MANAGING MONEY
You’ve all heard the phrase “Money
doesn’t grow on trees…”
●
Well, where does it grow? In your bank
account money earns interest and grows.
You can invest and your money will grow.
You can make a budget and save and
Money is a
material resource
●
Budgets can help you achieve short and
long term goals.
Budget Example
●
Income is the
amount brought
home.
Earning an Income
●
Hourly Wage
– Amount of money earned
per hour of work. Can vary based on
number of hours worked.
Hourly Wage Overtime
●
If someone works more than 40 hours a
week or holidays, they can earn
OVERTIME which is usually their normal
hourly rate plus 50%.
Paycheck Deductions
Deduct means to reduce or take away from.
Money is taken from the amount you earn to
Gross Income vs. Net Income
●
Total amount of money before deductions
is your gross income.
Deductions
Federal and State Income Taxes –
Government’s main source of income and
is used to provide services, programs, and
facilities to citizens.
Basics of Budgeting
Establish financial goals.
Determine sources of income
Estimate expenses
Compare income and expenses
Write budget and keep records
10.02 Factors that influence
spending
A. Advertising
● Is a paid public message communicated through various media that promotes the sale of goods and services.
● Causes people to impulse buy (buy without thought)
● Manufactures know their ad worked if you buy their product.
● Ads are to convince you to buy something.
Jingles and Slogans
● Are to make you remember the product.
● Let’s see how much YOU remember!
● Have it your way Taste the rainbow Eat Fresh
Think outside the bun Is it in you?
Every kiss begins with… Are you gellin?
Like a good neighbor…
B. Purchasing practices
⚪ Decide where to shop, when to buy, and what to buy.
⚪ Comparison shopping means comparing
products and prices in different stores before buying.
⚪ Have you ever impulse bought?
● Impulse buying can be prevented by following a shopping list.
● Advertisers are sneaky! They use cartoon
characters to convince
Deciding WHAT to buy:
● Judge quality – Not just price! Judge the quality. Sometimes lower price is still good quality!
● Suitability – Know what product you need before you go shopping for it.
● Use and Care – Read labels. Would you want to buy a whole wardrobe of dry clean only?
D. Consumer rights and responsibilities
1. Right to be informed – 515
2. Right to redress/recourse – 518
3. Right to safety – 517
4. Right to choose/selection - 516
5. Right to Performance – 516
6. Fraud – 515
Money!
► A teenager lost a contact lens while playing
basketball in his driveway. After a fruitless search, he went inside and told his mother the lens was nowhere to be found and they needed to order more lens. Undaunted, she went outside and in a few minutes, returned with the lens in her hand. "How did you manage to find it, Mom?" the
10.03 Check Writing
ALL STUDENTS STAND UP!!!
● If you can not go the rest of your life without spending
money on the following, sit down. Opening day for movies
Manicure/pedicure
Golfing/club memberships
Hairstyles that have expensive treatments (color, perms, etc.) Cell phones
Going out to dinner 2 or 3x a week Vacations in high seasons
Check Writing
Check Writing
● DATE: Include the month, day and year you
Check Writing
● PAYEE: Write the name of the person or
Check Writing
● AMOUNT IN NUMBERS: Write the amount of
Check Writing
● AMOUNT IN WORDS: Write the amount of
Check Writing
● SIGNATURE: Sign all checks the way you
Check Writing
● MEMO: Use the memo area to note the
Check Writing
● ROUTING NUMBERS: The nine-digit string of
Check Writing
● ACCOUNT NUMBER: The number used to
Check Writing
● CHECK NUMBER: The number used to
Check Writing
● TRANSIT NUMBER: Used to list checks for
Check Writing
● Check Register: Don’t forget to balance your
Check Writing
12 Rules About Checking
1)
Only write checks when you have
enough money in your account.
2)
Write checks legibly.
3)
Write the check amount as far to the
left as possible.
12 Rules About Checking
5)
Don’t erase mistakes on a check.
6)Don’t sign blank checks.
12 Rules About Checking
9)
Always keep checks in a safe place.
10)Destroy voided or unused checks and
deposit slips.
11)
Record every transaction in the
checkbook register.
12)
Keep a running balance in the
Check Writing
How to Cash a Check
● BLANK ENDORSEMENT: Sign your name the
same way it is written on the front of the check.
How to Cash a Check
● SPECIAL ENDORSEMENT: Do this when you
want to give someone else the money. Write “pay to the order of” and that person’s name. Then sign it. Now that person is the only one that can cash the check.
William J. Doe Pay to the order of
How to Cash a Check
● RESTRICTIVE: When you want your check to
be very safe, like when you send it by mail to your bank, use this type of endorsement.
Then , it can only be deposited into your account.
Did You Know
$ The percentage of undergraduate students carrying at least 1 credit card has risen 24% since 1998
$ 92% of college students have a credit card by their
sophomore year
$ Almost half (47%) of all college students carry four or more credit cards
$ 21% of undergrads owed between $3000 & $7000 on their credit card – a 61% increase from 2000
What are Credit Cards?
Pre-approved credit which can be used for
the purchase of items now and payment of
Are Debit Cards a type of
Credit Card?
NO!
Debit=Credit
Debit cards allow payment and purchase
to happen simultaneously
Debit Cards are:
$ Not the same as credit
cards
$ Not a form of credit at all $ Directly linked to your
Why Use a Credit Card?
$ Proper use can help establish good credit rating
$ Conveniently accepted across United States and abroad
$ Emergency buying power
$ Additional form of identification
$ Record of purchases on bill statement
Why Not Use a Credit Card?
$ Improper use can damage credit rating
$ Higher risk for impulsive buying and overspending
$ Debt trap when used unwisely
$ Expensive way to borrow due to high interest rates
$ Less to spend in the future due to paying off purchases from past
$ Possible hidden fees & surcharges
Types of Credit Cards
Cards where purchases can be made in many
locations
$
Bank Credit Cards
¢ Card issued by financial institution
$
Retail Credit Cards
Obtaining a Credit Card
$
Comparison shop when choosing the right card
$
Know the facts
¢ Terms and conditions of credit card accounts differ ¢ Be aware of “hidden” costs of card(s)
$
Federal Truth in Lending Act
A Schumer Box
you May Expect To See
Annual Percentage Rate for purchases and balance transfers*
2.99% APR (.00819% daily periodic rate) on purchases and balance transfers until the first day of the billing cycle that includes the six (6) month anniversary date of the opening of your account. In the absence of the introductory rate, 12.99% APR(.03559% daily periodic rate) on purchases and balance transfers.**
Grace period for repayment of the balance for purchases
You will have a minimum of 25 days without a finance charge on new
purchases if the total New Balance is paid in full each month by the statement closing date.
Method of computing the balance used in calculating finance charges for purchases
Average daily balance (including new purchases)
Annual fee $25
Minimum finance charge For each Billing Period that your Account is subject to a finance charge, a minimum total Finance Charge of $0.50 will be imposed.
Miscellaneous fees Cash advance fee: 2.5% of amount of the cash advance, but not less than $2.50.
$ Annual Percentage Rate (APR): interest rate charged for amount borrowed in terms of percentage per year $ Grace Period: amount of time allowed before finance
charges (interest or cost of credit) are applied
Annual Percentage Rate for Purchases Grace Period for Purchases Minimum Finance Charges Balance Calculation Method for Purchases
Annual Fees Transaction Fees for Cash Advances Late Payment Fees 19.9% Not less than 25 days
$.50 when a finance charge
at a periodic rate is charged
Average daily balance method (including new purchases) $20 per year
2% with a minimum fee
of $3
$29
$ Minimum Finance Charge: minimum amount charged for card use
$ Balance Calculation Method: method used to determine balance including finance charges
Annual Percentage Rate for Purchases Grace Period for Purchases Minimum Finance Charges Balance Calculation Method for Purchases
Annual Fees Transaction Fees for Cash Advances Late Payment Fees 19.9%
Not less than 25 days
$.50 when a finance charge at a periodic rate is charged Average daily balance method (including new purchases) $20 per year
2% with a minimum fee
of $3
$29
$ Annual Fees: yearly charge for credit card ownership
$ Cash Advance Transaction Fees: cash withdrawal fees $ Late Payment Fees: penalty fee for payments not made
by the due date
Annual Percentage Rate for Purchases Grace Period for Purchases Minimum Finance Charges Balance Calculation Method for Purchases
Annual Fees Transaction Fees for Cash Advances Late Payment Fees 19.9%
Not less than 25 days
$.50 when a finance charge
at a periodic rate is charged
Average daily balance method (including new purchases)
$20 per year
2% with a minimum
fee of $3
$29
Opening a Credit Account
1. Applicant completes a credit application
2. Lender conducts a credit investigation
3. Applicant is given a credit rating
4. Lender accepts or denies the credit request
5. If accepted, applicant evaluates the credit card details (USE THE SCHUMER BOX!)
Understanding the Bill
$ Minimum Payment Due: minimum amount to be paid
¢ If this amount is paid and a balance is left on the account,
additional finance charges will be included in the following month’s balance
$ Past Due Amount: the previous amount due which was not paid before the due date
$ Due Date: the day by which the company requires a payment to be made
Understanding the Bill
(continued)$
Credit Line
: the maximum amount of charges
allowed to an account
$
Finance Charge
: charges assessed for credit
✔ Sign card with signature and “Please See ID”
✔ Do not leave cards lying around
✔ Close unused accounts in writing and by phone, then cut up the card
✔ Do not give out account number unless making purchases
✔ Keep a list of all cards, account numbers, and phone numbers separate from cards
✔ Report lost or stolen cards promptly
