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Goal 9: Financial Planning, Budgeting, and Taxes . Objective: Make financial plans and balance a personal budget. PowerPoint Presentation
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Goal 9: Financial Planning, Budgeting, and Taxes . Objective: Make financial plans and balance a personal budget. I: How do plan for the future.

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Goal 9: Financial Planning, Budgeting, and Taxes.Objective: Make financial plans and balance a personal budget.

i how do plan for the future
I: How do plan for the future.
  • A: Make a budget: A Budget makes sure you have enough money to spend and save. A budget allows you to see where your money is being spent and it helps you make sure your income matches your expenses.
    • Income: The money you make from a job, or investments i.e dividends, bonuses, capital gains, interest on savings.
    • Expenses: Money paid out of your income.
      • Fixed expenses: tend to be the same each month. Ex. Rent or mortgage, phone plan, loan payment, car payment.
      • Variable expenses: tend to fluctuate each month. Ex. Clothing, groceries, entertainment, utilities.
budget credit activity
Budget / Credit Activity
  • Watch the video and take the quiz
  • Watch the video and take the quiz
ii credit cards
II: Credit Cards
  • A: Credit Cards: are forms of payment on credit. You buy something now and pay for it later. Managed properly, credit cards offer us convenience, a sense of security, and allow us to build a healthy credit history. Irresponsible credit card use can result in excessive debt and become a long-term liability. It can hinder your ability to get a loan for bigger purchases like a home or car.
  • B: Debit Cards: resemble a credit card but is linked to a checking or savings account. Funds are withdrawn immediately from the linked account with each purchase.
c credit card fees credit cards charge fees for their usage
C: Credit Card Fees: credit cards charge fees for their usage.
  • 1. Annual Fee:
  • 2. Annual Percentage Rate (APR):
  • 3. Finance Charge:
  • 4. Late Fee:
  • 5. Minimum Monthly Payment:
  • 6: Monthly Periodic Rate:
  • 7. Transaction Fee:
  • Visit the following website or do your own research to learn about these charges.

III: Taxes: Americans pay taxes every year to the Federal and State Government.Taxes are due on April 15thor the taxpayer will incur a penalty(fine by the IRS) unless they file for a later return.

  • A: Types of Taxes off income.
    • 1. Estate Tax: tax paid on inheritance from relative or individual.
    • 2. Income Tax: tax paid on salary from job.
    • 3. Capital Gains Tax: tax on gains (money made over and above the original selling price) made from selling stocks, land, or other investments.

B: Tax Credits: credits reduce the amount of tax you are liable for. Two types of tax credits- nonrefundable and refundable.

1. The Child and Dependent Care Credit is a nonrefundable tax credit based on expenses incurred for the car of a qualifying person.

2. The American Opportunity Credit is worth up to $2,500 per student for four years of post-secondary education. The credit is 40% refundable, up to $1000, so it can benefit those with no lax liability.

3. The Lifetime Learning Credit provides a maximum non-refundable tax credit of $2,000 per year for all students attending an eligible educational institution in your household. The Lifetime Learning Credit may be limited by your income and amount of tax.

things to think about
Things to think about
  • Students scholarships: If you have a qualified scholarship they are usually considered tax free as long as certain criteria and conditions are met. You are going to have to be a student at a qualified institution, be attending at least half time and you are going to have to use the scholarships for certain things. You must you them for books, fees, tuition, and any equipment that is need for school. The amounts of the scholarships are not for just what ever you want. You can find out more information on this subject on the government taxes website under the tax topic 421 which is benefits for tax education.
  • Student Loans:If you have qualified loans and other things, you should be able to claim them on your taxes as education credits. This cause you to get more money back on your taxes and the amounts are different for each year and for what kind of loan you have to report. Your financial aid administrator can help you with anything that you do not understand and how to report the loans. That also goes for anyone who prepares your taxes each year.

C: Refundable tax credits: A refundable tax credit is a tax credit that can reduce your tax liability below zero (0). Because it is possible to receive a refund from this type of credit, they’re referred to as refundable. Examples:

    • 1. The Earned Income Tax credit (EIC) is a refundable tax credit that reduces or eliminates the tax paid by low-income workers.

D: Tax Deductions: Tax deductions are expenses that reduce the amount of income subject to tax.

  • There are two types of deductions most taxpayers will qualify for:
    • Standard:
    • Itemized:
    • The Standard deduction:

The standard deduction is a fixed dollar amount based on your filing status. ( Married, single)


Itemized Deductions include:

    • Miscellaneous itemized deductions
    • Archer medical savings accounts (MSAs)
    • Casualty and theft losses
    • Charitable contributions
    • Deductible taxes
    • Health savings account (HSAs)
    • Interest expenses
    • Medical and dental expenses
    • Mortgage points
    • Employee business expenses
    • Student loan interest
iv filing taxes
IV: Filing Taxes
  • A: The 1040 is the form a taxpayer fills out to file for a tax refund or to pay taxes. If you have paid too much to the government you will receive a tax refund. If you have paid too little then you will owe money to the federal or state government.
  • B: Recommended records to file taxes:
  • Preparing your tax return will be easier if the records you need are organized and readily available.:
    • Proof of identification
    • Social Security numbers for you, your spouse, and dependents ( children, elderly parents you care for)
    • Wages and earnings statements: Form W-2, W-2G, 1099-R etc. These forms come from employers, investment firms, by mail or on-line.
    • Interest and dividends statements from banks, brokerages, etc.
    • A copy of last year’s tax return.
    • Bank routing and account numbers.
    • The amount you paid for childcare and the childcare provider’s tax identification number.
    • Receipts for charitable donations.

Go to the following website

  • Read Tax Return Filing Basics. Answer the following question and discuss with a partner.
    • 1. What are the two ways to file a tax return?
    • 2. What can you do if you cannot afford to hire someone to do it for you?
    • 3. What form of identification do you need to claim your spouse and children?
classroom homework activity
Classroom/Homework Activity
  • Look on page 550-551 of your textbook and make a budget using the dollar amount given.
  • Fill in a budget spreadsheet (create one in your notes)
  • Answer all 4 questions under Analyzing economics.
education and earning power
  • Assignment 2: Take a look on page 526 of your textbook.
  • Analyze the chart.
    • 1. What are the median incomes for men and women who are employed full time?
    • 2. What is the difference in median income between female high school graduates and females who attain bachelor’s degrees?
    • 3. Is the unemployment rate greater for worker’s with only a high school diploma? Why?
    • 4. What is underemployment? How is it different from unemployment?
  • A good budget is a useful tool. It can help you to:
    • Understand your actual financial situation
    • Fill your basic and material needs
    • Gradually achieve your objectives
    • Avoid debt
    • Save
    • All of the above
    • Answer: All of the above.