travel time personal finance needs/wants opportunity costs the decision making process taxes check...
TRANSCRIPT
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Diane Jankowski 1
Personal Finance
Needs/WantsOpportunity Costs
The Decision Making ProcessTaxes
Check Writing Tips
MONEY, MONEY, MONEY …
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Diane Jankowski 2
Needs/Wants/ResourcesWants: Things a person does not need to
survive, but would like to have (cell phone, computer, cable tv)
Needs: Things that you must have in order to survive (food, water, shelter, clothing, love)
Resources: Things that people can use to make or obtain what they need or want - limited
MUST MAKE A DECISION – Opportunity Cost
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Opportunity CostOpportunity cost is what you have to forgo when
you choose option A over option B. This must be taken into consideration in order to make the best choice possible.Time MoneySpace
Example: If I choose to go to the football game as opposed to staying home to study, I will not be prepared for the test and therefore get a poor grade.
Diane jankowski
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BusinessBusinesses supply goods and services to consumers with the motivation to make a profit. The good/service providing must satisfy a customer need or want.
Profit = income – expenses (companies try to keep income > expenses)
Operating in the red means income < expenses (bad)Operating in the black means income > expenses (good)
Companies thrive on competition (the contest between businesses to win customers).
How can there be so many pizza places in Lyndhurst?
Josie’s – $1.00 a slice - caters to high school students
(place order at counter, pay, and eat)
Mr. Bruno’s – over $2.00 a slide - caters to business people
(sit down, look at menu, waitress takes order,
eat, and pay)
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Diane Jankowski 5
How much does the average American earn per year?
Things to consider:
Location
Education
Career
PARADE MAGAZINE
www.parade.com/news/what-people-earn/.../salary-guessing-game.html
Play the earnings game and see if you can guess
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MONEY: Gross or Net?
1. GROSS PAY
The amount you earned
Hourly rate X hours worked
$5.00 x 10 = $50.00
3. NET PAY
The amount you take home
Gross pay – taxes = net
$50.00 - $15.00 = $35.00
2. TAXES Approximately 30% of Gross Pay = income taxes to be paid
gross pay X tax rate (remember to move 2 decimal places to the left from the % symbol before calculating)
$50.00 x .3 = $15.00
Follow the steps below to calculate gross pay, taxes, and net pay
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The Decision Making Process
Step 1: Identify the situationWhat decision do you need to make?
Step 2: Identify possible courses of actionWhat are all the possible alternatives?
Step 3: Determine the pros and consWhat are the advantages/disadvantages of each alternative?
Step 4: Make a decisionHow would you rank each alternative/choice based upon the
pros/cons?How will you reach your goal?
Step 5: Evaluate your decisionHave you achieved the results expected?
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TaxesTaxes (required payment to the government)
1. Income Amount paid based on amount earned (Progressive)
2. Sales % added to purchase price of taxable items
3. Property Amount paid based on value of property (land/house)
owned
http://www.khanacademy.org/economics-finance-domain/core-finance/taxes-topic/taxes/v/calculating-federal-taxes-and-take-home-pay
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Check writing lesson Always begin writing the
amount close to the left edge on the line and in the box by the $
Only use the word “and” where the decimal point appears
Always write cents as a fraction of a dollar (50/100)
Always spell out the month and write the full year (2013) in the date
Never abbreviate the name of a business or person
Checks are legal documents
“Demand Note”
Must be paid on demand
Post dated checks are illegal if given to the payee on a date prior to the date written on the check
Bank will pay the amount written on the line
Be sure to sign the check after double-checking the information
If you make a mistake, VOID the check (save it) and write a new one