1. Teen Living Objective 10.01 Identify Sources of Income and Types of Spending

2. Income  Income = The amount of money someone earns and has available to spend

3. Type of Employment  Salaried Employee = earn the same amount of money per month, regardless of the hours worked  (vs. Hourly Employee = paid based upon number of hours worked)

4. Net/Gross Income  (Gross Income = The amount of income that you start with)  Net Income = The amount of income that is left after taxes

5. Net/Gross Income  Deductions = the amount of money subtracted from the total pay (gross income)  Gross annual income = $50,000  Taxes (33%) = 16,500  Insurance = -4,200  Net Income = $29,300

6. Savings  Savings Accounts = Keep money safe and pays YOU interest  (Interest works for you in a savings account, as you make $, but it can work against you)

7. Interest  Interest = a payment in addition to the original cost  (i.e. a new flat screen TV costs $500. You pay a total of $575 when making payments for a year. The extra $75.00 you paid for the TV was the INTEREST that you paid the store)

8. Payments  Monthly Loan Payments = regular payments toward the cost of an item plus the interest charged

9. Debit Cards  Allow a person to pay for items without writing a check  (the money comes directly out of their checking account, just as a check would)

10. ATM  Automatic Teller Machines = enable customers to withdrawal certain amounts of money from their checking accounts  (you can access your money any time of the day or over the weekend)

11. Credit Cards  Lowest Annual Percentage Rate = the most economical credit card has the lowest % rate  (the lower the rate, the less you have to pay the bank back for borrowing money)

12. Credit Cards  Grace Period = the amount of time before a finance charge is added to what is owed  (you can charge a purchase on your credit card, but if you pay the total before the due date, you do not pay a finance charge/interest)

13. Credit Card Terms