Finance and Money Management

Introduction to Personal Finance

What you will Learn

• What is Personal Finance

• Money the American Way

• You and Money

Video: Welcome to Personal Finance

Key Terms

• Consumer: A person or organization that uses a product or service

• Credit: The granting of a loan and the creation of debt; any form of deferred payment

• Debt: An obligation of repayment owed by one party to a second party. 

• Economy: A system by which goods and services are produced and distributed

• Financial literacy: The knowledge and skillset necessary to be an informed consumer and manage finances effectively

Key Terms (cont'd)

• Interest: A fee paid by a borrower to the lender for the use of borrowed money; typically interest is calculated as a percentage of the principal (original loan amount)

• Loan: A debt evidenced by a "note," which specifies the principal amount, interest rate, and date of repayment

• Personal finance: All of the decisions and activities of an individual or family regarding their money, including spending, saving, budgeting, etc

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In this Module

• Introduce Personal Finance

• Explore the Evolution of American Credit Industry

• Highlight the Importance of Knowledge and Behavior

What is Personal Finance?

Personal finance refers to all the financial decisions an individual or family must make in order to earn, budget, save, and spend money over time. These decisions are generally based on a variety of financial risks and planning for the future.

Video: What is Personal Finance 1.1A

Have a Job or Get an Allowance?

• What are you doing with your money?

• You need to make decisions about what to do with your money!

• Have a money plan

• Set money goals

Video: Key Components of Financial Planning 1.1B

Key Components of Financial Planning

• Assess your FINANCIAL situation

• Set Money Goals

• Write out a detailed plan to accomplish goals

• Execute your plan

• Know your money personality

• Monitor and Reassess your financial plan

• Replace Money Myths with Money Truths

Key Components to Personal Finance

Quiz in Schoology

Wealth Building

Winning at money is 80% behavior and 20% head knowledge.

Activity:

The Game of Chance

Discussion Question

Chapter 1 - Section 1 - Discussion Question

Money the American Way

Today's American Reality

Today's American Reality

• The Appearance of Being Financially Secure

• Most People are Struggling with Debt

• Americans are horrible at saving money and planning for Retirement

So why aren't Americans Better at Managing their Money?

• They have never been taught the right way.

• Controlling your Money Behavior

Video: A History of Credit and Consumerism 2.1A

Video: The Normal American Family 2.1B

Snapshot of the Normal American Family

• Credit Card Debt: $15,799.00

• Average Mortgage Debt: $149, 667.00

• Average Student Loan Debt: $32,559.00

• Average Car Loan: $13, 125.00

What is your Money Personality?

• Foundationsu.com

• Select High School

• Activities - Chapter 1

• Select: Money Personality Quiz

• Choose: Goto Quiz

• Take Quiz

What is your Relationship with Money?

• Frustration

• Role Models

• Pragmatic

• Money isn't Everything

Video 2.1d: Americans are Being Outsmarted

Americans are Being Outsmarted!

• Why do we allow ourselves to be outsmarted when it comes to our money?

Americans Like ........

• We like stuff—lots of stuff!

• We are told that debt is normal. It has become acceptable in our culture to use credit to buy things.

• We are taught that we can buy happiness. This is simply not true!

• Our debt system keeps us from building wealth because we are constantly giving our money away to pay for things we bought years ago.

Discussion Question

Chapter 1 - Section 2 - Discussion Question

You and Money

No one is born Financially Smart!

Video 3.1a - You and Money

You and Money

• Know the Language

• Decide where your money is going before you get your paycheck

• Understand the Vocabulary

• You will become a money expert.

Become Money Smart

• First, you need to be comfortable with basic math.

• Second, you must start learning the language of money.

• Third you need to learn how to manage your behavior with money.

Winning with Money

• Money is a tool. It’s up to you to manage it.

• You need to know your natural instincts when it comes to money.

• Once you know your money personality, you develop a financial plan that works for you.

• It’s in recognizing who you really are that allows you the opportunity to grow and learn.

What does winning with Money Look Like

• Survival

• Comfort

• Secure

• On which level would you like your financial future to rest?

How you View Money Matters!

Video: How you View Money Matters - 3.1C

Discussion Question

Chapter 1 - Section 3 - Discussion Question

Introduction to Personal Finance

Unit Test - Review