Presentation on theme: "Analyzing Financial Situations"— Presentation transcript:
1 Analyzing Financial Situations 16.3Analyzing Financial SituationsHow do you analyze financial situations to determine if they represent financially responsible decisions?
2 ADDITIONAL EXAMPLE 1Determine if the decision described was financially responsible or financially irresponsible. Explain your answer.AKathy has $10 in cash to spend at the grocery store. A box of cereal she likes to eat costs $4.45. Today they are on sale, 2 for $6. She purchases two boxes of the cereal.She made a financially responsible decision. Reason 1: She saved $2.90 on the second box. Reason 2: She spent cash, so she will not owe money on her purchase.
3 ADDITIONAL EXAMPLE 1Determine if the decision described was financially responsible or financially irresponsible. Explain your answer.BWilliam pays $900 each month for the mortgage on his house. A day before he was to pay his mortgage he had $1,200 in his checking account. That same day he uses a debit card to buy a $400 washing machine.
4 ADDITIONAL EXAMPLE 1He made a financially irresponsible decision. Reason 1: He had enough money in his checking account to pay his mortgage until he bought the washing machine. Reason 2: While a washing machine is important for a homeowner to have, he could still do his laundry at a coin-operated laundry facility until he saves enough money to buy a washing machine.
5 16.3 LESSON QUIZ8.12.E, 8.12.FIdentify the payment method used for each transaction as cash, a credit card, a debit card, or a stored-value card.1.Gina paid $3 to a street vendor for an ice cream cone.cash2.Patrick swipes his subway card as he enters the subway station.stored-value card3.Nick bought a new lawn mower and then paid for it the following month.credit card
6 Determine if the decisions described are financially responsible or financially irresponsible. Explain your answers.4.Mabel has $500 in savings. She is starting a new job as a nurse. She uses her credit card to buy $400 worth of uniforms.Mabel made a financially responsible decision. She will need uniforms to wear to her new job, and she has enough in her account to cover the cost.
7 Determine if the decisions described are financially responsible or financially irresponsible. Explain your answers.5.Justin quit his job. He has $500 in savings. He uses his debit card to pay $45 for his first month’s membership dues at an exercise club.Justin made a financially irresponsible decision. The club membership dues will need to be paid each month. Unless he finds a job, his savings will rapidly be depleted. He is not thinking of his future living expenses.
8 It is important to keep track of your money It is important to keep track of your money. Here is a money puzzle about tracking money.Dina thought she owed her mother $300. She paid $100 out of each of three bank accounts to pay her back. Later her mother realized that Dina actually only owed her $250, so she gave Dina back $50. Not knowing how to put an equal amount back into each of her accounts, Dina spent $20 on dinner and then put $10 back into each of her accounts.
9 When Dina put $10 back into each account, she essentially had withdrawn $90 from each account. $90 × 3 = $270; $270 + $20 (dinner) = $290. What happened to the other twenty dollars?Dina’s mother has $250, the place Dina ate dinner got $20, and each account has $10. So, $250 + $20 + 3($10) = $300. The amount paid was $250, so $90 × 3 = $270, and $270 – $20 (dinner) = $250.
10 How do you analyze financial situations to determine if they represent financially responsible decisions?Sample answer:Determine whether the situation is going to cause the purchaser to unnecessarily spend money that he or she does not have.