Family Economics & Financial Education
Get ready to Take Charge
of Your Finances
Life Of…..
Ben West
“A Teenager’s Spending Plan”
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Snapshot – Ben West
• Sneak peak into the life of Ben and his family
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Ben
James
Brenda
Anna
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Ben – 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
Ben’s Income and Expenses
• Ben’s Income
– Lou’s Logging Service
• $13.00/hour
• 15 hours a week
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Ben – 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
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Ben’s Income and Expenses
• Ben’s Expenses
– Social activities with Maria
• $75
– Cellular Phone
• Monthly budget is $50, however Ben often uses more minutes than
the plan allows and sends numerous text messages thus increasing
his bill
• Spends $90
– Saving
• $200
– Other Items
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Ben – 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
Ben’s expenses with his income.
• He 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...Ben – 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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West Family Expenses
• Ben’s Expenses
• Housing
– Monthly Payment
– Utilities
– Others – television, internet and
telephone
• Transportation
– Vehicle for Ben and Brenda
– Monthly payment and fuel
• Insurance
– Homeowners, disability, life,
auto, and health
• Food
– Groceries
– Pack daily lunches with leftovers
• Credit Card Balance
– Currently have $6,500 in credit
card debt
– Monthly minimum payment is
$160
– They often do not have enough to
pay more than the minimum
balance
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Ben – 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
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–
–
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Housing payment
Insurance
Property taxes
Repairs
Maintenance
• Utilities
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Heat
Electricity
Water
Sewer
Garbage
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Ben – 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
• Local Antenna
• Satellite Dish
• Digital Cable
• Telephone
• Internet
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Ben – 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
• West Family
– Pay for Ben and
Brenda’s vehicle
monthly payment and
fuel costs
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Ben – 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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•
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Dirt bike tools and upgrades
Snowboarding
Electronics
Hunting
Entertainment
Create Your Own
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Ben – 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 Balance Spending Plan
• Make all choices for the West family and Ben
• Complete a Major Expenditures Summary for the
West family
• Complete a Spending Plan for Ben
• Answer reflection questions
• Write a summary essay
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Ben – 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
• West Family
– Ben, James, Brenda, Anna
• Create a Major Expenditures Summary for the West’s
– Housing
– Transportation
• Create a Spending Plan for Ben
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–
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Social Activities
Cellular Phone
Savings
Others
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Ben – 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 Ben’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...Ben – 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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Ben’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...Ben – 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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Ben’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...Ben – 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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Ben’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...Ben – 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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Ben’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...Ben – 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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Ben’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...Ben – 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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Ben’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...Ben – 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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Ben’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...Ben – 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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Ben’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...Ben – 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 Education and Financial
Goals
SMART Goal
Specific
Measurable
Attainable
Realistic
Time Bound
State exactly
what is to be
done.
Include how the
goal can be
measured.
Determine steps to
reach the goal.
Do not set the goal
for something
unrealistic.
State when the
goal will be met.
•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...Ben – 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
West’s Major Expenditures
Housing
• Choose a house and housing others for the West
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...Ben – 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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West’s Major Expenditures
Transportation
• Choose a vehicle for the Ben and Brenda
• Refer to the Snapshot on pages 2-4
• Remember
– Ben and Brenda will share the vehicle
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Ben – 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
West’s Major Expenditures
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Major Expenditures Summary
• Transfer numbers to complete the summary
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Total housing cost
Total transportation cost
Insurance
Food
Credit Card Balance
• West family usually only pays the minimum monthly payment
• If they continue this habit, their $6,500 debt will cost $9,120
• It will take 4.75 years to pay in full if only the minimum payment
is paid each month
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Ben – 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
Ben’s Spending Plan
Payroll Withholdings
• Review Ben’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...Ben – 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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Ben’s Spending Plan
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Savings
• Review Ben’s Snapshot on pages 2-4
– Identify his needs, wants, values
• Review the short term and long term goals set for Ben
on page 12
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Ben – 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
Ben’s Spending Plan
Others
• Social activities with Maria
• Cellular phone
– How could Ben decrease the amount spent on his cell phone each
month?
• Choose which “others” items Ben would like
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Dirt bike tools and upgrades
Snowboarding
Electronics
Hunting
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...Ben – 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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Ben’s Spending Plan Summary
• Gross Income
• Expenses
• Calculate the Difference
• If the difference is a negative number, go back and
adjust some of Ben’s expenses.
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Ben – 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
Negative or Positive
Difference?
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• If the number on QQ is positive, adjust Ben’s expenses.
– Saving additional money for unexpected emergencies or expenses may be a
good idea.
• If the number on QQ is negative, go back and make
adjustments to Ben’s expenses.
– Changes need to be made consistently throughout the simulation.
– Keep in mind Ben’s needs, wants, values and goals when making changes.
• If the number on QQ is zero, congratulations! You have
balanced Ben’s Spending Plan!
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Ben – 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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Reflection Questions
• Once the difference equals zero….
– Answer questions 17-22 on pages 15 and 16
– Answer questions 23-27 on page 18
© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Ben – 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