• Managing Personal Finances
Next Generation Science/Common Core Standards Addressed!
• CCSS.ELA Literacy.RST.9‐10.8 Assess the extent to which
the reasoning and evidence in a text support the author’s
claim or a recommendation for solving a scientific or
technical problem.
• CCSS.ELA Literacy. RST.11‐12.9 Synthesize information
from a range of sources (e.g., texts, experiments,
simulations) into a coherent understanding of a process,
phenomenon, or concept, resolving conflicting information
when possible
Agriculture, Food and Natural Resource
Standards Addressed!
• CRP.01.01. Model personal responsibility in the workplace and
community.
• CRP.01.01.01.a. Define personal responsibility and distinguish
how it applies in workplace and community (e.g., make educated
choices, listen and follow directions, ask for help when needed,
meet expected standards, etc.).
Bell Work! STUDENT
LEARNING OBJECTIVES
• Conduct budgeting of personal finances.
• Develop financial goals.
• Understand how to use and balance a
checking account.
• Compare characteristics of various types of
investments.
Terms
• Bonds
• Budget
• Certificates of deposit
• Checking account
• Financial planning process
• Goal
Terms Continued
• Insured savings account
• Mutual funds
• Overdrafts
• Stocks
• United States savings bonds
Interest Approach
• How much money do you
spend in a week?
• How do you decide what
purchase?
Why is Financial Management
important?
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Knowing financial standing
Setting priorities and needs.
Planning credit needs.
Tax planning and reporting
Some disadvantages to
personal financial management.
• Initial set-up takes time
• Regular updating required
Budget
• Formal written or
unwritten plan
• Includes sources of
income and expenses
How do I prepare a Budget
• To prepare a budget one needs to consider
sources of income and items purchased.
• A budget categorizes the uses of cash as to
whether they are a necessity or a luxury.
Six Steps in Financial Planning
• Gather personal and financial data.
• Establish financial goals and objectives.
• Analyze financial information to identify
alternatives to achieve goals and objectives.
• Develop a financial plan.
• Implement the plan.
• Review the plan on a regular basis.
Checking Account
• A checking account is an account in which a
user makes deposits and may write checks or
use a debit card to be paid from the account.
Advantages of a Checking Account
• Reduces need to carry large quantities of
cash.
• May be able to accrue interest while money is
in the account.
• Safe way to pay by mail or online.
• Most all businesses accept checks or the use
of a debit card.
• Most banks provide online services.
Disadvantages
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A checking account may require monthly fees.
Time is required to balance the checkbook
There may be minimum balance requirements.
Stolen or lost checks or debit card can result in
loss of money from the account.
• Large charges are levied against overdrafts, when
a check is written in an amount greater than the
account balance.
• Avoid use of “Pin” numbers to avoid “Hacking”!
• Protect your password used for online banking.
Styles of checkbooks
• Duplicate check-carbon
copy remains in the
checkbook.
• Stub-information remains
in the checkbook.
• Safety paper-a watermark
that makes photocopying
obvious.
• Desk set-large binder with
three checks per page.
Balancing Checkbook
Note: Using online services simplifies the following practices.
• Mark deposits and checks that have cleared
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the bank.
Add to the current balance those checks that
are written but not cleared.
Subtract any deposits made but not cleared.
Subtract any service charges and add any
interest.
Compare the ending balances in the
checkbook against the monthly statement.
What types of investments are
available?
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Insured savings account
Savings bonds
Certificates of deposit
Bonds
Mutual funds
Stocks
Insured Saving Account
• Available through banks, saving and loans
associations, and other financial institutions.
• They are insured by a government agency.
• They are considered safe & convenient.
• All savings accounts are insured to a specified
limit of $ 250,000,00 by the FDIC.
Certificates of Deposit
• CDs are savings certificates worth a specific
amount of money, for a specific amount of
time, with a set interest rate.
• Usually pays a higher interest rate than
passbook savings accounts and are fairly
convenient.
• A penalty is assessed if money is withdrawn
prior to the “maturity” date.
US Savings Bonds
• Available through many financial institutions.
• Can be purchased through payroll deductions.
• Involve investing in the federal government by
buying bonds with a set maturity date at a
price below the face value of the bond.
Bonds
• Bonds are certificates of debt.
• Issued by corporations or government
agencies. Bonds promise payments of interest
on specific dates.
• Original investment is also paid back at
maturity. ( investment plus interest)
• Bonds are long term investment.
Mutual Funds
• Investors pool their money.
• Professional money managers manage the
pool of money for the individual investors.
Interest is paid to the investor based on the
amount invested.
• Quite often the investment is made by payroll
deduction.
Stocks
• Stocks represent a share of ownership in a
company.
• The value of the stock can increase or
decrease based on performance of the
company.
Review/Summary
• How would you conduct budgeting of personal
finances?
• How are financial goals developed?
• How to use and balance a checking account.
• Compare characteristics of various types of
investments.
The End!