Chapter 3 Quiz TODAY

MTV True Life “I am a compulsive shopper”

http://www.mtv.com/videos/true-life-full-episode-im-a-compulsive-shopper-two-girls-deal-with-extreme-shopping-addictions/1590955/playlist.jhtml

How could budgeting have helped these ladies be in a better circumstance financially?

Journal: “Do you keep records? If so what are they for…pay check stubs, car

insurance, receipts, savings account info, checking account, debit card, tags on

clothing, etc.?Why do you keep these records?

Chapter 3 Money Management Strategy

Personal Finance

Organizing Financial

Records

MONEY MANAGEMENT IS…

Planning how to get the most from your money

Helps you keep track of where you money goes

Helps you make wise financial decisions

Helps you reach your financial goals

MONEY MANAGEMENT CAN HELP YOU…

Plan and measure your financial progress

Handle routine money matters, such as paying bills on time

Determine how much money you have now and in the future

Make effective decisions about how to save money

Places you can keep financial records

Home Files: file box or drawer used for savings account info, bank statements, paycheck stubs

Safe-Deposit Boxes: small secure storage you rent at a bank; used for birth certificates, jewelry, titles (house or car) etc.

Home Computers: good for certain financial records and used for a financial tool

ActivityReview pages 60-64 in your textbookGet in groups of 3/4Get an envelope of different items listed

on paperCategorize the items into 3 groups

Orange= Home Files Purple= Safe Deposit Box Yellow= Home Computer

Place the items listed on the sheets of paper in the correct folders

Be prepared to discuss in class

Chapter 3 Notes (cont)

Article: 3 Frugal Resolutions for 2009Question: What are 3 important facts that you

can take from this article?

Personal Financial StatementsDocument that provides information about

and individuals current financial positionSummary of income & spending

What you owe? (car payment, car insurance, cell phone bill)

What you make?Personal balance sheet/net worth

statements Net worth: difference between amount you

make/have and debts that you need to pay

Assets…in the green!

Assets: items of value such as cash, property, personal possessions, and/or investments

Wealth: an abundance of valuable material possessions

Liquid Assets: cash items that can be quickly converted into cash (checking account item)

Can also include real estate recorded at market value

Liabilities…in the red!

Liabilities are debts you owe (Car payment, money you owe

your parents for spring break trip, cell phone bill for texting too much!)

Insolvency: financial state that occurs if liabilities are greater than assets

NET WORTH= Assets – Liabilities ( $3,200 = $4,000 - $800)

Income…making $$$Cash flow: the money that actually goes in and

out of your wallet and bank accountsIncome: money that you receive from a job,

allowance or interest earned on savings account

Take-home Pay: amount of income left after taxes and other deductions have been taken out

Discretionary Income: money left over after paying for essentials such as food, clothing, shelter, transportation etc. (you spend it at your own discretion)

JOURNAL: Why do we need to know our cash flow? What do assets and liabilities have to do with your financial future?

JOURNAL: WHY DO WE NEED TO KNOW OUR CASH FLOW?

WHAT DO ASSETS AND LIABILITIES HAVE TO DO WITH YOUR FINANCIAL

FUTURE?

What now…Save your notes—we have

one more day of notes next class

Get Personal Balance Sheet and Cash Flow Statement Review

Complete individually or with a partner

Be prepared to review your answers in class

Today's ActivitiesNEFE workbook pages 15-19 read and

complete individuallyNEFE pages 22-23 togetherJournal EntryNotes 15-20Chapter 3 packetHW: Read Chapter 4

JournalDo you currently use a

budget? Do your parents use a budget? What are some advantages to using a budget?

EXTRA CREDIT: Track all your income, expenses and spending for 1 week. Record it on a neat sheet of notebook paper or type. Worth 20 points!

BudgetPlan for using money to

meet wants and needsNecessary for successful

financial planningLearn how to live within

your incomeLearn how to spend

money wiselyDevelop good money

management skillsReach financial goals!

Steps for Creating a Personal Budget

1. Set your Financial Goals2. Estimate your Income3. Budget for Unexpected Expenses

Emergency Fund (medical, unemployment) 3-6 month living expenses

4. Budget for Fixed Expenses Mortgage, car payment, insurance, school loans etc.

5. Budget for Variable Expenses Heating & cooling, medical Consumer Price Index (CPI): measure of changes in

prices for purchased goods

6. Record What you Spend Budget Variance: what you budget to spend vs. what

you actually spend

7. Review Spending & Saving Patterns

Budget Successfully by…

Planning carefully

Making the budget practical

Allowing for some flexibility

Writing the budget down and putting in an easily accessible location

Ways to

Increase

Savings!!! Pay yourself first Write yourself a check

from your paycheck to immediate deposit into savings account

Payroll Savings Set aside a fixed amount

to go into savings directly from your paycheck

Spending less to Save Spend less each day! E.g. not getting that

morning coffee, renting a movie instead of going out to one

Now what?Print your notes….3 days worth, 3 journals

—20 points!!!

Get a Chapter 3 packet from me Ch 3 crossword puzzle Money Management Strategy Financial Pickles Money Management Quiz

Review Financial Pickles together!