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Introduction to Income vs. Expenses

Introduction to Income vs. Expenses. 7 th Grade Income vs. Expenses #1. Pre-Test. What are the two keys to financial success? What is the average annual income for a high school dropout? For a family of four in Minneapolis, what is the average annual costs for their necessities?.

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Introduction to Income vs. Expenses

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  1. Introduction to Income vs. Expenses 7th Grade Income vs. Expenses #1

  2. Pre-Test • What are the two keys to financial success? • What is the average annual income for a high school dropout? • For a family of four in Minneapolis, what is the average annual costs for their necessities?

  3. Objectives • Learn the keys to financial success • Learn how education level affects annual income • Understand the importance of strategic budgeting • Compare income vs. expenses

  4. Good Annual Income • Education is the top determiner of your income • The average American changes careers five times • When you have a good education you • Become more marketable when changing careers • Have a better chance for promotion, which increases your income • It is important you know income by education level

  5. Income by Education Level Source: US Department of Labor: Labor Statistics Report, 2012

  6. Strategic Budgeting • Many people spend more money than they earn • A budget helps you live within your income • Financial problems are often a major factor in • High levels of stress • Marital and family problems • Disease and illness • Budgeting • Income vs. Expenses

  7. Avg. Expenses: Necessities Source: Economic Policy Institute: Briefing Paper 2010

  8. Income vs. Expenses

  9. Income vs. Expenses • The average costs for necessities are • $4,700 a month or $56,400 a year for a family of four in Minneapolis • This includes expenses for • House and car payments, medical insurance, food • Heating, air conditioning, electricity, water, child care • This does not include expenses for • Cable TV, restaurants, internet, sports activities • Movie tickets, cell phones, music downloads, etc.

  10. Income vs. Expenses • What annual income does a family of four need in Minneapolis? • $56,400

  11. Metro Area: Child Care Source: Economic Policy Institute: Briefing Paper 2010

  12. Child Care vs. Income • What would be the annual cost for child care if a family has an infant and a pre-school age child? • $8,150 + $6,500 = $14,650 • If a high school graduate earns $30,000 a year, how much would they pay in taxes at a 20% rate? • $30,000 * .20 = $6,000 • What is the difference between the child care cost and high school graduate income after taxes? • $24,000 - $14,650 = $9,350

  13. Child Care vs. Income

  14. Pick a Partner • What type of a family do you envision yourself having as an adult? • What type of education do you plan on obtaining? • How will your education level help you meet your financial needs?

  15. Classroom Discussion • What type of a family do you envision yourself having as an adult? • What type of education do you plan on obtaining? • How will your education level help you meet your financial needs?

  16. Post-Test • What are the two keys to financial success? • What is the average annual income for a high school dropout? • For a family of four in Minneapolis, what are the average annual costs for their necessities?

  17. Review • The two keys to financial success • Make a good annual income • Strategic budgeting • What is the average annual income for a high school dropout? • $19,300 • For a family of four in Minneapolis, what are the average annual costs for their necessities? • $56,400

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