SS7E10 and SS6E13 Personal Money Management

Choose the correct word or phrase to complete each sentence. (Not all answers will be used.)

The money you earn by having a job is called ​ (a)   and is often called a ​ (b)   , or wage. It is the ​ (c)   of personal financial management.

• income
• salary
• starting point
• choice
• amount

Why is a budget an important tool to use for effective personal money management?

• It is a plan for spending and saving money.

• It helps guide you through purchasing a home.

• It establishes a legal contract between you and a potential client.

• It creates a step-by-step plan to making profitable financial investments.

Read each statement and determine whether it is a wise decision or an unwise decision related to spending and savings choices.

Groups:

(a) Wise Decision

,

(b) Unwise Decision

• I swipe my credit card when I don't have enough cash to buy what I want.

• I will set aside $50 from each paycheck for unexpected expenses.

• I buy everything I want rather than putting money into savings for college.

• I use an app on my smartphone to check and monitor my account every day.

• I was spending too much money so I started a budget to track my expenses.

• I don't have time to track my expenses; I just hope I have enough money to use my debit card.

One reason to use a budget is to plan for and save money for expected and unexpected costs.
Place each event or description in the correct category to indicate whether it describes an expected or unexpected expense.

Groups:

(a) Expected Expenses

,

(b) Unexpected Expenses

• $75 weekly groceries

• $650 washing machine repair

• $150 weekly childcare

• $450 car repair estimate

• $125 monthly electricity bill

• $8500 emergency room bill

• $4000 air conditioner installation

• $800 rent payment

Add the correct definition to each term to complete the entries in the Georgia Economic Dictionary.

• credit

• you spend money on something with the expectation that it will return a greater value in the future

• interest

• the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future

• invest

• a fee applied to money borrowed

Place each event or description in the correct category to indicate whether it describes a use of or a cost associated with credit.

Groups:

(a) Use of Credit

,

(b) Cost of Credit

• buying a safer vehicle

• Paying for a semester at college

• limits economic flexibility

• paying more for an item than it cost

• items could be repossessed if payments aren't made

• purchasing a home for your family

There are benefits to saving money every month to help build your financial security. Read each scenario and indicate whether it is a responsible decision or not when it comes to saving money.