1. Financial Planning and Budgeting Last Year Review

2. Intermediate-Term Goals Instant Gratification
Vocabulary Review
Financial Planning
Wants
Needs
Values
Goals
Cash Flow
Short-Term Goals
Long-Term Goals
Intermediate-Term Goals
Opportunity Cost
Instant Gratification
Delayed Gratification
Responsible Spender

3. Vocabulary Review
Spending Plan/Budget Cash Flow Income Fixed Expenses Variable Expenses Periodic or occasional expenses Pay Yourself 1st

4. Unit 4 - Good Debt, Bad Debt:
Using Credit Wisely

5. Unit 7 - Your Career:
Doing What Matters Most

6. Vocabulary Debt APR Term Fees Bankruptcy Credit History Credit Report
Credit Score
Universal Default
Installment Credit
Revolving Credit
Employee Benefits
Career
Job
4 C’s of Credit

7. Types of Credit Installment Credit Revolving Credit Fixed payments
Set period of time to repay
Set or varying interest rates
Car loans and home loans are typical examples.
Revolving Credit
No stated payoff time
Limit to credit
Minimum monthly payments
Interest rates vary or not
Finance charges
Credit cards most typical example
4-D

8. Places to get Credit Banks Credit Unions Department Stores
Automobile Dealers
Oil Companies (for gas stations)
Federal Government (for student loans)
Others?
4-E

9. WHEN YOU BUY “STUFF” You bought “STUFF” with your credit card.
In fact, you bought $500 worth of “STUFF” with your credit card.
Your APR is 18%.
You plan to pay $10 a month to pay it off.
You will pay $431 in interest
Final cost of your purchases = $931.40
And it will take SEVEN YEARS and NINE MONTHS
4-F 1

10. The Cost of Using Credit Cards
$700 for a Game System
And it will take over
7 years
to pay off!
APR = 24%
Payment: 4% of current balance
Finance Charge $550.04
Your Stereo REALLY cost $1,250.04
Do you think you would still want the same gaming system 7 years from now??
4-H 1

11. The Cost of Borrowing Money
Interest Rate = 24%
Payment = 4% of Current Balance
BALANCE
TIME TO PAY OFF
INTEREST CHARGED
TOTAL COST
$2,000
11 YEARS
6 MONTHS
$1,850
$3,850
$6,000
16 YEARS
1 MONTH
$5,850
$11,850
$10,000
18 YEARS
2 MONTHS
$9,850
$19,850
4-I 1 2 3

12. Financial Consequences of Debt
Could put you in a state of overspending and perpetual debt, where you get used to carrying a balance and paying extremely high interest rates.
4-K-1

13. Financial Consequences of Debt
Could adversely affect your credit rating, making it harder to get loans when you really need them.

14. The Four “Cs” of Credit
Collateral
Capital
Capacity
Character
4-L

15. How Credit Scores Are Determined
Your payment history
Information about how you make your payments on credit cards, store accounts, car loans, finance companies, mortgages
Accounts in collection or past due, and how long past due
Information in public records, such as bankruptcy, judgments, liens, wage attachments or child support
4-M-1 1 2 3

16. How Credit Scores Are Determined
Your overall debt
How much you owe on all your accounts
How much credit you have available to use
4-M-2

17. How Credit Scores Are Determined
Your credit account history
When you opened and used each of your accounts
How recently you applied for new credit
Recent good credit history following past payment problems
4-M-3

18. How Credit Scores Are Determined
Types of Credit
The different types of credit accounts you have
i.e. revolving or installment
The total number of accounts you have
4-M-3 1 2 3

19. Protect Yourself Against Inaccurate Credit Reports
Get a copy of your free credit reports from all credit rating agencies.
Examine it thoroughly.
If you find something that is incorrect, ask the agency to investigate the information.
If that doesn’t resolve the issue, you can attach a short statement to your credit report.
4-O

20. Rule of Thumb 70% Living Expenses 4-P 20% Save or Invest 10%
Pay Off Debt
20%
Save or Invest
4-P

21. Relationship of Career and Earning Power
I Need Years to Prepare
Doing what I love to do
I Want a Family
I Want to Make Lots of Money
I Want to Be Happy
7-A

22. post secondary education
• salary
• vocational school
• community college
• four-year college/university
• major
• certification
• license
• associate degree
• bachelor’s degree
• master’s degree
• doctoral degree

23. The Opportunity Cost of Working
Take an evening shift job
Decide to stay in current position…
Going to college and starting work later on
Give up time with family and friends
Instead of relocating to take a better job
And getting a better-paying job as a result
Can You Think of Some Other Examples?
7-C

24. Average College Costs Four Year Public Institutions
Sample Average Undergraduate Costs,
Four Year Public Institutions
Four Year Private Institutions
Resident
Out-of-State
Resident
$16,357
$26,304
$33,301
Source: College Board’s Trends in College Pricing, 2006
7-H

25. Career Pathway Explore Career in HS Years
Internship / PT Job in Related Field
Receives Formal Education/Training
Takes First Job
Promotes to Higher-paying Position
Goes back to School to Study
More in Chosen Field
Takes Next Job at Higher Pay
School at Night
On-the-job training
Promotion
7-E
Takes new job

26. Key Employee Skills Thinking Skills Basic Skills Personal Skills
Resource Management
Skills
Personal Skills
Interpersonal
Skills
Information Management
Skills
Systems
Skills
Technology Skills
7-D-1

27. Key Employee Skills
Basic Skills
Able to read, write, perform basic math computations; listens well; speaks clearly
7-D-2

28. Interpersonal Skills Key Employee Skills
Team player, able to teach and lead other employees with diverse backgrounds, meets customer expectations, negotiates well
7-D-4

29. Organizational Skills
Key Employee Skills
Organizational Skills
Works well in an organization, can monitor and correct performance, suggests improvements to the organization
7-D-5

30. Resource Management Skills
Key Employee Skills
Resource Management Skills
Makes good use of time, money, materials and employee resources. Thinks of more efficient ways of doing things
7-D-7

31. Information Management Skills
Key Employee Skills
Information Management Skills
Obtains, processes and organizes information; has solid analytical and problem-solving skills
7-D-8

32. Organizational Skills
Key Employee Skills
Organizational Skills
Works well in an organization, can monitor and correct performance, suggests improvements to the organization
7-D-5

33. Technology Skills Key Employee Skills
Solid skills in various electronic media (computers), can operate various types of equipment with ease, can maintain and repair equipment
7-D-9

34. Education and Experience
NEFE High School Financial Planning Program
Education and Experience
Unit 7 – Your Career: Doing What Matters Most
Some high school, no degree
High school diploma, or equivalent
Associate Degree
Professional Degree
Doctoral Degree
Master’s Degree
Bachelor’s Degree
Some college, no degree
Millions of 2006 dollars
Worklife earnings estimates by highest level of educational attainment
Source, US Census Bureau, current population survey, educational attainment in the US. 2005 1
1.2
1.5
1.6
2.5
2.1
3.4
4.4
7-F

35. Ranking Order of Key Employee Skills1 5 9 10 6 2 7 12 11 8 4 13 3
Source: Job Outlook 2006, National Association of Colleges and Employers
7-G

36. Typical Employee Benefits
Medical, Dental, Vision and or Insurance
Sick Leave, Paid Vacation Time and Holidays
Worker’s Compensation Insurance
Life Insurance
Retirement Benefits
Retirement Savings Plans
Employee Assistance Programs
7-K-1

37. Factors that Can Affect Your Earning Potential
Promotions
Being Fired
Being Laid Off
Additional Training
Advanced Degrees
A New Job
Business Downturn
Relocation
Changing Careers
Life-Changing Situations
Business Upturn
What other factors can you think of?
7-L