Personal Management
Merit Badge
$
Lots of effort , but totally worth it!
HANDOUT
• Fill in the blanks.
• OR use your own pages.
• You may use the words I’ll suggest,
or • You may use other words you like
better!
Brainless
attendance
HANDOUT
• Name ______________________________________
• Date of merit badge classes: 1st ____________
2nd ____________
To help you in the future: Keep it! Read again in 5 yrs! *
• Boxed portions:
To be reviewed with your Merit Badge Counselor.
• AFTER you’ve completed EVERYTHING (ready to discuss)!
• If I go too fast, stop me.
• Bring this handout back next time:
Do the following:
Choose an item that your family might want to
purchase that is considered a major expense.
p.2, Requirement #1:
HDTV
Item chosen: _______________
$1,000
Approximate cost: ___________
(b) Write a plan that tells how your family would
save money for it.
• We can save money by:
Mostly _______ earnings, but each
_____________________________
of us could contribute.
_____________________________
p.2, Requirement #1 (continued):
(b)1. Discuss the plan with your
merit badge counselor.*
2. Discuss the plan with your family.
**When are you going to do this? • (FHE?)
3. Discuss how other family needs
must be considered in this plan.**
*When are you going to discuss this with your merit
badge counselor?
p.2, Requirement #1:
Do the following:
(c). Develop a written shopping strategy
for the purchase:
1. Determine the quality of the item
(using consumer publications or rating systems).
Google, Yahoo, EBay, Consumer Reports
_______________________________________
p.2, Requirement #1:
Do the following:
(c). Develop a written shopping strategy
for the purchase:
2. Comparison shop for the item.
Find out where you can buy the
item for the best price.
Call around
Who you called:
What you learned:
Gwido’s
Pawn Shop
____________
Don’t go there!
________________
________________
____________
p.2, Requirement #1:
Do the following:
(c). Develop a written shopping strategy
for the purchase:
2. Comparison shop for the item.
Find out where you can buy the
item for the best price.
Study ads
Where you looked:
What you learned:
Newspaper
Sears had a great sale
________________ ____________________
www.ebay.com
Including shipping…
________________ ____________________
p.2, Requirement #1:
Do the following:
• (1)(c)2
Yes
Did you find a great sale or a discount coupon? ________
____________________________________________
Consider alternatives:
but________
Can you buy the item used? Maybe,
___________________
could, but already found…
Should you wait for a sale? I___________________
p.3 Prepare a budget reflecting:
Your expected income (allowance, gifts, wages),
Your expected expenses & savings (Outgo).
Track your actual.
1st Week
INCOME
EXPENSES & SAVINGS
Expected Actual
Allowance
Job
Gifts
_________
_________
_________
Total in
______
______
______
______
______
______
______
______
______
______
______
______
______
______
Expected Actual
Donations ______
Savings
______
Savings (for… ______
Save to Buy ______
Junk food ______
_________ ______
Total Out ______
______
______
______
______
______
______
______
EXAMPLE
INCOME
OUTGO
Expected Actual
Allowance $10
_____ Donations
$10
Job
_____ Savings
$10
Gifts
_____ Savings (for…
_________ ______ _____ Save to buy
_________ ______ _____ Junk food
_________ ______ _____ _________
Total in
_____
Total Out
$30
Expected Actual
$3
______
$3
______
$3
______
$3
______
$30 ______
______
______ ______
$42 ______
2(b). Compare expected income with expected expenses.
2. If outgo exceeds income, determine steps to balance: I can increase
more or decrease expenses by_______________
buying less junk
income by working
___________
Another EXAMPLE
INCOME
OUTGO
Expected Actual
Allowance $10
_____ Donations
$10
Job
_____ Savings
$10
Gifts
_____ Savings (for…
_________ ______ _____ Save to buy
_________ ______ _____ Junk food
_________ ______ _____ _________
$30
Total in
_____
Total Out
Expected Actual
$3
______
$3
______
$3
______
$3
______
______ ______
______ ______
$12 ______
2(b). Compare expected income with expected expenses.
2. If expected income exceeds expected outgo, state how you would
use the excess money: I could have some for __________________
better stuff later.
EXAMPLE
INCOME
OUTGO
Expected Actual
$10 Donations
Allowance $10
_____
$10
$20 Savings
Job
_____
$10
$20 Savings (for…
Gifts
_____
_________ ______ _____ Save to buy
_________ ______ _____ Junk food
_________ ______ _____ Presents
Total in
_____
Total Out
$30
$50
Expected Actual
$3
$ 5
______
$3
$ 5
______
$3
$ 5
______
$3
$ 5
______
______ ______
______ ______
$20
______
$12
$40
• What actually happened?
• This guy should have $10 more now than 1 week ago.
If you finish one week of expected and actual by next class...
actual income, expenses,
and savings for 13 consecutive weeks.
p.3-7, Req 2a Track your
•
•
•
•
•
•
•
•
•
Income
Source
Actual
___________ _______
___________ _______
___________ _______
___________ _______
___________ _______
___________ _______
Total _______
•
•
•
•
•
•
•
•
•
Expenses
Where
Actual
___________ _______
___________ _______
___________ _______
___________ _______
___________ _______
___________ _______
Total _______
• How are you going to remember to do this each
day? (How about putting it on your pillow?)
•
Share this with your merit badge counselor.
Discuss with your merit badge
counselor Five of the following concepts:
p.8 Req. #3
a. The emotions you feel when
you receive money:
When I honorably earn money, I feel ______
Good
If I’d stolen the money, I’d feel _____
Bad!
b. How the amount of money
you have with you affects
your spending habits:
If I have lots of money, I tend to spend ______
more.
If I don’t have my money, it is ______
harderto spend.
Unless I have a credit card, then it is still easy to spend money I don’t have.
*
c. Your thoughts when you
excited
buy something new:
happy
I usually feel ___________________
Your thoughts about the
same item 3 months later:
excited
happy
I’m usually less __________
about it.
p.8 Req. #3
Discuss with your merit badge counselor Five of the following concepts:
(c) Explain the concept of:
buyers remorse
Often after buying something people feel _______
sorrow (remorse)
and wish they could undo the _________.
purchase
Especially if they ________
borrowed $, when it is time to make
buyer’s remorse
payments, they feel sorry or have _______
_______.
3d. How hunger affects
you when shopping
for food items:
If I’m hungry, I tend to buy more .
3e. Your experience of buying an item
after seeing or hearing advertisements
for it.
Did the item work as well
Not _______
always.
as advertised? ___
Often, the ad makes it sound _____
better than it actually is.
Once in awhile it is actually better
_____ than I expected.
3f. Your understanding
of what happens when
you put money into a
savings account:
teller’s drawer
It goes into the ______________,
bank’s safe or into the ___________
bank’s bank
then into the ___________
loaned out or invested
then, most of it gets ___________________
interest for the use of my money.
They pay me _______
They can afford to because they charge the borrowers
higher rate than the rate they pay me.
interest at a ______
Charitable Giving
3g. Explain its purpose and your thoughts
about it:
I think it is a _______ idea to give to a charity or church.
Good charities use money to help the poor
____ and _____,
sick
worthwhile
build buildings for worship
__________ and other __________
purposes.
3h. What you can do to
better manage your
money:
I can save _____
more of my earnings for more important
things I’ll need in the future.
I can use ____
less of it for junk.
I can use my money for more
____ worthwhile purposes.
p. 9, Requirement #4. Explain the following to your mb counselor:
4a. The difference between saving and investing, including reasons
for using one over the other.
• “Saving”*usually means:
low___ risk way to
accumulate money.
• My father wanted me to save ever penny I got, I didn’t like
that.
Save $100 each month at 5%
$20,000
$18,000
$16,000
$14,000
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
1st
year
Savings $1200
Interest Earned $30
Save $100 each month at 5%
$20,000
$18,000
$16,000
$14,000
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
5th
year
Savings $6000
Interest Earned $830
Save $100 each month at 5%
$20,000
$18,000
$16,000
$14,000
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
10th
year
Savings $12000
Interest Earned $3530
Save $100 each month at 5%
$20,000
$18,000
$16,000
$14,000
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
Now
15th
year
Savings $18000
Interest Earned
$8730
earning > $110+ each month
p. 9, req 4a
Recommended Savings:
• Save _____%
in an Emergency Fund.
10
Try to never, ever spend this money!
• Save enough for your “_____
for ______”
sure
expenses.
Stuff you know you’ll be spending money on once a year!
• Save whatever you can just to _____
buy ______
stuff .
Savings Goal:
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
Emergency
For Sure
Buy Stuff
p. 9, Requirement #4. Explain the following to your Merit
Badge Counselor:
4a. The difference between saving and investing, including reasons
for using one over the other.
• “Investing” usually
higher -risk with a
means ______
higher return.
hope of a ______
Stocks
&
Bonds
p.9, Requirement 4a. Explain the following to your merit badge counselor.
• Reasons for saving: People typically save money
emergencies
for future needs including ____________.
• Reasons for saving rather than investing: People who save
money in a bank or credit union are much ____likely
to lose
less
it. And more likely to be able to get it when they ______
want ___
it
• Banks and credit unions are usually very careful with
our $, and our savings are insured by agencies of the
FDIC & _______
NCUA
U.S. Government: _____
p.9, Requirement 4a. Explain the following to your merit badge counselor.
• Reasons for investing: People invest in hopes of
earning __________.
more money
• Reasons for investing rather than saving:
Although the risk of loss is higher, and some
work some
investments require lots more ______,
lots _____
more money.
investments earn ___
Stocks
&
Bonds
p.9, Requirement 4b. Explain the following to your merit badge counselor.
4b. Explain the concepts of return on investment and risk.
expected
• Return on investment refers to the
amount you receive __
_____ of
in excess
the amount you invested.
• Risk is a measure of the possibility
loss
of suffering harm or ____.
140
120
100
80
at 5%
• Why would anybody choose 5%
when they invest at 25%?
• The greater the rate, the higher the
____.
risk
Return
Invest
60
40
20
0
at 10%
at 25%
actual
120
100
80
Return
Invest
60
• or: The greater the risk, the higher
40
possible _______
return and possible _______.
loss 20
0
at 5%
at 10%
at 25%
p. 9, Requirement #4c Explain the concepts of simple interest and
compound interest.
Suppose you bury $1,000, and dig it up 20 years from now
• Instead, suppose you put it in the bank and earn 5% for
20 years
3000
2500
2000
1500
• PRINCIPAL
1000
500
0
1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20
p. 9, Requirement #4c Explain the concepts of simple interest and
compound interest.
Simple interest: Interest paid only on the ________
principal balance.
3000
2500
2000
1500
1000
500
0
1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20
p. 9, Requirement #4c Explain the concepts of simple interest and compound interest.
Now, suppose you have them add your interest to your principal balance.
Compound interest: Interest paid on both the principal and previously paid _______
interest.
3000
2500
Compound
2000
Interest
1500
1000
500
Principal
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
p. 9, Req. #4 Explain how these (simple interest & compound
interest) affect the results of your investment exercise (p.12).
If I save or invest $1000 and I spend all the earnings as I
get it, I do not get the advantage of _____________.
compounding
If I have my earnings added to the investment, I
principal
earn interest not only on the ________
prior earnings
but also on the ______
_________
And, I get compound interest.
3000
2500
2000
1500
1000
500
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
p. 10, Req. #5 Select 5 publicly traded stocks from the business
section of the newspaper.
a. Explain to your merit badge counselor the
importance of the following information for
each stock:
Current price:
much an investor
Is important to know how _____
can buy,
and help him decide whether to buy
___, sell
___, trade
____,
hold or _____
avoid a stock.
____,
The current price may be obtained on-line
______, from
stock ______,
broker or estimated from _________.
newspaper
a ____
p. 10, Req. #5 Explain the importance of:
b. How much the price changed from the
previous day:
It is important to see if the price changed, and
much and whether it went up
how _____,
__ or down
____.
If it went down a lot, something might be
wrong with the company.
seriously ______
p. 10, Req. #5 Explain the importance of:
c. The 52-week high and the 52-week low
prices:
•
It is important to see if the price has been about
higher or _____
lower than it is now.
the same, or ______,
If it went down a lot, something might be
wrong with the company, or with
seriously ______
the stock market __
in _______.
general
It might be a good time to ___.
buy
But it might be a good time to _____
avoid __.
it
a lot
Knowing this is enough to realize you need to know __
___ more
______!
p. 10, Req. # 5 Obtain the business section of your newspaper
and obtain the following for 5 stocks:
• Usually buy 100 shares
at a time.
9/25/04
Date of Newspaper: ________
Name1st stock
Close Price Net Change 52-wk high
“Name”
“Last”
“Chg”
“1yrhi”
______________
_________
_________
___________
DeltaAir
3.26
- .70
15.54
Explain: The importance for this stock:
Current price (est: _______)
__________________________
3.00 Low
enough to buy a bunch
Change from previous day: Lost
__________________________
70¢ per share: danger
The 52-week high:
__________________________
Lost
$12.28 p/share: danger
Should I buy?
• (on 8/28/06: 68¢, then down to $0)
p. 10, Req. # 5 Obtain the business section of your newspaper
and obtain the following for 5 stocks:
(I’ve already given you 1)
Date of stock quote: ________
Name 2nd stock
Close Price Net Change 52-wk high
“Name”
“Last”
“Chg”
“1yrhi”
______________ _________ _________ ___________
Explain: The importance for this stock:
Current price (est: _______) __________________________
Change from previous day: __________________________
The 52-week high:
__________________________
• SATURDAY