Personal Money Management Mr. Banks

SS8E3 Explain the principles of effective personal money management Explain that income is the starting point for personal financial management. Explain Describe the reasons for and the benefits of a household budget. Describe Describe the reasons for and the benefits of saving. Describe the uses of debt and associated risks. SS8E3 Explain the principles of effective personal money management

Words to know ___________ - an amount of money spent, as a whole or on a particular thing. __________ - the amount of money a person earns during a year. ___________- using money in hopes of gaining more in the future by lending to businesses in exchange for a share of profits. ___________ - setting aside of income for future use. ___________ - the amount a person purchases. ___________ - a plan for spending ___________ - a legal proceeding involving a person or business that is unable to repay outstanding debts. __________ - an amount of money loaned to a person that must be paid back along with additional interest. ___________- an amount of money borrowed by one party from another party. ___________ - an additional amount you pay to use borrowed money.

Words to know Expenditure - an amount of money spent, as a whole or on a particular thing. ___________ - the amount of money a person earns during a year. ___________- using money in hopes of gaining more in the future by lending to businesses in exchange for a share of profits. ___________ - setting aside of income for future use. ___________ - the amount a person purchases. ___________ - a plan for spending ___________ - a legal proceeding involving a person or business that is unable to repay outstanding debts. __________ - an amount of money loaned to a person that must be paid back along with additional interest. ___________- an amount of money borrowed by one party from another party. ___________ - an additional amount you pay to use borrowed money.

Words to know Expenditure - an amount of money spent, as a whole or on a particular thing. Income - the amount of money a person earns during a year. ___________- using money in hopes of gaining more in the future by lending to businesses in exchange for a share of profits. ___________ - setting aside of income for future use. ___________ - the amount a person purchases. ___________ - a plan for spending ___________ - a legal proceeding involving a person or business that is unable to repay outstanding debts. __________ - an amount of money loaned to a person that must be paid back along with additional interest. ___________- an amount of money borrowed by one party from another party. ___________ - an additional amount you pay to use borrowed money.

Words to know Expenditure - an amount of money spent, as a whole or on a particular thing. Income - the amount of money a person earns during a year. Investing - using money in hopes of gaining more in the future by lending to businesses in exchange for a share of profits. ___________ - setting aside of income for future use. ___________ - the amount a person purchases. ___________ - a plan for spending ___________ - a legal proceeding involving a person or business that is unable to repay outstanding debts. __________ - an amount of money loaned to a person that must be paid back along with additional interest. ___________- an amount of money borrowed by one party from another party. ___________ - an additional amount you pay to use borrowed money.

Words to know Expenditure - an amount of money spent, as a whole or on a particular thing. Income - the amount of money a person earns during a year. Investing - using money in hopes of gaining more in the future by lending to businesses in exchange for a share of profits. Savings - setting aside of income for future use. ___________ - the amount a person purchases. ___________ - a plan for spending ___________ - a legal proceeding involving a person or business that is unable to repay outstanding debts. __________ - an amount of money loaned to a person that must be paid back along with additional interest. ___________- an amount of money borrowed by one party from another party. ___________ - an additional amount you pay to use borrowed money.

Words to know Expenditure - an amount of money spent, as a whole or on a particular thing. Income - the amount of money a person earns during a year. Investing - using money in hopes of gaining more in the future by lending to businesses in exchange for a share of profits. Savings - setting aside of income for future use. Spending - the amount a person purchases. ___________ - a plan for spending ___________ - a legal proceeding involving a person or business that is unable to repay outstanding debts. __________ - an amount of money loaned to a person that must be paid back along with additional interest. ___________- an amount of money borrowed by one party from another party. ___________ - an additional amount you pay to use borrowed money.

Words to know Expenditure - an amount of money spent, as a whole or on a particular thing. Income - the amount of money a person earns during a year. Investing - using money in hopes of gaining more in the future by lending to businesses in exchange for a share of profits. Savings - setting aside of income for future use. Spending - the amount a person purchases. Budget - a plan for spending ___________ - a legal proceeding involving a person or business that is unable to repay outstanding debts. __________ - an amount of money loaned to a person that must be paid back along with additional interest. ___________- an amount of money borrowed by one party from another party. ___________ - an additional amount you pay to use borrowed money.

Words to know Expenditure - an amount of money spent, as a whole or on a particular thing. Income - the amount of money a person earns during a year. Investing - using money in hopes of gaining more in the future by lending to businesses in exchange for a share of profits. Savings - setting aside of income for future use. Spending - the amount a person purchases. Budget - a plan for spending Bankruptcy - a legal proceeding involving a person or business that is unable to repay outstanding debts. __________ - an amount of money loaned to a person that must be paid back along with additional interest. ___________- an amount of money borrowed by one party from another party. ___________ - an additional amount you pay to use borrowed money.

Words to know Expenditure - an amount of money spent, as a whole or on a particular thing. Income - the amount of money a person earns during a year. Investing - using money in hopes of gaining more in the future by lending to businesses in exchange for a share of profits. Savings - setting aside of income for future use. Spending - the amount a person purchases. Budget - a plan for spending Bankruptcy - a legal proceeding involving a person or business that is unable to repay outstanding debts. Credit - an amount of money loaned to a person that must be paid back along with additional interest. ___________- an amount of money borrowed by one party from another party. ___________ - an additional amount you pay to use borrowed money.

Words to know Expenditure - an amount of money spent, as a whole or on a particular thing. Income - the amount of money a person earns during a year. Investing - using money in hopes of gaining more in the future by lending to businesses in exchange for a share of profits. Savings - setting aside of income for future use. Spending - the amount a person purchases. Budget - a plan for spending Bankruptcy - a legal proceeding involving a person or business that is unable to repay outstanding debts. Credit - an amount of money loaned to a person that must be paid back along with additional interest. Debt- an amount of money borrowed by one party from another party. ___________ - an additional amount you pay to use borrowed money.

Words to know Expenditure - an amount of money spent, as a whole or on a particular thing. Income - the amount of money a person earns during a year. Investing - using money in hopes of gaining more in the future by lending to businesses in exchange for a share of profits. Savings - setting aside of income for future use. Spending - the amount a person purchases. Budget - a plan for spending Bankruptcy - a legal proceeding involving a person or business that is unable to repay outstanding debts. Credit - an amount of money loaned to a person that must be paid back along with additional interest. Debt- an amount of money borrowed by one party from another party. Interest - an additional amount you pay to use borrowed money.

Words to know Blooper’s word of the Day Expenditure - an amount of money spent, as a whole or on a particular thing. Income - the amount of money a person earns during a year. Investing - using money in hopes of gaining more in the future by lending to businesses in exchange for a share of profits. Savings - setting aside of income for future use. Spending - the amount a person purchases. Budget - a plan for spending Bankruptcy - a legal proceeding involving a person or business that is unable to repay outstanding debts. Credit - an amount of money loaned to a person that must be paid back along with additional interest. Debt- an amount of money borrowed by one party from another party. Interest - an additional amount you pay to use borrowed money. Blooper’s word of the Day

Is a Financial Literacy Campaign Necessary? How many families filed for personal bankruptcy in 2005? __________ What is the percentage of families who live beyond their means? _________ How many credit cards does the average household have? What is the average debt of compulsive gamblers? ____________

Is a Financial Literacy Campaign Necessary? How many families filed for personal bankruptcy in 2005? 1.5 Million Families What is the percentage of families who live beyond their means? _________ How many credit cards does the average household have? What is the average debt of compulsive gamblers? ____________

Is a Financial Literacy Campaign Necessary? How many families filed for personal bankruptcy in 2005? 1.5 Million Families What is the percentage of families who live beyond their means? 40% of American Families How many credit cards does the average household have? ____________ What is the average debt of compulsive gamblers?

Is a Financial Literacy Campaign Necessary? How many families filed for personal bankruptcy in 2005? 1.5 Million Families What is the percentage of families who live beyond their means? 40% of American Families How many credit cards does the average household have? 9 What is the average debt of compulsive gamblers? ____________

Is a Financial Literacy Campaign Necessary? How many families filed for personal bankruptcy in 2005? 1.5 Million Families What is the percentage of families who live beyond their means? 40% of American Families How many credit cards does the average household have? 9 What is the average debt of compulsive gamblers? $70,000

Budgets and savings What are the 2 MOST important pieces of a budget that you need to know before starting to make your budget? ______________ and ______________

Budgets and savings Income and What are the 2 MOST important pieces of a budget that you need to know before starting to make your budget? Income and ______________

Budgets and savings Income and Expenditures What are the 2 MOST important pieces of a budget that you need to know before starting to make your budget? Income and Expenditures

Why should you save? “Savings is the portion of income not spent on current expenditures” Sudden Loss of Income Unexpected Medical Expenses Breakdown of Necessary Appliance Planning for Retirement Education Large Purchases Ability to Pursue Opportunities Volatility of Social Security Longer Life Expectancy Travel Investments

The Burden of Debt Every debt comes with a risk to both the borrower and the lender

Debt and Associated Risks _____________ is an amount of money borrowed by one party from another party. While we typically thing of debt as a _______________ consequence of poor planning or circumstances beyond one’s control, debt can provide ___________ opportunities for individuals. Acceptable uses of debt include purchasing a home (___________), advancing ______________, starting or expanding a _____________, and fulfilling dreams. However, fulfilling a dream is not a license to debt-finance lavish spending without regard for the future. Debt allows for the ____________ payment for goods or opportunities and usually comes with a ____________, known as _____________ (an additional amount you pay to use borrowed money).

Debt and Associated Risks Debt is an amount of money borrowed by one party from another party. While we typically thing of debt as a _______________ consequence of poor planning or circumstances beyond one’s control, debt can provide ___________ opportunities for individuals. Acceptable uses of debt include purchasing a home (___________), advancing ______________, starting or expanding a _____________, and fulfilling dreams. However, fulfilling a dream is not a license to debt-finance lavish spending without regard for the future. Debt allows for the ____________ payment for goods or opportunities and usually comes with a ____________, known as _____________ (an additional amount you pay to use borrowed money).

Debt and Associated Risks Debt is an amount of money borrowed by one party from another party. While we typically thing of debt as a negative consequence of poor planning or circumstances beyond one’s control, debt can provide positive opportunities for individuals. Acceptable uses of debt include purchasing a home (___________), advancing ______________, starting or expanding a _____________, and fulfilling dreams. However, fulfilling a dream is not a license to debt-finance lavish spending without regard for the future. Debt allows for the ____________ payment for goods or opportunities and usually comes with a ____________, known as _____________ (an additional amount you pay to use borrowed money).

Debt and Associated Risks Debt is an amount of money borrowed by one party from another party. While we typically thing of debt as a negative consequence of poor planning or circumstances beyond one’s control, debt can provide positive opportunities for individuals. Acceptable uses of debt include purchasing a home (mortgage), advancing ______________, starting or expanding a _____________, and fulfilling dreams. However, fulfilling a dream is not a license to debt-finance lavish spending without regard for the future. Debt allows for the ____________ payment for goods or opportunities and usually comes with a ____________, known as _____________ (an additional amount you pay to use borrowed money).

Debt and Associated Risks Debt is an amount of money borrowed by one party from another party. While we typically thing of debt as a negative consequence of poor planning or circumstances beyond one’s control, debt can provide positive opportunities for individuals. Acceptable uses of debt include purchasing a home (mortgage), advancing education, starting or expanding a _____________, and fulfilling dreams. However, fulfilling a dream is not a license to debt-finance lavish spending without regard for the future. Debt allows for the ____________ payment for goods or opportunities and usually comes with a ____________, known as _____________ (an additional amount you pay to use borrowed money).

Debt and Associated Risks Debt is an amount of money borrowed by one party from another party. While we typically thing of debt as a negative consequence of poor planning or circumstances beyond one’s control, debt can provide positive opportunities for individuals. Acceptable uses of debt include purchasing a home (mortgage), advancing education, starting or expanding a business, and fulfilling dreams. However, fulfilling a dream is not a license to debt-finance lavish spending without regard for the future. Debt allows for the ____________ payment for goods or opportunities and usually comes with a ____________, known as _____________ (an additional amount you pay to use borrowed money).

Debt and Associated Risks Debt is an amount of money borrowed by one party from another party. While we typically thing of debt as a negative consequence of poor planning or circumstances beyond one’s control, debt can provide positive opportunities for individuals. Acceptable uses of debt include purchasing a home (mortgage), advancing education, starting or expanding a business, and fulfilling dreams. However, fulfilling a dream is not a license to debt-finance lavish spending without regard for the future. Debt allows for the delayed payment for goods or opportunities and usually comes with a ____________, known as _____________ (an additional amount you pay to use borrowed money).

Debt and Associated Risks Debt is an amount of money borrowed by one party from another party. While we typically thing of debt as a negative consequence of poor planning or circumstances beyond one’s control, debt can provide positive opportunities for individuals. Acceptable uses of debt include purchasing a home (mortgage), advancing education, starting or expanding a business, and fulfilling dreams. However, fulfilling a dream is not a license to debt-finance lavish spending without regard for the future. Debt allows for the delayed payment for goods or opportunities and usually comes with a cost, known as _____________ (an additional amount you pay to use borrowed money).

Debt and Associated Risks Debt is an amount of money borrowed by one party from another party. While we typically thing of debt as a negative consequence of poor planning or circumstances beyond one’s control, debt can provide positive opportunities for individuals. Acceptable uses of debt include purchasing a home (mortgage), advancing education, starting or expanding a business, and fulfilling dreams. However, fulfilling a dream is not a license to debt-finance lavish spending without regard for the future. Debt allows for the delayed payment for goods or opportunities and usually comes with a cost, known as interest (an additional amount you pay to use borrowed money).

Car loans For example The interest would amount to $____________. If you finance a vehicle for $20,000 with an interest rate of 3% for a 60 month period the entire loan total would be $____________. The interest would amount to $____________.

Car loans For example The interest would amount to $____________. If you finance a vehicle for $20,000 with an interest rate of 3% for a 60 month period the entire loan total would be $___21,562_________. The interest would amount to $____________.

Car loans For example The interest would amount to $___1,562_________. If you finance a vehicle for $20,000 with an interest rate of 3% for a 60 month period the entire loan total would be $___21,562_________. The interest would amount to $___1,562_________.

Credit- How much are you really spending? Take the monthly rate and x by the number of months in the loan term How much would a car cost if you had a 2% interest loan for 12 month? How much would the same car at 2% cost if you had a loan for 48 months? How much would a car cost if you had a 12% loan for 12 months? 48 months?

The cost of credit Any observations? 12 months @ 2% = ___________________ 48 months @ 2% = _______________ 12 months @ 12% = __________________ 48 months @ 12% = _______________

The cost of credit Any observations? 12 months @ 2% = $15,162.96 48 months @ 2% = _______________ 12 months @ 12% = __________________ 48 months @ 12% = _______________

The cost of credit Any observations? 12 months @ 2% = $15,162.96 48 months @ 2% = $15,620.64 12 months @ 12% = __________________ 48 months @ 12% = _______________

The cost of credit Any observations? 12 months @ 2% = $15,162.96 48 months @ 2% = $15,620.64 12 months @ 12% = $15,992.76 48 months @ 12% = _______________

The cost of credit Any observations? 12 months @ 2% = $15,162.96 48 months @ 2% = $15,620.64 12 months @ 12% = $15,992.76 48 months @ 12% = $ 18,960.48 Remember that the better your credit core, the lower interest rate you can get

Personal Finance & careers This project is going to give you a chance to plan your “future” You will… Choose a career Write a paragraph about why you chose that particular career (7-9 well formed sentences) Research Career Salary- Bureau of Labor Statistics Training- Internship, Apprenticeship, College Answer a question about the geography of your career choice Create a basic budget Includes lines for Housing Food Transportation Utilities Insurance Student Loans Etc.

Blooper’s word of the day Remember to fill out and turn in you Blooper Paper (BP) Each correct BP is worth 1 point on a test