Unit 1: Introduction to Personal Finance

Examine the charts, graphics, and reading
excerpts in Chapter 3: Budgeting.
o Make a list of questions you would like to have
answered as we go through the chapter.

WB: Before You Begin, pgs. 50-51
o Review the Learning Outcome objectives and Key
Terms
o Complete the “Before” column on the “Measure Your
Progress” chart

Journal:
On average, how much money do you spend per
week?
2. What are your top three expenses?
1.
Section 1

Video 1.1 (10 minutes): Cash Flow Planning

Journal:
1.

Describe in your own words what it means to have a
budget.
Read:
1.
10 Things Millionaires Do NOT Do (p. 52)

In what way is money active?
o Money can easily be spent without accurate
accounting of where it all went.

Why is it important to have a cash flow plan?
o It allows you to be intentional with your spending
and saving.

Video 1.2 (6 minutes): Four reasons people avoid
budgets

Journal:
1.

What do you think is most challenging when it comes to
keeping a monthly budget?
Read:
What’s the difference between a cash flow statement
and a budget? (p. 53)
2. Real Wealth Building Begins with Your Behavior (p. 54)
1.

Why do some people avoid writing or following
budgets?
o If budgeting is not done correctly, people view budgets
as restrictive or ineffective.

All checks are eventually taken to a financial
institution.
o This is why you must add your signature to the back
of the check, telling the institution what to do with
your money.

An endorsement is your signed approval for a
check to be:
o Cashed
o Deposited
o Assigned to someone else

Blank Endorsement:
o Just your signature
o Anyone can cash your
check if it is lost or
stolen.

Restrictive Endorsement:
o For deposit only, our
signature, and your account
number.
o This type of endorsement can
only be deposited into your
account.

Special Endorsement:
o Write “Pay to the order of,”
the person’s name, followed
by your signature.
o This type of endorsement is
used if you are signing your
check over to another person.

Activity:
o Endorse a Check WS
o How to Manage Your Checking Account WS
Section 2

Video 2.1 (8 minutes): Responsible Banking

Journal:
1.

Explain why Dave describes overdrafts as a sign of
“crisis living.”
Read:
Balancing Your Checking Account (p. 56)
2. Are multiple accounts a good idea? (p. 58)
3. Banking tools (p. 59-60)
1.
• Vary from month to
month
• Electricity
• Gas
• Groceries
• Clothing
• Occur at various times
throughout the year
and tend to be large
lump sums.
• Tuition payments
• Athletic/Club dues
• Car repairs
Variable
Fixed
Intermittent
Discretionary
(NonEssential)
• Expenses that
remain relatively
the same from
month to month
• Rent/Mortgage
• Insurance
premiums
• Cable Bill
• Expenses for things
we don’t NEED.
• Restaurants
• Gifts
• Candy
• Etc.
1.
What is the First Foundation?
2.
Why is it important to maintain an accurate balance
of your checking account?
3.
Should a checking account be used as a saving or
spending account?
4.
What are three things you’ll need to balance your
checking account each month?
5.
Which record is the most accurate reflection of your
current balance?
6.
What transactions will you need to include on
your account register?
7.
Why is it important to keep your own financial
records?
8.
What does it mean to reconcile your account?
How often should you do this?
9.
Why is it a good idea to select “credit” instead of
“debit” when using your debit card for
purchases?
10.
Have you ever written a budget?
11.
You have heard Dave say that personal finance
is 20% head knowledge and 80% behavior. How
does this relate to budgeting?
12.
Some Americans believe that a credit card is
safer for purchases than a debit card. Explain
why that is a money myth.

Activity:
1.
Balance Your Checking Account
2.
BB&T Activity
3.
Calculating Your Net Worth
Section 3

Video 3.1 (8 minutes): Cash Flow Plans Don’t
Work When…

Journal:
1.
Why do you think it is so common in America to
spend more than you make?

Explain how budgeting helps you save money.
o Managed money goes farther because you
intentionally cut out unnecessary spending.

Describe the ways in which having an agreed
upon budget can improve a relationship.
o A written plan, if lived and agreed on, removes guilt,
shame, fear and fights regarding how money is spent
and saved.

Have you ever witnessed money affecting a
relationship close to you?

Activity:
o M&M Budget Activity

Quiz
o Write checks
o Check register
o Deposit slips
o Check endorsement
o Bank reconciliation

Video 3.2 (13 minutes): The Zero-Based Budget

Journal:
Explain in your own words what a zero-based
budget is.
2. Why is it important to write a zero-based budget
every month?
1.

What is a zero-based budget?
o A budget where every dollar has a name on paper, on
purpose.

What is the envelope system and how does it
work?
o A system for managing spending on things that don’t
normally have a fixed monthly expense.

Your budget will only work if you follow it. What
are some things you can do to make sure you stick
to your budget?
o Use the envelope system, direct transfer from checking to
savings each week, etc.

In a zero-based budget, income minus expenses/
purchases should equal _________.
o Zero

Look at the student budget form. In what categories
might it be a god idea to use the envelope system?
o Where you see the envelope icon.

You have a friend who has not taken a personal
finance course. How would you describe the
benefits of budgeting to him/her?

Fixed Income: Receiving the same amount of
money each paycheck.
o Salary

Irregular income: Receiving a different amount
of money each paycheck.
o Hourly paychecks

Discretionary income: Money left over after all
of your expenses have been paid that you can use
however you would like.

Fixed expense: stays
relatively the same each
month.

o Mortgage or rent

Variable expense:
changes each month
o Groceries, electric bill, etc.

Discretionary
expense: You have a
choice on whether or not
to spend money on these
items.
o Dining out
Intermittent expense:
Expenses that happen
periodically
o Vehicle or house repairs

Impulse purchase: an
item that is bought
without previous
planning or
consideration of the
long-term effects.

Activity:
1.
The Student Budget (35 minutes)
2.
Family Reality Check (25 minutes)

Budget Builder – foundationsU.com/3

Take Action Challenge, pg. 69

Study Guide: Money in Review, pgs. 70-71

Complete the “After” column on the “Measure
Your Progress” chart, pg. 51.