10 of their student handout to complete the “Determining the Life Insurance
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Need’s” exercise
SHOW SLIDE 9-8: Types of Life Insurance
Instructor’s Note: Instructor read and discuss with students using the slide.
Types of Life Insurance:
• If you decide you need additional life insurance over and above the maximum you already get in your Army
SGLI coverage, you will need to understand the various types available to you.
• There are two basic types: Term insurance and Permanent insurance.
SHOW SLIDE 9-9: Term Life Insurance
Instructor’s Note: Instructor read and discuss with students using the slide.
Term Life Insurance:
The advantages of term policies include:
• Term premiums are lower than those for permanent insurance so you get more insurance coverage for less
money. This allows you to buy more coverage when you need it the most, such as when you have young
children.
• Because term provides insurance for a specific period of time, it is ideal for covering specific financial
needs such as covering your life until your children are through college, until they are self-supporting, or
covering your life until you pay off your mortgage.
The disadvantages of term policies include:
• Premiums increase every time a policy is renewed, so the cost of term insurance can become prohibitive
as you near your late 50’s and 60’s.
• Term life doesn't provide a savings feature known as cash value. Term policies only pay benefits if you die
while the policy is in force.
• If your insurance company wants you to take a medical exam when you want to renew your policy, you
may be turned down if your health condition has deteriorated.
• You could outlive your coverage. Term insurance is generally not renewable after age 70 or 75, depending
on your state’s insurance regulations.
SHOW SLIDE 9-10: Servicemembers Group Life Insurance (SGLI)
Instructor’s Note: Instructor read and discuss with students using the slide.
SGLI:
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• A term policy you should be aware of is your Serviceman's Group Life Insurance (SGLI).
o Provided to each member of the Army for the ridiculously low price of 65 cents per ten thousand per
month.
o Can provide up to $400,000 in life insurance and includes a mandatory rider for Traumatic Injury
Protection under Servicemembers' Group Life Insurance (TSGLI). This policy should be your first life
insurance consideration.
o TSGLI payments are designed to help traumatically injured Servicemembers and their families with
financial burdens associated with recovering from a severe injury.
o TSGLI payments range from $25,000 to $100,000 based on the qualifying loss suffered.
o SGLI has also expanded to include Family Coverage.
o Reservist and National Guardsmen qualify for full SGLI if they drill 12 times a year.
SHOW SLIDE 9-11: SGLI-Family Coverage
Instructor’s Note: Instructor read and discuss with students using the slide.
SGLI-Family Coverage:
• Spouses and children of active duty members, who are listed on the service member's personnel file, are
eligible for low cost insurance coverage.
o Family coverage is available only to members insured under the SGLI program.
--It is not available to those insured under the VGLI program.
o If you are covered under full-time SGLI, you are eligible to insure your spouse, regardless of whether
your spouse is on active duty, retired, or is a civilian.
o Coverage starts at $10,000 and is available in increments of $10,000 up to $100,000 at a cost of $0.50
per $10,000 of coverage for spouses under the age of 35.
o Children are automatically covered for $10,000 at no cost to the service member.
o SGLI family coverage is AUTOMATIC unless it is declined, in writing. To do so, you must obtain a
waiver statement from your personnel office.
SHOW SLIDE 9-12: SGLI and Other Life Insurance
Instructor’s Note: Instructor read and discuss with students using the slide.
SGLI and Other Life Insurance:
• If you decline SGLI (not recommended) or decide to add to it, ensure that any other policies.
o Specifically cover loss of life due to war and combat.
o Cover loss of life due to suicide.
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SHOW SLIDE 9-13: Survivor Benefits (While On Active Duty)
Instructor’s Note: Instructor read and discuss with students using the slide.
Survivor Benefits:
• The death gratuity is $100,000, (100% tax free) and is paid to the next of kin for the following armed
service members:
o A member of an armed force under his jurisdiction who dies while on active duty or while performing
authorized travel to or from active duty; A Reserve of an armed force who dies while on inactive duty training
(with exceptions);
o Any Reserve of an armed force who assumed an obligation to perform active duty for training, or
inactive duty training (with exceptions) and who dies while traveling directly to or from that active duty for
training or inactive duty training;
o Any member of a reserve officers' training corps who dies while performing annual training duty under
orders for a period of more than 13 days, or while performing authorized travel to or from that annual training
duty; or any applicant for membership in a reserve officers' training corps who dies while attending field
training or a practice cruise or while performing authorized travel to or from the place where the training or
cruise is conducted; or
o A person who dies while traveling to or from or while at a place for final acceptance, or for entry upon
active duty (other than for training), in an armed force, who has been ordered or directed to go to that place,
and who Has been provisionally accepted for that duty; or Has been selected for service in that armed force.
• Burial Benefits. DoD will process, transport, and inter remains. It provides a casket, vault and headstone for
interment in a government cemetery or may reimburse costs of up to $7,700, if the family elects to make
private arrangements. Transportation to the burial for the immediate family is provided by the government at
no charge, or may be reimbursed up to the government rate. It is recommended that family members make
no travel arrangements until they have spoken with their casualty assistance officer. The casualty assistance
officer will guide the family through the specific requirements and paperwork for the particular branch of
service involved. Specific information about burial benefits and military honors is available at:
www.militaryfuneralhonors.osd.mil.
• Round Trip Travel and BAH. P.L.109-163 made permanent the extended time that surviving families may
occupy government quarters or be paid housing allowances from 180 to 365 days. Those eligible for Basic
Allowance for Housing (BAH) will be paid in one lump sum. Survivors are also authorized one relocation
move at government expense, which must be completed within one year following the death of the service
member. Spouses are eligible for Commissary, Exchange, and Morale, Welfare and Recreation activities
privileges indefinitely unless they remarry. Children maintain eligibility until age 18 or 23, if still enrolled full-
time in college. Military exchanges forgive Military Star credit card debt owed by families when their service
member is killed in combat. Survivors are also eligible for legal assistance advice on benefits and
entitlements, insurance or taxation.
• Arrears in Pay and Leave. Arrears of Pay is a one-time payment made to a beneficiary after your death.
The arrears of pay payment to your beneficiary will include: The pro-rated amount of your final month’s pay,
o Credit Life Insurance. These policies offer to pay off specific debts should you die or, in some cases,
become disabled. They are profit generators for the companies selling them and seldom are a good value.
o Credit Card Loss. These policies are often quite expensive, and you should know that your liability is
generally limited to $50 per card.
SHOW SLIDE 9-20: More Frivolous Insurance
Instructor’s Note: Instructor read and discuss with students using the slide.
More Frivolous Insurance:
• Rental Car Collision (CDW). If you own a car, chances are your policy will cover you when you are driving a
rental. It also likely that your credit card provides some degree of coverage. Be sure you really need this
expensive addition to the cost of renting a car before you agree to it at the counter.
• Accidental Death or Dismemberment. This feature, for an additional premium, doubles your life insurance
payoff if you die from an accident. Your insurance amount should be based on your survivor's requirements,
regardless of how you die. Also, keep in mind that most people, even those who die young, do so of natural
causes.
• Flight Insurance. For example, you pay $14 per flight for a million dollar payoff if you die on the flight. Better
to buy 14 lottery tickets. You don't have to die to collect if you hit the jackpot.
• Pet Insurance. Policies cost from $40 to $100 per year. They often don't cover leukemia or other major
illnesses.
• Extended Warranties. Most major purchases come with sufficient warranties to protect you in the event
you purchase a "lemon". Companies wouldn't offer these extended warranties if they didn't think they would
make money off them.
SHOW SLIDE 9-21: Insurance Scams
Instructor’s Note: Instructor read and discuss with students using the slide.
Insurance Scams:
• Most individuals who work in the insurance industry are honest and ethical. However, young Soldiers are
often targeted by those who are not.
• A recent investigation by the DOD Inspector General documented several instances of improper insurance
sales practices including misleading presentations, presentations by unauthorized personnel, and agents
trying to sell during duty hours or in the barracks.
• Two tactics known to have been used by unethical salespersons are convincing the young Soldier to drop
SGLI because it does not build cash value, and claiming non-existent dependents to decrease income tax
withholding in order to "invest" the "additional" take-home pay in high-cost cash value life insurance.
• In this latter case, the Soldier gets a rude shock on April 15 when he or she discovers they must write a
sizable check for income taxes.
SHOW SLIDE 9-22: Sound Advice
158
Instructor’s Note: Instructor read and discuss with students using the slide.
Sound Advice:
• Here are some tips to help you through the insurance jungle:
• As with any major purchase, don't be rushed in to making a decision. Any "good deal" available today will
likely be there tomorrow. Sleep on it, and be sure to have any contract reviewed by Army Legal Services
PRIOR to signing.
• Be sure to consider your military benefits when determining your insurance requirements and don't get
pressured into a decision, like buying auto insurance at a car dealership. Shop hard using several agents
and the internet. A few hours spent now can mean thousands of dollars over your lifetime.
SHOW SLIDE 9-23: Sources of Assistance
Instructor’s Note: Instructor read and discuss with students using the slide.
Sources of Assistance:
• As a member of the military, you have several sources of help in determining your insurance needs and
meeting your requirements.
• Army Legal Services is always ready to review any contract you are considering. In addition, there are
several internet sites, not aligned with any insurance company that will assist you in finding the lowest cost
insurance policies to meet your needs.
Check on Learning:SHOW SLIDE 9-24: LSA 9 Check on Learning
Note: Conduct a check on learning and summarize this portion of the
learning activity.
SHOW SLIDE 9-25: LSA 9 Check on Learning
Instructor’s Note: Conduct a check on learning with the students.
Note: Animated slide, click enter to reveal answers.
Q1. What does Renter’s Insurance cover?
A1. Answer: b. Your possessions only
SHOW SLIDE 9-26: LSA 9 Check on Learning (Cont.)
Instructor’s Note: Continue check on learning with the students.
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Note: Animated slide, click enter to reveal answers.
Q2. What is the most important, mandatory coverage in your auto
insurance policy?
A2. Answer: b. Liability
SHOW SLIDE 9-27: LSA 9 Check on Learning (Cont.)
Instructor’s Note: Continue check on learning with the students.
Note: Animated slide, click enter to reveal answers.
Q3. What is one way to reduce your auto insurance premium?
A3. Answer: a. Attend a driver’s training class
SHOW SLIDE 9-28: LSA 9 Check on Learning (Cont.)
Instructor’s Note: Continue check on learning with the students.
Note: Animated slide, click enter to reveal answers.
Q4. Permanent life insurance which is designed to provide lifelong
protection is called?
A4. Answer: d. All of the Above
SHOW SLIDE 9-29: LSA 9 Check on Learning (Cont.)
Instructor’s Note: Continue check on learning with the students.
Note: Animated slide, click enter to reveal answers.
Q5. What is the maximum amount of Serviceman’s Group Life Insurance
(SGLI) coverage available to Soldiers?
A5. Answer: d. $400,000
SHOW SLIDE 9-30: LSA 9 Check on Learning (Cont.)
Instructor’s Note: Continue check on learning with the students.
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Note: Animated slide, click enter to reveal answers.
Q6. True or False. You should never buy any insurance under pressure.
A6. Answer: True
SHOW SLIDE 9-31: LSA 9 Check on Learning (Cont.)
Instructor’s Note: Continue check on learning with the students.
Note: Animated slide, click enter to reveal answers.
Q7. True or False. SGLI family coverage is automatic unless waived in
writing.
A7. Answer: True
Review Summary:SHOW SLIDE 9-32: LSA 9 Summary
Instructor’s Note: Conduct final LSA summary for the final lesson for
PFMT.
Summary:
• In this lesson, we discussed a subject of vital interest to you for the rest of
your lives - insurance.
• We covered four primary types of insurance with particular emphasis on
the different automobile policy provisions and types of life insurance
available.
• We reviewed the military benefits that you should consider when
determining your personal insurance requirements and we talked about
some frivolous insurance you might be tempted to purchase.
• We concluded this lesson by telling you where you can find assistance
with your insurance needs.
Instructor’s Note: Prep to transition into both TLO Check on Learning
questions and Summary.
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SECTION IV. SUMMARY
Method of Instruction: Discussion (Small or Large Group)Mode of Delivery: Resident InstructionInstr Type(I:S Ratio): Military - ICH (1:25) (Every instructor must meet the qualification standards
established in AR 350-1, AR 614-200, TR 350-70, TR 350-10 and theproponent school instructor certification program. )
Time of Instruction: 5 mins
Check onLearning Show Slide #4: TLO Check On Learning
Note: Return to the remaining two slides at (TLO Check on Learning & TLO Summary) at the conclusion of LSA #9.
Instructor's Note: At this time, break class into equal groups. Each group take out paper and as a group, write down a
few questions from the lesson that they just received. Give them enough time to get their questions written. Once all
groups have a sufficient amount of good questions, have each group pass their questions to another group and have
them answer them. Allow sufficient time for them to answer the questions. Once all questions have been answered,
have each group read their questions and answers.
Review/Summary Show Slide #5: TLO Summary
Instructor’s Note: Read TLO
Action: Perform Personal Financial Management Training
Conditions: As a new FM Soldier in a classroom environment using doctrinal and administrative publications, practical
exercises, handouts, and discussion.
Standard: With at least 75% accuracy, students must demonstrate proficiency with:
1. Review Financial Ethics
2. Review Retirement / Thrift Savings Plan
3. Analyze Leave and Earning Statement / myPay
4. Developing a Spending Plan
5. Managing a Checking Account
6. Identify the Essentials of Credit
7. Review Consumer Awareness
8. Assess the Car Buying Process
9. Assess Your Insurance Needs
“Or”
The proper management of your personal finances can have a long-lasting and far-reaching impact on you as a Soldier
or a civilian. The last thing you want to be thinking about while patrolling mountains of Afghanistan is if you are being
paid properly or if your Family is financially stable back at home. Whatever your reason for joining the Army there is
one unavoidable fact: it is your duty as a Soldier to fulfill your financial obligations and to provide for your family.
Hopefully, this training provided you with the ammunition you need to prepare you for your financial readiness.
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“Or”
Instructor's at this time, have several students explain the most important take away to them from this lesson. Facilitate
a discussion on each answer.
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SECTION V. STUDENT EVALUATION
TestingRequirements There are no evaluations, assessments at the end of the lesson. After all LSAs have been presented, the measurement
of the learning the students received will be measured via Check on Learning questions given throughout the lessons.
FeedbackRequirements An AAR will be conducted after each module. There is an end of course critique that will be conducted at the end of the