1. Personal Management Merit Badge$
Lots of effort
, but totally worth it!

2. HANDOUT Fill in the blanks. OR use your own pages.
You may use the words I’ll suggest, or -
You may use other words you like better!
Brainless
attendance

3. HANDOUT
Name ______________________________________
Date of merit badge classes: 1st ____________
2nd ____________
To help you in the future: Keep it! Read again in 5 yrs! *
Boxed portions: To be reviewed with your Merit Badge Counselor.
AFTER you’ve completed EVERYTHING (ready to discuss)!
If I go too fast, stop me.
Bring this handout back next time:

4. Item chosen: _______________ Approximate cost: ___________ HDTV $1,000
p.2, Requirement #1: Do the following: Choose an item that your family might want to purchase that is considered a major expense.
Item chosen: _______________ Approximate cost: ___________
HDTV
$1,000
(b) Write a plan that tells how your family would save money for it.
We can save money by:
_____________________________
Mostly _______ earnings, but each of us could contribute.

5. p.2, Requirement #1 (continued):
(b)1. Discuss the plan with your
merit badge counselor.*
2. Discuss the plan with your family.
**When are you going to do this?
(FHE?)
3. Discuss how other family needs
must be considered in this plan.**
*When are you going to discuss this with your merit badge counselor?

6. p.2, Requirement #1: Do the following:
(c). Develop a written shopping strategy for the purchase:
1. Determine the quality of the item
(using consumer publications or rating systems).
_______________________________________
Google, Yahoo, EBay, Consumer Reports

7. p.2, Requirement #1: Do the following:
(c). Develop a written shopping strategy for the purchase:
2. Comparison shop for the item.
Find out where you can buy the item for the best price.
Call around
Who you called: What you learned:
____________ ________________
Gwido’s Pawn Shop
Don’t go there!

8. p.2, Requirement #1: Do the following:
(c). Develop a written shopping strategy for the purchase:
2. Comparison shop for the item.
Find out where you can buy the item for the best price.
Study ads
Where you looked: What you learned:
________________ ____________________
Newspaper
Sears had a great sale
Including shipping…

9. p.2, Requirement #1: Do the following:
(1)(c)2
Yes
Did you find a great sale or a discount coupon? ________ ____________________________________________
Consider alternatives:
Maybe, but________
Can you buy the item used? ___________________
I could, but already found…
Should you wait for a sale? ___________________

10. p.3 Prepare a budget reflecting:
Your expected income (allowance, gifts, wages),
Your expected expenses & savings (Outgo).
Track your actual.
1st Week INCOME
Expected Actual
Allowance ______ ______
Job ______ ______
Gifts ______ ______
_________ ______ ______
Total in ______ ______
EXPENSES & SAVINGS
Expected Actual
Donations ______ ______
Savings ______ ______
Savings (for… ______ ______
Save to Buy ______ ______
Junk food ______ ______
_________ ______ ______
Total Out ______ ______

11. _________ ______ _____ OUTGO Expected Actual Donations ______
EXAMPLE
INCOME
Expected Actual
Allowance _____
Job _____
Gifts _____
_________ ______ _____
Total in _____
OUTGO
Expected Actual
Donations ______
Savings ______
Savings (for… ______
Save to buy ______
Junk food ______ ______
_________ ______ ______
Total Out ______
$10
$30
$ 3
$30
$42
2(b). Compare expected income with expected expenses.
I can increase income by ___________
determine steps to balance:
2. If outgo exceeds income,
working more
or decrease expenses by_______________
buying less junk

12. _________ ______ _____ OUTGO Expected Actual Donations ______
Another EXAMPLE
INCOME
Expected Actual
Allowance _____
Job _____
Gifts _____
_________ ______ _____
Total in _____
OUTGO
Expected Actual
Donations ______
Savings ______
Savings (for… ______
Save to buy ______
Junk food ______ ______
_________ ______ ______
Total Out ______
$10
$30
$ 3
$12
2(b). Compare expected income with expected expenses.
2. If expected income exceeds expected outgo,
state how you would use the excess money: I could have some for __________________
better stuff later.

13. _________ ______ _____ OUTGO Expected Actual Donations ______
EXAMPLE
INCOME
Expected Actual
Allowance _____
Job _____
Gifts _____
_________ ______ _____
Total in _____
OUTGO
Expected Actual
Donations ______
Savings ______
Savings (for… ______
Save to buy ______
Junk food ______ ______
______ ______
Total Out ______
$10
$30
$10
$20
$50
$ 3
$12
$ 5
$20
$40
Presents
What actually happened?
This guy should have
$10 more now than 1 week ago.
If you finish one week of expected and actual by next class...

14. How are you going to remember to do this each day?
p.3-7, Req 2a Track your actual income, expenses, and savings for 13 consecutive weeks.
Income
Source Actual
___________ _______
___________ _______
Total _______
Expenses
Where Actual
___________ _______
___________ _______
___________ _______
Total _______
How are you going to remember to do this each day?
(How about putting it on your pillow?)
Share this with your merit badge counselor.

15. a. The emotions you feel when you receive money:
p.8 Req. #3 Discuss with your merit badge counselor Five of the following concepts:
a. The emotions you feel when you receive money:
When I honorably earn money, I feel ______
Good *
If I’d stolen the money, I’d feel _____
Bad!
b. How the amount of money you have with you affects your spending habits:
If I have lots of money, I tend to spend ______
more.
If I don’t have my money, it is ______ to spend.
harder
Unless I have a credit card, then it is still easy to spend money I don’t have.

16. c. Your thoughts when you buy something new:
excited
happy
I usually feel ___________________
Your thoughts about the same item 3 months later:
excited
happy
I’m usually less __________ about it.

17. p.8 Req. #3 Discuss with your merit badge counselor Five of the following concepts:
(c) Explain the concept of: buyers remorse
Often after buying something people feel _______
sorrow (remorse)
and wish they could undo the _________.
purchase
Especially if they ________ $, when it is time to make payments, they feel sorry or have _______ _______.
borrowed
buyer’s remorse

18. 3d. How hunger affects you when shopping for food items:
If I’m hungry, I tend to buy
more
3e. Your experience of buying an item after seeing or hearing advertisements for it.
Did the item work as well as advertised? ___ _______
Not always.
Often, the ad makes it sound _____ than it actually is.
better
Once in awhile it is actually _____ than I expected.
better

19. 3f. Your understanding of what happens when you put money into a savings account:
teller’s drawer
It goes into the ______________,
bank’s safe
bank’s bank
then into the ___________
or into the ___________
loaned out or invested
then, most of it gets ___________________
interest
They pay me _______ for the use of my money.
They can afford to because they charge the borrowers interest at a ______ rate than the rate they pay me.
higher

20. Charitable Giving 3g. Explain its purpose and your thoughts about it:
I think it is a _______ idea to give to a charity or church.
Good charities use money to help the ____ and _____, build buildings for __________ and other __________ purposes.
poor sick
worship worthwhile

21. 3h. What you can do to better manage your money:
I can save _____ of my earnings for more important things I’ll need in the future.
more
I can use ____ of it for junk.
less
I can use my money for ____ worthwhile purposes.
more

22. usually means: ___ risk way to accumulate money. low-
p. 9, Requirement #4. Explain the following to your mb counselor: 4a. The difference between saving and investing, including reasons for using one over the other. *
“Saving”
usually means: ___ risk way to accumulate money.
low-
My father wanted me to save ever penny I got, I didn’t like that.

23. Save $100 each month at 5%
If you can put $100 each month into a relatively safe savings account (federally insured), you should be able to beat the 5% rate of this example, at least as soon as you build up a few hundred dollars and can take advantage of time certificates of deposit. As you accumulate funds, you can stagger the maturities, so you have relatively ready access to money in emergencies.

24. Save $100 each month at 5%
After 5 years you would have saved up $6000 and the financial institution would have added interest of about $830. That is, if you do not withdraw any of the funds you’ve saved.

25. Save $100 each month at 5%
If you continue making the deposits and refrain from taking any of the money out, after 10 years you will have deposited $12,000 and the financial institution will have added $3530 in accumulated interest.

26. Now earning > $110+ each month
Save $100 each month at 5%
If you can stick with the savings program for 15 years, at 5%, the value of compounding interest becomes evident to a remarkable degree. Now the monthly interest earned exceeds the monthly contribution you have been making.
Now earning > $110+ each month

27. p. 9, req 4a Recommended Savings:
Save _____% in an Emergency Fund. 10
Try to never, ever spend this money!
Save enough for your “_____ ______” expenses.
for sure
Stuff you know you’ll be spending money on once a year!
Save whatever you can just to _____ ______ .
buy stuff

28. Savings Goal: Recommended savings goal:
Start stashing 10% of your earnings into an emergency fund that you try to never, ever spend.
Have a separate saving account for your “for sure” expenses. Things you know are coming around once in awhile (examples: Christmas, property tax, auto repairs, insurance premiums, etc.)
Have a 3rd savings account to just buy stuff. We all like to buy things that cost more than our paycheck. If you don’t save for it, you borrow for it (if you buy it), and if you borrow, you get less for your money.

29. “Investing” usually means ______ -risk with a hope of a ______ return.
p. 9, Requirement #4. Explain the following to your Merit Badge Counselor: 4a. The difference between saving and investing, including reasons for using one over the other.
“Investing” usually means ______ -risk with a hope of a ______ return.
Stocks & Bonds
higher
higher

30. emergencies less want it
p.9, Requirement 4a. Explain the following to your merit badge counselor.
Reasons for saving: People typically save money for future needs including ____________.
emergencies
Reasons for saving rather than investing: People who save money in a bank or credit union are much ____likely to lose it. And more likely to be able to get it when they ______ ___
less
want it
Banks and credit unions are usually very careful with our $, and our savings are insured by agencies of the U.S. Government: _____ & _______
Several companies have popped up recently which encourage people to “put their equity to work”. In other words, get another loan on your home, invest the proceeds, and use the earnings to make the mortgage payments. If you can consistently earn more on the investment than you pay on the loan, it works, but remember:
Rule #1 The greater the rate, the higher the risk.
Rule #2 If you can’t afford to lose it, don’t invest it.
Rule #3 Don’t borrow it, if you don’t want to pay it back. (Realize that
the investment may evaporate. There is a very real possibility
of the benefits promised disappearing. Is the risk of being
required to make the payments on the old and the new loan
worth the possibility of the benefit promised?)
Two recent programs we’ve reviewed involve out-of-the-country annuity investments. Remember:
Question #1 Who will protect you if out-of-country problems occur?
FDIC
NCUA

31. Reasons for investing: People invest in hopes of earning __________.
p.9, Requirement 4a. Explain the following to your merit badge counselor.
Reasons for investing: People invest in hopes of earning __________.
Several companies have popped up recently which encourage people to “put their equity to work”. In other words, get another loan on your home, invest the proceeds, and use the earnings to make the mortgage payments. If you can consistently earn more on the investment than you pay on the loan, it works, but remember:
Rule #1 The greater the rate, the higher the risk.
Rule #2 If you can’t afford to lose it, don’t invest it.
Rule #3 Don’t borrow it, if you don’t want to pay it back. (Realize that
the investment may evaporate. There is a very real possibility
of the benefits promised disappearing. Is the risk of being
required to make the payments on the old and the new loan
worth the possibility of the benefit promised?)
Two recent programs we’ve reviewed involve out-of-the-country annuity investments. Remember:
Question #1 Who will protect you if out-of-country problems occur?
more money
Stocks & Bonds
Reasons for investing rather than saving: Although the risk of loss is higher, and some investments require lots more ______, some investments earn ___ _____ money.
work
lots more

32. 4b. Explain the concepts of return on investment and risk.
p.9, Requirement 4b. Explain the following to your merit badge counselor.
4b. Explain the concepts of return on investment and risk.
expected
Return on investment refers to the amount you receive __ _____ of the amount you invested.
in excess
Risk is a measure of the possibility of suffering harm or ____.
loss
Why would anybody choose 5% when they invest at 25%?
The greater the rate, the higher the ____.
actual
risk
or: The greater the risk, the higher possible _______ and possible _______.
return
loss

33. Instead, suppose you put it in the bank and earn 5% for 20 years
p. 9, Requirement #4c Explain the concepts of simple interest and compound interest.
Suppose you bury $1,000, and dig it up 20 years from now
Instead, suppose you put it in the bank and earn 5% for 20 years
PRINCIPAL

34. p. 9, Requirement #4c Explain the concepts of simple interest and compound interest.
Interest paid only on the ________ balance.
Simple interest:
principal

35. Compound Interest Principal
p. 9, Requirement #4c Explain the concepts of simple interest and compound interest.
Now, suppose you have them add your interest to your principal balance.
Compound interest: Interest paid on both the principal and previously paid _______
interest.
Compound
Interest
Principal

36. but also on the ______ _________ principal prior earnings
p. 9, Req. #4 Explain how these (simple interest & compound interest) affect the results of your investment exercise (p.12).
If I save or invest $1000 and I spend all the earnings as I get it, I do not get the advantage of _____________.
compounding
If I have my earnings added to the investment, I earn interest not only on the ________
but also on the ______ _________
principal
prior earnings
And, I get compound interest.

37. Is important to know how _____ an investor can buy, much
p. 10, Req. #5 Select 5 publicly traded stocks from the business section of the newspaper.
a. Explain to your merit badge counselor the importance of the following information for each stock:
Current price:
Is important to know how _____ an investor can buy,
much
and help him decide whether to ___, ___, ____, ____, or _____ a stock.
buy sell trade
hold avoid
The current price may be obtained ______, from a ____ ______, or estimated from _________.
on-line
stock broker
newspaper

38. p. 10, Req. #5 Explain the importance of:
b. How much the price changed from the previous day:
It is important to see if the price changed, and how _____, and whether it went __ or ____.
much
up down
If it went down a lot, something might be seriously ______ with the company.
wrong

39. p. 10, Req. #5 Explain the importance of:
c. The 52-week high and the 52-week low prices:
It is important to see if the price has been about the same, or ______, or _____ than it is now.
higher lower
If it went down a lot, something might be seriously ______ with the company, or with the stock market __ _______.
wrong
in general
It might be a good time to ___.
But it might be a good time to _____ __.
buy
avoid it
a lot more
Knowing this is enough
to realize you need to know __ ___ ______!

40. Usually buy 100 shares at a time.
p. 10, Req. # 5 Obtain the business section of your newspaper and obtain the following for 5 stocks:
Usually buy 100 shares at a time.
9/25/04
Date of Newspaper: ________
Name1st stock Close Price Net Change 52-wk high
“Name” “Last” “Chg” “1yrhi”
______________ _________ _________ ___________
Explain: The importance for this stock:
Current price (est: _______) __________________________
Change from previous day: __________________________
The 52-week high: __________________________
DeltaAir
3.26
- .70
15.54
3.00
Low enough to buy a bunch
Lost 70¢ per share: danger
Lost $12.28 p/share: danger

41. Should I buy?
(on 8/28/06: 68¢, then down to $0)

42. Date of stock quote: ________
p. 10, Req. # 5 Obtain the business section of your newspaper and obtain the following for 5 stocks: (I’ve already given you 1)
Date of stock quote: ________
Name 2nd stock Close Price Net Change 52-wk high
“Name” “Last” “Chg” “1yrhi”
______________ _________ _________ ___________
Explain: The importance for this stock:
Current price (est: _______) __________________________
Change from previous day: __________________________
The 52-week high: __________________________

43. SATURDAY