Citizens

and

The Economy

How do we contribute to the

economic common good??

Be productive!!!

What does this mean???

Your Economic

Responsibilities

Work & pay taxes

Spend your money wisely

Save a portion of your income

Needs Vs. Wants

Needs:

Anything that is necessary for

your survival.

Example:

Shelter and Food

Wants

Anything that makes your

life more comfortable;

however, you can easily

leave without.

Example:

iPod, Cell Phone, & Jewelry

Parts of a Budget

Spending & Savings

A combination of one’s fixed and flexible expenses and remaining disposable income

Investment:

Anything that a person puts money into with the hopes that the item increases in value over time.

Retirement

Providing for yourself when you are no longer working.

Estate

Planning for the smooth transition of property to designated beneficiaries after one’s death.

Spending and Savings

Fixed Expenses

Payment will stay the same

every month

Ex:

Rent

Mortgage Payment

Car Payment

Insurance Payment

Flexible Expenses

Payments will vary in amount

from month to month

Ex:

Electric & Heating Bill

Gas for your Car

Groceries

Personal Entertainment

Why do people

save money?

1. Major Purchases ex: buying a car

2. Large annual or semiannual

expenses…paying your real estate taxes

3. Unexpected Expenses…home repairs

4. Long Term Expenses…pay for your

retirement

5. Accumulate wealth

Benefits of Saving Money

Security:

Money in a bank can not be lost…FDIC

insured!

Interest:

A payment that financial institutions

make to you in exchange for the use of

your money while it is deposited.