2 Money Going OutMoney going out is called expenses, which come in two categoriesFixed Expenses—set amount that is the same every time, like rent and car paymentsVariable Expenses—amounts that change, like gas for the car or groceries; you have more control over theseLook up rents for a 1-bedroom apartment in Lincoln City for this date on Craig’s list. Notice how much the rents vary. Discuss reasons that could account for this and write them in your notebook. Remember, once you have chosen an apartment, it is a fixed expense.
3 Cash Management and Budget Building Cash management is how you handle money coming in and going out; also called cash flowThe best way to manage money is a budgetMoney is limited so a budget guides monthly spendingA budget helps use what you have for needs, wants and goalsBudgets have two main partsIncomeExpensesThe trick is to balance them; imbalance creates DEBT
4 Cash Management and Budget Building PYFPay yourself firstThe government takes its percentage, so you take yours firstPut it in savingsYou might want to start with 10% off the topImportant lifetime money management toolYou’ll be dealing with money for your whole life, so learn this now to achieve long term goals
5 Building Your Own Budget Sample Budget for Tom Thumb for the week of June 6Money Coming InWork (after taxes)Gifts/AllowanceOtherTotal IncomeMoney Going OutFixed ExpensesPYFCar PaymentAuto InsuranceTotal Fixed ExpensesVariable ExpensesGasFoodClothingFun StuffBig EventsTotal Variable ExpensesTotal Outgoing (fixed + variable expenses)Any money left over (income minus outgo)
6 Create Your Own BudgetStudy the sample budget on the previous slide. Copy the outline into your notebook.If you don’t have a steady income right now, assume you get an allowance of 20 dollars a week.If you don’t pay rent or have a car, substitute another fixed expense, like cell phone billsYour budget should be for one week and should include PYF for goals from Unit 1
7 Making the Most of Your Dollars How to stretch your dollarsBuy items on saleSave CouponsGarage SalesThrift storesSometimes you have to buy new, so learn to evaluate sales pitches to separate the truth from fictionRead the fine printConsumer ReportsAsk around: friends, family, internet bulletin boardsIdentify Propaganda for what it is
8 Making the Most of Your Dollar The Power of PropagandaWatch the video. In your notebook list and describe the propaganda techniques. How will this knowledge be helpful in making decisions about what to buy?
9 Cost/Benefit Analysis Weighing the costs of a benefit or service against the benefits it will provideImagine you have the opportunity to purchase season passes to Magic Mountain. The season pass is 100 dollars. Individual tickets are 50 dollars. What are the benefits? How many times would you have to attend in one year to break even?Think of an item or service you would really like to have. Copy the chart into your notebook and consider the costs and benefits.CostsBenefits
10 How Do You Spend Your Money Create a pie chart of your personal budget on power point. An example of expenses is done below.Print the page and place it in your notebook.
11 BibliographyTEXT AND ASSIGNMENTSNEFE High School Financial Planning Program, Student Guide. National Endowment for Financial Education. Greenwood Village, COPage 8: “The Power of Propaganda.” You Tube.ImagesPage 7: “The Old Wooden Bucket.” atticPaperAll images not catalogued are from Microsoft ClipArt Gallery.