1. Unit 2 - Budgeting: Making the Most of Your Money Did you Know? In 2014, the average American teen spent $104 per week. Did you Know? In 2014, the average American teen spent $104 per week.

2. Unit Two – Budgeting: Making the Most of Your Money  What is in the store window to get you to walk in? What techniques are used to get you into the door?  What is the first thing you see when you walk into the store? Are you ever tempted to buy it?  What do you have to walk past in order to get to the object you want to buy? Did you ever pick up anything on the way?  When standing in line at the register, have your ever picked up anything on display to buy?  When you get your item, do you receive any coupons or flyers that will encourage you to come back? Do they have expiration dates?

3. Unit Two – Budgeting: Making the Most of Your Money ?

4. What does the repair or replacement cost? 1. Break flat-screen TV 2. Break laptop 3. Download virus on computer 4. Fender bender 5. Flat tire 6. Fractured/broken bone 7. Lost cell phone 8. Lost iPad 9. Run out of gas

5. Unit Two – Budgeting: Making the Most of Your Money Establish priorities; plan in advance to:  Make progress to achieve goals  Avoid “traps” and buyer’s remorse  Deal with unexpected costly events  Have money on hand when you need it  Put you in control of how your money is used By failing to prepare, you are preparing to fail. Benjamin Franklin

6. Unit Two – Budgeting: Making the Most of Your Money  …Helps you determine where you are spending your money currently.  …Helps you decide where to spend your money in the future.  …You have an organized way to save for things that cost more.  …Puts you in control of your financial future, beginning NOW.

7. Unit Two – Budgeting: Making the Most of Your Money  Helps you create a BUDGET  What is a Budget?  A plan for managing your money during a given period of time  Understanding your Income and Expenses

8. Unit Two – Budgeting: Making the Most of Your Money  Any money you receive  Where do most teens get their money?  62% part-time employment, summer job, or neighborhood jobs (i.e. babysitting)

9. Unit Two – Budgeting: Making the Most of Your Money Tips to Predict:  Use what is known:  Pay  Regular allowance  Average interest earned  Be conservative:  When estimating, aim lower rather than higher  Don’t count on windfalls Sources of Income: Paycheck Allowance Interest Gift money Sales

10. Unit Two – Budgeting: Making the Most of Your Money  If you earn $12.00/hour and work for 40 hours a week, how much money will you take home?  Expect at least 20% to be taken out for taxes!

11. Unit Two – Budgeting: Making the Most of Your Money  Federal and State Income Taxes – fees collected by the federal/state government to support its programs; sent to the IRS/state revenue department  Social Security – provides a small income and other services to the elderly  Medicare – provides medical insurance to the elderly

12. Unit Two – Budgeting: Making the Most of Your Money  Gross Income  Total amount of income from your wages, before any payroll deductions taken out  # of hours worked x rate per hour  Net Income  Gross Income minus taxes or other deductions  Take-home pay

13. Unit Two – Budgeting: Making the Most of Your Money

14.  What you spend money on; your needs and wants  3 main types of expenses:  Fixed  Variable  Periodic or Occasional

15. Unit Two – Budgeting: Making the Most of Your Money  Fixed - costs the same amount every time  Rent, Car Payment, Cable bill, etc.  Variable – fluctuate in amount; usually have more control over how much they’ll be  Food, Electric bill, etc.  Periodic or Occasional expenses – you don’t pay every month, and can be either fixed or variable  Car Insurance due every 6 months  Auto repairs

16. Unit Two – Budgeting: Making the Most of Your Money  P.Y.F. – Pay Yourself First!  Saving is an all-important part of reaching your financial goals  Whenever you receive money, you should immediately put a certain amount into an account that you will set aside to use later to meet a long- term financial goal

17. Unit Two – Budgeting: Making the Most of Your Money

18.  If Expenses > Income  Variable expenses  Income  Unnecessary expenses  If Income > Expenses  P.Y.F. Savings funds  Any loan obligations Ideal Situation: Spend at or Below your Means Income > or = Expenses

19. Unit Two – Budgeting: Making the Most of Your Money 1. You need a budget, even if you don’t want one.  B udgets are the most practical way to regain control of your finances. They take some work and disciple, but they pay off in spades. 2. You can make a budget in 3 steps. ▪ Keep track of your current spending for a time, categorize and total your spending, and then track it to make sure it doesn’t exceed the limits you impose.

20. Unit Two – Budgeting: Making the Most of Your Money 3. Be careful with cash  If you find that you have no idea where your cash is going after you visit the ATM, consider tracking cash spending better. 4. Live within your means  It may seem simple, but don’t spend more than you make

21. Unit Two – Budgeting: Making the Most of Your Money 5. Understand the difference between a want & a need  Sometimes the things we think we “need” are better classified as luxuries. ie) drinking a mocha latte every morning when you could brew coffee at home. 6. Take 10% off the top. Pay yourself first.  Every paycheck, put 10% aside for you. This way, you will never spend more than 90% of your income.

22. Unit Two – Budgeting: Making the Most of Your Money 7. Let your computer do the work.  There are great software programs out there to make budgeting less of a chore. 8. Don’t obsess.  Focus on the big picture.

23. Unit Two – Budgeting: Making the Most of Your Money 9. Don’t count your eggs before they’re hatched.  Windfalls are nice, but you can’t depend on them. Big tax refunds, end-of-year bonuses, or investment returns are not guaranteed. 10. Don’t let your spending creep up.  As you make more money, don’t spend more.

24. Unit Two – Budgeting: Making the Most of Your Money  May come up short on money before the next paycheck or allowance payment  More likely to not reach long-term spending goals  Added stress if struggling to keep up with payments  May need to give up something you planned if money needs to be used for unexpected emergencies  Give up independence if you need to rely on others for financial help

25. Unit Two – Budgeting: Making the Most of Your Money  Does it makes sense to create and live within a budget when you don’t have a lot of money?  What if you find that you are consistently spending more in one area than you had planned to?  What if you find that you can’t live within your budget?