Unit1:Earningand

ManaginganIncome

PersonalFinancialLiteracy

Objectives

•  Identifysourcesandtypesofincome.•  Discussthelong-termfinancialbenefitsofgettinganeducation.

•  Discussnon-collegeeducationalternativesthatcouldimproveyourfinancialfuture.

•  Compareneedsversuswants.

Objectives

•  Discusstheimportanceoflivingwithinyourmeans.

•  Discussthebasicstepsinafinancialspendingplan.

•  Discussmethodsofmanagingpersonalfinances.

WhyDoWeWork?

Theaveragepersonspends84,280hoursworkingduringalifetime:

40hoursaweek,49weeksayear,age22-65.Mostpeopleworktoearnanincometopayforhousing,food,transportation,andextras

TypesofIncome

Fixedincome–thesameeachtimeyoureceiveit,e.g.,weeklyallowanceorbiweeklyormonthlywages.Variableincome–changesbecauseofhourlyjobs,tips,orgiftsofmoney.

WhereDoyouGetMoney?

•  Mostincomecomesfromwagesorsalaryearnedfromjoborcareer

•  Othertypesofincome: Tips,bonuses,overtimepay Gifts Allowances Interest Income-producinghobbies

JoborCareer?Abenefitpackageusuallycomeswithacareer.Youmayget: Insurance Paidvacation Paidsick/familyleave Retirementplans

EducationPays

•  Animalcareworker-HSgrad: $19,360 •  VeterinaryTechnologist/Technician-ASdegree: $28,900 •  Veterinarian–BSplus3-4yrscollege: $89,450

2015U.S.CensusStatisticsfromSmartAsset.com•  88%hadatleastahighschooldiplomaorGED•  33%hadaBachelorsorhigherdegree•  12%hadamasters,professionalordoctoratedegreeAVERAGESalaries•  Lessthanhighschooldiploma-$25,636/yrave•  Highschooldiplomaaverage-$35,256/yrave•  Somecollege-$38,376/yrave•  AssociatesDegree-$41,496/yrave•  Bachelor’sDegree-$59,124/yrave•  Master’sDegree-$69,732/yrave•  ProfessionalDegree-$89,960/yrave•  DoctorateDegree-$84,396/yrave

StartSavingforEducation

•  By2025,76percentofalljobswillrequiretrainingbeyondhighschooland/oracollegeeducation.

AlternativestoCollege

•  Apprenticeships/Internships•  CareerTech•  CommunityCollege•  Companytrainingprograms•  Military•  OnlineLearning

Needsvs.Wants

•  Knowthedifferencebetweenneedsandwants:

•  Needs-basicnecessities:roofoveryourhead,clothes,shoes,awaytogettoworkorschool,food,water,electricity,gas

•  Wants-thingsyoudesire:videogame,beachvacation,concerttickets

•  Sometimeswantsdisguisethemselvesasneeds.

SetaGoal

Goal–aplanwithaspecificresultinmind•  Short-term—lessthansixmonthsTakeACTtestinDecember

•  Intermediate—sixmonthstoayearCompletecollegescholarshipapplications

•  Long-term—onetofiveyearsObtainjobindesiredcareerfieldBuyacarBuyahouse

SMARTGoals

S SpecificactionM MeasurableresultsoroutcomeA Attainableorabletoachieve,notan

impossibledreamR RealisticT Timelyorgivingyourselfenough

time

LivingWithinYourMeans

•  TrackSpendingDoyouuseacheckregisterDoyouhaveanapptotrackspending

•  StopImpulseBuying•  CreateaFinancialPlanDoyouhaveabudgetwritten,digitalorapp?

YourFinancialPlan

•  Establishfinancialgoals•  Totalyourincome•  Estimateandtotalyourexpenses•  Analyzeincomeandexpenses•  Prepareaspendingplan

AppsorWebToolshttps://www.lifehack.org/articles/technology/best-15-money-management-apps-that-make-financial-planning-easy.html•  BudgetSimple(Web)•  Mint(Web,iOS,Andriod)•  Yodlee(Web)•  YouNeedaBudget(Web,Windows,Mac)•  Spendee(iOS,Android)•  Expensify(Web,Android,iOS,WindowsPhone,Blackberry)

ManagingPersonalFinances

•  Ignoringpersonalfinancescancausemountingdebt,poorcreditreports,garnishmentofwages,andbankruptcy.

• Managingpersonalfinancesisalifelongprocess.

DevelopGoodFinancialHabits

•  Livewithinyourmeansandspendlessthanyoumake.

•  Saveforshort-termandlong-termgoals.•  Threetosixmonthsemergencyaccount

FinancialChallenges•  Attendtofinancialproblemsimmediately.

•  Revisityourspendingplan.•  Adjustyourexpensesandspending.•  Don’tusecreditcardstofixproblems.•  Contactcreditorsimmediatelyifyoucan’tpay.

BeReadytoChange

•  Re-evaluateyourbudgetaslifechanges– careermoves– Spouse,children,etc.

UnitReview1.  Namedifferenttypesofincome.2.  Explainthedifferencebetweenfixedand

variableincome.3.  Discusswhypeoplework.4.  Analyzetherelationshipbetweeneducation

andincome.5.  Compareandcontrastajobwithacareer.6.  Giveexamplesofcareerswheretheskillscan

belearnedinalternativestocollege.

UnitReview-Continued7.  Explainwhyitisimportanttodistinguish

betweenneedsandwants.8.  Whatistherelationshipofincometoneeds

andwants?9.  Whyisitimportanttolivewithinyour

means?10. Describethepurposeofaspendingplan.11. Whattypeofexpenseisflexibleinaspending

planandwhy?