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What will you do with your future?. Careers. Where do you see yourself in 5-10 years?. Create an outline/rough draft Things to think about: Which college/university/trade s chool Desired job/career Where you want to live? What kind of family do you want? How will you support this life?.

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where do you see yourself in 5 10 years
Where do you see yourself in 5-10 years?

Create an outline/rough draft

Things to think about:

  • Which college/university/trade school
  • Desired job/career
  • Where you want to live?
  • What kind of family do you want?
  • How will you support this life?
goal length
Goal Length
  • Short-term
    • 0-3 months
  • Intermediate-term
    • 3-12 months
  • Long-term
    • More than 1 year
job vs career
Job vs. Career
  • Are these the same?
  • What is a job?
    • Something that just gets you by for a while
    • Ex. Part time @ McDonald’s, Wal-mart, Mall
  • What is a career?
    • A chosen occupation with room for advancement
    • Ex. Policeman, architect, accountant, manager
what are skills
What Are Skills?
  • Gifted or Learned?
  • What kind of skills can a person have?
    • Sports – Michael Jordan
    • Computer – Bill Gates
    • Drawing – Walter Disney
    • Comedian – Chris Rock
  • What kind of skills are required today?
skills
skills
  • Analytical
  • Communication
  • Computer
  • Detail-Oriented
  • Flexiblity/Adaptability
  • Honesty/Integrity
  • Interpersonal
  • Leadership
  • Motivation/Initiative
  • Organizational
  • Self-confidence
  • Strong work ethic
  • Teamwork

Which ones do you have?

skills1
Skills
  • How do you know what skills are needed?
  • 1st – decided what you want to do for your career
  • 2nd – research what is required for training/school
  • 3rd – work toward & obtain required skills
training schooling time
Training/Schooling – Time
  • Trade School
    • Cosmetology School (usually < 2 yrs)
  • Community College
    • 2 yrs for Associates Degree
  • Public & Private University
    • 4 yrs for Bachelors Degree
  • Post Bachelor’s – both require a Bachelors
    • Masters (2 yrs) / Doctorate (2 yrs)
training schooling cost
Training/Schooling – Cost
  • Trade School
    • About $2,000 total
  • Community College
    • About $2,000 per semester
  • Public University
    • Ranges from $3,000 - $8,000 per semester
  • Private University
    • Ranges $15,000 - $50,000 per semester
applying for a job
Applying for a job
  • Use proper language and speech
  • Update your résumé
  • Call and be persistent. Don’t give up.
before the interview
Before the Interview
  • 1. Research the organization.
  • 2. Practice your interviewing skills.
  • 3. Prepare questions that you plan to ask.
  • 4. Prepare proper dress and grooming.
  • 5. Plan to arrive early at the interview.
during the interview
During the interview
  • 1. Relax. Be yourself.
  • 2. Answer questions completely and calmly.
  • 3. Ask questions to help you better know the organization.
  • 4. Ask when you might hear from the organization.
after the interview
After the interview
  • 1. Write down notes on how you can improve for your next interview.
  • 2. Promptly send a thank-you letter to the person with whom you interviewed to express your appreciation for the opportunity to meet with them.
possible interview questions
Possible Interview Questions

1. What activities have helped you expand your interests, abilities, and knowledge?

2. In what types of situations have you done your best work?

3. Describe people who motivated you the most.

4. Describe someone with whom you had difficulty working with.

5. What are your major strengths?

6. What are your weaknesses? What have you done to overcome your weaknesses?

7. What do you know about our organization?

8. Who is someone you admire? Why do you admire that person?

fringe benefits
Fringe Benefits

A payment from an employer other than wages/money

  • Health, dental, and eye care insurance
  • Life insurance/disability insurance
  • Flexible spending account
  • Health savings account
  • Tax-deferred retirement plan
  • Paid vacation
  • Paid holidays
  • Parental leave
  • Stock purchase plan
  • Employee assistance plans
  • Employee fitness programs
  • Employee discounts
  • Tuition assistance or reimbursement
needs v wants
Needs V. Wants
  • Need?
    • Must have to survive
  • Want?
    • Extras in life that make it fun & interesting
    • Need – shoes Want – Jordan’s
decisions influences
Decisions & Influences
  • Values
  • Peers
  • Habits
  • Feelings (love, anger, frustration, rejection)
  • Family
  • Risks and consequences
  • Age
1 smart goals
1. SMART Goals
  • Specific
  • Measurable
  • Attainable
  • Realistic
  • Time Bound
1 set smart goals
1. Set SMART Goals
  • Specific
    • Where or what?
  • Measurable
    • How much?
  • Attainable
    • Can I achieve this?
  • Realistic
    • Within my means?
  • Time Bound
    • How long?
  • Wants vs. Needs
    • Do you need it?
    • Do you want it?
  • Values
    • What do you believe in?
  • Goals
    • Clear, consice
2 analyze information
2. Analyze Information
  • Where do you get your money from?
    • Job/parents/government?
  • Where is your money going?
    • Keep a record of where you are spending your money
assignment spending log
Assignment: Spending Log
  • Keep track of how much money you are getting and spending this week.

Keep track each day in your notebook.

or

Make a foldable that you can keep in your wallet and update every time you purchase something.

3 create a plan
3. Create a Plan
  • Identify your goal
    • What do you need/want?
        • Our Example: Shoes
  • Establish your criteria
    • What kind? When? Where?
        • Our Example: Athletic, Casual, Dressy / JCPenny, Kohl’s, Finish Line / Prices
3 create a plan1
3. Create a Plan
  • Examine your options
    • What are all the options?
        • Our Example: Athletic – Nike’s, Adidas, Jordan’s, Reebok
        • Our Example: Nike v. Puma v. Pumps
  • Weigh the pros and cons
    • Do the bad outweigh the good?
        • Our Example: Price / Quality / Need/Want
3 create a plan2
3. Create a Plan
  • Make your decision
    • Pick the one that’s best for you.
        • Our Example: Which ever one has the most pros and suits your needs
  • Evaluate results
    • Was it a good choice? Why or why not?
4 implement the plan
4. Implement the Plan
  • Be a Responsible Spender
    • It takes discipline!
    • Don’t spend more than you have
  • Stick to your Plan
    • Write your goals out so you can see them
    • Tell someone else
    • Review your plan regularly
5 monitor modify the plan
5. Monitor & Modify the Plan
  • A plan is NOT written in STONE
    • Your goals will change
    • Unexpected obstacles
    • Resources may change
    • Receive unexpected money
  • Modify whenever life changes
let s try it
Let’s Try it
  • Tony is starting basketball in two months and needs to buy new shoes. He is expecting to spend $100. How much will he need to save per month to reach his goal?
    • What is the length of the goal?
    • How much per month?
on your own
On Your Own
  • Jill just lost her phone and needs to buy a new one. She wants to get it by next Friday and she knows it will cost $50 for the phone she wants. How much will Jill need to save per day to reach her goal?
percentage review
Percentage Review

Fact: 34% = 34.00%

  • Move decimal two places to the left when changing percent to decimal

Fact: 126% = 1.26

  • Move decimal two places to the right when changing decimal to percent

Fact: .067 = 6.7%

essential question
Essential Question
  • How does a budget help you reach your goals?
goals should be
Goals SHOULD be…
  • Specific
  • Measurable
  • Attainable
  • Realistic
  • Timebound
budget
Budget
  • What is a budget?
    • PLAN for your money
  • Income – expenses = net worth (positive or negative)
why have a budget
Why have a Budget?
  • To determine how much $ you have to spend
  • To decide how you want to spend you $
  • To determine how to spend $ in the future
  • To learn to live on less than available income
  • To stay out of financial trouble
what does a budget do
What does a budget do?
  • Puts you in control of your $$
  • Helps you create a spending visual
  • Helps you prevent impulse spending
  • Helps you decide what you can & cannot afford
  • Keeps track of how you spend your $$
  • Helps you create a savings plan
essential questions
Essential Questions
  • What is net pay and why is it used when budgeting?
  • What are the three steps to calculate Net Pay?
paycheck vocabulary
Paycheck Vocabulary
  • Hourly Rate
    • Amount you get paid per hour
  • Gross Pay
    • Total amount you are paid before taxes
  • Net Pay
    • Total amount you are paid after taxes
  • Tax Rate
    • Percentage taken out for taxes
what is a w 4 form
What is a W-4 form?
  • A form that tells the employer the correct amount of tax to withhold from an employee's paycheck.
  • Employee fills out
what is a w 2 form
What is a W-2 form?
  • A form that reports an employee's annual wages and the amount of taxes withheld from his or her paycheck.
  • Employer fills out
part 1 income
Part 1 – Income
  • Money you receive
    • Job/parents/government
  • Paycheck
    • Taxes taken out
types of taxes
Types of Taxes
  • Federal Income Tax
  • State Income Tax
  • Social Security Tax
  • Medicare Tax
calculating net pay
Calculating Net Pay
  • Total Hrs Worked * Hourly Rate = Gross Pay
  • Gross Pay * Tax Rate = $ of Taxes Taken Out
  • Gross Pay - $ of Taxes Taken Out = Net Pay
let s try it together
Let’s Try It Together
  • $7.50 * 25 hours = $187.50
  • $187.50 * .25 = $46.88
  • $187.50 - $46.88 = $140.62

Net Pay = $140.62

  • Sarah earns $7.50 / hour and works 25 hours per week. About 25% of her pay is deducted for taxes.
  • What is Sarah’s Net Pay?
what if
What if?
  • How would you calculate net pay for someone that gets a yearly salary?
  • If John gets paid $25,000 salary, 19% is taken out for taxes, and he gets a check twice a month, how much is his net pay?
let s try it1
Let’s Try It
  • Katie works part time at Department Store ABC and is paid $9.65 an hour plus commission on everything she sells.  This month her commission was $794. She is taxed the same on her commission as on her regular hourly pay.  Her husband works at XYZ Factory is paid a salary (the same amount every month).  Clark’s salary is $49,000 a year.  Katie works 36 hours a week on average at Department Store ABC. 

(Tax Rate = 22%)

let s try it2
Let’s Try It
  • They own a house and pay a monthly mortgage payment of $1850, this includes house insurance.  They pay $65-$75 for utilities (water, trash, and electric).  They go out on the town to movies, dinner, or other entertainment and spend between $35 and $50 a week.  They only pay for cell phones and spend $75 a month for their entire smart phone bill. They have to share one car.  Their car payment is $310 a month.  Their insurance is $475 every six months.
essential questions1
Essential Questions
  • What are different types of expenses and how do they differ?
part 2 expenses
Part 2 – Expenses
  • Something you spend money on (needs & wants)
  • #1 Expense = PYF (Pay Yourself First)
    • Saving money for yourself
    • Builds good saving habit
    • Can be done automatically
types
Types

Expense Types

  • Essential
    • Must have
  • Non-Essential
    • Not necessary
  • Fixed
    • Same amount on every bill
  • Variable
    • Changes on every bill
  • Periodic
    • Not paid every month
let s try it3
Let’s Try It

What type(s) of an expense this is?

Fixed Variable Periodic

Essential Non-essential

Phone

Rent/Mortgage

Cable

Car Insurance

Magazine

Subscription

going farther
Going Farther…
  • Categorize each expense that you had last week into Essential and Non-essential
  • Calculate your total expenses by category.
essential question1
Essential Question
  • How do you set up and create a budget? What steps do you take?
let s try it4
Let’s Try It
  • Sarah owes $230 a month on her used car. She is responsible for her phone ($35-45), gas ($45-60), and car insurance ($65) which are all monthly bills.
  • What expenses does Sarah have?
  • What are Sarah’s Total Expenses?
  • How much money does Sarah have left over to save for her goals?
draw it
Draw It
  • Draw a picture of different things that would represent each type of expense. Label each picture to represent the expense.
creating a budget
Creating a Budget
  • Decide Length of Time
    • Week, two weeks, month
  • Record Income
    • Must be for length of time designated above
  • Categorize Expenses
    • Fixed, variable, periodic, essential, non-essential
  • Subtract Income and Expenses
slide58

#1

#2

  • Time
  • Income
  • Categorize Expenses
  • Subtract Income & Expenses
    • $575 - $575 = $0 left over

#4

#3

#3

#4

essential questions2
Essential Questions
  • In what ways could the information found in a budget be visualized?
  • How would visualizing a budget be beneficial?
visual representation of your data
Visual Representation of your Data

Line Graph

Pie Chart

Bar Graph

Column Graph

how to create a pie chart for your budget
How To Create A Pie Chart For Your Budget

A Pie Chart Always = 100%

Jessica’s Expenses = 100% = $575

How do you know what the expense percentage is?

x

100%

$100

$575

Set up a ratio:

=

essential question2
Essential Question

Assess the importance of savings accounts, certificate ofdeposits, and bonds.

money doesn t grow on trees
Money doesn’t grow on trees
  • It takes money to make money!
terms you ll see hear
Terms You’ll See & Hear
  • Save
  • Invest
  • Principal
  • Interest
  • Interest Rate
  • Compound Interest
  • Annual
  • Quarterly
  • Rate of Return
  • Diversification
  • Stock
  • Simple Interest
saving investing
Saving ≠ Investing
  • Saving is for meeting shorter-term goals
  • Investing is for meeting longer-term goals.
  • Why are saving & investing important?
    • Makes you less tempted to spend it
    • Doesn’t burn a hole in your pocket
    • Makes your money grow - Free Money!
essential question3
Essential Question

Draw conclusions on how saving and investing differ from each other.

methods of saving
Methods of Saving
  • Certificate of Deposit
  • Savings account that accrues interest
  • Individual Retirement Account
  • Pension plan
  • Education savings plans
methods of investing
Methods of Investing
  • Stocks and bonds
  • Mutual Funds
  • Real Estate
  • Annuities
  • Collectibles & commodities
time value of money
Time Value of Money
  • The relationship among time, money, and rate of interest.
  • A dollar is not always worth a dollar
    • Sometimes more, sometimes less
  • Inflation
    • A rise in the cost of goods and services over time.
    • Decreases the spending power of each dollar you have.
time lengths
Time Lengths

= once a year

= twice a year

= four times a year

= once a month

= every two months/twice a month

= every two weeks/twice a week

= every day

  • Annual
  • Bi-annual
  • Quarterly
  • Monthly
  • Bi-monthly
  • Bi-weekly
  • Daily
what is interest
What is Interest?
  • Brainpop Video
  • Earned Interest
    • The payment you receive for allowing a financial institution/corporation to use your money
  • Simple Interest is interest paid on principal only
  • Compound Interest is interest paid on principal and on interest
calculating interest
Calculating Interest
  • Simple Interest = Principal × interest rate × number of times interest is calculated
  • Example:
    • P = $50 i = 2.5% T = annually for 1 yr
    • Interest = $1.25
let s try it5
Let’s Try It

Calculate Simple Interest - Annually

1. P = $126 i = 9% T = 10 year

$126 * .09 * 10 = $113.40

2. P = $892 i = 6% T = 7 year

$892 *.06 * 7 = $374.64

3. P = $537 i = 4.67% T = 15 year

$537 * .0467 * 15 = $376.17

essential question4
Essential Question

Draw conclusions on how you can earn more money.

compound interest
Compound Interest
  • Earning interest on top of interest

A = P (1 + i)n

  • A = Amount in account
  • P = Principal
  • i = interest rate
  • n = number of times interest is calculated
let s try it a p 1 i n
Let’s Try It A=P(1+i)n
  • P=$1000 i=3.4% compounded quarterly for 5yrs
  • P=$397 i=2.8% compounded bi-annually for 10 yrs
  • P=$1986 i=0.1% compounded daily for 3 yrs
  • P=$3500 i=1.7% compounded monthly for 2 yrs
homework
Homework

Simple Interest=P x R x T

A=P(1+i)n

  • P=$1800 i=8.4% compounded annually for 15yrs
  • P=$895 i=4.5% compounded bi-annually for 5 yrs
  • P=$1575 i=0.1% compounded daily for 3 yrs
  • P=$270 i=2.5% compounded monthly for 10 yrs
more money
More MONEY!!!
  • More money saved/invested more money
  • Higher interest rates more money
  • More time (sooner) invested more money
essential question5
Essential Question

Draw conclusions on why different investment options have different levels of risk.

review
Review

A=P(1+i)n

  • P=$1800 i=8.4% compounded annually for 15yrs
  • P=$895 i=4.5% compounded bi-annually for 5 yrs
  • P=$1575 i=0.1% compounded daily for 3 yrs
  • P=$270 i=2.5% compounded monthly for 10 yrs
slide85
Risk
  • Low risk – conservative
    • Savings account
  • High risk – aggressive
    • Stock market
  • Returns:
    • Dividends – interest
    • Capital Gains – growth in a stock
    • Capital Loss – reduction in a stock
rule of 72 double your
Rule of 72 – Double your $$$
  • If you have $200 and find an account that offers 6% interest, how long will it take for your money to double?
  • 72 ÷ 6% = 12 years
  • What if you could earn 9% interest?
  • 72 ÷ 9% = 8 years
  • What if you want to double your money in 4 years?
  • 72 ÷ 4 years = 18% interest
essential question6
Essential Question
  • In what ways does liquidity relate to the rate of return?
  • Determine the importance of liquidity when investing.
liquidity
Liquidity
  • What do you think of when you see the term LIQUIDITY?
    • Not talking about a wet substance (science)
    • Not talking about something you can drink
  • Ability to convert assets (valuables) into cash/money.
income investment options liquid
Income Investment Options - Liquid
  • Savings Accounts
  • U.S. Savings Bonds
  • Certificates of Deposit (CDs)
  • Money Market Deposit Accounts
  • Money Market Mutual Funds
  • Corporate/Government Bonds
growth investment options not very liquid
Growth Investment Options – Not very Liquid
  • Stocks
  • Real Estate
  • Collectibles
  • Mutual Funds
diversification
Diversification
  • Don’t put your eggs all in one basket!
  • Diversification:
    • Spreading your money out and putting it in several different types of accounts
    • Reduces investment risk and impactthat a drop in any one investment’s value can have on your overall investment portfolio
smart and steady
Smart and Steady
  • Learn good investment strategies now, when time is on your side
  • Dollar cost averaging
    • Practice of investing a fixed amount in the same investment at regular intervals, regardless of what the market is doing
    • Evens out the ups and downs of the market
essential question7
Essential Question

Compare and contrast how Banks and Credit Unions differ?

how does a bank cu work
How Does a Bank/CU Work?

Interest & withdrawals to customers

Deposits from customers

  • Loans to borrowers:
  • Businesses
  • Mortgages
  • Personal

Interest from borrowers

Fees for services

  • Bank’s costs of doing business:
  • Salaries
  • Taxes
  • Other costs

Bank retains required reserves

financial services
Financial Services
  • Offered by both Credit Unions & Banks
    • Checking & Savings Accts / Online Banking
    • CDs / IRAs / Savings Bonds
    • Credit Cards / Debit Cards
    • Loans:
      • Auto, Boat, RV, Student, Mortgage, Home Equity
    • Small Business / Investments
    • Traveler’s Checks / Wire Transfers
financial institutions
Financial Institutions

Banks

Credit Unions

  • For profit
  • Owned by stockholders
  • Offer services to anyone
  • Profits benefit small group of stockholders
  • $250,000 insured by Federal Deposit Insurance Corporation (FDIC)
  • Not-for-profit
  • Owned by members/customers
  • Offer services to members
  • Profits return to members (lower fees, higher interest, etc.)
  • $250,000 insured by National Credit Union Savings Insurance Fund (NCUSIF)
how do you start
How Do You Start?
  • 1st – Open a savings account
    • Build good habits by making regular deposits
  • 2nd – Open a checking account
    • Keep track of all deposit and spending amounts
      • Write down EVERYTHING in a checkbook ledger
    • Debit card (check card) / Checks
bank on this opening an account questions
Bank on This - Opening an Account Questions
  • How much do people spend on money orders/check cashing fees per year?
  • What are four ways to get money into your account?
  • Why would a bank hold a deposited check?
  • What three ways can you access your money?
  • When does money come out of your account when you use a debit card?
bank on this going deeper
Bank on This – Going Deeper
  • The video said that it is important to keep track of how much money you spend. Why?
  • How would you keep track of how you spend your money everyday?
essential question8
Essential Question

How do the procedures used when completing a deposit slip compare with writing a check?

deposit slip step by step

6

7

5

4

3

2

1

Deposit Slip Step - By - Step

x

Today’s date goes here

1

2

5

0

9

3

7

5

2

5

Print Your Name Here

Print Your Address Here

4

5

0

0

3

Sign Your Name Here

7

5

0

0

3

3

3

3

3

3

4

3

2

5

3

4

Click the numbers

deposit slip practice
Deposit Slip Practice
  • Justin got paid $167.95 this Thursday from his job. He wants to keep $50 out for personal spending, and then put the rest of it into his checking account.
  • Checking account #456789321
deposit practice
Deposit Practice

If you wanted to deposit $100 into your savings account, what would the deposit slip look like when you filled it out?

Account # 10123456678

x

1

6

7

9

5

Today’s date

Justin LastName

Your Address Here

Justin LastName

0

0

0

5

1

2

9

3

1

1

7

9

5

4

5

6

-

7

8

Exercise 5-C, pg 62

deposit slip practice1
Deposit Slip Practice
  • Raven got paid $150 in tips (cash) and $206.84 this Thursday from her job. She wants to keep $70 out for personal spending, and then put the rest of it into her checking account.
  • Checking account #357951864

Write out on your blank deposit slip

deposit slip practice2
Deposit Slip Practice

Write out on your blank deposit slips (two)

Fred got paid $235.76 this Thursday from his job. He wants to deposit 10% of it into his savings account & then put the rest of it into his checking account.

Savings account #134679852

Checking account #147896325

complete the check
Complete the Check

Ron wrote a check of $75 to Mr. John Reese for working in Ron’s yard on September 12th.

check practice
Check Practice
  • Wrote check #1001 for a month of utilities to JEA for $125.87 on January 10th, 2012
  • Wrote check #1002 to Jack Smith’s Grocery for $187.50 on January 12th, 2012
  • Wrote check #1003 to AT&T for $50 to pay your phone bill on January 15th, 2012

Write out on your blank checks

essential question9
Essential Question

Why is it important to keep a daily record of your spending when you are using a bank account?

bank on this debit cards preliminary questions to video
Bank on This – Debit CardsPreliminary Questions to Video
  • What do ATM and Debit cards allow you to do?
  • Can you use a debit card as credit and/or debit when you go to a store?
  • When you use your Debit card at a store, can you get cash back?
  • What should you do after every time you use money out of your account?
  • Why is it important to keep a record of all your transactions?
debit card
Debit Card
  • Directly connected to your Checking Acct
    • When you purchase something, the money comes out of your checking account!
  • Different from a credit card
    • Credit card is a loan and must be paid back to the lender
    • You don’t get a bill in the mail a month later because the money already came out of your account
overdrawing your account
Overdrawing Your Account
  • What happens if you do not have money in your account and you write a check or use your debit card anyway?
    • “Bounce” your check
      • Get a Returned Check Fee from your bank
      • Get a fee from the store you wrote it to
      • Can affect your credit score if it happens often
bank on this overdraft fees
Bank on This – Overdraft Fees
  • What is an overdraft fee?
  • What should you know at all times before you make a purchase?Why?
  • When can you enroll in overdraft protection?
  • What services does the bank offer to help prevent you from going to a negative balance?
bank on this overdraft fees2
Bank on This – Overdraft Fees
  • What happens if you don’t have overdraft protection and you spend more than you have?
  • What happens if your account is negative for consecutive days at a time?
essential question10
Essential Question

Why is it important to keep a record of your spending when you are using a bank account?

How often should that information be recorded?

checkbook register
Checkbook Register
  • What is it? – A tool to help you successfully manage your money
  • YOU are the ONLY ONE RESPONSIBLE for tracking your purchases!!!
  • Use to record all transactions (checks, deposits, & debit cards)
  • Let’s you know how much money you have left in your account – balance
key questions
Key Questions
  • What types of transactions should you keep a record of?
  • Why should you keep a record of your deposits and purchases?
key question why
Key Question – Why?
  • It is YOUR responsibility
    • No one else will do it for you
  • If the bank makes a mistake, how will you prove it if you don’t have anything to compare it to?
  • Know the balance of your account at all times
register step by step
Register Step By Step

For each transaction:

  • Enter the DATE
  • Enter the DESCRIPTION
  • Enter the deposit or payment AMOUNT
  • Enter the BALANCE left afterwards
  • CHECKS ONLY – enter the check #
register example
Register Example

Subtract (-)

Add (+)

Balance

Date

Description

Check #

Deposit

1/11

Deposit to Checking

200 00

200 00

200 00

Auto

1/11

Charge for Personalized Checks

20 00

20 00

WD

180 00

23 11

100

1/15

Fine Foods

23 11

Groceries

156 89

putting into practice
Putting Into Practice
  • Jane’s Bank Account
    • Read the scenario/problem
    • Use transactions for March to complete the checkbook register
    • Complete first few as a class
essential question11
Essential Question
  • How do different automated systems compare as far as convenience?
automated services
Automated Services
  • Online Banking
    • Available 24/7
      • Cash withdrawals, deposits, balances, statements
    • How do you know if the website is safe?
      • https:// & Lock symbol
  • Telephone Banking
    • Allows you to make transfers, hear last few transactions, etc.
automated services1
Automated Services
  • ATM - Automated Teller Machine
    • Services
      • Cash withdrawals, deposits, transfers, statements, balances
  • Direct Deposit – Electronic Funds Transfer
    • money/wages are automatically put into your checking/savings account
    • Check is only a copy
automated services2
Automated Services
  • Text Messaging
    • Sends you alerts or messages about your account

Why Automated Services?

  • Offer:
    • Convenience – access your money anytime
    • Personal Safety – not a lot of cash in pocket
    • Knowledge – track your balance on a daily basis
    • Time Savings – direct deposit & paying bills online
essential question12
Essential Question

How does what you do with your

money affect your credit score?

terms of credit
Terms of Credit
  • Annual Percentage Rate
  • Annual Fee
  • Finance Charge
  • Late Fee
  • Origination Fee (home loans)
  • Over the Limit Fee
  • Universal Default Clause

QUIETLY:

Use a dictionary/book to find the definitions of these vocabulary terms

Do with a partner…

one pair per dictionary/book

other terms
Other Terms
  • Credit Limit
    • Maximum amount of loan
  • Loan Term
    • Length of time you have to pay off loan
  • Grace Period
    • Length of time before interest starts
stats
Stats
  • Nearly 33% of teens owe money to either a person or company, with an average debt of $230.
  • About 26% of teens age 16-18 already have more than $1,000 in debt.
stats1
Stats
  • 30% of teens say they understand how credit card interest and fees work.
  • 36% of teens say they know how to establish good credit.
what is credit
What is Credit?
  • Someone is willing to loan you money (principal) which you promise to repay with interest
  • ↑ interest rate, ↑ amount you pay
  • Allows you to purchase things that you might not afford if paid for all at once.
essential question13
Essential Question
  • Explain factors that affect creditworthiness.
  • What causes a credit score to rise and fall?
4 c s of credit
4 C’s of Credit
  • Character
    • Are you trustworthy?
  • Collateral
    • Asset lenders can take if default on loan
  • Capital
    • Owning personal items of value
  • Capacity
    • Ability to repay a loan
types of credit ranked from best to worst when trying to build credit score
Types of Credit – ranked from best to worst when trying to build credit score
  • Mortgage
  • Student Loan
  • Installment Loan
  • Major Credit Card
  • Store Credit Card
take control of your credit score
‘Take Control of Your Credit Score’

Answer in Complete Sentences!

  • How is a credit score calculated?
  • What is considered a good score?
  • What actions impact a credit score?
  • Why does having a good score matter?
  • Why would a bank or cell phone company care about your credit?
  • In what ways does a credit score impact your life?
essential question14
Essential Question

What causes a credit score to rise and fall and how can you personally control your score?

credit score
Credit Score
  • What is credit score?
    • A number that reflects your creditworthiness
  • Who calculates your score?
    • Credit Agencies
      • TransUnion Equifax Experian
    • Each agency gives you a score and then they average the three scores
  • Changes over time
  • Ranges from 300(bad)-850(good)
building good credit
Building GOOD Credit
  • Pay bills ON TIME!!!
  • Make additional savings deposits
  • Be choosy with credit cards & loans
  • Pay off balance each month
  • Keep balance low
hurting your credit
Hurting your Credit
  • Late payments
  • Bouncing checks
  • Owning a lot of credit cards/loan
  • Having HIGH balances
  • Changing credit cards frequently

Assignment: Complete Credit Crisis Scenarios

checking your credit
Checking your Credit
  • How often should you check your credit score?
    • At LEAST once a year
    • Possible to check it up to three times per year for free
    • Every time afterwards will cost you money
video analysis
Video Analysis
  • While watching the following advertisements, think about how each of these is different.
  • Listen to the speaker at the end of the videos and compare what each one says.
credit cards good or bad
Credit Cards: Good or Bad???

Negatives

Positives

  • Easy to spend more money that you have
  • Items cost more than their original price
  • Hurt Credit Score
  • Convenience
  • Emergencies
  • Build Credit Score
  • Bonuses
  • Special Offers
what do you spend on what
What do you spend on what?
  • How do you know how much you should be spending on living expenses or saving or paying debt?
  • ANSWER: 70-20-10 RULE
  • 70% of your total net income should used on living expenses, 20% on saving, and 10% on paying off debt.
70 20 10 rule
70-20-10 Rule
  • If we spend 70% of our income on living expenses and we spend $40 a month on debt, what is our total income and how much do we save?
  • If we spend $1590 on living expenses a month, how much do we spend on debt?
how to tackle excessive debt
How to Tackle Excessive Debt
  • Pay extra $ to smallest balance
  • Pay extra $ to highest interest rate
  • Continue until all debt is repaid
  • Tell your creditors about your situation – they want to be paid and will usually try to help you out
monthly payments
Monthly Payments
  • How do you know what you can afford?
  • If you take out a loan for a new car, how do you know how much you can afford for a monthly payment?
how to calculate monthly pmts
How to Calculate Monthly Pmts

Step 1: Amount minus Down Payment equals Balance

Step 2: Balance times Interest Rate equals Interest Accrued Yearly

Step 3: Interest Accrued Yearly times Length of Loan equals Total Interest

Step 4: Total Interest plus Balance equals Total Paid to Lender

Step 5: Total Paid to Lender divided by Number of Months equals Monthly Payment

example
Example
  • Matt is preparing to buy a car. The total cost for the sale, including taxes and registration, is $12,000. He agreed to make a $1,500 down payment. He signed a three-year loan for the balance at 8% interest. How much will he pay per month to repay the loan over the next three years?

1) $12,000 - $1,500 = $10,500 2) $10,500 * .08 = $840

3) $840 * 3 = $2,520 4) $2,520 + $10,500 = $13,020

5) $13,020 / 36 = $361.67

example1
Example
  • Matt is preparing to buy a car. The total cost for the sale, including taxes and registration, is $15,000. He agreed to make a $3,500 down payment. He signed a five-year loan for the balance at 2% interest. How much will he pay per month to repay the loan over the next five years?
example2
Example
  • Matt is preparing to buy a house. The total cost for the sale, including taxes and registration, is $115,000. He agreed to make a $5,000 down payment. He signed a thirty-year loan for the balance at 4% interest. How much will he pay per month to repay the loan over the next thirty years?
example3
Example
  • Matt is preparing to buy a house. The total cost for the sale, including taxes and registration, is $115,000. He agreed to make a $5,000 down payment. He signed a thirty-year loan for the balance at 4% interest. How much will he pay per month to repay the loan over the next thirty years?
essential question15
Essential Question

Explain insurance, why it is important to have, and how to minimize your spending.

how to save money on insurance
How to Save Money on Insurance
  • Shop at least three places
    • compare rates and policies; ask about discounts and special rates.
  • Purchase more than one type of insurance from the same company; insure all cars with the same company.
  • ASK QUESTIONS!!!! IT’S OK NOT TO KNOW EVERYTHING…NO ONE DOES!
how to save money on insurance1
How to Save Money on Insurance
  • Choose the right car.
    • Sports cars, accessories (rims) cost more
  • Don’t smoke.
    • Considered a distraction – easier to get into an accident
  • Select a higher deductible.
    • The more you have to pay out of pocket
  • Reduce your daily driving.
    • The more you drive the likelier you are to have an accident
how to save money on insurance2
How to Save Money on Insurance
  • Carefully consider before adding riders or floaters.
    • More people on your insurance, the higher the risks
  • Have a good driving record & good grades (“B” or better).
    • No accidents, responsible behavior
  • Ask about discounts.
    • Good grades, safe driver, high credit score, referring a friend
  • Eliminate collision and comprehensive coverage if car is older.
    • If the car is not worth a lot, it’s cheaper to have the minimum coverage
how to save money on insurance3
How to Save Money on Insurance
  • Drive defensively.
    • People with no accidents pay less
  • Avoid theft and vandalism.
    • The more protection your vehicle has, the less you pay
  • Avoid filing excessive claims.
    • If you get in an accident with a friend and no one is hurt or the cars aren’t damaged…there is no need to report it
  • Keep tabs on credit.
    • The better your credit score, the more money you save