Analyzing Financial Situations 16.3 Analyzing Financial Situations How do you analyze financial situations to determine if they represent financially responsible decisions?

ADDITIONAL EXAMPLE 1 Determine if the decision described was financially responsible or financially irresponsible. Explain your answer. A Kathy has $10 in cash to spend at the grocery store. A box of cereal she likes to eat costs $4.45. Today they are on sale, 2 for $6. She purchases two boxes of the cereal. She made a financially responsible decision. Reason 1: She saved $2.90 on the second box. Reason 2: She spent cash, so she will not owe money on her purchase.

ADDITIONAL EXAMPLE 1 Determine if the decision described was financially responsible or financially irresponsible. Explain your answer. B William pays $900 each month for the mortgage on his house. A day before he was to pay his mortgage he had $1,200 in his checking account. That same day he uses a debit card to buy a $400 washing machine.

ADDITIONAL EXAMPLE 1 He made a financially irresponsible decision. Reason 1: He had enough money in his checking account to pay his mortgage until he bought the washing machine. Reason 2: While a washing machine is important for a homeowner to have, he could still do his laundry at a coin-operated laundry facility until he saves enough money to buy a washing machine.

16.3 LESSON QUIZ 8.12.E, 8.12.F Identify the payment method used for each transaction as cash, a credit card, a debit card, or a stored-value card. 1. Gina paid $3 to a street vendor for an ice cream cone. cash 2. Patrick swipes his subway card as he enters the subway station. stored-value card 3. Nick bought a new lawn mower and then paid for it the following month. credit card

Determine if the decisions described are financially responsible or financially irresponsible. Explain your answers. 4. Mabel has $500 in savings. She is starting a new job as a nurse. She uses her credit card to buy $400 worth of uniforms. Mabel made a financially responsible decision. She will need uniforms to wear to her new job, and she has enough in her account to cover the cost.

Determine if the decisions described are financially responsible or financially irresponsible. Explain your answers. 5. Justin quit his job. He has $500 in savings. He uses his debit card to pay $45 for his first month’s membership dues at an exercise club. Justin made a financially irresponsible decision. The club membership dues will need to be paid each month. Unless he finds a job, his savings will rapidly be depleted. He is not thinking of his future living expenses.

It is important to keep track of your money It is important to keep track of your money. Here is a money puzzle about tracking money. Dina thought she owed her mother $300. She paid $100 out of each of three bank accounts to pay her back. Later her mother realized that Dina actually only owed her $250, so she gave Dina back $50. Not knowing how to put an equal amount back into each of her accounts, Dina spent $20 on dinner and then put $10 back into each of her accounts.

When Dina put $10 back into each account, she essentially had withdrawn $90 from each account. $90 × 3 = $270; $270 + $20 (dinner) = $290. What happened to the other twenty dollars? Dina’s mother has $250, the place Dina ate dinner got $20, and each account has $10. So, $250 + $20 + 3($10) = $300. The amount paid was $250, so $90 × 3 = $270, and $270 – $20 (dinner) = $250.

How do you analyze financial situations to determine if they represent financially responsible decisions? Sample answer: Determine whether the situation is going to cause the purchaser to unnecessarily spend money that he or she does not have.