Money Matters Class 1: Introduction
26
MONEY MATTERS MONEY MATTERS Class 1 Class 1 Presented by Presented by Susan Huff Susan Huff MONEY MATTERS MONEY MATTERS Coordinator Coordinator
-
Upload
athens-clarke-county-library -
Category
Economy & Finance
-
view
2.908 -
download
1
description
Importance of understanding your finances, your income and understanding your pay stub are covered in Part 1 of the of the 6-part Money Matters series created by the Athens-Clarke County Library. Money Matters is part of Smart investing @ your library®, and is brought to you by a joint grant from the American Library Association and FINRA, the Financial Regulatory Authority Foundation.
Transcript of Money Matters Class 1: Introduction
MONEY MATTERSMONEY MATTERSClass 1Class 1
Presented byPresented by
Susan HuffSusan Huff
MONEY MATTERS CoordinatorMONEY MATTERS Coordinator
MONEY MATTERSMONEY MATTERS
Series of 6 classesSeries of 6 classes
One hour per classOne hour per class
Opportunity to earn scholarship moneyOpportunity to earn scholarship money
Rate your Financial BehaviorRate your Financial Behavior Before / After ClassBefore / After Class
Benefits of GEDBenefits of GED
Increase earning powerIncrease earning power More job opportunitiesMore job opportunities Jobs with better benefitsJobs with better benefits Ability to seek additional educationAbility to seek additional education Financial SecurityFinancial Security OtherOther
BankruptcyBankruptcy
1.4 million people in 20081.4 million people in 2008 Average age 38Average age 38 44% couples44% couples 30% women 30% women 26% men 26% men Every class, race, education, Every class, race, education,
income levelincome level
ReasonsReasons 2 of 3 lost job2 of 3 lost job
50% experience serious health problem50% experience serious health problem
DEBTDEBT Owed more than 1 ½ times annual incomeOwed more than 1 ½ times annual income $24,000 income $24,000 income → $36,000 debt→ $36,000 debt
States with highest ratesStates with highest rates
NevadaNevada
GEORGIAGEORGIA
UtahUtah
TennesseeTennessee
Financial LiteracyFinancial Literacy
Skill for lifeSkill for life
68.1% high school seniors failed a basic 68.1% high school seniors failed a basic financial quizfinancial quiz
only 10% scored a C or betteronly 10% scored a C or better
The 1The 1stst Step Step
Understanding:Understanding:
1.1. how much money you havehow much money you have
2.2. where it goeswhere it goes
What is Income?What is Income?
Income is the flow of cash Income is the flow of cash or cash-equivalents or cash-equivalents received from work (wage received from work (wage or salary), capital (interest or salary), capital (interest or profit), land (rent), or or profit), land (rent), or other sources (gift)other sources (gift)
Monthly Gross IncomeMonthly Gross Income List each person’s fixed incomeList each person’s fixed income
Salary and wagesSalary and wages Child supportChild support AlimonyAlimony Social securitySocial security
List variable incomeList variable income Bonus checksBonus checks income tax refundsincome tax refunds tipstips
AddAdd
RULES:RULES:to calculate monthly incometo calculate monthly income
Weekly IncomeWeekly Income Multiply by 4.3 for monthly incomeMultiply by 4.3 for monthly income
Biweekly IncomeBiweekly Income Multiply by 2.2 for monthly incomeMultiply by 2.2 for monthly income
Twice a Month IncomeTwice a Month Income Multiply by 2 for monthly incomeMultiply by 2 for monthly income
Monthly Income WorksheetMonthly Income WorksheetGross Income Income #1 Income #2 Income #3 Total
Wages / Salary
Part-Time Work
Self-Employment
Bonus / Overtime / Tips
Child Support
Maintenance
Rental Property
Disability
Unemployment Insurance
Food Stamps
Pension
Social Security
Interest / Dividends
National Guard Reserves
Tax Refund
Other
Total Monthly Gross Income
Income #1 - JoeIncome #1 - Joe
$1,100 every two weeks$1,100 every two weeks
Monthly $1,100 X 2.2 = $2420Monthly $1,100 X 2.2 = $2420
Part-timePart-time
$70 per week$70 per week
Monthly $ 70 X 4.3 = $301Monthly $ 70 X 4.3 = $301
Total Income for Joe $2420 + $301 = 2721 Total Income for Joe $2420 + $301 = 2721
Monthly Income Worksheet
Gross Income Income #1 Income #2 Income #3 Total
Wages / Salary $2420
Part-Time Work 301
Self-Employment
Bonus / Overtime / Tips
Child Support
Maintenance
Rental Property
Disability
Unemployment Insurance
Food Stamps
Pension
Social Security
Interest / Dividends
National Guard Reserves
Tax Refund
Other
Total Monthly Gross Income $2721
Weekly Income - multiply by 4.3 Bi-weekly Income - Multiply by 2.2
Income #2 - MariaIncome #2 - Maria
$ 2.50 per hour plus tips$ 2.50 per hour plus tips
$2.50 X 40 = $100 per week $2.50 X 40 = $100 per week
Monthly $100 X 4.3 = $430Monthly $100 X 4.3 = $430
Tips average $10 per hour workedTips average $10 per hour worked
or $10 x 40 hours = $400 per weekor $10 x 40 hours = $400 per week
Monthly $400 x 4.3 = $1,720Monthly $400 x 4.3 = $1,720
Income #2 - MariaIncome #2 - Maria
Child Support for teenage sonChild Support for teenage son$300 per month$300 per month
Total IncomeTotal Income $430 + $ 1720 + 300 = $2450$430 + $ 1720 + 300 = $2450
Monthly Income Worksheet
Gross Income Income #1 Income #2 Income #3 Total
Wages / Salary 2420 430
Part-Time Work 301
Self-Employment
Bonus / Overtime / Tips 1720
Child Support 300
Maintenance
Rental Property
Disability
Unemployment Insurance
Food Stamps
Pension
Social Security
Interest / Dividends
National Guard Reserves
Tax Refund
Other
Total Monthly Gross Income 2721 2450
Income # 3 - MattIncome # 3 - Matt
Works 20 hours per week at $7.25Works 20 hours per week at $7.25
$7.25 X 20 = $145$7.25 X 20 = $145
Monthly $145 X 4.3 = 623.50 Monthly $145 X 4.3 = 623.50
Monthly Income Worksheet
Gross Income Income #1 Income #2 Income #3 Total
Wages / Salary 2420 430 2850
Part-Time Work 301 623 924Self-Employment
Bonus / Overtime / Tips 1720 1720
Child Support 300 300Maintenance
Rental Property
Disability
Unemployment Insurance
Food Stamps
Pension
Social Security
Interest / Dividends
National Guard Reserves
Tax Refund
Other
Total Monthly Gross Income 2721 2450 623 5794
Determine Your DeductionsDetermine Your Deductions
Money taken from your paycheck to cover Money taken from your paycheck to cover things like taxes and health insurancethings like taxes and health insurance
Required DeductionsRequired Deductions Federal TaxFederal Tax State TaxState Tax FICA – social security tax (6.2%)FICA – social security tax (6.2%) Medicare (1.45%)Medicare (1.45%)
DetermineDetermine Your Your DeductionsDeductions
Voluntary Deductions:Voluntary Deductions: Health InsuranceHealth Insurance Life InsuranceLife Insurance Retirement – 401 KRetirement – 401 K FSA – Flexible Spending AccountFSA – Flexible Spending Account OthersOthers
Pay StubPay Stub
Employee Name Period Ending
James Smith 8-May-09
Description Current YTD
Gross Pay $ 480.00 $ 8,640.00
Federal Income Tax $ 35.60 $ 640.80
FICA $ 29.76 $ 535.68
Medicare $ 6.96 $ 125.28
State Tax $ 8.90 $ 160.20
Disability $ 0.60 $ 10.80
Health Insurance $ 20.00 $ 360.00
Net Pay $ 378.18 $ 6,807.24
Calculate Your Net Calculate Your Net IncomeIncome
Take home pay, the money you have left Take home pay, the money you have left after deductions are madeafter deductions are made
Monthly Net Income Income #1 Income #2 Income #3 Total
Total Monthly Gross Income
(-) Total Monthly Deductions
(=) Monthly Net Income
BUDGETBUDGET
A budget is simply a plan showing how A budget is simply a plan showing how you plan to spend your money to meet you plan to spend your money to meet you financial goals.you financial goals.
What do I need to prepare a budget?What do I need to prepare a budget? List of incomeList of income List of expenses, including debt paymentsList of expenses, including debt payments
Financial Problems and Financial Problems and WorkWork
Pre-employment screeningPre-employment screening
Call from CreditorsCall from Creditors
Wage GarnishmentWage Garnishment
Put Yourself In ChargePut Yourself In Charge
Have a plan for your money and stick to itHave a plan for your money and stick to it
Prepare a budget for yourself and keep it Prepare a budget for yourself and keep it up to dateup to date
Establish a savings habit – save as much Establish a savings habit – save as much as you can and do it regularly!!as you can and do it regularly!!
