Money Management

ATTITUDES ABOUT MONEY

1. If I could spend $1,000, I would……….2. Rich People…………..3. Saving Money ………………….4. Credit should be used ………………….5. Budgeting is …………………………..6. The most important thing money does for me is………………….

Answer the questions below:

Financial Planning: A process individuals engage in to achieve long-term financial success while having a quality standard of daily living.

A spending plan is: A paper or electronic document used to record both planned and actual income through expenditures over a period of time.

A goal: the end result of something a person intends to acquire, achieve, do, reach or accomplish in the near of distant future.

A financial goal is: are specific objectives to be accomplished through financial planning.

WANT: Something unnecessary but desired.

NEED: Something thought to be an essential for life.

Value: A belief about what is desirable & important to an individualIncome:

Money earned

Fixed Expense: May have a fixed amount due each month.

Flexible Expenses: Can vary each month in the amount owed.

INCOMEPayment for providing resources in the market.

Wages – computed by X an hourly pay rate by

the number of hours worked.

Gross Earnings:Money earned before any deductions or taxes withheld.

$3,598 $539.70

$3,598 $223.08

$3,598 $52.17

XXXXXXXXXX

ABC Mart10 Washington St.Our Town, USA 12345

123-45-6789

John a. Dough123 Main St.Our Town, USA 12345

Form W-2

This form is used when reporting earnings for the entire year to the IRS.

W-4Federal Form- Determines what amount of income tax they should deduct from each employee’s paycheck based on that person’s situation.

Methods Of DepositsDirect Deposit – employee’s paycheck is deposited into an authorized account electronically. * MOST secure way to pay employees.

Paper paycheck – most common method of paying employees. * Must sign the back on designated line to cash or deposit.

Payroll Credit – payment electronically loaded on to plastic card.

Methods of DebitsChecks – Paper receipt of payment to the one owed.

Debit Card - A credit card that automatically debits your account upon placing a purchase.

Making a DEPOSIT

1. Write the date of the deposit in this field.2. If you are depositing currency (paper bills), write the total amount here.3. If you are depositing coins, write the total amount here.4. If you are depositing a check, write the bank transit number here, which is the top portion of the two-part number printed in the upper corner of the check.5. Write the amount of the check here.

teens – lesson 6 - slide 6-D

6. If you are depositing more checks than can be listed on the front, continue to list them on the back, and write the total amount of the checks on back here.7. Write the total amount you are depositing here.8. If you are making a deposit inside a bank with a teller and you want to receive cash back from your deposit, write the amount you want in this field.9. Write the total amount (less cash back) of your deposit in this field.

Writing a Check

teens – lesson 6 - slide 6-Fa

1. Date Enter the date on which you are writing the check.

2. Payee Enter the name of the person or the company you are going to give the check to.

3. Amount of check in numerals Enter the amount of the check, in numbers. Don’t leave any space between the pre-printed dollar symbol ($) and the numbers indicating the amount of the check; there should be no room for someone to add in extra numbers.

4. Amount of check in words Enter the amount of the check in words. Start writing at the far left side of the line. Follow the dollar amount by the word “and,” then write the amount of cents over the number 100. Draw a line from the end of the 100 to the end of the line.

Check Number

Date Description Deposit Amount

Withdraw Amount

611 4/22 Chili’s 24.32

ATM 4/30 CASH 40.00

5/1 AEP 500.00

Keeping a running BALANCE !

EXPENSES

Why Use Banks ?

Service – banks provide a place to keep money safe and accessible.

Manageable – provide you with information that keeps checks/balances on your finances. Investment – provide you with tools to increase your overall worth.Lender – provide you with funds to make large purchases with the intent to repay.

Savings accounts - keep your money safe and make it grow with interest.Checking accounts - allow for purchases and pay bills using paper checks instead of cash.Loans - help with purchase expensive items and then pay the money back over time, plus interest.Credit cards - can be a convenient way to buy things and pay for them over time, but the interest rate is frequently higher than with loans.Investment accounts - make their money grow over time, and be prepared for large expenses, for example college education.

Reading A Bank Statement

teens – lesson 6 - slide 6-H

SHOW ME THE MONEY:Reaching Your Goals:

What’s your goal?

Timeline in

reaching goal?

Total needed to

save ?

What will be your monthly savings?

What steps can you take to reach monthly goals?

What “wants” can you cut to

help with goal?

Budget Goals Actual Budget

Fixed Expenses

Savings $200 $0

Cell Phone $100 $150

Car Payment $100 $100

Variable Expenses

Gas $50 $80

Entertainment $50 $160

Clothes $60 $100

Total $560 $590

Net Income: $590

Managing A Budget

Borrow only what you can repay.

Read and understand the credit contract.

Pay debts promptly.

Notify creditor if you cannot meet payments.

Report lost or stolen credit cards promptly.

Never give your card number over the phone unless you initiated the call or are certain of the caller’s identity.

Borrowing/Credit Cards

Establish a steady work record.

Pay all bills promptly.

Open a checking account and don’t bounce checks.

Open a savings account and make regular deposits.

Apply for a local store credit card and make regular monthly payments.

Get a co-signer on a loan and pay back the loan as agreed.

Credit History

CREDIT CARDSTYPES OF CREDIT CARDS

1. Bank Carda. Visa, MasterCard

2. Store Carda. Macy’s, Chevron

3. Travel and entertainment card a. American Express

SHOPPING FOR CREDIT CARD1. Schedule of payment (monthly)2. APR (annual percentage rate)3. Annual Fee4. Late Fee (timeline)5. Credit Limit6. How widely is card accepted

PROTECTING YOURSELF1. Keep record credit card numbers2. Keep record of phone number to call if lost.3. Keep receipts of purchase until bill arrives.4. Limit giving card no. on telephone5. Report card lost or stolen immediately6. Shop on secure websites7. Destroy old credit cards

CREDIT CARD STATEMENT

SAVINGS• A little can add up!

• Save this each week … at % interest … in 10 years you’ll have• $7.00 5% $4,720• 14.00 5% $9,440• 21.00 5% $14,160• 28.00 5% $18,880• 35.00 5% $23,600

• You can buy … two fast food meals or one movie ticket (and a candy bar) or save $7.00 this week.

• You can buy … two small cheese pizzas or one large pepperoni pizza, delivered or one new CD or save $14.00 this week.

• What can you give up to save for your financial goals?

TYPES OF SAVINGS

Money Market Savings Certificates of Deposit (CD)Bonds Mutual FundsRetirement Investment StocksReal Estate College Fund

instrument maturity risk yield minimum balance

taxable?

Savings Account

Immediate None if insured Low $5 Yes

Certificate of Deposit

90 days or more None if insured Moderate Varies Yes

Bonds

Corporate 5–30 years Some Moderate $1,000 Yes

Municipal 1–20 years Some Moderate $5,000 No federal,some states

Stocks Immediate Low to high Low to high Varies Yes

U.S. Treasury

Bills 1 year or less None Moderate $10,000 Federal only

Notes 1–10 years None $1,000 Federal only

Bonds 10–30 years None $1,000 Federal only

Mutual Funds

Varies Low to high Moderate Varies Usually

Retirement Funds

When buyer is60 years old

Low Moderate Varies At maturity

Comparing Savings and Investment Plans

Be Smart with Your MONEY !