Presentation on theme: "Principles of Investing"— Presentation transcript:
1 Principles of Investing Chapter 7 Budgeting 101Principles of Investing
2 Before We BeginPlease have your notebook and your Chapter 7 Packet on your desk
3 Ch 7 Essential Questions 1. How is money active?2. What are the reasons why people do not budget?3. What are some common problems associated with budget failures?4. What are the benefits of a budget?5. What is a zero-based budget and how does one complete it?
4 Lesson 1 1. How is money active? Explain why money is “active”Define cash flow plan and state when a cash flow plan should be developedState and explain 5 ways money can be utilized2. What are the reasons why people do not budget?State and explain 4 reasons why people do not budget
5 DO NOW Write down 3-5 different ways you use your money. Write down what you think are the 3 most important categories in a budget.
9 Reasons Why People Do Not Budget A budget has a negative connotation because it has been used to control them.You fear what you may find so you don’t create a budget.It has been used to abuse themMost people have never had one that really worked so they don’t want to try another budget.
10 Lesson 1 1. How is money active? State and explain 3 ways to use a checkIdentify and explain 4 advantages of using checksIdentify and explain 4 disadvantages of using checksIdentify and define the parts of a checkPractice writing 3 checksIdentify and define the parts of a checkbook registerPractice recording 3 checks into a checkbook register2. What are the reasons why people do not budget?
11 DO NOW List 3 ways you use a check List 3 advantages of using checks List 3 disadvantages of using checks
12 Ways to Use a Check 1. Make a payment 2. Cash it 3. Write it out as cashThis can be done in one of two ways
13 Advantages of Using Checks 1. Safety or Security2. Convenience3. Records of your Transactions4. Proof
14 Disadvantages of Using Checks 1. Security Concerns2. Time3. Recordkeeping4. Not being able to use them all the time or everywhere
15 Activity 1 How to Write a Check Definition- an order to a bank to pay a specified sum to the person or business named on the checkOnly 51% of teens know how to write a check
16 I explained the parts of a check I explained the parts of a check. Then I modeled and demonstrated how to write a check by using the one below
17 Activity 1 - How to Write a Check All of you are now going to practice writing checks by writing 3 checks on your own or with the person sitting next to youCheck Number 1Check amount: $ Date: January 10, Who the check is being paid to: AT&TCheck Number 2Check amount: $ Date: January 21, Who the check is being paid to: ComcastCheck Number 3Check amount: $ Date: February 11, Who the check is being paid to: ShopRite
18 Students volunteer to demonstrate how they wrote their 3 checks
19 Activity 1- How to Write a Check After you write a check you then have to record the check information into your checkbook registerThis is very important!All of you are now going to practice recording the checks into a checkbook registerOn your own or with the person sitting next to you, record the 3 checks you just wrote into the checkbook register
21 Students volunteer to demonstrate how they recorded the 3 checks they wrote in the checkbook register
22 Lesson 1 1. How is money active? State and explain 4 reasons why it is important to budget one’s checkbookExplain the process of fixing an error/s in one’s bank statementDescribe how to balance or reconcile (think scale!) one’s account after receiving one’s bank statementPractice recording 14 transactions into a checkbook register and then balancing or reconciling a checkbook2. What are the reasons why people do not budget?
23 DO NOW List 3 reasons why it is important to balance your checkbook What should you do if you find an error in your bank statement? (A record, usually sent to the account holder once per month, summarizing all transactions in an account)
24 Reasons to Balance your Checkbook 1. To keep track of your money2. To catch mistakes3. To avoid overdrafts4. To help with budgeting
25 Your Bank Statement1. When you receive your bank statement, compare your check register to the bank statement to make sure that neither you nor your bank made a mistakeThis is called balancing or reconciling your accountIf you find an error on your statement you must notify your bank within 60 days from the date of the statement
26 Activity 2- Balancing your Checkbook Definition- a book of blank checks with a register for recording checks writtenOnly 34% of teens know how to balance a checkbook and reconcile an account register to a bank statement
27 Activity 2- Balancing your Checkbook All of you are now going to practice filling out the check register and balancing or reconciling your checkbook
29 Students volunteer to demonstrate how they balanced their checkbook by recording all of their transactions and deposits into their checkbook register and calculating the correct adjustments to their balances.
30 Lesson 23. What are some common problems associated with budget failures?State and examine 4 common problems associated with budget failures4. What are the benefits of a budget?State and examine 6 benefits of a budget
31 DO NOWList 3 reasons why you think people fail at maintaining or following a budgetList 3 benefits of having a budget
33 Common Problems Associated with Budget Failures 1. The budget doesn’t work because things are left out2. The budget is too complicated3. You don’t actually create a budget4. You write a budget, but don’t live on it
34 Benefits of a Budget1. Removes the management by crisis from your finances2. Managed money goes further than money that is not managed3. Managed money removes many of the money fights from your marriage4. Budgets remove guilt, shame, and fear from relationships5. A written plan can remove many overdrafts and stress from your life6. A written plan can show you where you’re over spending in certain areas of your life
35 Discussion Questions1. Of the 5 ways one can utilize money, which 2 ways are the most important and why? Please explain2. Which advantage of using checks is the most important for consumers and why? Please explain3. Do the advantages of using checks outweigh the disadvantages? Please explain4. Due to the tech-savvy world we live in today, should paper checks and checkbooks be a thing of the past? Please explain5. Which advantage of a budget is the most important for families?6. Only 32% of Americans, or nearly 1 in 3 Americans, put together a budget each month. Why is this so and how can we convince more Americans to create a monthly budget? Please explainStudents wrote their thoughts down and then shared their thoughts with the class- interactive instruction
36 Lesson 3 4. What are the benefits of a budget? 5. What is a zero-based budget and how does one complete it?Define a zero-based budget and practice completing 2 zero-based budgets
37 DO NOW List 3 reasons why students should learn how to budget. What age do expect your parents to stop supporting you financially?How much do you think you spend a month?
38 According to Dave…86% of teens agree with the following statement: I expect and would like my parents to stop supporting me financially before age 25On average, teens spend $19 per week
39 Activity 3 Student Budget Definition- cash flow plan; assigns every dollar to a specific category/expense at the beginning of each month.Only 41% of teens know how to budget their money
41 Activity- Student Budget All of you are now going to read through the first scenario (Marcus) and create a zero-based budget for MarcusBudgets will vary!Monthly TotalThis column shows you how much you are spending on necessities each month.If you do not know the amount, write down your best estimate.AccountWrite in how this area is paid—by check, automatic bank draft, cash, etc.
42 Students volunteer to demonstrate how they created a budget for Marcus
43 Activity- Student Budget All of you are now going to create your own personal budget based on your income and expensesBudgets will vary! BUT must include Giving and Saving as funded categoriesYou all need to get in the habit of putting something away in these categories, even if it isn’t the full %.Teenagers tend to spend a lot of money on clothes and entertainment, so make sure those categories are appropriately fundedFinally, Remember, the point is to spend every dollar on paper before the month begins!
44 Students volunteer to demonstrate how they created a budget for themselves