Personal
Finance
Chapter 3
Establishing Financial Habits
Share Save Spend®
• Sharing
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Establishing Financial Habits
Share Save Spend®
• Sharing
• Saving
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Establishing Financial Habits
Share Save Spend®
• Sharing
• Saving
• Spending
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Establishing Financial Habits
Your Values
• Your values vary from those of others and
influence your financial decisions
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• What do you value?
• What do you think most Americans your
age value?
• How do your values affect how you
spend your money?
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Establishing Financial Habits
Your Financial Plan
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Determine your current situation.
Identify and prioritize your goals.
Develop a long-term plan.
Organize your records.
Set up a budget.
Keep it simple.
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Establishing Financial Habits
Your Financial Plan
• Determine your income.
• Determine your expenses.
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Establishing Financial Habits
Your Financial Plan
• Identify and prioritize your goals.
Financial Goals
1. Buy new car
2. Pay off student loan
3. Move to bigger apartment
4. Buy new shoes
5. Vacation at Yellowstone
6. Eat at fine restaurant
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Establishing Financial Habits
Your Financial Plan
• Distinguish between short-term, mediumterm, and long-term goals.
• Adjust your plan and goals over time.
Short-Term Goals
Medium-Term Goals
Long-Term Goals
1. Eat at fine restaurant
2. Buy new shoes
3. Move to bigger apt.
1. Buy a new car
2. Finish college
3. Vacation at Yellowstone
1. Buy travel trailer
2. Pay off student loan
3. Save for retirement
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Your Financial Plan
Sharing
• Sharing is also called charitable giving,
philanthropy, and altruism.
• Sharing connects people and gives them a
sense of pride.
• Research an organization
that meets your interests.
• Volunteer now.
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Your Financial Plan
Sharing Suggestions
• Birthdays
• Holidays
• Service-learning
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• Why do people share?
• Who benefits from people sharing?
• What kinds of opportunities do you have
to share in your community?
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Which of the following is not one of
the suggested ways to plan your
finances?
A.
B.
C.
D.
E.
Set up a budget.
Set goals.
Determine your income.
Freely spend your money.
Prioritize your goals.
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Which of the following is not one of
the suggested ways to plan your
finances?
A.
B.
C.
D.
E.
Set up a budget.
Set goals.
Determine your income.
Freely spend your money.
Prioritize your goals.
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Your Financial Plan
Keeping Records
• Organize your records.
– Alphabetical
– Numerical
– Chronological
• Manage your money with a
computer-based system.
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Your Financial Plan
Paying Taxes
• Types of Taxes
– Social Security / Medicare
– Sales
– Property
– Estate
– Income
– User fees
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FICA
Your Financial Plan
Paying Taxes: Forms
• Form W-4: Withholding
• Form W-2: Wage and tax statement
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Your Financial Plan
Paying Taxes: Forms
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Form 1040EZ
Form 1040A
Form 1040
State and local
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Your Financial Plan
Calculating Your Taxes
• Adjusted gross income (AGI)
= sum of all sources of income − adjustments
– Wages / business income +$20,179 (Wages)
+$15 (Interest)
– Interest income
+$650 (Unemployment)
– Unemployment
−$2,000 (Student Loan)
---------------– Social Security / pensions $18,844 (AGI)
– IRA contributions
– Student loan payments
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Your Financial Plan
Calculating Your Taxes
• Adjusted gross income (AGI)
• Tax deductions
– Itemized
• Schedule A
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Your Financial Plan
Calculating Your Taxes
• Adjusted gross income (AGI)
• Tax deductions
– Itemized
• Schedule A
– Standard
2007 Standard Deduction (Fed)
$5,350 = Single
$7,850 = Head of household
$10,700 = Married filing jointly
$5,350 = Married filing separately
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Your Financial Plan
Calculating Your Taxes
• Adjusted gross income (AGI)
• Tax deductions
– Itemized
• Schedule A
– Standard
• Tax credits
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Which of the following forms lists
your wages and income from the
previous year?
A.
B.
C.
D.
E.
Form 1040
Form 1040EZ
Form 1040A
Form W-4
Form W-2
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Which of the following forms lists
your wages and income from the
previous year?
A.
B.
C.
D.
E.
Form 1040
Form 1040EZ
Form 1040A
Form W-4
Form W-2
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Why do we pay taxes?
What type of taxes do you pay?
What type of taxes are the most fair?
What are some examples of tax
deductions and tax credits?
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