It’s Your MoneyPreparing for College and Careers

Goals for the unit

Understand and apply financial terms

Be able to make better financial (economic) decisions

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•Personal Bankruptcies•Home Foreclosures

• Learning how to manage your money will reap great financial rewards in your lifetime. The earlier and more you learn, the better off you will be. $$

That’s good except when the lists are

Indiana ranks at the top of these lists

• A Want is something you would LIKE to have; • A NEED is essential to living.

Want or Need?

• Examples of NEEDS• Food• Clothing• Shelter• Water

• Examples of wants• More clothes• New phone• Car• Puppy

PERSONAL SAVINGS

• Savings should begin early and often.

• Start now and save 10% of any money you receive whether from a paycheck or as a birthday gift from your Grandma.

• Note: Average Social Security benefit in 2012 was $1,230. Will that be enough for you to live on each month?

• If you don’t plan, you will spend all your money. That’s called “living paycheck to pay check”.

• Housing and debt expenses should not exceed 30% of your income.

SPENDING

BudgetA plan for spending AND saving

If you fail to plan, you are planning to fail.

--Ben Franklin

• Buy NOW and pay for the item later which sounds good but…..

• When later comes, you have to pay even more than the item cost because of the added interest.

Credit

It’s really “Buy now, pay MORE later”

“Buy now, pay later”

• Annual Percentage Rate

• The interest rate at which you are borrowing (or saving money) stated on an yearly basis.

• Example: • My bank will pay me .05% of my account balance in interest this year.

• Or• To buy my car, it costs me 6 % of my loan balance each year in interest.

A.P.R.

21%

.05 %

8 %

• A credit card allows you to buy things TODAY and pay for it over time but you will also have to interest.

• A debit card deducts the money from your checking account so you pay today and take the item home today with no interest.

Credit Card or Debit CardThey look the same so what’s the difference?

Being on time pays with credit:

Paying all your bills on time will help you achieve a good credit rating and you will be able to borrow money whenever you need or want it and at a competitive interest rate.

To determine your rating, banks or lenders look at your credit report (your bill paying history) to see if there are any late payments or charged off accounts. Late payments will stay on your report for 7 years.

Credit ReportYour bill paying history

Your Gross Pay

Net Pay

FICA 6.2%Medicare 1.45%Other Federal, state and local taxes

Congratulations, you’ve got a job! Finally you can start buying some of those wants you’ve had for a long time.

But wait, there are two amounts on your paycheck:

Gross pay is your pay BEFORE taxes have been deducted.

Net pay is your final total AFTER taxes have been deducted. It is also called “Take home pay” because it’s what you actually take home.

Gross Pay vs Net Pay

When someone steals your personal information and uses it without your permission.

Identity Theft

Examples of Personal Information:•Date of Birth•Social Security Number•Bank and Credit Card Account Numbers

To prevent , think SCAM:Be Stingy with informationCheck your accounts regularlyAsk for copies of your credit report each yearMaintain careful financial records

Now you have the keys to your financial success!