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 signature Your bank Optional memo line Amount in numbers
Financial Responsibility • Check register (record your checks):
Financial Responsibility • Balance this check book: Balance 5/2 Opening Deposit 5/4 Home Depot (Grill) 5/5 Deposit (Paycheck) 1222 5/7 Mariano’s (Grocery) 1223 5/9 CD One Price Cleaners 1221 400 125. 50 274. 50 350 85 12. 50 400 624. 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!!
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