1. Personal Financial Literacy: Managing Financial Well-Being
Essential Question: How do fiscally responsible individuals create and manage a personal budget?

2. Education = $$$

3. Managing a Personal Budget
Budgets have two sides
Revenue – Money earned each pay period
Expenditures – Money spent each pay period
Balanced Budget – Revenue is equal to expenditures
Budget Surplus – Revenue > expenditures = Savings
Budget Deficit – Expenditures > revenue = Debt

4. Revenue
Depending on the career field, revenue each pay period can be the same or it can change.
Salary
$47,830 Median salary in NC
$3, a month
Wages
Minimum Wage $7.25
$15,080 per year if you work 40 hours a week

5. Revenue Sample Pay Stub from May (year to date = Jan – May)
Gross pay is $ ; Net pay is $

6. Expenditures
The net pay you earn is used for various expenditures throughout the month.
Financial Experts recommend not spending more than 30% of your gross pay on rent/mortgage per month and about 12% on food throughout the month.
Monthly costs
Variable costs
(utility bills, credit card bills, etc.)
Fixed costs
(rent, mortgage, car payments, etc.)

7. Other Expenses
In addition to monthly expenses, it is wise to put some money aside for savings and investments.
Savings accounts can be used to help you save money.
You can also invest in retirement accounts or in the stock market to help earn wealth over time.
Many people also choose to set aside money each month for charitable giving.
Charitable donations frequently come with tax benefits – if you donate a certain amount thru the year, you can write it off on your taxes and earn a higher tax refund.

8. Balancing Your Checkbook

9. Bank Accounts: Checking
Checking Accounts– money is typically deposited either automatically or by the individual each month into an account meant for daily use.
Debit card
Individuals can also use paper checks.
Typically no interest earned in a checking account.

10. Writing a Check The date the check is written
Pay “to the order of”…Who is getting paid
The amount written in numbers
The amount written in words (must end in **/100)
Memo note – to remind yourself what it’s for or to let payee know information
Signature Line
Check Number
Bank Routing Number
Your Account Number

11. Bank Accounts: Savings
Savings Accounts are set up to be used to help individuals SAVE money. Money in these accounts is not meant to be spent every day.
Money can easily be transferred between checking and savings accounts, so individuals usually go in and move the money to a savings account once they are paid.
Many banks penalize individuals who draw money out of accounts too often.
Typically do offer low interest payments to help individuals save money more quickly.

12. Savings Accounts: Money Market Accounts
A Money Market Savings Account is a type of savings account that usually earns a higher amount of interest than a basic savings account.
(Example: You are permitted to make no more than six transfers and/or payments to another account of yours with your bank or to a third party each monthly period.)
Can close the account at any time with no penalty

13. Bank Accounts: Certificates of Deposits (CDs)

14. Time Deposits vs. Demand Deposits
A Time Deposit is a deposit put into an account at a bank that cannot be touched for a specific amount of time (CD, for example).
Advantage for the bank – more time to draw interest
Advantage for the consumer – more interest than other savings or checking accounts
By contrast, a Demand Deposit is a deposit put into an account at a bank that can be withdrawn at any time.
Advantage for the consumer – convenience
Disadvantage for the consumer – less interest than a CD or Savings account

15. Bank Security
Bank accounts are backed up by the federal government up to $250,000 by the Federal Deposit Insurance Corporation so even if a bank goes bankrupt your money is safe.
Credit Union accounts are backed by the National Credit Union Association for the same amount.