Family Economics & Financial Education
Get ready to Take Charge
of Your Finances
Life Of…..
Monica Erickson
“A Teenager’s Spending Plan”
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Snapshot – Monica Erickson
• Sneak peak of the life of Monica and her
family
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–
–
–
Monica
Sharise
Tyrone
Grandma and Grandpa
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 2
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
Snapshot
Monica’s Income and Expenses
• Monica’s Income
– Lucy’s Luscious Cakes and Pastries
• $10.00/hour
• 15 hours a week
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 3
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Snapshot
Monica’s Income and Expenses
• Monica’s Expenses
– Saving for culinary school
• Half of monthly income
– Pebblebrook Culinary Team
• $60.00
– Transportation
• Subway or city bus pass
– Other Items
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 4
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Spending Plan
• The goal is to create a spending plan that balances
Monica’s expenses with her income.
• She 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
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 5
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
Snapshot
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Erickson Family Expenses
• Monica’s Expenses
• Housing
– Monthly Payment
– Utilities
– Others – television, internet and
telephone
• Transportation
– Vehicle for Sharise and the
family
– Monthly payment and fuel
• Insurance
– Health, life, auto
• Food
– Groceries
– Eat out three times a week and
pick up take-out once a week
• Saving
– Down payment on a condominium
or apartment
– Monica’s future education expenses
– A portion of child support from
Monica’s dad is saved for future
education expenses
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 6
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Housing
• Monthly Payment
–
–
–
–
–
Housing payment
Insurance
Property taxes
Repairs
Maintenance
• Utilities
–
–
–
–
–
Heat
Electricity
Water
Sewer
Garbage
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 7
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Housing Others
• Satellite Dish
• Digital Cable
• Telephone
• Internet
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 8
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Transportation
• Monthly Payment
– Car payment
– Maintenance
• Fuel
– An average is listed
– This cost may
increase/decrease depending
on the cost of fuel
• Erickson Family
– Pay for Sharise’s vehicle
monthly payment and
fuel costs
• Monica
– Pays for her public
transportation pass
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 9
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Others
•
•
•
•
•
•
Cellular Phone
Culinary Upgrades
Electronics
Clothes
Entertainment
Create Your Own
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 10
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
Goal:
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To Create A Balance Spending Plan
• Make all choices for the Erickson family and Monica
• Complete a Major Expenditures Summary for the
Erickson family
• Complete a Spending Plan for Monica
• Answer reflection questions
• Write a summary essay
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 11
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Quick Review
• Erickson Family
– Monica, Sharise, Tyrone, Grandparents
• Create a Major Expenditures Summary for the
Erickson’s
– Housing
– Transportation
• Create a Spending Plan for Monica
– Savings
– Public transportation costs
– Others
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 12
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Snapshot Reflection
• Review Monica’s Snapshot on pages 2-4
• Answer questions 1-5 on page 10
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 13
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Monica’s Paycheck
Personal
Information
State the employee’s
name, address, and
social security
number.
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 14
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Monica’s Paycheck
Pay Period
The length of time
which an employee’s
wages are calculated.
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 15
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Monica’s Paycheck
Gross Pay
The total amount of
money earned during
the pay period before
payroll withholdings.
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 16
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Monica’s Paycheck
The amount of
money subtracted
from the gross pay
for taxes.
Payroll
Withholdings
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 17
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Monica’s Paycheck
The amount required
by law for employer
to withhold from
earned wages to pay
taxes.
Withholding
Tax
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 18
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Monica’s Paycheck
Federal Insurance
Contribution Act –
includes Social
Security and
Medicare
FICA
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 19
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Monica’s Paycheck
Net Pay
The amount of
money remaining
after all payroll
withholdings have
been removed from
gross pay.
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 20
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Monica’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.
Year-to-Date
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 21
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Setting Financial Goals
•Short Term – less than one year
•Long Term – more than one year
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 22
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
Erickson’s Major Expenditures
Housing
• Choose a house and housing others for the Erickson
family
• Refer to the Snapshot on pages 2-4
• Remember
– Family size
– Lifestyle
– Other family dynamics
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 23
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Erickson’s Major Expenditures
Transportation
• Choose a vehicle for the Erickson family
• Refer to the Snapshot on pages 2-4
• Remember
– Family size
– Sharise often transports clients in her vehicle
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 24
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
Erickson’s Major Expenditures
Major Expenditures Summary
• Transfer numbers to complete the summary
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 25
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Monica’s Spending Plan
Payroll Withholdings
• Review Monica’s paycheck on page 11
– State Withholding Tax
– Federal Withholding Tax
– FICA
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 26
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Monica’s Spending Plan
Savings
• Review Monica’s Snapshot on pages 2-4
– Identify her needs, wants, values
• Review the short term and long term goals set for
Monica on page 12
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 27
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Monica’s Spending Plan
Transportation
• Monica will pay for her public transportation pass
• She does not have a vehicle or other form of
transportation and needs to get to school and work
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 28
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Monica’s Spending Plan
Others
• Choose which “others” items Monica would
like
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–
–
–
–
–
Cellular Phone
Culinary Upgrades
Electronics
Clothing
Entertainment
Create Your Own
• Draw an item and identify the cost in the space provided
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 29
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Monica’s Spending Plan
Summary
• Gross Income
• Expenses
• Calculate the Difference
• If the difference is a negative number, go back and
adjust some of Monica’s expenses.
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 30
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Negative or Positive
Difference?
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• If the number on TT is positive, adjust Monica’s
expenses.
– Saving additional money for unexpected emergencies or expenses may be a
good idea.
• If the number on TT is negative, go back and make adjustments
to Monica’s expenses.
– Changes need to be made consistently throughout the simulation.
– Keep in mind Monica’s needs, wants, values and goals when making
changes.
• If the number on TT is zero, congratulations! You have
balanced Monica’s Spending Plan!
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 31
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona
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Reflection Questions
• Once the difference equals zero….
– Answer questions 17-21 on pages 15 and 16
– Answer questions 22-26 on page 18
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 32
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona