 A Budget ◦ makes sure you have enough money to spend and save ◦ allows you to see where your money is being spent ◦ it helps you make sure your income matches your expenses 1.Income: The money you make from a job, or investments i.e dividends, bonuses, capital gains, interest on savings 2.Expenses: Money paid out of your income. a.Fixed expenses: tend to be the same each month. Ex. Rent or mortgage, phone plan, loan payment, car payment. b.Variable expenses: tend to fluctuate each month. Ex. Clothing, groceries, entertainment, utilities.

 A. Credit Cards: are forms of payment on credit ◦ buy now and pay later ◦ Managed properly, credit cards offer us  convenience,  sense of security  build a healthy credit history ◦ Irresponsibly used credit cards:  result in excessive debt  become a long-term liability  hinders your ability to get a loan for bigger purchases like a home or car  B. Debit Card: looks like a credit card, but is linked to a checking or savings account ◦ Funds are withdrawn immediately from the account with each purchase

 credit cards charge fees for their usage ◦ Annual Fee ◦ Annual Percentage Rate (APR) ◦ Finance Charge ◦ Late Fee ◦ Minimum Monthly Payment ◦ Monthly Periodic Rate ◦ Transaction Fee

 Interest: The amount of money that you pay to borrow money or the amount of money that you earn on a deposit  Annual Interest Rate: The percent of interest that you pay for money borrowed, or earn for money deposited  Simple interest formula: I = Prt ◦ I is the interest earned ◦ P is the principal or the amount of money that you start out with ◦ r is the annual interest rate  4.5% interest is represent as.045 ◦ t is the time in years  represent as a decimal 9 months =.075  Balance: The sum of the principal (P) & the interest (Prt)

 Dianna deposits $725 into a savings account that pays 2.3% simple annual interest. How much interest will Dianna earn after 18 months? Solution  2.3% rate of interest will be expressed as.023  In the simple interest formula, time is measured in years. Write 18 months as or 1.5 years.  I = Prt Use the formula for simple interest.  Substitute $725 for P, for r, and 1.5 for t.  I = (725)(0.023)(1.5)  I = $25.01

 Use the formula: A = P + Prt  A represents the sum of the principal (P) and the interest earned (Prt)  Example  Belinda deposits $550 in an account that pays 3.7% simple annual interest. If she keeps the money in the account for 2 years, how much will Belinda have in her account after 2 years?  Solution ◦ (550) (2) (.037) = = $ 590.7

 Complete the Calculating Interest & Balance wkst  Complete the Budget Blast activity packet

 A. Types of Taxes on income ◦ 1. Estate Tax: tax paid on inheritance ◦ 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  Examples 1. The Child and Dependent Care Credit 2. The Lifetime Learning Credit 3. Earned income credit

 A: The 1040 is the form a taxpayer fills out to file for a tax refund or to pay taxes ◦ paid too much to the government, you receive a tax refund ◦ paid too little then, you owe money to the federal or state government  B: Recommended records to file taxes ◦ 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, 1099 ◦ Interest and dividends statements from banks & brokerages ◦ A copy of last year’s tax return ◦ Bank routing and account numbers ◦ Receipts for charitable donations

 Homework due ___________  Go to the following website basics/ basics/  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?

 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?