family economics & financial education 3.19.5.g 1 get ready to take charge of your finances life...

Family Economics & Financial Education 3.19.5.G1

Get ready to Take Charge of Your Finances

Life Of…..

Carlos Chavez“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...Carlos – 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 – Carlos Chavez

• Sneak peak into the life of Carlos and his family– Carlos– Nana (Martha)– Jorge– María – Adriana – Marco

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SnapshotCarlos' Income and Expenses

• Carlos' Income– Sunshine Inn

•$8.50/hour•10 hours a week

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SnapshotCarlos' Income and Expenses

• Carlos' Expenses– Extracurricular

Activities • Youth group ski

trip – $5.00 per month

• Track expenses– $2.50 per month

– Transportation• $100.00

– Saving• Family Support

– $40.00 per month

• College expenses– $50.00 per

month

– Lunch•$24.00per

month

– Others

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Spending Plan

• The goal is to create a spending plan that balances Carlos' expenses with his income.

• He cannot have more expenses than income.

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

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

affect decisions made when creating a spending plan

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SnapshotChavez Family Expenses

• Carlos' Expenses• Housing

– Monthly Payment– Utilities– Others – television,

internet and telephone• Transportation

– Vehicle for María– Monthly payment and

fuel– Bus pass for Jorge

• Insurance– Homeowners, disability,

life, auto, and health

• Food– Groceries– School lunches

• Savings and Debt– Savings of $125 per

month for retirement and future college expenses

– Monthly medical payments of $155.00

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Housing

• Monthly Payment– Housing

payment– Insurance– Property taxes– Repairs– Maintenance

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

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• Digital Cable

• Add Ons

• Telephone

• Cellular Phone

• Internet

Housing Others

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Transportation

• Monthly Payment– Car payment– Maintenance

• Fuel– An average is

listed– This cost may

increase/decrease depending on the cost of fuel

• Chavez Family– Pay for María's

monthly payment and fuel costs

• Bus Pass

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Others

• Running Supplies• Downhill Ski Supplies• Electronics• Video Games• Entertainment• Cellular Phone • Create Your Own

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Goal:To Create A Balance Spending Plan

• Make all choices for the Chavez family and Carlos

• Complete a Major Expenditures Summary for the Chavez family

• Complete a Spending Plan for Carlos• Answer reflection questions• Write a summary essay

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Quick Review

• Chavez Family– Carlos, Nana (Martha), Jorge, María, Adriana,

Marco• Create a Major Expenditures Summary

for the Chavez Family – Housing– Transportation

• Create a Spending Plan for Carlos– Extracurricular Activities – School Lunches– Savings– Others

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Snapshot Reflection

• Review Carlos' Snapshot on pages 2-4• Answer questions 1-5 on page 10

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Carlos' Paycheck

Personal Information

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

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Carlos' Paycheck

Pay Period

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

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Carlos' Paycheck

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

Gross Pay

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Carlos' Paycheck

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

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Carlos' Paycheck

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

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Carlos' Paycheck

Federal Insurance Contribution Act – includes Social Security and MedicareFICA

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Carlos' Paycheck

Net Pay

The amount of money remaining after all payroll withholdings have been removed from gross pay.

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Carlos' Paycheck

Totals of 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.

Year-to-Date

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Setting Education and Financial Goals

•Short Term – less than one year

•Long Term – more than one year

SMART Goal

SpecificState exactly what is to be

done.

MeasurableInclude how the goal can

be measured.

AttainableDetermine

steps to reach the goal.

RealisticDo not set the

goal for something unrealistic.

Time BoundState when the

goal will be met.

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Chavez’s Major ExpendituresHousing

• Choose a house and housing others for the Chavez family

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

– Family size– Lifestyle– Other family dynamics

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Chavez’s Major ExpendituresTransportation

• Choose a vehicle for María• Refer to the Snapshot on pages 2-4• Remember

– They need enough room in the vehicle for the family and supplies when they take trips together

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Chavez’s Major ExpendituresMajor Expenditures Summary

• Transfer numbers to complete the summary– Total housing cost– Total transportation cost– Insurance– Food– Savings and Debit

• Each month $125.00 is saved for retirement and future college expenses

• Each month $155.00 is paid to help a medical debt of $11,000

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Carlos' Spending PlanPayroll Withholdings

• Review Carlos' paycheck on page 11– State Withholding Tax– Federal Withholding Tax– FICA

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Carlos' Spending PlanSavings

• Review Carlos' Snapshot on pages 2-4– Identify his needs, wants, values

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

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Carlos' Spending PlanOthers

• Extracurricular Activities • School Lunches• Choose which “others” items Carlos would

like– Running Supplies– Downhill Ski Supplies– Electronics– Video Games– Entertainment– Create Your Own

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

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Carlos' Spending Plan Summary

• Gross Income• Expenses

• Calculate the Difference

• If the difference is a negative number, go back and adjust some of Carlos' expenses.

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Negative or Positive Difference?

• If the number on XX is positive, adjust Carlos' expenses.– Saving additional money for unexpected emergencies or

expenses may be a good idea.

• If the number on XX is negative, go back and make adjustments to Carlos' expenses.– Changes need to be made consistently throughout the

simulation.– Keep in mind Carlos' needs, wants, values and goals when

making changes.

• If the number on XX is zero, congratulations! You have balanced Carlos' Spending Plan!

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Reflection Questions

• Once the difference equals zero….– Answer questions 17-22 on pages 15 and

16– Answer questions 23-27 on page 18

family economics & financial education 3.19.5.g 1 get ready to take charge of your finances life...

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