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Personal Management Merit Badge $ Lots of effort, but totally worth it!

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Presentation on theme: "Personal Management Merit Badge $ Lots of effort, but totally worth it!"— Presentation transcript:

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2 Personal Management Merit Badge $ Lots of effort, but totally worth it!

3 HANDOUT Fill in the blanks. OR use your own pages. You may use the words Ill suggest, or - You may use other words you like better! Brainless attendance

4 HANDOUT Boxed portions: To be reviewed with your Merit Badge Counselor. To help you in the future: Keep it! Read again in 5 yrs! If I go too fast, stop me. Bring this handout back next time: 2 nd ____________ Name ______________________________________ Date of merit badge classes: 1 st ____________ * AFTER youve completed EVERYTHING (ready to discuss)!

5 p.2, Requirement #1: Do the following: Choose an item that your family might want to purchase that is considered a major expense. (b) Write a plan that tells how your family would save money for it. We can save money by: _____________________________ Item chosen: _______________ Approximate cost: ___________ HDTV Mostly _______ earnings, but each of us could contribute. $1,000

6 p.2, Requirement #1 (continued): (b)1. Discuss the plan with your merit badge counselor.* *When are you going to discuss this with your merit badge counselor? (FHE?) 2. Discuss the plan with your family. **When are you going to do this? 3. Discuss how other family needs must be considered in this plan.**

7 p.2, Requirement #1: Do the following: (c). Develop a written shopping strategy for the purchase: 1. Determine the quality of the item (using consumer publications or rating systems). _______________________________________ Google, Yahoo, EBay, Consumer Reports

8 p.2, Requirement #1: Do the following: (c). Develop a written shopping strategy for the purchase: 2. Comparison shop for the item. Find out where you can buy the item for the best price. Call around Who you called:What you learned: ____________ ________________ Gwidos Pawn ShopDont go there!

9 p.2, Requirement #1: Do the following: (c). Develop a written shopping strategy for the purchase: 2. Comparison shop for the item. Find out where you can buy the item for the best price. Study ads Where you looked:What you learned: ________________ ____________________ Newspaper www.ebay.com Sears had a great sale Including shipping…

10 p.2, Requirement #1: Do the following: (1)(c)2 Did you find a great sale or a discount coupon? ________ ____________________________________________ Can you buy the item used? ___________________ Should you wait for a sale? ___________________ Maybe, but________ I could, but already found… Yes Consider alternatives:

11 p.3 Prepare a budget reflecting: Track your actual. Your expected income (allowance, gifts, wages), Your expected expenses & savings (Outgo). 1 st Week INCOME Expected Actual Allowance______ ______ Job______ ______ Gifts______ ______ _______________ ______ Total in ______ ______ EXPENSES & SAVINGS Expected Actual Donations______ ______ Savings______ ______ Savings (for… ______ ______ Save to Buy______ ______ Junk food______ ______ _______________ ______ Total Out ______ ______

12 INCOME Expected Actual Allowance _____ Job _____ Gifts _____ _______________ _____ Total in _____ OUTGO Expected Actual Donations ______ Savings ______ Savings (for… ______ Save to buy ______ Junk food ______ ______ _______________ ______ Total Out ______ $10 $30 $ 3 $30 $42 2(b). Compare expected income with expected expenses. determine steps to balance: working more EXAMPLE I can increase income by ___________ 2. If outgo exceeds income, or decrease expenses by_______________ buying less junk

13 INCOME Expected Actual Allowance _____ Job _____ Gifts _____ _______________ _____ Total in _____ OUTGO Expected Actual Donations ______ Savings ______ Savings (for… ______ Save to buy ______ Junk food ______ ______ _______________ ______ Total Out ______ $10 $30 $ 3 $12 2(b). Compare expected income with expected expenses. 2. If expected income exceeds expected outgo, state how you would use the excess money: I could have some for __________________ Another EXAMPLE better stuff later.

14 INCOME Expected Actual Allowance _____ Job _____ Gifts _____ _______________ _____ Total in _____ OUTGO Expected Actual Donations ______ Savings ______ Savings (for… ______ Save to buy ______ Junk food______ ______ ______ ______ Total Out ______ $10 $30 $ 3 $12 $10 $20 $50 $ 5 $20 $40 What actually happened? Presents This guy should have EXAMPLE $10 more now than 1 week ago. If you finish one week of expected and actual by next class...

15 (How about putting it on your pillow?) p.3-7, Req 2a Track your actual income, expenses, and savings for 13 consecutive weeks. Income SourceActual ___________ _______ Total_______ Expenses WhereActual ___________ _______ Total_______ How are you going to remember to do this each day? Share this with your merit badge counselor.

16 p.8 Req. #3 Discuss with your merit badge counselor Five of the following concepts: a.The emotions you feel when you receive money: b.How the amount of money you have with you affects your spending habits: * If I have lots of money, I tend to spend ______ If Id stolen the money, Id feel _____ When I honorably earn money, I feel ______ more. If I dont have my money, it is ______ to spend. harder Unless I have a credit card, then it is still easy to spend money I dont have. Good Bad!

17 Im usually less __________ about it. c.Your thoughts when you buy something new: Your thoughts about the same item 3 months later: I usually feel ___________________ excited happy excited happy

18 (c) Explain the concept of: buyers remorse Often after buying something people feel _______ sorrow (remorse) Especially if they ________ $, when it is time to make payments, they feel sorry or have _______ _______. borrowed and wish they could undo the _________. purchase buyers remorse p.8 Req. #3 Discuss with your merit badge counselor Five of the following concepts:

19 3d. How hunger affects you when shopping for food items: Did the item work as well as advertised? ___ _______ If Im hungry, I tend to buy. 3e. Your experience of buying an item after seeing or hearing advertisements for it. Not always. Once in awhile it is actually _____ than I expected. Often, the ad makes it sound _____ than it actually is. better better more

20 then, most of it gets ___________________ then into the ___________ 3f. Your understanding of what happens when you put money into a savings account: They pay me _______ for the use of my money. They can afford to because they charge the borrowers interest at a ______ rate than the rate they pay me. interest higher It goes into the ______________, tellers drawer banks safe loaned out or invested or into the ___________ banks bank

21 Charitable Giving 3g. Explain its purpose and your thoughts about it: I think it is a _______ idea to give to a charity or church. Good charities use money to help the ____ and _____, build buildings for __________ and other __________ purposes. poor sick worship worthwhile

22 I can save _____ of my earnings for more important things Ill need in the future. I can use my money for ____ worthwhile purposes. 3h. What you can do to better manage your money: I can use ____ of it for junk. more less more

23 usually means: ___ risk way to accumulate money. Saving p. 9, Requirement #4. Explain the following to your mb counselor: 4a. The difference between saving and investing, including reasons for using one over the other. low- * My father wanted me to save ever penny I got, I didnt like that.

24 Save $100 each month at 5%

25

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27 û Now earning > $110+ each month

28 p. 9, req 4a Recommended Savings: Save _____% in an Emergency Fund. Try to never, ever spend this money! 10 Save enough for your _____ ______ expenses. Stuff you know youll be spending money on once a year! for sure Save whatever you can just to _____ ______. buy stuff

29 Savings Goal:

30 p. 9, Requirement #4. Explain the following to your Merit Badge Counselor: 4a. The difference between saving and investing, including reasons for using one over the other. Stocks & Bonds Investing usually means ______ -risk with a hope of a ______ return. higher higher

31 Reasons for saving rather than investing: People who save money in a bank or credit union are much ____likely to lose it. And more likely to be able to get it when they ______ ___ p.9, Requirement 4a. Explain the following to your merit badge counselor. Reasons for saving: People typically save money for future needs including ____________. emergencies less Banks and credit unions are usually very careful with our $, and our savings are insured by agencies of the U.S. Government: _____ & _______ FDICNCUA want it

32 Reasons for investing rather than saving: Although the risk of loss is higher, and some investments require lots more ______, some investments earn ___ _____ money. p.9, Requirement 4a. Explain the following to your merit badge counselor. Reasons for investing: People invest in hopes of earning __________. more money lots more Stocks & Bonds work

33 p.9, Requirement 4b. Explain the following to your merit badge counselor. 4b. Explain the concepts of return on investment and risk. Return on investment refers to the amount you receive __ _____ of the amount you invested. in excess Risk is a measure of the possibility of suffering harm or ____. loss Why would anybody choose 5% when they invest at 25%? The greater the rate, the higher the ____. risk or: The greater the risk, the higher possible _______ and possible _______. returnloss expected actual

34 p. 9, Requirement #4c Explain the concepts of simple interest and compound interest. Suppose you bury $1,000, and dig it up 20 years from now Instead, suppose you put it in the bank and earn 5% for 20 years PRINCIPAL

35 p. 9, Requirement #4c Explain the concepts of simple interest and compound interest. Simple interest: Interest paid only on the ________ balance. principal

36 p. 9, Requirement #4c Explain the concepts of simple interest and compound interest. Now, suppose you have them add your interest to your principal balance. interest. Compound interest: Interest paid on both the principal and previously paid _______ Principal Compound Interest

37 p. 9, Req. #4 Explain how these (simple interest & compound interest) affect the results of your investment exercise (p.12). If I save or invest $1000 and I spend all the earnings as I get it, I do not get the advantage of _____________. If I have my earnings added to the investment, I earn interest not only on the ________ but also on the ______ _________ compounding principal prior earnings And, I get compound interest.

38 and help him decide whether to ___, ___, ____, ____, or _____ a stock. p. 10, Req. #5 Select 5 publicly traded stocks from the business section of the newspaper. a. Explain to your merit badge counselor the importance of the following information for each stock: Current price: Is important to know how _____ an investor can buy, much The current price may be obtained ______, from a ____ ______, or estimated from _________. stock broker buy sell trade hold avoid newspaper on-line

39 p. 10, Req. #5 Explain the importance of: b. How much the price changed from the previous day: If it went down a lot, something might be seriously ______ with the company. wrong It is important to see if the price changed, and how _____, and whether it went __ or ____. muchup down

40 p. 10, Req. #5 Explain the importance of: c. The 52-week high and the 52-week low prices: If it went down a lot, something might be seriously ______ with the company, or with the stock market __ _______. wrong It is important to see if the price has been about the same, or ______, or _____ than it is now. higher lower It might be a good time to ___. But it might be a good time to _____ __. buy avoid it Knowing this is enough to realize you need to know __ ___ ______! in general a lot more

41 p. 10, Req. # 5 Obtain the business section of your newspaper and obtain the following for 5 stocks: Date of Newspaper: ________ Name1 st stockClose PriceNet Change 52-wk high NameLastChg1yrhi _______________________ _________ ___________ Explain: The importance for this stock: Current price (est: _______) __________________________ Change from previous day: __________________________ The 52-week high: __________________________ 9/25/04 DeltaAir3.26-.7015.54 3.00Low enough to buy a bunch Lost 70¢ per share: danger Lost $12.28 p/share: danger Usually buy 100 shares at a time.

42 Should I buy? (on 8/28/06: 68¢, then down to $0)

43 p. 10, Req. # 5 Obtain the business section of your newspaper and obtain the following for 5 stocks: (Ive already given you 1) Date of stock quote: ________ Name 2 nd stockClose PriceNet Change 52-wk high NameLastChg1yrhi _______________________ _________ ___________ Explain: The importance for this stock: Current price (est: _______) __________________________ Change from previous day: __________________________ The 52-week high: __________________________

44 SATURDAY


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