1. The Decision Making Process
MONEY, MONEY, MONEY …
Personal Finance
Needs/Wants
Opportunity Costs
The Decision Making Process
Taxes
Check Writing Tips

2. Needs/Wants/Resources
Wants: Things a person does not have to survive, but would like to have (cell phone, computer, cable tv)
Needs: Things that you must have in order to survive (food, water, shelter, clothing, love)
Resources: Things that people can use to make or obtain what they need or want - limited
MUST MAKE A DECISION – Opportunity Cost

3. Opportunity Cost
Opportunity cost is what you have to forgo when you choose option A over option B. This must be taken into consideration in order to make the best choice possible.
Time
Money
Space
Example: If I choose to go to the football game as opposed to staying home to study, I will not be prepared for the test and therefore get a poor grade.

4. Business
Businesses supply goods and services to consumers with the motivation to make a profit. The good/service providing must satisfy a customer need or want.
Profit = income – expenses (companies try to keep income > expenses)
Operating in the red means income < expenses (bad)
Operating in the black means income > expenses (good)
Companies thrive on competition (the contest between businesses to win customers).
How can there be so many pizza places in Lyndhurst?
Josie’s – $1.00 a slice - caters to high school students
(place order at counter, pay, and eat)
Mr. Bruno’s – over $2.00 a slide - caters to business people
(sit down, look at menu, waitress takes order,
eat, and pay)

5. How much does the average American earn per year?
Things to consider:
PARADE MAGAZINE
Location
Education
Career
-people-earn/.../salary- guessing-game.html‎
Play the earnings game and see if you can guess

6. Follow the steps below to calculate gross pay, taxes, and net pay
MONEY: Gross or Net?
Follow the steps below to calculate gross pay, taxes, and net pay
1. GROSS PAY
3. NET PAY
The amount you earned
Hourly rate X hours worked
$5.00 x 10 = $50.00
The amount you take home
Gross pay – taxes = net
$ $15.00 = $35.00
2. TAXES
Approximately 30% of Gross Pay = income taxes to be paid
gross pay X tax rate (remember to move 2 decimal places to the left from the % symbol before calculating)
$50.00 x .3 = $15.00

7. The Decision Making Process
Step 1: Identify the situation
What decision do you need to make?
Step 2: Identify possible courses of action
What are all the possible alternatives?
Step 3: Determine the pros and cons
What are the advantages/disadvantages of each alternative?
Step 4: Make a decision
How would you rank each alternative/choice based upon the pros/cons?
How will you reach your goal?
Step 5: Evaluate your decision
Have you achieved the results expected?

8. Taxes Taxes (required payment to the government)
1. Income
Amount paid based on amount earned (Progressive)
Sales
% added to purchase price of taxable items
3. Property
Amount paid based on value of property (land/house) owned
domain/core-finance/taxes-topic/taxes/v/calculating-federal- taxes-and-take-home-pay

9. Check writing lesson Checks are legal documents “Demand Note”
Must be paid on demand
Post dated checks are illegal if given to the payee on a date prior to the date written on the check
Bank will pay the amount written on the line
Be sure to sign the check after double- checking the information
If you make a mistake, VOID the check (save it) and write a new one
Always begin writing the amount close to the left edge on the line and in the box by the $
Only use the word “and” where the decimal point appears
Always write cents as a fraction of a dollar (50/100)
Always spell out the month and write the full year (2013) in the date
Never abbreviate the name of a business or person