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3.18.3.G1
Welcome to
Life in…United States
…a Family Finance Simulation
Developed by:
Family Economics & Financial Education Project
Take Charge America Institute - University of Arizona
Funded by a grant from Take Charge America, Inc.
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 1
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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Objectives
 Demonstrate the relationship between income and education
 Provide realistic insights into the costs of living associated
with the spending plan process
 Apply financial literacy reasoning in order to make
informed, financially responsible decision (MSC for PFLE Standard
1).
 Develop skills to plan and manage money effectively by
identifying financial goals and developing spending plans
(MSC PPFLE Standard 3).
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 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
3.18.3.G1
Life In…United States
Video Clip
http://www.moneytalks.ucr.edu/english/intro.html
Video – Making Your Dreams Come True
5 min – load and run at least once before class start
© Family Economics & Financial Education – Revised April 2007 – Life in…Simulation page 3
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
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What is “Life In…” ?
 Family finance simulation
 Emulates the “real life” constraints households encounter
when managing their finances
 All costs are national averages
– United States Census Bureau, United States Department of Labor,
Bureau of Labor Statistics, United States Department of Agriculture,
National Coalition on Health Care, and various private businesses
 Simulation is an average community in the United States
– 25 individuals in 18 households
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 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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Day 1
 Record your choice of a student partner (optional)
and the identity of a selected scenario from
highlighted options).
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of Arizona
Background
information
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 Background Information
– Describes individual and/or family values, needs and wants
– Family dynamics and lifestyle choices are explained
?Who is in the community?
?Create a poster including your family name, all
family members and ages, occupation(s), two things
you value or enjoy doing, and interesting habits
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 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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3.18.3.G1
Career descriptions
 Occupational Outlook Handbook guides
– Nature of work, working conditions, training required, job
outlook and earnings
 Read carefully to learn more about your new identity
?Conditions of your job
?Identify 3 work conditions characteristic to your
job, training required, and median earnings
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of Arizona
What are
Spending plans?
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 Spending Plan
– A financial statement used to assist in money management
comprised of income and expenses
 Income - money earned or received
 Expenses - money spent
– Fixed Expenses - stay the same every month, due on a
certain date
– Flexible Expenses - vary month to month, can be decreased
or eliminated
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 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
3.18.4.G1
Major expenditure
Percentages
 Identify the average percent of
net income spent in a specific
category
 Use as a guide when making
spending decisions
– Percentages should be adjusted to
meet individual values, needs and
wants
 Other includes items such as:
–
–
–
–
Clothing
Personal care
Entertainment
Donations
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 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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What to complete
 Goal of “Life in…”
– Make spending plan decisions to meet the needs of the
family by balancing their income and expenses
 Assignments to complete
–
–
–
–
Setting a Financial Goal worksheet 3.18.4.A1
Guided Spending Plan worksheet 3.18.4.A2
Spending Plan Statement 3.18.4.A3
Life in…United States Reflection Essay 3.18.4.B1
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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
3.18.4.G1
3.18.3.G1
Life in…
United States
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 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
3.18.4.G1
3.18.3.G1
Day 2 / 3
1.
2.
3.
4.
5.
Set with your partner,
roommate or spouse, and read
your paper copy of your
selected scenario.
Complete paycheck pretest
Open excel spreadsheet from
V drive, and save as
instructed to the H.
Open the adobe file - general
notebook on the V drive as a
reference
Listen to discussion of
paycheck main ideas
6.
Follow directions on pg 2 of
general notebook to complete
rows 9-25 of spreadsheet
7. Complete paycheck posttest,
using clickers
8. Listen to discussion of saving
and investing main ideas
9. Continue to follow directions
on pg 2 of g. ntb to complete
rows 25-29 of spreadsheet.
10. (Print spread sheet)
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 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
3.18.4.G1
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Education vs. Income
 Job announcement envelopes
– The color your name is printed in on the front of the envelopes represents your
obtained level of education
– All children are printed in brown
 Who is in our community?
–
–
–
–
Orange: less than 9th grade
Light pink: high school drop out
Green: high school graduate or GED
Sky blue: some college
–
–
–
–
Red: associate’s degree
Navy: bachelor’s degree
Purple: graduate degree
Black: doctorate degree
? How does having individuals with various levels of
education benefit a community?
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 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
3.18.4.G1
3.18.3.G1
Who are you?
 Review your profile
– Remember to consider the family’s values, needs and wants
when making decisions
 All items printed in red text must be included in the
spending plan
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 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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3.18.3.G1
Setting a financial goal
 Set a financial goal
– Financial goals provide direction when creating a spending
plan
– Behind Spending Plan tab, complete each section of a
SMART goal
• Review profile and consider the families values, needs and wants
• Set SMART financial goal
– Complete question #2 on the Guided Spending Plan
• Don’t forget to include the dollar amount of the goal in the
spending plan!
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 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
Understanding the
paycheck
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 Under the profile tab review the paycheck(s) for your
scenario
 Review all elements of a paycheck
– Gross income
– Payroll deductions
– Net income
? Why do some paychecks have additional withholding for
retirement and medical and others do not?
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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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3.18.3.G1
Pg 11 & 12 of Notebook
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of Arizona
Complete the
following:
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 Based upon your paycheck, complete question #3 in
the Guided Spending Plan:
– Record gross income
– Record all paycheck deductions
– Calculate net income
 For dual-income families, add both paychecks
together (show your work on the spreadsheet)
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 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
3.18.4.G1
3.18.3.G1
Saving
 Saving versus Investing
– Saving: income not spent on current consumption
– Investing: spending intended to gain by adding to the assets,
not available for immediate withdrawal
 Saving
– A person should save 10% of net income
? Why should families have 3-6 months
income saved for emergencies?
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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
3.18.4.G1
3.18.3.G1
Saving
 Guided Spending Plan
question #4
 Calculate what 10% of your
families net income is
 Determine what amount
you will be saving or
investing and record it
? How much, if any, was
dedicated to savings and why?
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 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
3.18.4.G1
3.18.3.G1
Day 4
1. Paycheck quiz retake and
Housing pretest.
2. Recap and review savings
3. Housing information
4. Continue to complete rows
30-45 as directed on pg 3,
and 13-18 of g. ntb (adobe
file on V) Record your
decision details in the
appropriate row.
Save your work!!!
If you are not finished with
rows 1-45, ask to borrow a
“general notebook, and
finish for homework.
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 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
3.18.4.G1
3.18.3.G1
Housing
 Housing, on average, is 30%
of an households net income
 Calculate what 30% of your
families net income is
 The information sheet
describes basic terminology,
renting vs. buying, mortgages
and how to determine
insurance costs and various
types of insurance
– Review this to make the best
spending plan decision
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 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
3.18.4.G1
3.18.3.G1
Housing
Purchase
 Assume a 20% down payment
has been made on a 30-year
mortgage with a 6% interest
rate
 Must include all items in red in
your spending plan:
–
–
–
–
Mortgage
Insurance
Property taxes
Repairs and maintenance
Rent
 Assume a deposit has been made
 Must include all items in red in your
spending plan
– Rent
– Laundromat (when applicable)
 If you have a pet, your rental unit
must allow for them and applicable
fees must be paid
 Renter’s insurance is not required, but
recommended
– $15.83/mo. for $25,000 coverage
Only choose a house available for the type of location in which you live!
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 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
3.18.4.G1
3.18.3.G1
Housing Amenities
 Required amenities
– Power
– Water/sewer
– Garbage
 Some rentals include all or
some of the required
amenities
 Optional amenities
–
–
–
–
–
Internet
Cellular phone
Land line in home
Cable/Satellite
Recycling
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 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
3.18.4.G1
3.18.3.G1
Housing
 Guided Spending Plan Question
#5
– Determine whether to rent or
buy
• Unless indicated in the profile
– Select a home and amenities
– Record all housing expenses
– Identify which housing and
amenities options were chosen
 Select additional housing
expenses
– Under the “Average
Expenditures” tab
– Record cost(s) in the “other”
section
 Calculate your housing sub-total
– Is it approximately 30% of net
income?
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 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
3.18.4.G1
3.18.3.G1
Housing Reflection
? How does the housing
selected fit with the
family’s values, needs and
wants?
? What might influence a
family to spend more or
less than 30% of net
income for housing?
? Will utility bills be
higher during different
seasons of the year?
? Did you choose to rent
or purchase a home and
why?
? Was renter’s insurance
selected? Why or why
not?
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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
3.18.4.G1
3.18.3.G1
Day 5
1. Complete transportation
pretest.
2. Correct housing pretest.
3. Discuss transportation slides
4. Continue to complete rows
46-51 as directed on pg 3,
and 19-24 of g. ntb (adobe
file on V) Record your
decision details in the
appropriate row.
Save your work!!!
If you have not finished up
to row 51, borrow a general
notebook to finish for
homework.
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 27
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of Arizona
3.18.4.G1
3.18.3.G1
Transportation
 Transportation, on average,
is 20% of a households net
income
 Calculate what 20% of
your households net income
is
 The information sheet
describes basic terminology,
new vs. used, automobile
financing, how to determine
insurance costs and various
types of insurance
– Review this to make the best
spending plan decision
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 28
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of Arizona
3.18.4.G1
Online resources for
real life
 http://autofinancing10
1.org/index.cfm
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of Arizona
3.18.3.G1
3.18.4.G1
3.18.3.G1
Transportation
Transportation options:
 Purchasing new:
– Not pre-owned, warranty,
wide selection
 Purchasing used:
– Costs less, lower insurance
rates, depreciates more slowly
 Alternative options:
– Less expensive than a vehicle
– Availability is limited in
some locations
Things to know:
 Assume down payment, license,
registration and other fees have
been paid
 All items in red must be
included in the spending plan
–
–
–
–
Payment
Insurance
Fuel costs
Repairs and maintenance
 If an alternative option is
chosen, it must be appropriate
for the location
Some profiles indicate transportation choices the family has made
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 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
3.18.4.G1
3.18.3.G1
Transportation
 Guided Spending Plan Question #6
– Determine new, used, or alternative options
• Unless indicated in the profile
• If a family already owns a vehicle, only insurance, fuel, and repairs and
maintenance must be included
– Select transportation
– Identify which transportation option(s) was chosen
– Record all transportation expenses
 Calculate your transportation sub-total
– Is it approximately 20% of net income?
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 31
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of Arizona
Transportation
Reflection
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3.18.3.G1
? How does the
transportation selected fit
with the family’s values,
needs and wants?
? Did you choose new,
used, or alternative
options and why?
? What might influence a
family to spend more or
less than 20% of net
income for
transportation?
? What are ways a family
can reduce their
transportation expenses?
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 32
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of Arizona
Insurance – Protecting What
You Have
What do you have that you could
not replace without great
sacrifice?
What do you have that you could
not replace without great sacrifice?
How to Insure that it is Protected
• Don’t leave it lying
around, unprotected.
• Put your savings in a
bank that is FDIC
insured.
• Cost = Free
How to Insure that it is Protected
•
•
Cost - $70-__________ per month
Drive safely, and don’t loan your car
to friends.
Car Insurance- Cost factors:
– Grades - Honor roll discount
– Type of car - Choose car
carefully
– Marital Status - Single people
pay more than married
– Individual or Family member –
will your parents let you join the
family plan?
– Amount of mileage per year
– Credit history matters
– Driving Record
– Deductibles and coverage
– Previous claims – it may be
better to pay the repair yourself
if it is small
– Choice of company – shop
around
– Location – Compare zip codes
and rates
How to Insure that it is Protected
•
Lead a healthy lifestyle
– Decisions regarding drugs,
alcohol, tobacco, nutrition,
sexuality, peers, sports, weight
management, etc
•
Health Insurance
– If your parents have it, you can
stay on their plan if and while you
are a full time student until you
turn 23.
– Choose a career / job that offers
group health insurance – more
affordable
– If you are a non tobacco using
healthy adult, you can shop
around for a policy. Cost
approximately $250 a month.
– If you have health problems,
contact advocacy groups for the
health problem for some advice.
Cost - $ 250-________________per month
How to Insure that it is Protected
• Keep your possessions
locked and fire protected.
• Homeowner or Renter
Insurance will cover the
cost or the replacement
cost of your possessions
– if you can prove you
owned them and they
were stolen or destroyed
by fire.
– Keep receipts and photos
in a safe place
– Shop around for the best
price with the best terms.
Cost - $10-__________ per month
How to Insure that it is Protected
Cost - $10-__________ per month
• Protect your social
security # and your
mail
• Request a free credit
report every year
• Identity Theft
Insurance will protect
you to some degree.
Shop around for the
best identity theft
insurance terms
For all of your insurances…
• Remember to set the money aside for your
deductible in case you have to spend it.
• Example
– If my house is hit by lightning and catches on
fire, my share of the bill will still be $1,000.00
(my deductible), so I would still need to have
that amount in savings, in addition to paying
my premium for the policy every month.
In the Future….
• Life Insurance will
help protect your
family if you die and
can no longer earn
money to take care of
them.
• Don’t wait too long to
get life insurance,
because the older you
are, the more it costs.
• Shop around
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Insurance
 Insurance, on average, is 7%
of a households net income
 Calculate what 7% of your
households net income is
 The information sheet
describes basic terminology,
how to determine insurance
costs and various types of
insurance
– Review this to make the best
spending plan decision
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 42
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
3.18.4.G1
3.18.3.G1
Insurance
Health
What is
it?
When is it
needed?
Provides financial
protection for
injury and illness
Always!
Disability
Replaces a portion
of income if
unable to work
because of injury
or illness
Almost always
Life
Provides a specific
sum of money to
beneficiaries if an
individual dies
If others depend
upon an individual
for financial support
(families with
children)
My be provided by the employer
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of Arizona
3.18.4.G1
3.18.3.G1
Health Insurance
1. Determine if health
insurance is provided by
employer
–
If provided, analyze what
family members are
protected
2. If not provided, determine
if it will be purchased
separately
3. If so:
–
Identify the age of the
oldest individual being
covered
Review the appropriate plan
–
•
•
•
–
1 individual = single
2 individuals = single +
dependent
More than 2 = family plan
Select from the row of the
appropriate age and column
of the appropriate plan
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of Arizona
3.18.4.G1
3.18.3.G1
Disability Insurance
1. Determine if disability insurance is provided by
employer
2. If not provided, determine if it will be purchased
separately
3. If so:
– Monthly net income x .02 = monthly cost
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of Arizona
3.18.4.G1
3.18.3.G1
Life Insurance
1. Determine if life insurance
is provided by employer
2. If not provided, determine
if it will be purchased
separately
 If so:
– Identify who will be insured
– Must be purchased for each
individual being insured
separately
 Select the amount of
coverage
– $100,000
– $250,000
– $350,000
 Determine if your scenario
uses tobacco or not
 Determine the monthly cost
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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
3.18.4.G1
3.18.3.G1
Insurance
 Guided Spending Plan Question #8
– Determine if insurance is provided by employer or will be purchased
– If necessary, select insurance options
– Record all insurance expenses
 Calculate your insurance sub-total
– Is it approximately 7% of net income?
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 47
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
3.18.4.G1
3.18.3.G1
Insurance Reflection
? What factors influenced
the choice whether or not
to purchase insurance?
? If life insurance was
selected, how was the
coverage amount chosen?
? If insurance was not
provided by the employer,
how did insurance costs
impact the spending plan?
? If disability insurance
was not chosen, what
would happen if an
individual was injured
and could not work for 6
months?
© Family Economics & Financial Education - Revised May 2009 - Life in...United States Simulation - Bancroft-Notebook Cover and Profile Page 48
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of Arizona
3.18.4.G1
3.18.3.G1
Food
 Food, on average, is
15% of a households
net income
 Calculate what 15% of
your households net
income is
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3.18.4.G1
3.18.3.G1
Types of Food Plans
 Thrifty
–
–
–
–
 Moderate-cost
Generic brands
Canned fruits and vegetables
No junk food
Chicken and hamburger
 Low-cost
– Mostly fresh fruit and
vegetables
– Both name brand and generic
– Variety of meats
 Liberal
– Generic brands
– Some fresh fruit and
vegetables
– Chicken, hamburger, turkey,
ham
–
–
–
–
Organic
Name brands
Fresh fruit and vegetables
Variety of meats including
steak and lobster
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3.18.4.G1
3.18.3.G1
Food
 Guided Spending Plan Question #7
– If the profile indicates the amount spent on food, record it
– Food tab is for adults only
– Cost of food at home for adults chart:
•
•
•
•
Determine if you are allocating food for an individual or 2 adults
Identify which food plan is affordable and fits with your scenario
Identify the age of the adult(s)
Record the food plan selected and amount
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3.18.4.G1
3.18.3.G1
Food
 Cost of eating out
– Go to the Average Expenditures tab
– Analyze the average costs based upon income level
– Determine and record the amount
 Cost of food for children
– Go to the Cost of Raising Children document behind the cost of raising
children tab
– Select the appropriate table based upon single or two-parent families and
income
– Record the proper amount in the “food at home” category
 Calculate your food sub-total
– Is it approximately 15% of net income?
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3.18.4.G1
3.18.3.G1
Food Reflection
?Will the cost of food vary
depending on where an
individual lives? Why or
why not?
? What impact does eating
out have on a spending
plan?
? How was the cost of food
at home plan selected?
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Costs of raising
children
 If you have children, go to the Cost of Raising
Children tab
1. Select the appropriate table based upon single or
two-parent families and income
2. Find the row for the oldest child
3. Add together the costs of:
Clothing + Healthcare (could be reduced if insured) +
Childcare + Education + Miscellaneous = Total cost
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3.18.4.G1
3.18.3.G1
3.18.4.G1
Cost of Raising
Children
3.18.3.G1
 Total cost is based on families with 2 children
? Will child care
 If there are not two children:
– Single parent family
• 1 child = total cost x 1.35
• 3 or more children = total cost x .72
– Two-parent family
• 1 child = total cost x 1.24
• 3 or more children = total cost x .77
costs vary
depending on
where an
individual
lives? Why or
why not?
 Record total on the Guided Spending Plan #9
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3.18.4.G1
3.18.3.G1
Credit card statements
America’s Debt



A 2007 survey of college students said that one-third of
students reported having two credit cards or more, while
12% had three or more credit cards.
Many students believe they will make much more money
after college than they will actually earn. Students take on
debt because they expect to be able to repay it.
College students carry an average of $1,035 of credit card
debt (this does not include college loans).
?Why do so many young people have credit card debt?
Source: Buffalo State College, Financial Literacy Key to Prevent College Student Credit Card Debt, October 2007, http://www.newswise.com/articles/view/534061
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Credit card statements
3.18.4.G1
3.18.3.G1
 Congratulations!
– Your monthly credit card bill has arrived
 Guided Spending Plan Question #10
– Identify how much debt, if any, was received
– Need to include at least the minimum payment
?How will credit card debt
impact other spending plan
decisions?
?How long do you estimate
it will take to pay off your
debt?
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Personal Profile
Expenses
3.18.4.G1
3.18.3.G1
 Review personal profile and record all expenses
printed in red
– Hobbies, activities, medical expenses, pets, charity
donations, extra bills, habits, etc.
 Expenses identified in red are valued or necessary and
can not be eliminated
 Incorporate any expenses not already included in the
Average Expenditures section of the Guided Spending
Plan question 11
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3.18.4.G1
3.18.3.G1
Average Expenditures
 Guided Spending Plan
Question # 11
 Review the average
expenditures for:
–
–
–
–
–
–
Entertainment
Personal Care
Health Care
Apparel & Services
Contributions
Education and Reading
 Based upon your scenarios
income level select expenses
 These are flexible expenses
based upon averages
– Therefore, you may choose
to allocate more or less
money to each category
 Record expenses and total
them
Remember to allocate enough money to
cover all members of the family!
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Average Expenditures
Reflection
?How do the expenses and
amounts selected reflect
your family’s values, needs,
and wants?
?If an individual is insured,
why would they still have
health care expenses?
3.18.4.G1
3.18.3.G1
? What average
expenditures were selected
and why?
? Did you chose to
allocate more or less
money in a certain
category and why?
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3.18.4.G1
3.18.3.G1
Chance cards
 Each day brings new surprises…
– Why a spending plan is a “plan” for how to allocate your
money
– Spending plans are always evaluated and adjusted based
upon life's events
 Guided Spending Plan Question #12
– Identify what chance card was received
– Incorporate that chance card into your spending plan
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of Arizona
Chance Cards
Reflection
3.18.4.G1
3.18.3.G1
?Are you financially
prepared for unexpected
events?
? What impact does the
chance card have on your
spending plan?
?If received, how was extra
money allocated and why?
?Would insurance have
protected against the risk?
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Balancing the spending
plan
3.18.4.G1
3.18.3.G1
 Guided Spending Plan Question #13
1. Transfer all income and expense subtotals throughout the
worksheet onto this chart
2. Subtract the total expenses from the total income
 Your balance must equal zero
– Make changes as necessary
• If there is a net gain, where will the extra money be allocated?
• If there is a net loss, identify what changes may be made?
 Identify decisions made to have the spending plan
balance
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3.18.4.G1
3.18.3.G1
Evaluating your goal
 Were you able to reach your SMART goal?
– Why or why not?
 Re-write your goal to reflect what your spending plan
indicates
 Guided Spending Plan Question #14
?How did setting a goal before creating the spending plan help
you make financial decisions?
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of Arizona
Creating the Spending
Plan Statement
3.18.4.G1
3.18.3.G1
 Write your revised goal on the Spending Plan
Statement
 Transfer all income and expense information to the
Spending Plan Statement
 Identify the percentage of net income spent on each
category
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3.18.4.G1
3.18.3.G1
Discussion
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3.18.4.G1
3.18.3.G1
Reflection
?If there was a net gain,
how was the money
allocated?
?If there was a net loss,
what changes were made to
the spending plan?
?How does your percent
allocation in categories
compare with the national
average?
? How does this process
emulate real life?
? How did working with a
partner and discussing
options influence
decisions? Was it hard,
easy?
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