PERSONAL FINANCE Unit 3: Financial Responsibility and Money Management

PERSONAL FINANCE

Unit 3: Financial Responsibility and

Money Management

Chapter 7: Budgeting 101

Financial Responsibility•54% of those that do a poor job of sticking to a budget claim “unexpected expenses” as the reason.•93% of teens say it’s important to know how to live within your means.•You must know how much things cost before you buy them.•Let’s see if you know how much things cost…

Financial Responsibility•People hate to budget because:•1. It limits them from using their own money.•2. It is a sign of financial weakness.•3. It never works because its easy to break.•4. Fear!•Budgets are a tool to help you stay within your financial means!

Financial Responsibility•How to write a check:

Your name & address

Today’s date

Check number

Name of person you’re writing check to.

Dollar amount in words

Your bank

Your signature

Optional memo line

Amount in numbers

Financial Responsibility•Check register (record your checks):

Financial Responsibility•Balance this check book:

1221 5/4

1222

5/2

5/5

5/9

5/7

Opening Deposit

Home Depot (Grill)

Deposit (Paycheck)

Mariano’s (Grocery)

CD One Price Cleaners1223

400

125.50

350

85

12.50

400

Balance

274.50

624.50

539.50

527

Financial Responsibility•Balancing your checkbook is simple addition and subtraction.•People forget to write everything down, so they get it wrong.•With online banking, you have access to your account balances anywhere you can access a computer.•Be careful not to access your bank information on a public computer!!!!!!

Financial Responsibility•Zero-based budgeting is spending every dollar on paper before the month begins.•When creating a budget remember to include:•All income sources•All bills (estimated bills)•Savings•Retirement funds (IRA)

Chapter 8: Bargain Shopping

Bargain Shopping•Paying retail: paying full asking price for an item in a store.•Discount stores sell items that are usually at a retail shop for a much lower price. (Home Goods, Marshalls, TJ Maxx, DSW, etc.)•For other items, sometimes there is room to negotiate a better price. (Cars, houses, etc.)

Bargain Shopping•Why do people negotiate?

•They are not the only ones to sell that item.•Even if they sell it at a discount to you, they still make a profit on it.•When people feel they get a good deal, they usually come back.•Sales are tracked and they are usually competing for sales quotas.

Bargain Shopping•Bargaining Tips

•1. Cash is KING! It gives you more bargaining power. Everyone takes cash.•Walk Away Power: you always have the upper hand because you can simply walk away and take your business elsewhere.•Never agree to a price you don’t feel good about.

Bargain Shopping•When bargaining simply saying, “That’s not good enough” speaks for itself. •Do not fall in love with an item or else you lose your walk away power.•Walk away power only works if you are actually willing to WALK AWAY!•Even if you love the item, make them believe you will walk away.

Bargain Shopping•2. You must be patient.•For expensive purchases, do your research. •Make sure you know how much the item costs and if you can find it cheaper.•Online shopping allows you to compare prices and find out how much an item costs before going to a store.

Bargain Shopping•Know the best times to buy items.•Car dealers give better deals at the end of the month to meet sales quotas.•They also will sell last year’s models at a reduced cost.•You can buy a snow blower cheaper after winter than when it snows a lot.•Deals can be had simply by timing your purchase right!

Chapter 9: Relating With Money

Relating with Money•Men and women react differently about money.• It is the biggest reason families fight.•Who should make the decisions?

•Both of you!•Who should make the budget?

•The one better at it!•Come to an agreement about finances!

Relating with Money•Differences between Men and Women•Men love to share facts, women love to express feelings.•Men connect by doing things, women connect by talking.•Men tend to compete, women tend to cooperate.•Men tend to be controlling, women tend to remain agreeable.

Relating with Money•Find a person who you can discuss major purchases and your budget.•That person has to be honest and you must trust that they have your best interest in mind.•Do not go shopping with the friend who has a lot of money and buys everything at retail prices. •You might spend to keep up with them!

Relating with Money•Teaching kids how to manage money begins and ends with parents. •Parents should foster the idea that if you work, you get paid; if you do not work, you do not get paid.•Give children money on commission, instead of an allowance.•They should not feel like they are entitled to money.

Relating with Money•Somewhere at 13-15 years old, open a checking account for the child and teach him/her how to run it.•Save using a clear, see through container. •The visual reinforcement is powerful.•Teach by example.• If you are bad with money, your kids will probably be bad with money.

Giving!!