Presentation Transcript

1. Personal Finance

2. Preview Some things we are going to learn in our Personal Finance Unit How to balance your checkbook How to write a personal check How to calculate your paycheck How to read your paycheck How to create a monthly budget
3. Vocabulary Why do we have to talk vocabulary? So that when we have discussions, you know what we’re talking about You don’t want to beef about being razzed for beating your gums when the big cheese told you to shut your trap. You want to be a bimbo with a breezer. And if you didn’t understand that, it’s because you didn’t understand the vocabulary!
4. 1920’s slang Beef-complain Razzed-made fun of Beating your gums-chattering idly Big cheese-person in charge Shut your trap-be quiet Bimbo-strong man Breezer-convertible
5. Debit and Credit Debits and Credits are entries made in account ledgers to record changes in value resulting from financial transactions They are the official names for putting money into your account (credit) and taking money out of your account (debit) that you’ll see in your checkbook
6. Ledger Ledger is another word we use for checkbook
7. Balance Balance is a running total of how much money you have. It is calculated by taking the amount of money you had before, adding any deposits you have made or subtracting any purchases or withdrawals you have made
8. Putting money in Deposit Direct Deposit from an employer Deposit Slip Cash, personal checks Some ATMs don’t need slips anymore When depositing a personal check, you must endorse the check Sign your name on the back Transfer from another account
9. Taking Money Out Write a check Debit Card Use like a credit card, spends like a check/cash Cash Back Withdraw Transfer to another account
10. Ledger “Rules” One item per line, EITHER credit or debit Always perform the indicated operation from the previous balance to create a new balance. The balance is your running total.
11. Sample Ledger
12. There’s an app for that! Yes, in today’s world, there are apps for that. And I totally recommend you get one! Not all apps are created equal Some have categories and will track your spending and let you set self-imposed budgets Some only track your balance Some link to your bank account Some are actually designed by your bank
13. Writing a check
14. Fields on a check “Pay to the Order of” Who are you writing your check to? “Make checks payable to”
15. Fields on a Check The dollar amount You MUST SPELL OUT THE DOLLARS! Four Hundred and Sixty Dollars The change is written as a fraction And 57/100 Then draw a line so that nothing else can be written
16. Fields on a Check The box with the dollar sign Put the amount in numerals Yes, you’re writing the amount twice! $460.57
17. Fields on a Check “For” Can be left blank, but is often useful for your record keeping and theirs Put any notes, like “December Rent, Apt 966”, so that your landlord doesn’t mix your check up with another apartment or for another month Also useful with paying medical bills “med rec # 314159”
18. Fields on a check The last line is your signature The check is invalid unless you sign
19. Writing a check
20. Need Cash? You can write a check for cash while you’re at the bank This is what people did before there were debit cards and ATMs everywhere. If your bank charges an ATM fee, this is a good way to get around it Simply write “Cash” in the “Pay to the order of” field, and then fill the rest of the check out normally with the dollar amount. Sign it, endorse it, and give it to the teller at the bank
21. Paying a Bill Online using Bank Account
22. How to calculate your paycheck You will get paid one of two ways Hourly Salaried Annual Salary By the job
23. Hourly Your paycheck will be different each time, anywhere from slightly different to very different, based on the number of hours you work. Multiply the number of hours you work by your hourly rate Ex. $7.25 x 38.25 hours (bonus, how many hours and minutes?) This gives you GROSS PAY
24. Salaried (typical) Annual salary is paid out over a number of pay periods (typically weekly, biweekly, or monthly) Salary will be divided by number of pay periods in the year and paid out on this schedule Ex. Like from the game of life…$67,000 paid out monthly is $67,000 ÷ 12 =$5,583.33 The same amount paid biweekly is $67,000 ÷ 26 = $2576.92 Remember this is GROSS PAY
25. Salaried (atypical) To every rule, there is an exception Each company is allowed to pay you in a way that is beneficial and cost effective for them. This sometimes results in odd pay schedules. These are (for the most part) legal as long as your employer spells out (in writing) how and when you get paid.
26. Salaried (atypical) cont. Pro-rated salaries Teachers who start in the middle of a year Probationary position Not yet certified, still in training, not graduated from a program
27. Overtime Hourly “Time and a half” This is calculated as 1.5 times your normal rate for every hour you work over You’ve worked 43 hours. That’s 3 hours over 40. Your normal rate is $7.25. So for the first 40 hours, you earn $7.25. for the last 3, you earn 1.5 x $7.25 Remember, this is all in GROSS PAY
28. Overtime Cont Salaried Some salaried positions don’t pay overtime! Teachers Farmers Inmates Politicians Salaried overtime Calculated same way, at time and a half Typically companies will calculate an hourly rate for you Sometimes there will be a cutoff, like “the half cannot exceed such and such amount” This is up to the company, and is agreed upon in writing at time of hire