introduction to income vs. expenses

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Introduction to Income vs. Expenses 7 th Grade Income vs. Expenses #1

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Introduction to Income vs. Expenses. 7 th Grade Income vs. Expenses #1. Pre-Test. What are the two keys to financial success? What is the average annual income for a high school dropout? For a family of four in Minneapolis, what is the average annual costs for their necessities?. - PowerPoint PPT Presentation

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Page 1: Introduction to Income vs. Expenses

Introduction to Income vs. Expenses

7th GradeIncome vs. Expenses #1

Page 2: Introduction to Income vs. Expenses

Pre-Test

1. What are the two keys to financial success?

2. What is the average annual income for a high school dropout?

3. For a family of four in Minneapolis, what is the average annual costs for their necessities?

Page 3: Introduction to Income vs. Expenses

Objectives • Learn the keys to financial success• Learn how education level affects annual

income• Understand the importance of strategic

budgeting• Compare income vs. expenses

Page 4: Introduction to Income vs. Expenses

Good Annual Income

• Education is the top determiner of your income• The average American changes careers five times• When you have a good education you• Become more marketable when changing careers• Have a better chance for promotion, which increases

your income• It is important you know income by education level

Page 5: Introduction to Income vs. Expenses

Income by Education Level Income by Education Level

Source: US Department of Labor: Labor Statistics Report, 2012

Page 6: Introduction to Income vs. Expenses

Strategic Budgeting

• Many people spend more money than they earn• A budget helps you live within your income• Financial problems are often a major factor in • High levels of stress• Marital and family problems • Disease and illness

• Budgeting• Income vs. Expenses

Page 7: Introduction to Income vs. Expenses

Avg. Expenses: Necessities

Source: Economic Policy Institute: Briefing Paper 2010

Page 8: Introduction to Income vs. Expenses

Income vs. Expenses

Page 9: Introduction to Income vs. Expenses

Income vs. Expenses

• The average costs for necessities are• $4,700 a month or $56,400 a year for a family of four in

Minneapolis • This includes expenses for

House and car payments, medical insurance, food Heating, air conditioning, electricity, water, child care

• This does not include expenses for Cable TV, restaurants, internet, sports activities Movie tickets, cell phones, music downloads, etc.

Page 10: Introduction to Income vs. Expenses

Income vs. Expenses

• What annual income does a family of four need in Minneapolis?– $56,400

Page 11: Introduction to Income vs. Expenses

Metro Area: Child Care

Source: Economic Policy Institute: Briefing Paper 2010

Page 12: Introduction to Income vs. Expenses

Child Care vs. Income

• What would be the annual cost for child care if a family has an infant and a pre-school age child?– $8,150 + $6,500 = $14,650

• If a high school graduate earns $30,000 a year, how much would they pay in taxes at a 20% rate? – $30,000 * .20 = $6,000

• What is the difference between the child care cost and high school graduate income after taxes?– $24,000 - $14,650 = $9,350

Page 13: Introduction to Income vs. Expenses

Child Care vs. Income

Page 14: Introduction to Income vs. Expenses

Pick a Partner

• What type of a family do you envision yourself having as an adult?

• What type of education do you plan on obtaining?

• How will your education level help you meet your financial needs?

Page 15: Introduction to Income vs. Expenses

Classroom Discussion

• What type of a family do you envision yourself having as an adult?

• What type of education do you plan on obtaining?

• How will your education level help you meet your financial needs?

Page 16: Introduction to Income vs. Expenses

Post-Test

1. What are the two keys to financial success?

2. What is the average annual income for a high school dropout?

3. For a family of four in Minneapolis, what are the average annual costs for their necessities?

Page 17: Introduction to Income vs. Expenses

Review 1. The two keys to financial success

Make a good annual incomeStrategic budgeting

2. What is the average annual income for a high school dropout? $19,300

3. For a family of four in Minneapolis, what are the average annual costs for their necessities?$56,400