Chapter 3

Finances- assets in the form of money Money- anything you exchange for g&s

Electronic Funds Transfer (EFT) ∙ transfer of money ∙ most common EFT= online services and debit card EBT – Electronic Benefits Transfer Denomination or Face Value ∙ number printed or stamped on money

Financial Needs-things needed to survive Financial Wants- things you desire Standard of Living  measures how well you are living based income, comfort, material goods, and quality of life  Financial Security- safety, comfort, peace of mind  Financial Decisions- based on needs, wants and money

I. Financial Goals- plans you have for using your money  Open-ended Savings - flexible savings goal, no specific goal II. Two Types of Financial Goals 1. Spending  Buying things you want and need – NOW  Short-term goal- < 1 year 2. Savings  Saving for things you want and need – FUTURE  Long-term goal- > 1year Introduce: SMART

Balance Sheet – a financial statement showing your net worth ASSETS - things that you own LIABILITIES - things that you owe Assets – Liabilities = NET WORTH Introduce: RIP-L

Budget- plan for spending your money - an estimate Income - money you receive Expenses- money you spend a.) Fixed- stays the same: rent, car note, cable b.)Variable- change from month to month: clothing, food, utilities

1. List all income: wages, bonus, gifts 2. List all expenses: variable and fixed 3. Do the math! 4. Balance the Budget- Explain to the class!!!! ▲ Income – Expenses = surplus (+) or deficit (-) ▲ Surplus - Income > Expenses ▲ Deficit - Expenses > Income

Income  Base Pay a.) hourly wage $7.25 per hour b.) annual salary $85,000 per year Paycheck - a document showing how much you should be paid Pay Period - number of days which you are being paid – weekly, bi-weekly, monthly… Pay Stub –shows earnings, taxes, and other deductions

Types of Benefits INSURANCE: Health, Life and Disability VACATION/HOLIDAYS: Paid time off RETIREMENT: 401(k), Stock Options