Family Economics & Financial Education

1. Family Economics & Financial Education Get ready to Take Charge of Your Finances Life Of….. Ben West “A Teenager’s Spending Plan” Funded by a grant from Take Charge America, Inc.

2. Snapshot – Ben West • Sneak peak into the life of Ben and his family • Ben • James • Brenda • Anna

3. SnapshotBen’s Income and Expenses • Ben’s Income • Lou’s Logging Service • $13.00/hour • 15 hours a week

4. SnapshotBen’s Income and Expenses • Ben’s Expenses • Social activities with Maria • $75 • Cellular Phone • Monthly budget is $50, however Ben often uses more minutes than the plan allows and sends numerous text messages thus increasing his bill • Spends $90 • Saving • $200 • Other Items

5. Spending Plan • The goal is to create a spending plan that balances Ben’s expenses with his income. • He can not have more expenses than income. • Spending Plan • Financial statement • Tracks income and expenses • Used to assist with money management and help individuals reach financial goals • An individual’s perception of needs, wants and values will affect decisions made when creating a spending plan

6. Ben’s Expenses Housing Monthly Payment Utilities Others – television, internet and telephone Transportation Vehicle for Ben and Brenda Monthly payment and fuel Insurance Homeowners, disability, life, auto, and health Food Groceries Pack daily lunches with leftovers Credit Card Balance Currently have $6,500 in credit card debt Monthly minimum payment is $160 They often do not have enough to pay more than the minimum balance SnapshotWest Family Expenses

7. Housing • Monthly Payment • Housing payment • Insurance • Property taxes • Repairs • Maintenance • Utilities • Heat • Electricity • Water • Sewer • Garbage

8. Housing Others • Local Antenna • Satellite Dish • Digital Cable • Telephone • Internet

9. Transportation • Monthly Payment • Car payment • Maintenance • Fuel • An average is listed • This cost may increase/decrease depending on the cost of fuel • West Family • Pay for Ben and Brenda’s vehicle monthly payment and fuel costs

10. Others • Dirt bike tools and upgrades • Snowboarding • Electronics • Hunting • Entertainment • Create Your Own

11. Goal:To Create A Balance Spending Plan • Make all choices for the West family and Ben • Complete a Major Expenditures Summary for the West family • Complete a Spending Plan for Ben • Answer reflection questions • Write a summary essay

12. Quick Review • West Family • Ben, James, Brenda, Anna • Create a Major Expenditures Summary for the West’s • Housing • Transportation • Create a Spending Plan for Ben • Social Activities • Cellular Phone • Savings • Others

13. Snapshot Reflection • Review Ben’s Snapshot on pages 2-4 • Answer questions 1-5 on page 10

14. Personal Information Ben’s Paycheck State the employee’s name, address, and social security number.

15. Pay Period Ben’s Paycheck The length of time which an employee’s wages are calculated.

16. Gross Pay Ben’s Paycheck The total amount of money earned during the pay period before payroll withholdings.

17. Payroll Withholdings Ben’s Paycheck The amount of money subtracted from the gross pay for taxes.

18. Withholding Tax Ben’s Paycheck The amount required by law for employer to withhold from earned wages to pay taxes.

19. FICA Ben’s Paycheck Federal Insurance Contribution Act – includes Social Security and Medicare

20. Net Pay Ben’s Paycheck The amount of money remaining after all payroll withholdings have been removed from gross pay.

21. Year-to-Date Ben’s Paycheck Totals of the deductions which have been withheld from an individual’s paycheck from January 1 to the last day of the pay period indicated on the paycheck stub.

22. Setting Education and Financial Goals • Short Term – less than one year • Long Term – more than one year SMART Goal Specific State exactly what is to be done. Measurable Include how the goal can be measured. Attainable Determine steps to reach the goal. Realistic Do not set the goal for something unrealistic. Time Bound State when the goal will be met.

23. West’s Major ExpendituresHousing • Choose a house and housing others for the West family • Refer to the Snapshot on pages 2-4 • Remember • Family size • Lifestyle • Other family dynamics

24. West’s Major ExpendituresTransportation • Choose a vehicle for the Ben and Brenda • Refer to the Snapshot on pages 2-4 • Remember • Ben and Brenda will share the vehicle

25. West’s Major ExpendituresMajor Expenditures Summary • Transfer numbers to complete the summary • Total housing cost • Total transportation cost • Insurance • Food • Credit Card Balance • West family usually only pays the minimum monthly payment • If they continue this habit, their $6,500 debt will cost $9,120 • It will take 4.75 years to pay in full if only the minimum payment is paid each month

26. Ben’s Spending PlanPayroll Withholdings • Review Ben’s paycheck on page 11 • State Withholding Tax • Federal Withholding Tax • FICA

27. Ben’s Spending PlanSavings • Review Ben’s Snapshot on pages 2-4 • Identify his needs, wants, values • Review the short term and long term goals set for Ben on page 12

28. Ben’s Spending PlanOthers • Social activities with Maria • Cellular phone • How could Ben decrease the amount spent on his cell phone each month? • Choose which “others” items Ben would like • Dirt bike tools and upgrades • Snowboarding • Electronics • Hunting • Entertainment • Create Your Own • Draw an item and identify the cost in the space provided

29. Ben’s Spending Plan Summary • Gross Income • Expenses • Calculate the Difference • If the difference is a negative number, go back and adjust some of Ben’s expenses.

30. Negative or Positive Difference? • If the number on QQ is positive, adjust Ben’s expenses. • Saving additional money for unexpected emergencies or expenses may be a good idea. • If the number on QQ is negative, go back and make adjustments to Ben’s expenses. • Changes need to be made consistently throughout the simulation. • Keep in mind Ben’s needs, wants, values and goals when making changes. • If the number on QQ is zero, congratulations! You have balanced Ben’s Spending Plan!

31. Reflection Questions • Once the difference equals zero…. • Answer questions 17-22 on pages 15 and 16 • Answer questions 23-27 on page 18