Objective Teen Living Money Management

10.00 Analyze strategies for managing money to achieve financial stability Identify sources of income and types of spending Record factors that influence spending Explore ways to manage money.

Income The amount of money someone earns and has available to spend Net Income: the amount of money available after taxes are taken out Gross: Before taxes taken out—MUCH higher A salaried employee earns the same amount of money each month regardless of the hours worked. Teachers! (Anyone being paid a fixed amount of money for the their work, irregardless of the hours spent.)

Paycheck Paid by check: you must ENDORSE it by signing your name on the back of the check to cash or deposit it. Direct deposit: your money goes straight into your checking or savings account. (This can be good once you have this set up, but not good if you need your money deposited by a specific time on a particular day.)

Deductions The amount of money taken out of your paycheck for taxes, insurance, other items.

Checking Account Comes with a register ( booklet for recording each check amount, date, number, and to whom the check goes) Record the amount of the check in the check register immediately Any check that you have written, but does not appear on the bank statement is still outstanding, and has to be considered to reconcile your account correctly Reconciling a bank statement means your check register must match the bank statement

Savings Accounts Keep money safe and pays you interest on the money When choosing a place to open a savings account, be aware of any fees the bank may charge you.

Automatic Teller Machines (ATM) Enables customers to withdraw money from their account at any time of day or night, even when the bank is not open. (You must have a card that is connected to a bank account.) The money is taken out of your checking or savings account, depending on which you choose. Safety: Look around you. Protect your PIN number. After using the ATM, lock your doors and leave quickly

Credit Cards The grace period is the amount of time before a finance charge is added to the balance or amount owed. Use wisely! If your parents provide you with their credit card in case of an emergency, save it for unexpected car repairs, etc. DO NOT CHARGE: two packs of gum; dinner out for all your friends; two blouses you want, but do not need.

Debit Card Used instead of writing a check. Money comes out of a checking account or savings account. You already have the money in the bank

Loans Make regular payments toward the cost of the item bought on “time,” usually for items that cost a lot of money: house, car, college education. Otherwise you should save your money, until you can pay cash.

Credit Look for the lowest annual percentage rate Interest: amount charged to let you use money you do not have, to buy things. EX. Purchase $ stereo paying for it over the course of a year. Final cost is $ The extra $75.00 is interest.

Avoid Impulse Buying Purchasing something that you did not intend to buy Think about your purchases before buying. Is it a need or a want? Is it a fad? Will there be a newer, better item in a few weeks? Follow a specific list Impulse items are at the checkout

Advertising Make consumers aware of their choices Evaluate advertising by remembering that MOST celebrity endorsers are paid by the manufacturer to appear in the ad. Designed to attract attention and promote sales, NOT help consumers make wise decisions about the product Slogans or songs are designed to make consumers remember the ad: Alka-Seltzer (plop-plop, fizz-fizz); Burger King (have it your way); Big Mac (Two all beef patties…can you think of any?) Advertisers typically use internet websites, yellow pages, store windows, and point-of-sale (place where item is sold)

Defective Items Normally, return the item to the store where it was purchased Consumer’s right to redress means that you have the right to a refund or replacement when products do not work properly

Product Labeling Use this to get SOME information about the product. It will not contain all the information about the product

Budget Is a plan for spending and saving money Includes costs for food (all food, including trips to restaurants, fast food, lunch room) Anything on which you spend money is an EXPENSE A written or printed record of what you purchase is called a RECEIPT. These can be used to help you set up your budget

Consumer’s Rights 1. Right to be heard 2. Right to be informed 3. Right to redress/recourse (Explain what this means) 4. Right to safety 5. Right to choose/selection 6. Right to consumer education