Family Economics & Financial Education
Get ready to Take Charge
of Your Finances
Life Of…..
Mandy Gonzales
“A Teenager’s Spending Plan”
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Snapshot – Mandy Gonzales
• Sneak peak of the life of Mandy and her
family
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Mandy
Carmine
Bobby
Lolita
Connie
Roberto
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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
Mandy’s Income and Expenses
• Mandy’s Income
– Tasty Freeze
• $6.75/hour
• 16 hours a week
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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
Mandy ’s Income and Expenses
• Mandy ’s Expenses
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Cellular phone $75 per month
Savings $100 per month for extra curricular activities
Fuel $50 per month
Other
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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 the balances
Mandy ’s expenses with her income.
• She cannot 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 effect
decisions made when creating a spending plan
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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
Gonzales Family Expenses
• Housing
– Utilities and Taxes
– Maintenance
– Others – television, internet, and telephone
• Transportation
– One family vehicle monthly payment
– Fuel for Roberto’s car
– Half of the cost of fuel for the car shared by Mandy and Connie
• Insurance
– Homeowner’s, health, life, auto
• Food
– Groceries
• Credit card debt
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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
• Gonzales Expenses
– Utilities
– Property taxes
– Maintenance
• Additional Expenses
• Utilities
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Heat
Electricity
Water
Sewer
Garbage
– Housing Payment
– Insurance
•What is the impact on the family of not having a
housing payment because they live in Lolita's home?
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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...Mandy – 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
• Gonzales Family
– Monthly payment, and
fuel costs for Roberto’s
vehicle and half of the
fuel costs for Connie
and Mandy’s shared car.
• Mandy
– Pays half of her
vehicle’s fuel costs
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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
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Personal items
Entertainment
Music
Cheerleading
Miscellaneous
Create Your Own
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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:
To Create A Balanced Spending Plan
• Make all choices for the Gonzales family and Mandy
• Complete a major expenditures summary for the
Gonzales family
• Complete a spending plan for Mandy
• Answer reflection questions
• Write a summary essay
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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
• Gonzales Family
– Mandy, Carmine, Bobby, Lolita, Connie, Roberto
• Create a Major Expenditures Summary for the
Gonzales’
– Housing
– Transportation
• Create a Spending Plan for Mandy
– Savings
– Transportation fuel costs
– Others
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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 Mandy ’s Snapshot on pages 2-4
• Answer questions 1-5
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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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Mandy ’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...Mandy – 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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Mandy ’s Paycheck
Pay Period
The length of time
for which an
employee’s wages are
calculated.
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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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Mandy ’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...Mandy – 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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Mandy ’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...Mandy – 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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Mandy ’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...Mandy – 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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Mandy ’s Paycheck
FICA
Federal Insurance
Contribution Act –
includes Social
Security and
Medicare
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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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Mandy ’s Paycheck
Net Pay
The amount of
money left after all
payroll withholding
have been taken from
the gross pay.
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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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Mandy ’s Paycheck
Year-to-Date
Totals of all 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.
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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...Mandy – 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
Gonzales’ Major
Expenditures Housing
• Choose a house and housing others for the
Gonzales family
• Refer to the Snapshot on pages 2-4
• Remember
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Family size
Hobbies
Lifestyle
Other family dynamics
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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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Gonzales’ Major
Expenditures Transportation
• Choose a vehicle for the Gonzales family and
Mandy
• Refer to the Snapshot on pages 2-4
• Remember
– Family size
– Number of vehicles available
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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
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Gonzales’ Major Expenditures
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Major Expenditures Summary
• Transfer numbers to complete the summary
• Discuss how the credit card balance impacts the family
• How can a family help to decrease the cost of food per
month?
• Why is automobile and health insurance important?
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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
Mandy ’s Spending Plan
Payroll Withholdings
• Review Mandy ’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...Mandy – 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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Mandy ’s Spending Plan
Savings
• Review Gonzales ’s Snapshot on pages 2-4
– Identify her needs, wants, values
• Review the short term and long term goals set for
Mandy on page 12
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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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Mandy ’s Spending Plan
Transportation
• Mandy will pay for half of the cost of her fuel
for the vehicle she shares with Connie.
• She needs a vehicle to get to and from work
• Refer to page 7 to see which vehicle has been chosen
for Mandy
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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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Mandy ’s Spending Plan
Others
• Choose which “others” items Mandy would
like
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Personal items
Entertainment
Music
Cheerleading
Miscellaneous
Create Your Own
• Draw an item and list the cost in the space provided
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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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Mandy ’s Spending Plan Summary
• Gross income
• Expenses
• Calculate the difference
• If the difference is a negative number, go back and
adjust some of Mandy ’s expenses.
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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
Negative or Positive
Difference?
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• If the number on RR is positive, adjust Mandy ’s
expenses.
– Saving additional money for unexpected emergencies or events may be a
good idea.
• If the number on RR is negative, go back and make adjustments
to Mandy ’s expenses.
– Changes need to be made consistently throughout the simulation.
– Keep in mind Mandy ’s needs, wants, values and goals when making
changes.
• If the number on RR is zero, congratulations! You have
balance Mandy ’s Spending Plan!
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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 18-22 throughout the simulation
– Answer questions 23-27 on page 18
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Mandy – 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