1. ECONOMIC ACTIVITIES PERSONAL FINANCE REBECCA DEAN REID ROSS CLASSICAL HIGH SCHOOL

2. FOUR ECONOMIC ACTIVITIES Achieve Financial Security and personal satisfaction by being responsible with… Earning Spending Saving Investing

3. Career Choices Ability to Find Employment Ability to Advance Earnings Standard of Living Earning is gaining money by working, owning a business, or receiving investment returns. Money gained from earning is called earnings.

4. Career Choices Type of career/job Place of employment FACTORS AFFECTING EARNINGS

5. Ability to Find Employment Education level Employability skills Prior job performance Economic conditions Workplace trends and opportunities FACTORS AFFECTING EARNINGS

6. Type of career/job Education level Job performance Economic conditions Workplace trends and opportunities Ability to Advance FACTORS INFLUENCING EARNINGS

7. EARNINGS AFFECT YOUR STANDARD OF LIVING!

8. RESPONSIBLE EARNING involves realizing that career choices greatly affect lifetime earnings and standard of living. Responsible earning considers these factors when making career choices.

9. SPENDING… using money to purchase goods and services. The way a person spends money determines the value received and influences the economy. Each purchase contributes to the demand for the product or service purchased.

10. LAW OF SCARCITY: An economic system cannot produce all goods and services that consumers want, and most consumers do not have the resources to purchase everything they want. Choices must be made about how limited resources (time, money) are used.

11. TRADE-OFFS AND OPPORTUNITY COSTS When making a choice, other alternatives must be sacrificed. The highest-valued alternative that must be given up when a choice is made is the opportunity cost of the choice. The choice of one item while giving up another is called a trade-off.

12. RESPONSIBLE SPENDING includes researching and planning purchases in advance and making wise choices in light of opportunity costs and trade-offs that apply.

13. SAVING… putting aside money for later use. Money may be “saved” in a bank account or in a wallet. The form of savings used determines the financial return.

14. “LATER USES” FOR SAVINGS  Emergencies  Recurring expenses  Future purchases  Financial goals  Retirement

15. BENEFITS OF SAVING  Provide money for future purchases  Can be used to earn income  Produce a healthy economy  Increase personal financial security  Provide growth opportunities for business ventures

16. RESPONSIBLE SAVING means forming the habit of saving regularly and finding forms of saving that yield high returns.

17. BORROWING obtaining money, goods, or services at present in exchange for the promise of future payment... “Buy now, pay later.”

18. BORROWING = “BUYING ON CREDIT”  Borrowing means spending future income and includes buying on credit.  Having “good credit” depends on one’s willingness and ability to pay back what is owed when it is due.  Credit purchases are more costly than cash purchases if not paid back quickly.  The wise use of credit can help some individuals raise their standard of living by extending their buying power.

19. EXAMPLES OF BORROWING  Buying with a credit card  Buying on installment  Payday loans  Cash advances  Layaway purchases

20. REASONS FOR BORROWING  Major purchases  Emergencies  Convenience  Prepare for future goals  Take advantage of good sales/offers

21. RESPONSIBLE BORROWING means borrowing only what can be paid back when due.