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MONEY MANAGEMENT -- BUDGETS. After completing this unit, you should be able to: Analyze & prepare a personal budget… Evaluate why and how debt occurs…

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Presentation on theme: "MONEY MANAGEMENT -- BUDGETS. After completing this unit, you should be able to: Analyze & prepare a personal budget… Evaluate why and how debt occurs…"— Presentation transcript:

1 MONEY MANAGEMENT -- BUDGETS

2 After completing this unit, you should be able to: Analyze & prepare a personal budget… Evaluate why and how debt occurs… Prepare & analyze personal short & long term goals… Determine ways to increase personal income & avoid debt… DONT LET THIS HAPPEN TO YOU!!! Theo doesnt want to go to college – he wants to be regular people CREATING A PERSONAL BUDGET IS AN ONGOING, LIFELONG SKILL FOR PERSONAL AND CAREER PURPOSES…

3 Financial Plan: set of goals for acquiring, saving & spending money… Financial Goals: Measurable objectives related to acquiring or spending money… Can be short- or long-term… SMART Goals: Specific Measurable Attainable Relevant Timely How will you catch your dreams??? PERSONAL FINANCIAL GOALS

4 Needs must haves… survival… Wants desires… not necessary for survival… NEEDS / WANTS

5 Values (beliefs) Different for everyone… Family, friends, experiences… Affect how you think about money… Consider your values, then prioritize your needs & wants to direct your financial future… VALUES

6 Just because someone earns a million dollar salary doesnt mean they are a millionaire!!! What is wealth??? A plentiful supply of money or valuable goods… Assets: things you own… monetary value… Liabilities: debts you owe… Net Worth = Assets – Liabilities Disposable Income: (net pay/income) take home money used to pay expenses… Discretionary Income: what is left after all expenses are paid… BUILDING WEALTH

7 Oprah Winfrey Michael Jordan Mark Zuckerberg Donald Trump Bill Gates LeBron James NET WORTH EXAMPLES

8 8 SAMPLES PAY CHECKS AND PAYSTUBS

9 9 WHO IS FICA AND WHAT IS IT FOR? FICA (Federal Insurance Contributions Act) Which represents the tax that pays for retirees, people with disabilities, and children of deceased workers The employer pays the same percentage into Social Security and Medicare If self-employed, one is responsible to paying two times the Social Security and Medicare

10 10 10 MAJOR PAYROLL DEDUCTIONS Some have fixed amounts while other change depending on type or work or location 1.Federal Income Tax: 10.00%-39.00% 2.State Tax: 1.40%-8.97% 3.Local Tax: 1.00%-4.00% 4.Social Security/ Medicare (FICA):5.65% 5.Unemployment: <1.00% 6.Emergency Services: $10.00-$ Health Insurance : variable by employer 8.Union or Association Dues: variable 9.Pension Contribution: variable (k), 403(b), 457, etc. (voluntary): variable

11 Fixed Expenses Stay the same each month… Variable Expenses Change from month to month… CATEGORIZING EXPENSES Where does your money go??? As teenagers, your expenses are limited…

12 Useful tool to track your money and spend wisely… Created for a specific time period (usually 1 month)… You will need to know: the amounts of income for the period & total… the fixed & variable expenses & total… Subtract the total expenses from the total income (discretionary income)… If discretionary income is negative, reduce expenses… WHAT IS A BUDGET?

13 Personal Benefits??? Business Benefits??? Getting Your Teen on a Budget: BENEFITS TO CREATING A BUDGET

14 WHY DO WE NEED TO BUDGET??? ASK BILL COSBY…


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