Family Feud: Money, Money, Money!!! Family Budgeting Basics

Welcome to the Future! Imagine your Future… Let’s say you’re married with 2 kids. Your kids are 13 and 16. What do you want? What things do you envision your family having and doing. Using only the first column of your Family Feud Packet, complete the Checklist. Simply, put a check next to the items you desire. YOU MUST USE PENCIL FOR THIS ENTIRE ACTIVITY! Example: Housing: What kind of house do you see your family living in? __ New large 3 story house with basement and pool ____ Older 2 story house with a nice yard ____ Garden Home (one level home) with a small yard ____ Apartment

Everything comes with a price… Now, you are going to see how much each of these things cost… Write the cost of the option you chose in the second column of your paper labeled “cost.” Expenditures Cost Housing: What kind of house do you see your family living in? ____ New large 3 story house with basement and pool ____ Older 2 story house with a nice yard ____ Garden Home (one level home) with a small yard ____ Apartment   $2800 $1600 $1000 $800 Cars: What kind of cars for you, your spouse drive, and 16 year old? How many of each? ____ New Luxury Cars (like Mercedes, BMW, Lexus) ____ New Mid-level Cars (like Honda, Volkswagen, Kia) ____ Slightly Used Car that isn’t too old, but runs well ____ Old Used Car that still runs, but is old. $800 each $400 each $250 each $100 each Gas for Each Car You must pay for gas for each of your cars. Gas- # of cars x $100 per car = Savings: Do you want… you can do both… ____ Vacation at least once a year ($2500 or $200 per month) ____ Christmas/ Birthday Gifts $200 $100 Savings: College Savings for your Kid’s College 2 kids/ per month ____ Public/4 year/In-state (Alabama, Auburn, UAB, etc) ____ Public/4 year/Out of State (LSU, Ole Miss, Georgia, etc) ____ Private School (Samford, Harvard, Yale, etc) ____ Trade School/Community College (Jeff State, Shelton State, etc) $115 $166 $518 $75

Housing: What kind of house do you see your family living in? Expenditures Cost Housing: What kind of house do you see your family living in? ____ New large 3 story house with basement and pool ____ Older 2 story house with a nice yard ____ Garden Home (one level home) with a small yard ____ Apartment   $2800 $1600 $1000 $800 Cars: What kind of cars for you, your spouse drive, and 16 year old? How many of each? ____ New Luxury Cars (like Mercedes, BMW, Lexus) ____ New Mid-level Cars (like Honda, Volkswagen, Kia) ____ Slightly Used Car that isn’t too old, but runs well ____ Old Used Car that still runs, but is old. $800 each $400 each $250 each $100 each Gas for Each Car You must pay for gas for each of your cars. Gas- # of cars x $100 per car = Savings: Do you want… you can do both… ____ Vacation at least once a year ($2500 or $200 per month) ____ Christmas/ Birthday Gifts $200 $100 Savings: College Savings for your Kid’s College 2 kids/ per month ____ Public/4 year/In-state (Alabama, Auburn, UAB, etc) ____ Public/4 year/Out of State (LSU, Ole Miss, Georgia, etc) ____ Private School (Samford, Harvard, Yale, etc) ____ Trade School/Community College (Jeff State, Shelton State, etc) $115 $166 $518 $75 Cell Phones-What types of phones does your family have? ____ Whole family has iPhones with unlimited data and texting ____ Parent- iPhones, Kids- flip phones with texting (no data) ____ Everyone has a flip phone (no data) ____ Parents- flip phones; Kids- no phones ____ No Cell Phones $250 $180 $50 $0 At the Grocery Store ____ Top of the Line- eating the best there is ____ Middle of the Line-Average food/ average cost ____ Thrifty – Eating on a budget- cheap stuff $1100 $750 $550 Out to Eat: How many times a month do you go out to eat? ____ At least 2-3 times per week (10 times a month) ____ Once or Twice a week (6 times a month) ____ Less than once a week (3 times a month) ____ Once a month ____ NEVER $500 $300 $150 Cable and Internet Full package- with movie channels, DVR and Internet wifi Standard package with internet Wifi Basic package with internet Cable only Internet Only $220 $175 $125 Non-negotiables… you have to pay the following each month Utility Bills: Water, Power, Gas heat Charitable Giving Do you give money to your church? Or to other organizations like Race for the Cure? Humane Society? The Heart association? Total Cost

The Real World… YOU MUST USE PENCIL FOR THIS ENTIRE ACTIVITY! Now, the moment of truth… Your family income for this activity will be the same as the average family in Trussville makes, $80,108 (www.city-data.com). To figure out your family’s monthly income, divide your annual income by 12 --- what is it? So, your family has to make a budget (under the “Budget with Income” column) with the things you want that doesn’t go over $6,675 YOU MUST USE PENCIL FOR THIS ENTIRE ACTIVITY! Imagine your Future… Let’s say you’re married with 2 kids. Your kids are 13 and 16. What do you want? Total Cost Budget with Income Budget with Deductions Here We Go Again…

Cost Continued… Be sure to Tally your total cost! Savings: College Savings for your Kid’s College ____ Public/4 year/In-state (Alabama, Auburn, UAB, etc) ____ Public/4 year/Out of State (LSU, Ole Miss, Georgia, etc) ____ Private School (Samford, Harvard, Yale, etc) ____ Trade School/Community College (Jeff State, Shelton State, etc)   $115 $166 $518 $75 Cell Phones-What types of phones does your family have? ____ Whole family has iPhones with unlimited data and texting ____ Parent- iPhones, Kids- flip phones with texting (no data) ____ Everyone has a flip phone (no data) ____ Parents- flip phones; Kids- no phones ____ No Cell Phones $250 $180 $100 $50 $0 At the Grocery Store ____ Top of the Line- eating the best there is ____ Middle of the Line-Average food/ average cost ____ Thrifty – Eating on a budget- cheap stuff $1100 $750 $550 Out to Eat: How many times a month do you go out to eat? ____ At least 2-3 times per week (10 times a month) ____ Once or Twice a week (6 times a month) ____ Less than once a week (3 times a month) ____ Once a month ____ NEVER $500 $300 $150 Non-negotiables… you have to pay the following each month Utility Bills-Water, Power, Gas- $200- You have to pay this! Gas- $100 per car- You must pay for gas for each of your cars. Total Cost  Tally total Cost!

Taxes, Retirement, and Health Care Costs “All that is certain in life is death and taxes” —Benjamin Franklin

Why do we have taxes? The government has a lot of expenses… Build roads, schools, courthouses, jails, parks, and space shuttles. Fund our military, police officers, firefighters, public servants, teachers, or state and local maintenance workers. Pay for many important services for people and countries in need. In order to pay its bills, the government needs revenue, or a source of income. The money that the federal government uses to pay its bills comes mostly from taxes!

Where Does the Government’s Money Come From? http://apps.irs.gov/app/understandingTaxes/teacher/downloads.jsp

What Does the Government Spend it’s Money On? http://apps.irs.gov/app/understandingTaxes/teacher/downloads.jsp

Types of Taxes If you go to the store and buy a delicious Snicker’s Bar for $1.00 do you actually pay just $1.00? Nope, you’ve got to also pay for sales tax. So it probably ends up being about $1.10 But we also pay a lot of other types of taxes. Most of the taxes we pay actually come out of our paychecks before we even get the money. Federal Income Tax State Income Tax Local Income Tax Social Security (FICA) Medicare

Income Taxes Income tax is exactly what it sounds like. It is a tax on your income or a tax on the money you make. Your income is taxed by the National Government- pays for the Federal Budget State Government- pays for the State’s Budget Local Government- pays for your town and/or county’s expenses. Other types of deductions come out of your paycheck before you get it as well…

Social Security Social Security taxes are collected to aid workers who are retired or disabled, or for members of deceased workers families. When you retire, you will receive a Social Security check every month to help pay for your living expenses. But, your Social Security check each month probably won’t be enough to maintain your lifestyle, so most people have an alternative savings account to have after they retire.

Medicare Medicare taxes help people pay for their health care as they get older. When you get older, you will get sick more often. (It’s a fact of life.)

Insurance Healthcare is extremely expensive. Almost no one can pay for a trip to the hospital out of their own pocket. It is crucially important to pay for health insurance each month in case something happens.

The Tax Man! YOU MUST USE PENCIL FOR THIS ENTIRE ACTIVITY! Now that you know your post-taxes monthly income, you know what is time for… Time to Re-Budget! Use the “Budget with Deductions” Column. Think about your disposable income… what can you cut first? Your budget cannot go over $4,473.43 YOU MUST USE PENCIL FOR THIS ENTIRE ACTIVITY! Imagine your Future… Let’s say you’re married with 2 kids. Your kids are 13 and 16. What do you want? Total Cost Budget with Income Budget with Deductions Here We Go Again…

Budget with Deductions $4473 1) when you finish, answer question 2 and 3 in your reflection Yes, the page number is wrong on #3, you can look at today's notes. 2) Turn in the blue form and your family feud on my desk.

Housing: What kind of house do you see your family living in? Expenditures Cost Housing: What kind of house do you see your family living in? ____ New large 3 story house with basement and pool ____ Older 2 story house with a nice yard ____ Garden Home (one level home) with a small yard ____ Apartment   $2800 $1600 $1000 $800 Cars: What kind of cars for you, your spouse drive, and 16 year old? How many of each? ____ New Luxury Cars (like Mercedes, BMW, Lexus) ____ New Mid-level Cars (like Honda, Volkswagen, Kia) ____ Slightly Used Car that isn’t too old, but runs well ____ Old Used Car that still runs, but is old. $800 each $400 each $250 each $100 each Gas for Each Car You must pay for gas for each of your cars. Gas- # of cars x $100 per car = Savings: Do you want… you can do both… ____ Vacation at least once a year ($2500 or $200 per month) ____ Christmas/ Birthday Gifts $200 $100 Savings: College Savings for your Kid’s College 2 kids/ per month ____ Public/4 year/In-state (Alabama, Auburn, UAB, etc) ____ Public/4 year/Out of State (LSU, Ole Miss, Georgia, etc) ____ Private School (Samford, Harvard, Yale, etc) ____ Trade School/Community College (Jeff State, Shelton State, etc) $115 $166 $518 $75 Cell Phones-What types of phones does your family have? ____ Whole family has iPhones with unlimited data and texting ____ Parent- iPhones, Kids- flip phones with texting (no data) ____ Everyone has a flip phone (no data) ____ Parents- flip phones; Kids- no phones ____ No Cell Phones $250 $180 $50 $0 At the Grocery Store ____ Top of the Line- eating the best there is ____ Middle of the Line-Average food/ average cost ____ Thrifty – Eating on a budget- cheap stuff $1100 $750 $550 Out to Eat: How many times a month do you go out to eat? ____ At least 2-3 times per week (10 times a month) ____ Once or Twice a week (6 times a month) ____ Less than once a week (3 times a month) ____ Once a month ____ NEVER $500 $300 $150 Cable and Internet Full package- with movie channels, DVR and Internet wifi Standard package with internet Wifi Basic package with internet Cable only Internet Only $220 $175 $125 Non-negotiables… you have to pay the following each month Utility Bills: Water, Power, Gas heat Charitable Giving Do you give money to your church? Or to other organizations like Race for the Cure? Humane Society? The Heart association? Total Cost

Savings and Debt

Savings and Debt Why Save Money? 3 reasons… The unexpected will happen. Some day you won’t be able to work anymore. If you save now, you can live a better life in the future. Debt is the circumstance of owing money.

Savings Options--- INVEST $ Stock - When you own a share of stock, you are a part owner in the company with a claim (however small it may be) on every asset and every penny in earnings. But, your investment is subject to be lost if the company tanks. This means that you can MAKE money or LOSE money! Bonds—A Bond is simply an 'IOU' in which an investor agrees to loan money to a company or government in exchange for a predetermined interest rate. Bonds generally involve less risk than stocks. http://www.youtube.com/watch?v=TnLeJ62qqCs&safety_mode=true&persist_safety_mode=1

Savings Option--- Save $$ Savings Accounts – These are usually the safest option for people trying to save money. Banks will hold your money safely, and even pay you interest for keeping your money at their bank. They use your money to issue loans to other people, but don’t worry; the federal government will make sure you get your money back. (FDIC) After the Great Depression, many people hid money in coffee cans or buried money in their back yards b/c they felt banks were unsafe.

Managing Money It’s important to manage your money properly so that you are able to save money. Checking Account: This is a service provided by banks which allows individuals and businesses to deposit money and withdraw funds from a federally-protected account. People use checking accounts to hold money in a safe place until they use it. We put money that we know we will need to spend soon in these accounts. If you were saving for college would you use a checking or savings account? If you needed to buy groceries would you use a checking or savings account?

Credit and Debit Cards Debit Card Credit Card What it is.. Plastic card that allow electronic access to a person’s checking account. How it is paid.. When a purchase is made, money is automatically withdrawn from the checking account. Meaning the money comes straight out of your checking account. If you don’t have the money in your account, you can’t use your Debit Card. What it is.. Plastic card that allows users to purchase items electronically by loaning money from an institution. How it is paid.. Cardholder’s are billed each month the total amount what was purchased plus interest. If you charge $100, your bill will be more than $100!!!

Why people don’t use them… Why people use them… Debit Card Credit Card Why people use them… They are convenient. It’s safer than carrying cash. It’s faster than writing a check. Why people don’t use them… It’s easy to forget how much is in your account. Overdraft fees- you get charged if you spend more than is in your account! Why people use them… They are convenient. It’s safer than carrying cash. You don’t have to pay for the item right away if you don’t have enough money. Why people don’t use them… They are too easy to use. Debt can pile up fast. If you don’t pay the balance each month, you pay interest.

Credit Cards and Debt Why they are risky…. What to do instead: Average Interest Rate: 14.99%... You pay more. So that video game you bought for $60, actually cost more like $70. Why pay the extra money when you can use cash now? You won’t get more money next month, but you will have more to pay for. Must adjust your lifestyle to pay off debt. Easy to dig a deep debt hole, extremely difficult to get out. What to do instead: Use cash—accepted everywhere. Plus, a fist full of money looks cooler than a credit card. Use a debit card or checkbook. If you must use a credit card, treat it like a debit card. Record all of your purchases and balance your finances.

Let’s Test Your Knowledge. Answer Debit or Credit. The money I spend with this card comes directly from my bank account. DEBIT The money I spend with this card is a loan from the bank or from a credit card company. CREDIT I must have enough money in my checking /savings account to pay for my purchase in order to use this card. Because interest is charged on my unpaid balance with this card, I may pay more for items I purchase with this card than if I pay cash. I can set up a payment plan with the card company if I can’t pay for all of my purchases at the end of the month.

1. Sit with your partner 2. Get out your NB#33 Notes

Unemployment

Unemployment Mini-Lesson Start 22 seconds in to the clip… http://www.youtube.com/watch?v=_CdTu1pk06w&safety_mode=true&persist_safety_mode=1  

Fired Sometimes people lose their jobs because they don’t do a good job. That is usually called getting “fired.”

Laid Off Other times though, and what happens a lot these days, is that people lose their jobs even if they were great at it. If your job is no longer there because of a shrinking economy, that is called a LAY-OFF. The more people that are unemployed, the fewer people there are to buy things like TVs. This isn’t good for families and it isn’t good for the country.

Unemployment Continued. During times like this, when the economy is shrinking and lots of people are out of work this is known as a recession. It isn’t easy to just find a new job. The overall number of jobs decreases and the amount of people looking for jobs increases.

Unemployment Mini-Lesson  

Current Unemployment

Unemployment Rate Chart

Unemployment rate by State This map shows unemployment rates as of September 2012. They have decreased since September.

Unemployment Hits Home! Sad Day… Your monthly income is about to be cut in half. You and your spouse were what we call a dual income family. One of you just lost your job. Instead of making $80,108 a year, you now only make $40,054. Remember, to figure out your family’s monthly income, divide your annual income by 12. That would give you $3,337.50 But, don’t forget taxes!!! Your family has to make a budget (under the “Here We go Again” column) with the things you want that doesn’t go over $2,236.71 Remember to USE A PENCIL! Imagine your Future… Let’s say you’re married with 2 kids. Your kids are 13 and 16. What do you want? Total Cost Budget with Income Budget with Deductions Here We Go Again…

Housing: What kind of house do you see your family living in? Expenditures Cost Housing: What kind of house do you see your family living in? ____ New large 3 story house with basement and pool ____ Older 2 story house with a nice yard ____ Garden Home (one level home) with a small yard ____ Apartment   $2800 $1600 $1000 $800 Cars: What kind of cars for you, your spouse drive, and 16 year old? How many of each? ____ New Luxury Cars (like Mercedes, BMW, Lexus) ____ New Mid-level Cars (like Honda, Volkswagen, Kia) ____ Slightly Used Car that isn’t too old, but runs well ____ Old Used Car that still runs, but is old. $800 each $400 each $250 each $100 each Gas for Each Car You must pay for gas for each of your cars. Gas- # of cars x $100 per car = Savings: Do you want… you can do both… ____ Vacation at least once a year ($2500 or $200 per month) ____ Christmas/ Birthday Gifts $200 $100 Savings: College Savings for your Kid’s College 2 kids/ per month ____ Public/4 year/In-state (Alabama, Auburn, UAB, etc) ____ Public/4 year/Out of State (LSU, Ole Miss, Georgia, etc) ____ Private School (Samford, Harvard, Yale, etc) ____ Trade School/Community College (Jeff State, Shelton State, etc) $115 $166 $518 $75 Cell Phones-What types of phones does your family have? ____ Whole family has iPhones with unlimited data and texting ____ Parent- iPhones, Kids- flip phones with texting (no data) ____ Everyone has a flip phone (no data) ____ Parents- flip phones; Kids- no phones ____ No Cell Phones $250 $180 $50 $0 At the Grocery Store ____ Top of the Line- eating the best there is ____ Middle of the Line-Average food/ average cost ____ Thrifty – Eating on a budget- cheap stuff $1100 $750 $550 Out to Eat: How many times a month do you go out to eat? ____ At least 2-3 times per week (10 times a month) ____ Once or Twice a week (6 times a month) ____ Less than once a week (3 times a month) ____ Once a month ____ NEVER $500 $300 $150 Cable and Internet Full package- with movie channels, DVR and Internet wifi Standard package with internet Wifi Basic package with internet Cable only Internet Only $220 $175 $125 Non-negotiables… you have to pay the following each month Utility Bills: Water, Power, Gas heat Charitable Giving Do you give money to your church? Or to other organizations like Race for the Cure? Humane Society? The Heart association? Total Cost

NOW… you’re finished Complete your reflection. Turn in your Family Feud Budget sheet Turn in your blue price sheet Turn in your reflection KEEP YOUR NOTES IN YOUR BINDER. ADVANCED CLASSES – Web Quest is due Monday.