1. BMA-IBT-9 Develop effective money management strategies and understand the role and functions of financial institutions.

2. WHEN IT COMES TO MONEY, WHY DO WE DO WHAT WE DO?

3. FINANCIAL DECISIONS IMPACTED BY:
PERCEPTION OF NEED VS. WANT
PERSONAL VALUES
OPPORTUNITY COSTS
We will look at each of these one at a time.

4. FINANCIAL DECISIONS IMPACTED BY:
NEED VS. WANT
NEED – SOMETHING THAT IS ESSENTIAL;
REQUIRED FOR LIFE
WANT – SOMETHING THAT IS UNECESSARY BUT
DESIRED; MAY IMPROVE QUALITY OF LIFE

5. FINANCIAL DECISIONS IMPACTED BY:
NEED VS. WANT
IS EACH OF THE FOLLOWING A NEED OR A WANT?
FOOD
CAR
HOUSE
COAT
CELL PHONE
CLOTHES
Answers will vary. As humans, we need shelter. Does that shelter have to be a house? Could it be a shed in the woods? Depends on how you look at the question and what the students’ values are. For many, a shed in the woods would be unacceptable, so the need may be a decent structure in a decent and safe area. Even the word decent will be different for different people. This logic will apply for all of those things listed. Which will lead you into Values.

6. FINANCIAL DECISIONS IMPACTED BY:
PERSONAL VALUES
THOSE THINGS THAT ARE IMPORTANT TO YOU.
EXAMPLES
FAMILY LAW SUCCESS
FRIENDS HONESTY SERVICE TO OTHERS
RELIGION EDUCATION HEALTH

7. FINANCIAL DECISIONS IMPACTED BY:
PERSONAL VALUES
EACH PERSONS VALUES ARE DIFFERENT.
LET’S SEE HOW THEY DIFFER IN OUR CLASS!
Answers will vary. As humans, we need shelter. Does that shelter have to be a house? Could it be a shed in the woods? Depends on how you look at the question and what the students’ values are. For many, a shed in the woods would be unacceptable, so the need may be a decent structin a decent and safe area. Even the word decent will be different for different people.

8. FINANCIAL DECISIONS IMPACTED BY:
PERSONAL VALUES
USING SCRATCH PAPER PLACE THE VALUES LISTED IN ORDER FROM MOST IMPORTANT TO LEAST IMPORTANT USING NUMBER 1-9.
FAMILY LAW SUCCESS
FRIENDS HONESTY SERVICE TO OTHERS
RELIGION EDUCATION HEALTH

9. FINANCIAL DECISIONS IMPACTED BY:
PERSONAL VALUES
SHARE YOUR LISTS!
NOTICE HOW VERY FEW PEOPLE WILL HAVE THE SAME ORDER.
THAT IS BECAUSE VALUES ARE HIGHLY PERSONAL!
THESE VALUES SHAPE CHOICES, FINANCIAL AND OTHERWISE.

10. FINANCIAL DECISION IMPACTED BY:
OPPORTUNITY COSTS
THE VALUE OF THE NEXT BEST CHOICE THAT IS GIVEN UP WHEN MAKING A DECISION.
WHAT IS THE OPPORTUNITY COST OF GOING TO COLLEGE?
THE INCOME GIVEN UP THAT COULD HAVE BEEN EARNED IF YOU WERE WORKING

11. FINANCIAL DECISION IMPACTED BY:
OPPORTUNITY COSTS
WHAT IS THE OPPORTUNITY COST OF CHOOSING TO GO TO THE MOVIES ON FRIDAY NIGHT?
THE MONEY COULD HAVE BEEN USED ON SOMETHING ELSE!

12. FINANCIAL DECISION IMPACTED BY:
OPPORTUNITY COSTS
WHAT IS THE OPPORTUNITY COST OF CHOOSING TO DRIVE A NEW PICK-UP TRUCK?
MORE MONEY WAS SPENT ON A NEW CAR INSTEAD OF A USED CAR AND FUEL COST ARE HIGHER ON A BIG TRUCK!

13. WHEN IT COMES TO MONEY, WHY DO WE DO WHAT WE DO?
HOW WE DECIDE BETWEEN OUR NEEDS VS. WANTS INFLUENCES OUR SPENDING DECISIONS.
OUR PERSONAL VALUES INFLUENCE OUR SPENDING DECISIONS.
THE COSTS OR BENEFITS THAT WE FOREGO WHEN WE MAKE A SPENDING DECISION MUST BE CONSIDERED.

14. Gross Pay, Deductions, and Net Pay
Hourly wages
Overtime
Salary
Deductions
Net pay
Self-employed requirements
Gross pay
— Deductions
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Net pay

15. Benefits and Incentives
Profit sharing
Paid vacations and holidays
Employee services
Child care
Sick pay
Leaves of absence
Insurance
Bonuses and stock options
Pension and savings plans
Travel expenses
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16. Insurances that are taken out of checks.
Health insurance
Life insurance
Dental insurance
Vision insurance
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17. Budgets and Financial Records
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Unit 4-Chapter 8, page 173

18. Importance of Financial Planning
Disposable income
The money you have left to spend or save after taxes has been paid.
Financial plan
A set of goals for spending, saving, and investing the money you earn.
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19. Financial plan helps you:
Determine and evaluate options
Prioritize your options so your money goes as far as possible
Organize your financial resources so you can achieve your financial goals
Avoid money worries by planning on saving, spending and borrowing to live within your income.
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20. Estimate your expenses. Balance your budget.
Preparing a Budget
Estimate your income.
Decide how much to save.
Estimate your expenses.
Balance your budget.
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21. Simple Budget Expenses Lunches $ 80 Income Supplies 20 Work $320
Snacks 40
Entertainment 120
Income
Work $320
Allowance 20
Lunch money 40
Total income $380
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Total expenses $280
Savings
To credit union $100
Total expenses plus savings $380

22. Monthly Budget p.177 Fixed expenses
Cost you are obligated to pay at a specific times, regardless of other events. Changes in FE would change your lifestyle.
Ex Rent/Mortgage, car loan
50-60% suggested
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23. Monthly Budget Variable expenses
Costs that vary in amount and type depending on events and choices you make.
Grocery bill, eating out, entertainment
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