1. Chapter 15: Our Economy and You Social Science

2. Income Managing your money takes several steps, the first of which involves what you make There are several forms of income: Earned income from working through salary, wages, commission, or bonuses Owning stock and having money in a savings account Gifts and money renting or selling property Fringe benefits: indirect payments for their work, such as health care, sick leave, and vacation hours Dividends: payments from the profits of companies in which they own stock Disposable income: the amount of money left after taxes have been paid

3. Making a Budget To make good financial choices, you have to look at your disposable income and make trade-offs and possibly give up a wish in order to fulfill another A lot of choices are based on one’s goals and values Making a budget is a good way to decide how you want to spend your money Helps you set aside money for the things you need When making a budget, you have to look at your fixed expenses, or expenses that have to be paid regularly, usually every month, and your variable expenses, or expenses that change from month to month Always have enough money to pay for your fixed expenses before thinking about using your money for variable expenses

4. Spending Even after making a budget, you still have to decide what you need to buy with your disposable income after your fixed expenses are taken care of Everyone is pressured into buying the latest toys and gadgets, but knowing these pressure can help you make wise spending choices Once you decide that you want to buy an item, you must then decide what item to buy, at which point you must consider these options: Price Quality Features Warranty, or a manufacturer’s promise to repair it if it breaks within a certain time from the date of purchase Sales and Discounts You also have to be careful of loans when buying an item, and the true price of the item with the loan, which is the sales price plus interest

5. Saving People save money for all sorts of reasons, from setting money aside in case they have to pay for something unexpectedly to planning on buying an item in the future Several factors contribute to saving: Liquidity: the ability to turn savings back into cash Income: the interest you earn from savings accounts that qualify Some savings accounts acquire the highest interest from leaving your money for a set length of time, called a time deposit You can always acquire money through buying bonds, stocks, and mutual plans, which are a collection of investments made by some people to use towards stocks and bonds Safety: savings accounts and bonds are safe, but pay low interest, while stocks are risky, but can pay off if the company is successful

6. Insurance In order to cover yourself in case of a serious accident or emergency, people buy insurance, or a plan by which a company gives protection from the cost of injury or loss Person makes payments, or premiums, in exchange for coverage Insurance is based on if many people pay some money into an insurance plan, all the money will be enough to pay the large costs of the people who need the insurance Many types of insurance exist: Car (required by law) Health (provided by employer)

7. Careers The most important planning that you will do in your life is planning your career, or the occupation for which you train and which you pursue as your life’s work Your career will be the major dependent on how much you earn and what you are able to do with that money Because of the changing economy, the desire for some occupations always changes Evaluating your interests, talents, and personality, in addition to your life goals and personal values, is an important first step in discovering your career path

8. Career Research Once you have an idea of what you would like to do as a career, you can begin looking at career options through research Talk to someone who is in your field of interest, read about careers, follow someone at their place of employment, or get a summer job or internship in the field that interests you One good resource is the Occupational Outlook Handbook, which tells you everything you need to know about every job Understanding what an employer expects from their employees and what they are looking for in an employee is something you should know before job searching Persistence and effort are two important qualities