1. All of this information can also be found in your JA workbooks.
Junior Achievement
All of this information can also be found in your JA workbooks.

2. Key Terms
Debit Card – uses money from your checking account. Money in your checking account is yours.
Credit Card – uses money from a bank for purchases. You’re required to pay them back with added interest.

3. Leasing vs Buying
When you LEASE a car you don’t actually own it. It’s similar to renting.
EX: You can lease a car for 3 years at a certain rate (monthly payment).
Buying a car means you do monthly payments until you’ve paid for all of it and it’s entirely yours

4. INCOME Terms Annual  yearly
Deductions  certain things that comes out of your gross income. It’s the items which subtract from your total income.
Social Security  A social insurance system that provides benefits to most Americans who are retired, sick, or too disabled to work, and to families of workers who have died.

5. NET GROSS Income All income from any source
Your gross income is all the money you’ve earned before some is taken out
Amount of income after deductions have been taken out
“take-home pay”
Possible deductions:
TAXES
Social Security
Health Insurance
Retirement
Savings

6. Budget (page 67)
Needs  goods or services that you cannot survive without (food, water, clothing, shelter)
Wants  Make you happy but not necessary for survival
Expenditures  money that’s spent on goods, services, or bills
Impulse buying  buying based on immediate want
Short-term goals  financial objectives within a year’s time
Long-term goals  much longer than a year for larger outcomes (ex: college, trip to Europe, buying a car)

9. Carl agreed to work as an engineer at Yoda Manufacturing for $50,000 a year. After his first year working he realized that he only brought home $34,000. Federal and State taxes took out $11,000 and Social Security took $3,000. Carl also put $2,000 into his savings account.
What’s Carl’s gross annual income?
What’s Carl’s net annual income?
How much were his deductions for the year?
What is an example of opportunity cost in this?

10. Credit (page 56)
Credit Report  details your financial information, estimated income, credit card accounts with $ owed and payment history.
Credit Score  A number which measure your potential to repay a debt. The higher the score the better!

11. Page 57

12. Minimizing Risk (page 37)
Insurance Policies  a contract that outlines coverages plans and protects a person against financial loss or damage
Premium  the amount you pay for an insurance policy
Deductible/co-pay  Money paid out of pocket before insurance covers the remaining costs

13. Expenses (page 71)
Fixed Expenses  expenses that don’t change from month to month.
Ex: Phone bill, car payment, rent
Variable Expenses  expenses that aren’t the same each month.
Ex: doctor bills, entertainment (going to the movies, buying games), or car repairs
Discretionary income  Money available to spend on goods and services that are NOT essential.
“fun money”

14. Pay Yourself First (PYF) – page 31
This is where you create a savings account where money is AUTOMATICALLY deducted from your paycheck.
Your money is guaranteed to be saved.
Why do this? Homes need repairs, cars get totaled, unexpected medical bills, et cetera….

15. Opportunity Cost
Whenever we make a decision we ultimately turn down another.
EX: By saving money you now have less spending money and vice versa.
Opportunity cost is important when working out your budget and deciding how much money to spend in relation to how much money you want to save.

16. Co-Pay vs Deductible
Co-Pay  We pay a portion of the medical bill along with the insurance company
Ex: paying $30 at the doctor’s office
Deductible  We have to pay a set amount before the insurance company starts paying
Ex: Paying $3,000 before the insurance covers the rest

17. 3 Major Forms of Taxes Income  Money taken out of your paycheck
This would be a deduction as your income goes from Gross to Net
Sales  Money you pay in addition to the good or service you’re paying for
You buy a $20 shirt with 7% sales tax which means you pay $21.40 instead of $20.
Property  Taxes on houses or cars among others

18. Deductions from a Paycheck
Deductions are the money taken out of your gross income and there are many forms of them
Federal and State Income Tax
Health Insurance
Social Security
Medicare
Retirement (optional)
Savings (optional)