Family Economics & Financial Education 3.19.4.G1

Get ready to Take Charge of Your Finances

Life Of…..

Mandy Gonzales“A Teenager’s Spending Plan”

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 2 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Snapshot – Mandy Gonzales• Sneak peak of the life of

Mandy and her family– Mandy– Carmine– Bobby– Lolita – Connie– Roberto

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 3 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

SnapshotMandy’s Income and Expenses

• Mandy’s Income– Tasty Freeze

•$6.75/hour•16 hours a week

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 4 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

SnapshotMandy ’s Income and Expenses

• Mandy ’s Expenses– Cellular phone $75 per month– Savings $100 per month for extra

curricular activities– Fuel $50 per month– Other

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 5 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Spending Plan• The goal is to create a spending plan the

balances Mandy ’s expenses with her income.

• She cannot have more expenses than income.

• Spending Plan– Financial statement– Tracks income and expenses– Used to assist with money management and help

individuals reach financial goals– An individual’s perception of needs, wants and values will

effect decisions made when creating a spending plan

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 6 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

SnapshotGonzales Family Expenses

• Housing– Utilities and Taxes– Maintenance – Others – television, internet, and telephone

• Transportation– One family vehicle monthly payment – Fuel for Roberto’s car – Half of the cost of fuel for the car shared by Mandy and

Connie • Insurance

– Homeowner’s, health, life, auto• Food

– Groceries• Credit card debt

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 7 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Housing• Gonzales

Expenses– Utilities– Property taxes– Maintenance

• Additional Expenses– Housing Payment– Insurance

• Utilities– Heat– Electricity– Water– Sewer– Garbage

•What is the impact on the family of not having a housing payment because they live in Lolita's home?

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 8 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

• Satellite Dish

• Digital Cable

• Telephone

• Internet

Housing Others

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 9 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Transportation• Monthly Payment

– Car payment– Maintenance

• Fuel– An average is listed– This cost may

increase/decrease depending on the cost of fuel

• Gonzales Family– Monthly

payment, and fuel costs for Roberto’s vehicle and half of the fuel costs for Connie and Mandy’s shared car.

• Mandy – Pays half of her

vehicle’s fuel costs

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 10 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Others• Personal items• Entertainment• Music• Cheerleading• Miscellaneous• Create Your Own

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 11 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Goal:To Create A Balanced Spending Plan

• Make all choices for the Gonzales family and Mandy

• Complete a major expenditures summary for the Gonzales family

• Complete a spending plan for Mandy • Answer reflection questions• Write a summary essay

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 12 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Quick Review• Gonzales Family

– Mandy, Carmine, Bobby, Lolita, Connie, Roberto

• Create a Major Expenditures Summary for the Gonzales’– Housing– Transportation

• Create a Spending Plan for Mandy – Savings– Transportation fuel costs– Others

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 13 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Snapshot Reflection• Review Mandy ’s Snapshot on pages 2-4• Answer questions 1-5

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 14 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Mandy ’s Paycheck

Personal InformationState the

employee’s name, address, and social security number.

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 15 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Mandy ’s Paycheck

Pay Period

The length of time for which an employee’s wages are calculated.

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 16 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Mandy ’s Paycheck

Gross Pay

The total amount of money earned during the pay period before payroll withholdings.

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 17 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Mandy ’s Paycheck

Payroll Withholdings

The amount of money subtracted from the gross pay for taxes.

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 18 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Mandy ’s Paycheck

Withholding Tax

The amount required by law for employer to withhold from earned wages to pay taxes.

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 19 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Mandy ’s Paycheck

FICAFederal Insurance Contribution Act – includes Social Security and Medicare

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 20 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Mandy ’s Paycheck

Net Pay

The amount of money left after all payroll withholding have been taken from the gross pay.

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 21 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Mandy ’s Paycheck

Year-to-DateTotals of all the deductions which have been withheld from an individual’s paycheck from January 1 to the last day of the pay period indicated on the paycheck stub.

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 22 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Setting Financial Goals

•Short Term – less than one year•Long Term – more than one year

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 23 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Gonzales’ Major Expenditures Housing

• Choose a house and housing others for the Gonzales family

• Refer to the Snapshot on pages 2-4• Remember

– Family size– Hobbies– Lifestyle– Other family dynamics

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 24 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Gonzales’ Major Expenditures Transportation

• Choose a vehicle for the Gonzales family and Mandy

• Refer to the Snapshot on pages 2-4• Remember

– Family size– Number of vehicles available

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 25 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Gonzales’ Major ExpendituresMajor Expenditures Summary

• Transfer numbers to complete the summary

• Discuss how the credit card balance impacts the family

• How can a family help to decrease the cost of food per month?

• Why is automobile and health insurance important?

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 26 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Mandy ’s Spending PlanPayroll Withholdings

• Review Mandy ’s paycheck on page 11– State Withholding Tax– Federal Withholding Tax– FICA

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 27 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Mandy ’s Spending PlanSavings

• Review Gonzales ’s Snapshot on pages 2-4– Identify her needs, wants, values

• Review the short term and long term goals set for Mandy on page 12

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 28 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Mandy ’s Spending PlanTransportation

• Mandy will pay for half of the cost of her fuel for the vehicle she shares with Connie.

• She needs a vehicle to get to and from work

• Refer to page 7 to see which vehicle has been chosen for Mandy

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 29 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Mandy ’s Spending PlanOthers

• Choose which “others” items Mandy would like– Personal items– Entertainment– Music– Cheerleading– Miscellaneous– Create Your Own

• Draw an item and list the cost in the space provided

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 30 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Mandy ’s Spending Plan Summary• Gross income• Expenses

• Calculate the difference

• If the difference is a negative number, go back and adjust some of Mandy ’s expenses.

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 31 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Negative or Positive Difference?• If the number on RR is positive, adjust Mandy ’s

expenses.– Saving additional money for unexpected emergencies or

events may be a good idea.

• If the number on RR is negative, go back and make adjustments to Mandy ’s expenses.– Changes need to be made consistently throughout the

simulation.– Keep in mind Mandy ’s needs, wants, values and goals

when making changes.

• If the number on RR is zero, congratulations! You have balance Mandy ’s Spending Plan!

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© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – Slide 32 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

Arizona

Reflection Questions

• Once the difference equals zero….– Answer questions 18-22 throughout the

simulation– Answer questions 23-27 on page 18