A little food for thought…
An English teacher asked her 8th grade
class to write an essay on what they would
do if they had a million dollars.
Larry handed in a blank sheet of paper.
"Larry!" yelled the teacher, "you've done
absolutely nothing. Why?"
"Because if I had a million dollars, that's
exactly what I would do!"
MANAGING MONEY
10.01 Identify sources of
income and types of spending.
You’ve all heard the phrase “Money
doesn’t grow on trees…”
Well, where does it grow? In your bank
account money earns interest and grows.
You can invest and your money will grow.
You can make a budget and save and
watch your money grow.
Money is a material resource
Budgets can help you achieve short and
long term goals.
Budget Example
Income is the
amount brought
home.
Expenses are the
amount spent.
Earning an Income
Hourly Wage – Amount of money earned
per hour of work. Can vary based on
number of hours worked.
Salary – Set amount of money paid for a
specific amount of time. Does not vary
based on hours worked.
Hourly Wage Overtime
If someone works more than 40 hours a
week or holidays, they can earn
OVERTIME which is usually their normal
hourly rate plus 50%.
So if they normally make $6.50 an hour,
they would make $9.75 an hour overtime
pay.
Paycheck Deductions
Deduction means to reduce.
Money is taken from the amount you earn to
pay taxes and for benefits like insurance.
Gross Income vs. Net Income
Total amount of money before deductions
is your gross income.
Total amount of money after deductions is
your net income (take home pay).
Deductions
Federal and State Income Taxes –
Government’s main source of income and
is used to provide services, programs, and
facilities to citizens.
Social Security Taxes – (FICA) Provides for
retired, disabled, and widowed.
Basics of Budgeting
Establish financial goals.
Determine sources of income
Estimate expenses
Compare income and expenses
Write budget and keep records
Evaluate budget
What is included in a budget for a family
in a given month?
The typical family spend their money?
Housing 14%
Recreation
7%
Food
22%
Medical/Dental 8%
Clothing 10%
Transportation 14%
Personal 2%
Utilities, Home 14%
Other
9%
Improvements
10.02 Factors that influence
spending
Teen Living
A. Advertising
 Is a paid public message communicated through various
media that promotes the sale of goods and services.
 Causes people to impulse buy (buy without thought)
 Manufactures know their ad worked if you buy their
product.
 Ads are to convince you to buy something.
 Ads with celebrities : Celebrities don’t do anything for
free!! They are PAID to be in the ad!
Jingles and Slogans
 Are to make you remember the product.
 Let’s see how much YOU remember!
Have it your way
Taste the rainbow
Eat Fresh
Think outside the bun
Every kiss begins with Kay
Raising the bar
Just do it.
Live in your world, play in ours
You can do it, we can help
B. Purchasing practices
Decide where to shop,
when to buy, and what
to buy.
 Impulse buying can be
prevented by following a
shopping list.
Comparison shopping
means comparing
products and prices in
different stores before
buying.
 Advertisers are sneaky!
They use cartoon
characters to convince
youngsters and celebs for
older people and teens.
Have you ever impulse
bought?
C. Consumer/label information
Deciding WHAT to buy:
 Judge quality – Not just price! Judge the quality.
Sometimes lower price is still good quality!
 Suitability – Know what product you need before you go
shopping for it.
 Use and Care – Read labels. Would you want to buy a
whole wardrobe of dry clean only?
 Warrantees – written promise a product will perform as
stated. Full vs. Limited
D. Consumer rights and responsibilities
1.
2.
3.
4.
5.
Right to be informed – 515
Right to redress/recourse – 518
Right to safety – 517
Right to choose/selection - 516
Right to Performance – 516
Money!
►A
teenager lost a contact lens while playing
basketball in his driveway. After a fruitless search,
he went inside and told his mother the lens was
nowhere to be found and they needed to order
more lens. Undaunted, she went outside and in a
few minutes, returned with the lens in her hand.
"How did you manage to find it, Mom?" the
teenager asked. "We weren't looking for the same
thing," she replied. "You were looking for a small
piece of plastic. I was looking for $150."
10.03 Check Writing
All About Checks
ALL STUDENTS STAND UP!!!

If you can not go the rest of your life without spending
money on the following, sit down.
Opening day for movies
Manicure/pedicure
Golfing/club memberships
Hairstyles that have expensive treatments (color, perms, etc.)
Cell phones
Going out to dinner 2 or 3x a week
Vacations in high seasons
Buying name brand clothes
Check Writing

Checks include the following information:
Check Writing

DATE: Include the month, day and year you
are writing the check.
Check Writing

PAYEE: Write the name of the person or
business on the line, “Pay to the order of.”
Check Writing

AMOUNT IN NUMBERS: Write the amount of
the check in numbers.
Check Writing

AMOUNT IN WORDS: Write the amount of
the check in words.
Check Writing

SIGNATURE: Sign all checks the way you
sign the signature card.
Check Writing

MEMO: Use the memo area to note the
reason for the check.
Check Writing

ROUTING NUMBERS: The nine-digit string of
numbers used to identify your bank to process
the transaction
Check Writing

ACCOUNT NUMBER: The number used to
identify your unique account within the bank.
Check Writing

CHECK NUMBER: The number used to
identify a specific check within the sequence of
the register. It usually includes 3 or 4 digits.
Check Writing

TRANSIT NUMBER: Used to list checks for
deposit.
Check Writing

Check Register: Don’t forget to balance your
checkbook by filling out the check register.
Check Writing
12 Rules About Checking
12 Rules About Checking
1)
2)
3)
4)
Only write checks when you have
enough money in your account.
Write checks legibly.
Write the check amount as far to the
left as possible.
Always use a pen to write checks.
12 Rules About Checking
5)
6)
7)
8)
Don’t erase mistakes on a check.
Don’t sign blank checks.
Use restrictive endorsements.
Print the right date on a check.
12 Rules About Checking
9)
10)
11)
12)
Always keep checks in a safe place.
Destroy voided or unused checks and
deposit slips.
Record every transaction in the
checkbook register.
Keep a running balance in the
checkbook register.
Check Writing
How to Cash a Check
How to Cash a Check

BLANK ENDORSEMENT: Sign your name the
same way it is written on the front of the
check.
George W. Doe
How to Cash a Check

SPECIAL ENDORSEMENT: Do this when you
want to give someone else the money. Write
“pay to the order of” and that person’s name.
Then sign it. Now that person is the only one
that can cash the check.
Pay to the order of
William J. Doe
George W. Doe
How to Cash a Check

RESTRICTIVE: When you want your check to
be very safe, like when you send it by mail to
your bank, use this type of endorsement.
Then , it can only be deposited into your
account.
For Deposit Only
George W. Doe
Credit Cards 101
Did You Know
$ The percentage of undergraduate students carrying at
least 1 credit card has risen 24% since 1998
$ 92% of college students have a credit card by their
sophomore year
$ Almost half (47%) of all college students carry four or
more credit cards
$ 21% of undergrads owed between $3000 & $7000 on
their credit card – a 61% increase from 2000
Source: Nellie Mae, April 2002. Undergraduate Students & Credit Cards, pp. 1 & 2
What are Credit Cards?
Pre-approved credit which can be used for the
purchase of items now and payment of them
later.
Are Debit Cards a type of
Credit Card?
NO!
Debit=Credit
Debit Cards are:
$ Not the same as credit
cards
$ Not a form of credit at
all
$ Directly linked to your
bank account.
Debit cards allow payment and purchase
to happen simultaneously
Why Use a Credit Card?
$
$
$
$
$
$
Proper use can help establish good credit rating
Conveniently accepted across United States and abroad
Emergency buying power
Additional form of identification
Record of purchases on bill statement
Often required to hold a reservation
Why Not Use a Credit Card?
Improper use can damage credit rating
Higher risk for impulsive buying and overspending
Debt trap when used unwisely
Expensive way to borrow due to high interest rates
Less to spend in the future due to paying off purchases
from past
$ Possible hidden fees & surcharges
$ Privacy is an increasing concern
$ Identity theft easier
$
$
$
$
$
Types of Credit Cards
Cards where purchases can be made in many
locations
$ Bank Credit Cards
¢ Card issued by financial institution
$ Retail Credit Cards
¢ Credit and card issued by particular retailer (Old Navy,
The Bon, Home Depot, Shell Oil)
Obtaining a Credit Card
$ Comparison shop when choosing the right card
$ Know the facts
¢ Terms and conditions of credit card accounts differ
¢ Be aware of “hidden” costs of card(s)
$ Federal Truth in Lending Act
¢ Requires card issuer to display the cost of credit card
¢ Schumer Box: easy to read box format
A Schumer Box
you May Expect To See
Annual Percentage Rate for purchases
and balance transfers*
2.99% APR (.00819% daily periodic rate) on purchases and balance transfers until the
first day of the billing cycle that includes the six (6) month anniversary date of the
opening of your account. In the absence of the introductory rate, 12.99%
APR(.03559% daily periodic rate) on purchases and balance transfers.**
Grace period for repayment of the
balance for purchases
You will have a minimum of 25 days without a finance charge on new
purchases if the total New Balance is paid in full each month by the statement
closing date.
Method of computing the balance used
in calculating finance charges for
purchases
Average daily balance (including new purchases)
Annual fee
$25
Minimum finance charge
For each Billing Period that your Account is subject to a finance charge, a
minimum total Finance Charge of $0.50 will be imposed.
Miscellaneous fees
Cash advance fee: 2.5% of amount of the cash advance, but not less than
$2.50.
Late payment fee: $25
Over-the-credit-limit fee: $25
Returned check fee: $25
A Schumer Box and Credit Card
Terms Explained
Annual
Percentage
Rate for
Purchases
19.9%
Grace
Period for
Purchases
Not less
than
25 days
Minimum
Finance
Charges
Balance
Calculation
Method for
Purchases
$.50 when a
finance
charge at a
periodic rate
is charged
Average daily
balance
method
(including
new
purchases)
Annual Fees
$20 per year
Transaction
Fees for
Cash
Advances
2% with a
minimum fee
of $3
Late
Payment
Fees
$29
$ Annual Percentage Rate (APR): interest rate charged
for amount borrowed in terms of percentage per year
$ Grace Period: amount of time allowed before finance
charges (interest or cost of credit) are applied
A Schumer Box and Credit Card
Terms Explained
Annual
Percentage
Rate for
Purchases
19.9%
Grace Period
for
Purchases
Not less than
25 days
Minimum
Finance
Charges
$.50 when a
finance
charge at a
periodic rate
is charged
Balance
Calculation
Method for
Purchases
Average
daily
balance
method
(including
new
purchases)
Annual Fees
$20 per year
Transaction
Fees for
Cash
Advances
2% with a
minimum fee
of $3
$ Minimum Finance Charge: minimum amount
charged for card use
$ Balance Calculation Method: method used to
determine balance including finance charges
Late
Payment
Fees
$29
A Schumer Box and Credit Card
Terms Explained
Annual
Percentage
Rate for
Purchases
19.9%
Grace Period
for
Purchases
Not less than
25 days
Minimum
Finance
Charges
$.50 when a
finance charge
at a periodic
rate is charged
Balance
Calculation
Method for
Purchases
Average daily
balance
method
(including
new
purchases)
Annual Fees
$20 per year
Transaction
Fees for
Cash
Advances
2% with a
minimum
fee of $3
Late
Payment
Fees
$29
$ Annual Fees: yearly charge for credit card ownership
$ Cash Advance Transaction Fees: cash withdrawal fees
$ Late Payment Fees: penalty fee for payments not made
by the due date
Opening a Credit Account
1.
2.
3.
4.
5.
6.
Applicant completes a credit application
Lender conducts a credit investigation
Applicant is given a credit rating
Lender accepts or denies the credit request
If accepted, applicant evaluates the credit card details
(USE THE SCHUMER BOX!)
Applicant accepts or refuses credit terms
Understanding the Bill
$ Minimum Payment Due: minimum amount to be paid
¢ If this amount is paid and a balance is left on the account,
additional finance charges will be included in the following
month’s balance
$ Past Due Amount: the previous amount due which was
not paid before the due date
$ Due Date: the day by which the company requires a
payment to be made
$ New Balance: the total amount owed on a credit card
Understanding the Bill (continued)
$ Credit Line: the maximum amount of charges
allowed to an account
$ Finance Charge: charges assessed for credit
card use
Safety Tips
 Sign card with signature and “Please See ID”
 Do not leave cards lying around
 Close unused accounts in writing and by
phone, then cut up the card
 Do not give out account number unless
making purchases
 Keep a list of all cards, account numbers,
and phone numbers separate from cards
 Report lost or stolen cards promptly