managing personal finances. next generation science/common core standards addressed! ccss.ela...
TRANSCRIPT
• Managing Personal Finances
Next Generation Science/Common Core Standards Addressed!
• CCSS.ELA Literacy.RST.9‐10.8 Assess the extent to which the reasoning and evidence in a text support the author’s claim or a recommendation for solving a scientific or technical problem.
• CCSS.ELA Literacy. RST.11‐12.9 Synthesize information from a range of sources (e.g., texts, experiments, simulations) into a coherent understanding of a process, phenomenon, or concept, resolving conflicting information when possible
Bell Work! STUDENT LEARNING OBJECTIVES
• Conduct budgeting of personal finances.
• Develop financial goals.
• Understand how to use and balance a checking account.
• Compare characteristics of various types of investments.
Terms
• Bonds• Budget• Certificates of deposit• Checking account• Financial planning process• Goal
Terms Continued
• Insured savings account
•Mutual funds
•Overdrafts
• Stocks
•United States savings bonds
Interest Approach•How much money do you spend in a week?
•How do you decide what purchase?
Why is Financial Management important?
• Knowing financial standing
• Setting priorities and needs.
• Planning credit needs.
• Tax planning and reporting
Some disadvantages to personal financial
management.• Initial set-up takes time
• Regular updating required
Budget
• Formal written or unwritten plan
• Includes sources of income and expenses
How do I prepare a Budget
• To prepare a budget one needs to consider sources of income and items purchased.
• A budget categorizes the uses of cash as to whether they are a necessity or a luxury.
Six Steps in Financial Planning
• Gather personal and financial data.
• Establish financial goals and objectives.
• Analyze financial information to identify alternatives to achieve goals and objectives.
• Develop a financial plan.
• Implement the plan.
• Review the plan on a regular basis.
Checking Account
• A checking account is an account in which a user makes deposits and may write checks or use a debit card to be paid from the account.
Advantages of a Checking Account
• Reduces need to carry large quantities of cash.
• May be able to accrue interest while money is in the account.
• Safe way to pay by mail or online.
• Most all businesses accept checks or the use of a debit card.
• Most banks provide online services.
Disadvantages• A checking account may require monthly fees.
• Time is required to balance the checkbook
• There may be minimum balance requirements.
• Stolen or lost checks or debit card can result in loss of money from the account.
• Large charges are levied against overdrafts, when a check is written in an amount greater than the account balance.
• Avoid use of “Pin” numbers to avoid “Hacking”!
• Protect your password used for online banking.
Styles of checkbooks
• Duplicate check-carbon copy remains in the checkbook.
• Stub-information remains in the checkbook.
• Safety paper-a watermark that makes photocopying obvious.
• Desk set-large binder with three checks per page.
Balancing CheckbookNote: Using online services simplifies the
following practices.
• Mark deposits and checks that have cleared the bank.
• Add to the current balance those checks that are written but not cleared.
• Subtract any deposits made but not cleared.
• Subtract any service charges and add any interest.
• Compare the ending balances in the checkbook against the monthly statement.
What types of investments are available?
• Insured savings account
• Savings bonds
• Certificates of deposit
• Bonds
• Mutual funds
• Stocks
Insured Saving Account
• Available through banks, saving and loans associations, and other financial institutions.
• They are insured by a government agency.
• They are considered safe & convenient.
• All savings accounts are insured to a specified limit of $ 250,000,00 by the FDIC.
Certificates of Deposit
• CDs are savings certificates worth a specific amount of money, for a specific amount of time, with a set interest rate.
• Usually pays a higher interest rate than passbook savings accounts and are fairly convenient.
• A penalty is assessed if money is withdrawn prior to the “maturity” date.
US Savings Bonds
• Available through many financial institutions.
• Can be purchased through payroll deductions.
• Involve investing in the federal government by buying bonds with a set maturity date at a price below the face value of the bond.
Bonds
• Bonds are certificates of debt.
• Issued by corporations or government agencies. Bonds promise payments of interest on specific dates.
• Original investment is also paid back at maturity. ( investment plus interest)
• Bonds are long term investment.
Mutual Funds
• Investors pool their money.
• Professional money managers manage the pool of money for the individual investors. Interest is paid to the investor based on the amount invested.
• Quite often the investment is made by payroll deduction.
Stocks• Stocks represent a share of ownership in
a company.
• The value of the stock can increase or decrease based on performance of the company.
Review/Summary
• How would you conduct budgeting of personal finances?
• How are financial goals developed?
• How to use and balance a checking account.
• Compare characteristics of various types of investments.
The End!