Chapter 3 Quiz TODAY

1. Chapter 3 Quiz TODAY

2. MTV True Life “I am a compulsive shopper” • http://www.mtv.com/videos/true-life-full-episode-im-a-compulsive-shopper-two-girls-deal-with-extreme-shopping-addictions/1590955/playlist.jhtml • How could budgeting have helped these ladies be in a better circumstance financially?

3. Journal: “Do you keep records? If so what are they for…pay check stubs, car insurance, receipts, savings account info, checking account, debit card, tags on clothing, etc.? Why do you keep these records?

4. Personal Finance Chapter 3 Money Management Strategy

5. Money Management is… Money management can help you… Plan and measure your financial progress Handle routine money matters, such as paying bills on time Determine how much money you have now and in the future Make effective decisions about how to save money • Planning how to get the most from your money • Helps you keep track of where you money goes • Helps you make wise financial decisions • Helps you reach your financial goals Organizing Financial Records

6. Places you can keep financial records • Home Files: file box or drawer used for savings account info, bank statements, paycheck stubs • Safe-Deposit Boxes: small secure storage you rent at a bank; used for birth certificates, jewelry, titles (house or car) etc. • Home Computers: good for certain financial records and used for a financial tool

7. Activity • Review pages 60-64 in your textbook • Get in groups of 3/4 • Get an envelope of different items listed on paper • Categorize the items into 3 groups • Orange= Home Files • Purple= Safe Deposit Box • Yellow= Home Computer • Place the items listed on the sheets of paper in the correct folders • Be prepared to discuss in class

8. Article: 3 Frugal Resolutions for 2009 Question: What are 3 important facts that you can take from this article? Chapter 3 Notes (cont)

9. Personal Financial Statements • Document that provides information about and individuals current financial position • Summary of income & spending • What you owe? (car payment, car insurance, cell phone bill) • What you make? • Personal balance sheet/net worth statements • Net worth: difference between amount you make/have and debts that you need to pay

10. Assets…in the green! • Assets: items of value such as cash, property, personal possessions, and/or investments • Wealth: an abundance of valuable material possessions • Liquid Assets: cash items that can be quickly converted into cash (checking account item) • Can also include real estate recorded at market value

11. Liabilities are debts you owe • (Car payment, money you owe your parents for spring break trip, cell phone bill for texting too much!) • Insolvency: financial state that occurs if liabilities are greater than assets • NET WORTH= Assets – Liabilities ( $3,200 = $4,000 - $800) Liabilities…in the red!

12. Income…making $$$ JOURNAL: Why do we need to know our cash flow? What do assets and liabilities have to do with your financial future? • Cash flow: the money that actually goes in and out of your wallet and bank accounts • Income: money that you receive from a job, allowance or interest earned on savings account • Take-home Pay: amount of income left after taxes and other deductions have been taken out • Discretionary Income: money left over after paying for essentials such as food, clothing, shelter, transportation etc. (you spend it at your own discretion) JOURNAL: Why do we need to know our cash flow? What do assets and liabilities have to do with your financial future?

13. What now… • Save your notes—we have one more day of notes next class • Get Personal Balance Sheet and Cash Flow Statement Review • Complete individually or with a partner • Be prepared to review your answers in class

14. Today's Activities • NEFE workbook pages 15-19 read and complete individually • NEFE pages 22-23 together • Journal Entry • Notes 15-20 • Chapter 3 packet • HW: Read Chapter 4

15. Journal • Do you currently use a budget? Do your parents use a budget? What are some advantages to using a budget? • EXTRA CREDIT: Track all your income, expenses and spending for 1 week. Record it on a neat sheet of notebook paper or type. Worth 20 points!

16. Budget • Plan for using money to meet wants and needs • Necessary for successful financial planning • Learn how to live within your income • Learn how to spend money wisely • Develop good money management skills • Reach financial goals!

17. Steps for Creating a Personal Budget • Set your Financial Goals • Estimate your Income • Budget for Unexpected Expenses • Emergency Fund (medical, unemployment) • 3-6 month living expenses • Budget for Fixed Expenses • Mortgage, car payment, insurance, school loans etc. • Budget for Variable Expenses • Heating & cooling, medical • Consumer Price Index (CPI): measure of changes in prices for purchased goods • Record What you Spend • Budget Variance: what you budget to spend vs. what you actually spend • Review Spending & Saving Patterns

18. Budget Successfully by… • Planning carefully • Making the budget practical • Allowing for some flexibility • Writing the budget down and putting in an easily accessible location

19. Pay yourself first Write yourself a check from your paycheck to immediate deposit into savings account Payroll Savings Set aside a fixed amount to go into savings directly from your paycheck Spending less to Save Spend less each day! E.g. not getting that morning coffee, renting a movie instead of going out to one Ways to Increase Savings!!!

20. Now what? • Print your notes….3 days worth, 3 journals—20 points!!! • Get a Chapter 3 packet from me • Ch 3 crossword puzzle • Money Management Strategy • Financial Pickles • Money Management Quiz • Review Financial Pickles together!