©South-Western, Cengage Learning PART 2 On Your Own

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 2 Performance Outcomes In Part 2 of this simulation, you will learn to: 1.Determine a single person’s net worth. 2.Plan a realistic budget for a single person. 3.Record a person’s daily financial activities in a record book or in a computer file. 4.Organize the receipts, forms, and other paperwork involved in financial activities. Performance Outcomes are continued on the next slide.

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 3 Performance Outcomes 5.Maintain a checking account, including making deposits, writing checks, and balancing a checkbook register. 6.Use an automated teller machine (ATM) and a debit card. 7.Make smart purchasing decisions that fit within a person’s budget. 8.Evaluate a person’s financial activities at the end of each month.

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 4 Meet Tyra M. Burns Tyra Burns is 24 years old. She lives alone in a rented apartment. Tyra works full time as the assistant manager of the Water Point Grille. She earns $32,400 a year.

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 5 Figuring Out Net Worth Assets—what you own Liabilities—what you owe Net Worth—the dollar value of what you own minus the sum of your all your debts Assets – Liabilities = Net Worth

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 6 Statement of Net Worth

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 7 Statement of Net Worth List assets and their cash value.

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 8 Statement of Net Worth Add the amounts and enter the sum.

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 9 Statement of Net Worth List liabilities and their cash value.

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 10 Statement of Net Worth Add the amounts and enter the sum.

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 11 Statement of Net Worth Calculate net worth by subtracting total liabilities from total assets.

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 12 Statement of Net Worth Add total liabilities and net worth.

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 13 Tyra's Assets Checking account, $ Savings account, $69.65 Savings bond, $ Current value of her used car, $3, Value of her personal items, $1, Cash, $90.00

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 14 Tyra's Liabilities Amount she owes her parents for her car, $1, October rent, $ Tri-County Gas & Electric bill, $42.53 Maplewood Telephone Company bill, $35.95

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 15 Statement of Net Worth for Tyra Burns

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 16 Budget Worksheet

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 17 Planning Tyra’s Budget Monthly Income Monthly Expenses

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 18 Tyra’s Monthly Income Gross pay – Deductions = Net Pay Gross pay Deductions Net Pay Year-to-dateThis period

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 19 Expense Categories Savings/Debt Payoff Home Food/Sundries Personal Transportation Entertainment Miscellaneous Health Care

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 20 Budget Worksheet for Tyra Burns Savings/ Debt Payoff Transportation Home Entertainment Food/Sundries Personal Health Care Total expenses should be the same as net pay. Miscellaneous

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 21 Recording Tyra’s Transactions Use the Financial Record Book to record every transaction in one master record. A transaction is any event that involves money coming in or going out. To see how this works, you are going to record all of Tyra’s transactions for October.

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 22 Financial Record Book Deposit column Add the deposit to the amount in the Balance column. The result is the current balance—the total amount in the account after the transaction. Budget categories Subtract the payment from the amount in the Balance column. Again, the result is the current balance—the total amount in the account after the transaction.

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 23 Checkbook Register Check Number or other notation Date Payment or debit Fee Deposit or credit Balance Description of transaction

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 24 Paycheck Endorsed for Deposit Only Back of check Endorsement area Endorsement for deposit only

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 25 Filled-Out Deposit Ticket Account holder’s name and address Account number Date Amount of check to be deposited Total amount to be deposited

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 26 Write a Check Check number Date Amount using numerals Signature Account holder’s name and address Account number Purpose of the check Amount in words Payee

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 27 Parts of an Automated Teller Machine (ATM) All ATM machines are similar. They all have the eight parts shown here. Speaker Card Reader Slot Receipt Printer Selection Buttons Keypad Deposit Slot Cash Dispenser Display Screen

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 28 JUMPSTART Standard: Develop a plan for spending and saving. It is never too early to develop a plan for spending and saving. You can start planning by thinking about where you get money and how you spend it.

©South-Western, Cengage Learning Family Financial Management: PART 2 Slide 29 Special Topic Readings on the Data CD Special Topic 4:How a Budget Puts You in Control Special Topic 5:Where Does All the Money Go? Special Topic 6:Saving for Something Special