Family & Consumer Science: Unit 1, Lesson3: Managing Money

Family & Consumer Science: Unit 1, Lesson3: Managing Money

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If you had a gift card for $100 what would you spend it on?

Uni 1, Lesson 3: Objectives

• Balance a checking account.

• Create a simple budget to manage household income, expenses, long-term, and short-term savings.

• Describe the appropriate use of credit to increase family financial health

• Analyze the role of insurance to protect family income and assets.

• Examine how short-term and long-term financial goals change over a person’s lifetime.

• Analyze how poor financial decisions early in life can have negative consequences on future financial health.

Multiple Choice

What is the most common type of account opened by people throughout the country?

• Savings

• Credit

• Checking

• Money Market

A checking account is the most common type of account opened by people throughout the country

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Checking Account

• A checking account is a bank account that stores your money until you want it.

• You can use money from checking accounts by writing checks or by using an ATM (automated teller machine) or debit card. 

• Since you can access the funds at any time, these accounts are called demand accounts.

• Paying with a check or debit card is a great alternative to carrying large amounts of cash.

Making Budget-- You should include...

• Rent

• Savings

• Utilities

• Insurance

• Food

• Car/transportation

• travel

Multiple Choice

Expenses that are absolutely necessary:

• Fixed expenses

• Nondiscretionary Expenses

• Discretionary Expense

• Checking

Types of Expenses

Necessities/Nondiscretionary Expenses: These are expenses that are absolutely necessary. For example, your electric bill is something that has to be paid each month.

Types of Expenses

Nonessentials/Discretionary Expenses: These include things such as going out with your friends or deciding to stop at a coffee shop on your way to school. These items are not essential things you need. Another example of a discretionary expense would be your gym membership. Joining the gym is not something you are forced to do.

Types of Expenses

• Routine Expenses: These are expenses that stay the same month after month. A routine expense is your rent or your car insurance.

• Nonroutine Expenses: These are expenses that do not occur regularly but it is important to prepare for them. This could include a major car repair or a medical bill.

• Fixed Expenses: These are expenses that stay the same from month to month. This includes your rent, your gym membership, or your car insurance.

• Variable Expenses: These are expenses that change from month to month. This could include money spent on food, entertainment, and clothing.

Poll

A gym membership can be considered a fixed, discretionary expense.

• Yes

• No

• I have no clue

• Depends

Saving

Why  is important to assign a minimum amount to each item in your budget and to contribute this amount to your savings?

Poll

All debt is bad.

• True

• False

Good debt:

Help you earn money. Examples: Buying a house or car. These are investments.

Poll

Having debt can increase your wealth.

• Ture

• False

Increasing Wealth

Will the purchase increase in value?

Poll

Using your credit cards to pay for all of the extra items you want and cannot afford during the month is a good use of credit.

• True

• False

Credit

Paying for extras with a credit card can have disastrous consequences, and you could end up paying for these purchases for years.

Poll

It is difficult to get out of financial trouble.

• True

• False

Debt

It can take years to recover from too much debt or poor financial decisions.

Poll

Online banking is a convenient way to manage money.

• True

• False

Online Banking

Most banks offer ways for you to keep track of your money on a daily basis to help you manage what you have and avoid going into debt.

Poll

Good debt can also help your credit score.

• True

• False

Credit Scores & Debt

You show you are reliable when it comes to paying debt.

Poll

Bad debt is when you finance things that you consume and do not have the money or a plan to repay the debts within a reasonable amount of time.

• True

• False

Bad Debt

When you use your credit card to pay for your dinner night after night, you will then need to pay off something you already consumed and cannot get back.

Credit Card Bad Debt

Credit cards are generally seen as bad debt because of the things that credit cards are usually used to purchase. Buying a new outfit each week will accumulate debt and a large balance at the end of the month. Most people cannot afford to pay off their credit card bill each month – that is when it becomes a bad debt. Bad debt will hurt your overall credit score.

Poll

Paying off your credit cards each month actually increases your credit score.

• True

• False