1. 10 minutes of work time: COMPLETE PT 5.1 DUE at 11:26am TODAY
Class Website:
DEADLINES & HOMEWORK:
Lesson One: PT Due April 28th
Lesson Two: PT 5.2 Due April 29th
Vocabulary Quiz April 29th: Lessons 1-2
Lesson Three:
Lesson Four:
Lesson Five:
UNIT TEST:
Lesson 1 Performance Task:
Draw a two-panel cartoon that demonstrates the problem of scarcity.
The first panel should clearly demonstrate an understanding of what scarcity is and why things are scarce.
The second should demonstrate how scarcity influences the decision-making of individual consumers. Cartoons should include both images and captions.

2. Unit 5: Microecononmics & Personal Finance Lesson 2: Financial Planning: Budgeting 101
ESSENTIAL QUESTIONS:
What does it mean to be financially and fiscally responsible?
What factors guide wise financial planning?
WARM UP
When you get hired at a job, what kind of paperwork do you have to fill out?
For what purposes does money get taken out of your paycheck?
Lesson Vocabulary
Utilities
Employer
Paystub
Employee
Mortgage
Budget
Rent
Income
W-4 form
Expenses
W-2 Form
Net Pay
Tax withholdings:
Gross Pay
Income tax
Disposable income
FICA
Social Security Tax
Discretionary income
Medicare Tax
Fixed costs
Health insurance / FICA
Variable costs
Lesson Skills:
Practice Budgeting

3. Unit 5: Microecononmics & Personal Finance Lesson 2: Financial Planning: Budgeting 101
Lesson 2 Performance Task:
Select a candidate that is running for President in Write a guide for them describing what they will need to do to secure the nomination of their party and win the presidency. Your guide should apply at least 10 of the vocabulary terms from this Unit (and preferably from this lesson). OPTIONS INCLUDE:
Write a draft campaign plan
Write a newspaper article after the candidate wins that looks back on their path to the Presidency
Write a letter from the Candidate to their parent or spouse explaining what they’ll be doing while they’re away from home for the next year and a half.
Class Website:
DEADLINES & HOMEWORK:
Lesson One:
Lesson Two:
Lesson Three:
Lesson Four:
Lesson Five:
UNIT TEST:

4. Paychecks and Tax Forms Take Charge of your Finances
Family Economics & Financial Education
Paychecks and Tax Forms Take Charge of your Finances
Changes on slide 3, 18

5. YOU’RE HIRED!!!! Starting a New Job
Employer – organization that hires workers and pays them to do a job
Employee – individual that does work for payment
To receive a paycheck, an employee must:
Complete a Form W-4
Employee’s Withholding Allowance Certificate
Complete a Form I-9
Employment Eligibility Verification

6. Form W-4 The Tax Form You HAVE TO FILL OUT when hired:
Determines the percentage of gross pay that will be withheld for taxes
GROSS PAY – total amount earned BEFORE TAXES
Allowances – can reduce the amount of taxes deducted from paycheck
Means you keep more of your paycheck for now, BUT you may have to pay more in taxes later
Dependents cannot claim allowances
Dependent – a person who relies on the taxpayer for financial support

7. Steps to Completing a Form W-4
Print or type legal name on Line 1 and home address directly below the name
Write Social Security number on Line 2
On Line 3, check the appropriate box to indicate marital status
Enter a zero on Line 5 if not claiming any allowances
Sign name and date the form before giving it to the employer
Keep a copy for personal records

8. Form I-9 Employment Eligibility Verification Form
Used to prove your identity and employment eligibility
Must prove your identity & that you are a U.S. citizen, or that you have a green card or a work authorization
Examples include driver’s license, passport, Social Security card, and birth certificate

9. Three methods employers may use to pay employees:
Paying Employees
Three methods employers may use to pay employees:
Paycheck – employer gives employee a check with paystub attached
Most common method
Employee responsible for handling the paycheck
Immediately see payroll stub and deductions
Added the definition of paycheck to this PowerPoint slide because it was asked for on the note taking guide

10. Paying Employees continued
Direct Deposit - employers transfers paycheck directly into the employee’s bank account
Employee receives the paycheck stub detailing the paycheck deductions
Most secure because there is no direct handling of the check
Employee knows exactly when paycheck will be deposited and available

11. Paying Employees continued
Payroll Card - payment electronically loaded onto a plastic card linked to employee account
Employees may use the payroll card for ATM withdrawals or to make purchases like a debit card
Benefits:
Allows employees without bank accounts to avoid check cashing fees
Allows businesses to save the money and hassle of printing checks

13. Where Does My Money Go?
Almost 31% of an individual’s paycheck is deducted
PAYROLL DEDUCTIONS
Taxes are the largest expense most individuals will have
Taxes on income are paid immediately & sent to the IRS by the employer

14. Taxes
Taxes – money collected from citizens & other workers by local, state, and federal governments.
Used to provide public goods and services.
Largest amount of taxes a person pays is on his/her income.
Internal Revenue Service (IRS) – Collects federal taxes, issues regulations, and enforces tax laws written by the United States Congress.

15. Family Economics & Financial Education
Reading a Paycheck

16. Paycheck Stub A document given to employees each pay period
that shows & explains paycheck deductions
On-The-Go
Employee Beakens, Joe
Employee Identification
Check # 164
Check Amount $1,102.98
Employee Address 293 Michael Grove Billings, MT
Pay Type- Gross Pay
Deductions
Current
Year-to-date
 $1,353.33
Federal Withholding State Withholding Fed OASDI/EE or Social Security
Fed MED/EE or Medicare Medical 401K
$ $40.82 $83.91 $19.62 $0.00 $0.00
$ $ $ $ $0.00 $0.00
Totals
$250.35
$1,502.10
Pay Period 6/11/2004-7/11/2004

17. Personal Information Personal Information
On-The-Go
Employee Beakens, Joe
Employee Identification
Check # 164
Check Amount $1,102.98
Employee Address 293 Michael Grove Billings, MT
Pay Type- Gross Pay
Deductions
Current
Year-to-date
 $1,353.33
Federal Withholding State Withholding Fed OASDI/EE or Social Security
Fed MED/EE or Medicare Medical 401K
$ $40.82 $83.91 $19.62 $0.00 $0.00
$ $ $ $ $0.00 $0.00
Totals
$250.35
$1,502.10
Pay Period 6/11/2004-7/11/2004
Personal Information
States the employee’s full name, address, and Social Security or Employee ID #
Always check to ensure this information is correct

18. Pay Period
On-The-Go
Employee Beakens, Joe
Employee Identification
Check # 164
Check Amount $1,102.98
Employee Address 293 Michael Grove Billings, MT
Pay Type- Gross Pay
Deductions
Current
Year-to-date
 $1,353.33
Federal Withholding State Withholding Fed OASDI/EE or Social Security
Fed MED/EE or Medicare Medical 401K
$ $40.82 $83.91 $19.62 $0.00 $0.00
$ $ $ $ $0.00 $0.00
Totals
$250.35
$1,502.10
Pay Period 6/11/2004-7/11/2004
Pay Period
The length of time for which an employee’s wages are calculated; most are weekly, bi-weekly, twice a month, or monthly
The last day of the pay period is not always payday to allow a business to accurately compute wages

19. Gross Pay
On-The-Go
Employee Beakens, Joe
Employee Identification
Check # 164
Check Amount $1,102.98
Employee Address 293 Michael Grove Billings, MT
Pay Type- Gross Pay
Deductions
Current
Year-to-date
 $1,353.33
Federal Withholding State Withholding Fed OASDI/EE or Social Security
Fed MED/EE or Medicare Medical 401K
$ $40.82 $83.91 $19.62 $0.00 $0.00
$ $ $ $ $0.00 $0.00
Totals
$250.35
$1,502.10
Pay Period 6/11/2004-7/11/2004
changed the last sentence, it used to say “If a person is on salary, it is the total salary amount divided by the specified time period”
Gross Pay
The total amount of money earned during a pay period before deductions
This is calculated by multiplying the number of hours worked by the hourly rate
If a person is on salary, it is the total salary amount divided by the specified number of pay periods

20. Net Pay
On-The-Go
Employee Beakens, Joe
Employee Identification
Check # 164
Check Amount $1,102.98
Employee Address 293 Michael Grove Billings, MT
Pay Type- Gross Pay
Deductions
Current
Year-to-date
 $1,353.33
Federal Withholding State Withholding Fed OASDI/EE or Social Security
Fed MED/EE or Medicare Medical 401K
$ $40.82 $83.91 $19.62 $0.00 $0.00
$ $ $ $ $0.00 $0.00
Totals
$250.35
$1,502.10
Pay Period 6/11/2004-7/11/2004
Net Pay
The amount of money left after all deductions have been withheld from the gross pay earned in the pay period

21. Deductions Deductions
On-The-Go
Employee Beakens, Joe
Employee Identification
Check # 164
Check Amount $1,102.98
Employee Address 293 Michael Grove Billings, MT
Pay Type- Gross Pay
Deductions
Current
Year-to-date
 $1,353.33
Federal Withholding State Withholding Fed OASDI/EE or Social Security
Fed MED/EE or Medicare Medical 401K
$ $40.82 $83.91 $19.62 $0.00 $0.00
$ $ $ $ $0.00 $0.00
Totals
$250.35
$1,502.10
Pay Period 6/11/2004-7/11/2004
Deductions
The amount of money subtracted from the gross pay for required taxes, health insurance costs, and/or retirement benefits

22. Federal Withholding Tax
On-The-Go
Employee Beakens, Joe
Employee Identification
Check # 164
Check Amount $1,102.98
Employee Address 293 Michael Grove Billings, MT
Pay Type- Gross Pay
Deductions
Current
Year-to-date
 $1,353.33
Federal Withholding State Withholding Fed OASDI/EE or Social Security
Fed MED/EE or Medicare Medical 401K
$ $40.82 $83.91 $19.62 $0.00 $0.00
$ $ $ $ $0.00 $0.00
Totals
$250.35
$1,502.10
Pay Period 6/11/2004-7/11/2004
Federal Withholding Tax
Largest deduction withheld from an employee’s gross income
Federal INCOME TAX – goes into the Federal Budget

23. State Withholding Tax State Withholding Tax
On the Go Cafe
Employee Beakens, Joe
Employee Identification
Check # 164
Check Amount $1,102.98
Employee Address 293 Michael Grove Billings, MT
Pay Type- Gross Pay
Deductions
Current
Year-to-date
 $1,353.33
Federal Withholding State Withholding Fed OASDI/EE or Social Security
Fed MED/EE or Medicare Medical 401K
$ $40.82 $83.91 $19.62 $0.00 $0.00
$ $ $ $ $0.00 $0.00
Totals
$250.35
$1,502.10
Pay Period 6/11/2004-7/11/2004
State Withholding Tax
state income tax goes into State Treasury for the state budget
Pays for school, roads, state court costs, etc.

24. FICA (Federal Insurance Contribution Act)
On-The-Go
Employee Beakens, Joe
Employee Identification
Check # 164
Check Amount $1,102.98
Employee Address 293 Michael Grove Billings, MT
Pay Type- Gross Pay
Deductions
Current
Year-to-date
 $1,353.33
Federal Withholding State Withholding Fed OASDI/EE or Social Security
Fed MED/EE or Medicare Medical 401K
$ $40.82 $83.91 $19.62 $0.00 $0.00
$ $ $ $ $0.00 $0.00
Totals
$250.35
$1,502.10
Pay Period 6/11/2004-7/11/2004
FICA Witholding: special Federal taxes to pay for Medicare & Social Security

25. Social Security Social Security
On-The-Go
Employee Beakens, Joe
Employee Identification
Check # 164
Check Amount $1,102.98
Employee Address 293 Michael Grove Billings, MT
Pay Type- Gross Pay
Deductions
Current
Year-to-date
 $1,353.33
Federal Withholding State Withholding Fed OASDI/EE or Social Security
Fed MED/EE or Medicare Medical 401K
$ $40.82 $83.91 $19.62 $0.00 $0.00
$ $ $ $ $0.00 $0.00
Totals
$250.35
$1,502.10
Pay Period 6/11/2004-7/11/2004
Social Security
Nation’s retirement program, helps provide retirement income for elderly and pays disability benefits
Based upon a percentage (6.2%) of gross income, employer matches the contribution made by the employee

26. Medicare
On-The-Go
Employee Beakens, Joe
Employee Identification
Check # 164
Check Amount $1,102.98
Employee Address 293 Michael Grove Billings, MT
Pay Type- Gross Pay
Deductions
Current
Year-to-date
 $1,353.33
Federal Withholding State Withholding Fed OASDI/EE or Social Security
Fed MED/EE or Medicare Medical 401K
$ $40.82 $83.91 $19.62 $0.00 $0.00
$ $ $ $ $0.00 $0.00
Totals
$250.35
$1,502.10
Pay Period 6/11/2004-7/11/2004
Medicare
Nation’s health care program for the elderly and disabled, provides hospital and medical insurance to those who qualify
Based upon a percentage (1.45%) of gross income

27. QUICK WRITE WHAT IS MEDICARE AND HOW IS IT FUNDED?
WHAT IS SOCIAL SECURITY & HOW IS IT FUNDED?

28. Medical
On-The-Go
Employee Beakens, Joe
Employee Identification
Check # 164
Check Amount $1,102.98
Employee Address 293 Michael Grove Billings, MT
Pay Type- Gross Pay
Deductions
Current
Year-to-date
 $1,353.33
Federal Withholding State Withholding Fed OASDI/EE or Social Security
Fed MED/EE or Medicare Medical 401K
$ $40.82 $83.91 $19.62 $0.00 $0.00
$ $ $ $ $0.00 $0.00
Totals
$250.35
$1,502.10
Pay Period 6/11/2004-7/11/2004
Medical
The amount taken from the employee’s paycheck for medical benefits
Only in cases where an employee has to pay part or all of the cost of their insurance for themselves or their dependents

29. Health Insurance Average cost of health insurance plans (2014):
$6,025 for individual coverage
$16,000 for a family of four
EMPLOYERS usually pay at least 50% or more of this cost
Even if workers only pay 30%, that means an average worker would pay $400 per month

30. Retirement Plan Retirement Plan
On-The-Go
Employee Beakens, Joe
Employee Identification
Check # 164
Check Amount $1,102.98
Employee Address 293 Michael Grove Billings, MT
Pay Type- Gross Pay
Deductions
Current
Year-to-date
 $1,353.33
Federal Withholding State Withholding Fed OASDI/EE or Social Security
Fed MED/EE or Medicare Medical 401K
$ $40.82 $83.91 $19.62 $0.00 $0.00
$ $ $ $ $0.00 $0.00
Totals
$250.35
$1,502.10
Pay Period 6/11/2004-7/11/2004
Retirement Plan
The amount an employee contributes each pay period to a retirement plan
A specified percentage of the contribution is often matched by the employer
May be a 401K, or other state, or local Pension / retirement plan

31. Savings Plans
401(K) – special retirement account that gives tax breaks if you save money for retirement
Roth IRA – retirement account that lets you put in up to $5000/year
When you take money out after retirement, it is tax free

32. Year-to-Date Year-to-Date
On-The-Go
Employee Beakens, Joe
Employee Identification
Check # 164
Check Amount $1,102.98
Employee Address 293 Michael Grove Billings, MT
Pay Type- Gross Pay
Deductions
Current
Year-to-date
 $1,353.33
Federal Withholding State Withholding Fed OASDI/EE or Social Security
Fed MED/EE or Medicare Medical 401K
$ $40.82 $83.91 $19.62 $0.00 $0.00
$ $ $ $ $0.00 $0.00
Totals
$250.35
$1,502.10
Pay Period 6/11/2004-7/11/2004
Year-to-Date
Total of all of the deductions which have been withheld from an individual’s paycheck from January 1 to the last day of the pay period indicated on the paycheck stub

33. Quick Write Explain the difference between gross pay and net pay
Give examples of three withholdings that are automatically deducted from gross pay

34. Disposable / NET Income
TOTAL amount of money available to a family AFTER taxes have been deducted
After-tax income of all wage earners added up
$41, Durham Median Family Income
Half of Durham families make more; half make less
That’s about $32,850 after taxes

35. Discretionary Income Income spent on leisure or luxury items
Movies, eating out, jewelry, etc.
“discretionary” income goes to wants, rather than needs

36. Brainstorm Examples of:
Discretionary spending (economic wants):
Non-discretionary spending (things you MUST pay for):

37. Typical Household Expenses
Fixed
Variable
Mortgage/Rent
Property Taxes
Income Tax
Health Insurance (if no benefits)
Car Payments (if car is financed)
Car insurance
Child Care (pre-school/early morning/extended day)
Utilities
Food (groceries
Food (eating out)
Gasoline/transportation

38. Largest Expenses
Housing is largest single expense – should not exceed 30-35%
Health Insurance (if not provided)
Student Loan debt
Credit card payment
Food
Transportation

39. Rent vs. Mortgage
Mortgage – a loan taken from a bank to help you purchase a home
The bank pays for the house up front
You are the home owner
you make “mortgage” payments every month to the bank
Miss payments? You could lose the house to the bank
Rent – monthly amount paid to the owner of a property in exchange for the right to live there
Owner could:
Raise the rent
Sell the property
Decide to kick you out and move in themselves or rent to someone else

40. Can you survive in the workplace?
Do the budget simulaiton at
When done, go to this link and answer the questions you find there.

42. April 15th – TAX DAY
Income Tax due April 15
File form 1040 EZ

43. Exit Ticket
Why is it important to pay taxes even though we don’t like paying taxes?

44. Point Value & Rubric SEE RUBRIC ON HANDOUT 5 points
Project is submited BY:
Take home pay is calculated correctly
Student does accurate research to find realistic figures for the expense portion of the budget
Student makes effective adjustments to crisis scenario
Student lives within his/her means and is able to stay out of debt

45. Part I Decide whether to get married or not. Single: work individually
Married: work with a partner
NC does not allow domestic partnerships, but I do

46. PART II: INCOME You will be assigned an income.
You must then calculate your tax rate.
The more money you make, the higher your taxes
THIS is called PROGRESSIVE TAXATION

47. CALCULATE YOUR TAKE HOME PAY
Income
Tax Rate
Instructions
Take home pay
$8,700-$35,350
15%
Multiply your income up to $35,350 by .85
$35,351-$86,650
25%
Subtract $35,350 from your total income. Multiply your remaining income in this range by .75
$85,650-$178,650
28%
Subtract $86,650 from your total income. Multiply your remaining income in this range by .72
$178,650-$388,350
33%
Subtract $178,650 from your total income. Multiply your remaining income in this range by .67
TOTAL TAKE HOME PAY
Example: income $90,000
$90,000 - $86,500 = $3,500.
$3,500 x .72= $2,520 in take home pay
$86,650-$35,350 = $51,300
$35,350 x .75 = $38,474 take home pay in this bracket
$35,350 x .85 = $30, take home pay
Add your take home pay from each bracket: $30,047 + $38,474 + $2,520
Total take home pay = $71,041

48. PART III: EXPENSES
Use the internet and estimated cost spreadsheets to complete the expense portion of your budget.
Estimated cost sheets are posted to class website
Unit 5, Day 2

49. Part IV Discretionary Spending
Decide what extras you want to spend on.

50. SURPRISE!
At some point, you may or may not learn of a surprise change to your life situation.
This might increase or decrease your income or expenses.
You must adjust your budget accordingly.

51. REVIEW! Make Vocab cards for each key term from this lesson
Answer today’s essential Questions:
What does it mean to be financially and fiscally responsible?
What factors should guide wise financial planning?
END OF CLASS QUIZ:
GO TO: kahoot.it & then enter the game-pin on the screen