©south-western, cengage learning part 2 on your own
TRANSCRIPT
©South-Western, Cengage Learning
PART 2
On Your Own
©South-Western, Cengage Learning
Family Financial Management: PART 2 Slide 2
Performance Outcomes
In Part 2 of this simulation, you will learn to:
1. Determine a single person’s net worth.
2. Plan a realistic budget for a single person.
3. Record a person’s daily financial activities in a record book or in a computer file.
4. Organize the receipts, forms, and other paperwork involved in financial activities.
Performance Outcomes are continued on the next slide.
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Family Financial Management: PART 2 Slide 3
Performance Outcomes
5. Maintain a checking account, including making deposits, writing checks, and balancing a checkbook register.
6. Use an automated teller machine (ATM) and a debit card.
7. Make smart purchasing decisions that fit within a person’s budget.
8. Evaluate a person’s financial activities at the end of each month.
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Family Financial Management: PART 2 Slide 4
Meet Tyra M. Burns
Tyra Burns is 24 years old. She lives alone in a rented
apartment. Tyra works full time as the
assistant manager of the Water Point Grille.
She earns $32,400 a year.
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Family Financial Management: PART 2 Slide 5
Figuring Out Net Worth
Assets—what you own Liabilities—what you owe Net Worth—the dollar value of what you own
minus the sum of your all your debts
Assets – Liabilities = Net Worth
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Family Financial Management: PART 2 Slide 6
Statement of Net Worth
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Family Financial Management: PART 2 Slide 7
Statement of Net Worth
List assets and their cash value.
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Family Financial Management: PART 2 Slide 8
Statement of Net Worth
Add the amounts and enter the sum.
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Family Financial Management: PART 2 Slide 9
Statement of Net Worth
List liabilities and their cash value.
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Family Financial Management: PART 2 Slide 10
Statement of Net Worth
Add the amounts and enter the sum.
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Family Financial Management: PART 2 Slide 11
Statement of Net Worth
Calculate net worth by subtracting total liabilities from total assets.
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Family Financial Management: PART 2 Slide 12
Statement of Net Worth
Add total liabilities and net worth.
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Family Financial Management: PART 2 Slide 13
Tyra's Assets
Checking account, $740.12 Savings account, $69.65 Savings bond, $200.00 Current value of her used car, $3,700.00 Value of her personal items, $1,200.00 Cash, $90.00
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Family Financial Management: PART 2 Slide 14
Tyra's Liabilities
Amount she owes her parents for her car, $1,400.00
October rent, $450.00 Tri-County Gas & Electric bill, $42.53 Maplewood Telephone Company bill, $35.95
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Family Financial Management: PART 2 Slide 15
Statement of Net Worthfor Tyra Burns
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Family Financial Management: PART 2 Slide 16
Budget Worksheet
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Family Financial Management: PART 2 Slide 17
Planning Tyra’s Budget
Monthly Income Monthly Expenses
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Family Financial Management: PART 2 Slide 18
Tyra’s Monthly Income
Gross pay – Deductions = Net Pay
Gross pay
Deductions
Net Pay
Year-to-dateThis period
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Family Financial Management: PART 2 Slide 19
Expense Categories
Savings/Debt Payoff Home Food/Sundries Personal
Transportation Entertainment Miscellaneous Health Care
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Family Financial Management: PART 2 Slide 20
Budget Worksheetfor Tyra Burns
Savings/Debt Payoff Transportation
HomeEntertainment
Food/Sundries
Personal Health Care
Total expenses should be the same as net pay.Miscellaneous
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Family Financial Management: PART 2 Slide 21
Recording Tyra’s Transactions
Use the Financial Record Book to record every transaction in one master record.
A transaction is any event that involves money coming in or going out.
To see how this works, you are going to record all of Tyra’s transactions for October.
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Family Financial Management: PART 2 Slide 22
Financial Record Book
Deposit column
Add the deposit to the amount in the Balance column.
The result is the current balance—the total amount in the account after the transaction.
Budget categories
Subtract the payment from the amount in the Balance column.
Again, the result is the current balance—the total amount in the account after the transaction.
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Family Financial Management: PART 2 Slide 23
Checkbook Register
Check Number or other notation
Date
Payment or debit
Fee
Deposit or credit
Balance
Description of transaction
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Family Financial Management: PART 2 Slide 24
Paycheck Endorsed for Deposit Only
Back of check
Endorsement areaEndorsement for deposit only
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Family Financial Management: PART 2 Slide 25
Filled-Out Deposit Ticket
Account holder’s name and address
Account number
DateAmount of checkto be deposited
Total amount to be deposited
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Family Financial Management: PART 2 Slide 26
Write a Check
Check number
Date
Amount using numerals
Signature
Account holder’s name and address
Account number
Purpose of the check
Amountin words
Payee
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Family Financial Management: PART 2 Slide 27
Parts of an Automated Teller Machine (ATM)
All ATM machines are similar.
They all have the eight parts shown here.
SpeakerCard
Reader Slot
Receipt Printer
Selection Buttons
Keypad Deposit Slot
Cash Dispenser
Display Screen
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Family Financial Management: PART 2 Slide 28
JUMPSTART
Standard: Develop a plan for spending and saving. It is never too early to develop a plan for spending
and saving. You can start planning by thinking about where
you get money and how you spend it.
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Family Financial Management: PART 2 Slide 29
Special Topic Readings on the Data CD
Special Topic 4: How a Budget Puts You in Control
Special Topic 5: Where Does All the Money Go?
Special Topic 6: Saving for Something Special