Starting your financial future

 Empowering People to be Responsible for Themselves and The World

 how individual choices directly influence occupational goals and future earnings potential.  1. Take responsibility for personal financial decisions.  2. Make financial decisions by systematically considering alternatives and consequences.  3. Identify sources of personal income.  4. Develop a personal financial plan.

 1. Describe the impact of goal setting on personal financial success.  2. Explore career options.  3. Identify sources of personal income.  4. Describe factors affecting take-home pay.  5. Understand the concept of developing a spending plan that promotes living within one’s means.

 Use a career plan to develop personal income potential  Invest in your self  Explore career options

 What are some problems related to a career with lack of steady income, such as the musical career pursued by D.Woods?  What steps could a person take to resolve or avoid these problems?  How many of you have thought about the impact your career choice will have on your lifelong earning potential, on the stability and consistency of earnings, on your retirement income?

 Give an example of how education and/or training can affect lifetime income.

 Income for most people is determined by the market value of the productive resources they sell.  What workers earn depends, primarily, on the market value of what they produce and how productive they are.

 People’s incomes, in part, reflect choices they have made about education, training, skill development and careers.  People with few skills are more likely to be poor.

 : When workers learn and practice new skills, they are improving their human capital.  An important investment that students make in their future is their investment in human capital—their efforts to acquire and improve human capital.  There is a very strong correlation between the level of human capital a person possesses and the amount of income the person earns.

 People can acquire income in several ways, including wages, salaries, and money gifts, from rent and interest on financial instruments.  Income can be earned or unearned. Wages/salaries minus payroll deductions equal take-home pay.  Inflation reduces the purchasing power of income.  Government transfer payments provide unearned income to some households.  Generally, people earn higher incomes with higher levels of education.  Social Security and Medicare are government programs that provide insurance against some loss of income and benefits to eligible recipients.  Social Security and Medicare are funded by a compulsory payroll tax.

 Workers can improve their ability to earn income by gaining new knowledge, skills, and experiences.  Many workers receive employee benefits in addition to their pay.  Entrepreneurs, who work for themselves by starting new businesses, hope to earn a profit, but accept the risk of a loss.  People’s income reflect choices they have made about jobs and careers, education, and skill development.  The wages/salaries paid for a given job depend on a worker’s skills and education, plus the importance of the work to society and the supply of and demand for qualified workers.

 People pay taxes on many types of income, such as wages or salaries, interest, dividends, capital gains, tips, commissions, and profit from a self-owned business.  Deductions, exemptions, and credits reduce taxable income.

 People with more skills, education and training tend to be more productive and, as a result, earn higher incomes.  There is a correlation between educational and income earning potential.  Part of planning for you financial future is making a strong investment in your own human capital, which includes learning about earning and managing income.

 Human capital is the knowledge, talent and skills that people possess.  people are able to invest in their human capital by going to school, pursuing additional training and developing skills.  People develop human capital throughout life. Learning to read and compute are examples.  An important investment that students make in their future is their investment in human capital—their efforts to acquire and improve human capital.  There is a very strong correlation between the level of human capital a person possesses and the amount of income the person earns.  People develop human capital throughout life.

 Give examples of the human capital you possess—that is, the skills, talents and  education that you have now. (read, write, compute, play piano, play chess,  draw, use various woodworking tools, ability to use a computer, ability to work  with others, and so on)

 What investments did/do you make to develop and maintain this human  capital? (practiced reading, completed math homework, practiced piano,  joined the chess club, attended a special art class, attended a computer class,  made furniture and other wood items, and so on)

 If you want to own your own business in the future, what human capital might you need? Management skills, accounting skills, computer skills, communication skills, people skills?

 What investments might you make to develop this human capital? (pursue a  college degree in business or accounting, read professional journals, shadow  someone who owns a business, etc. )

 Review the key points of this lesson by discussing the following:  What is human capital? (the knowledge, talent and skills that people have)  What is investment in human capital? (efforts to acquire and improve human  capital)  How do people invest in human capital? (education, training and practice)  In general, how does investment in human capital—through education—affect  income? (The more education, the greater income people earn.)

 Select an occupation you are interested in.  Identify the human capital you currently possess that would be important in the occupation. (reading, mathematics, people skills, writing, etc.) and identify investments in human capital they must make to attain this occupation (additional education, training and so on).