Will Work for Food Candy 1 p 1

Will Work for Food Candy 1. p. 1 If you bring back the packet 2. p. 2 If you wrote a plan… Discuss with family… 3. p. 4 If you did the 1 st week of 13 -week Budget. 4. p. 12 If you completed the five stocks.

Personal Management Merit Badge $ Lots of effort , but totally worth it!

HANDOUT • Fill in the blanks. • OR use your own pages. • You may use the words I’ll suggest, or • You may use other words you like better! Brainless attendance

HANDOUT • Name ___________________ • Date of merit badge classes: 1 st ______ 2 nd ______ To help you in the future: Keep it! Read again in 5 yrs! * • Boxed portions: To be reviewed with your Merit Badge Counselor. • AFTER you’ve completed EVERYTHING (ready to discuss)! • If I go too fast, stop me. • Bring this handout back next time:

p. 2, Requirement #1: Do the following: 1(a) Choose an item that your family might want to purchase that is considered a major expense. HDTV Item chosen: ________ $1, 000 Approximate cost: ______ 1(b) Write a plan that tells how your family would save money for it. • We can save money by: Mostly _______ earnings, but each _______________ of us could contribute. _______________

p. 2, Requirement #1 b (continued): 1(b)1. Discuss the plan with your merit badge counselor. * 2. Discuss the plan with your family. **When are you going to do this? • (FHE, or? ) 3. Discuss how other family needs must be considered in this plan. *When are you going to discuss this with your merit badge counselor?

p. 2, Requirement #1 c: c. Develop a written shopping strategy for the purchase: 1. Determine the quality of the item (using consumer publications or rating systems). ____________________ EBay, Amazon, Consumer Reports…

p. 2, Requirement #1 c: 2. Comparison shop for the item. Find out where you can buy the item for the best price. Call around Who you called: Sleazy’s Pawn Shop ____________ What you learned: Don’t go there! ________________

p. 2, Requirement #1 c: 2. Comparison shop for the item. Find out where you can buy the item for the best price. Study ads Where you looked: What you learned: Newspaper Sears had a great sale ____________________ Online sellers Include shipping costs… ____________________

p. 2, Requirement #1 c: Yes Did you find a great sale or a discount coupon? __________________________ Consider alternatives: Can you buy the item used? Maybe, but__________ Should you wait for a sale? I could, but… __________

p. 3 Req. #2 a: Prepare a budget reflecting: Your expected income (allowance, gifts, wages), Your expected expenses & savings. Track your actual. 1 st Week INCOME EXPENSES & SAVINGS Expected Actual Allowance Job Gifts _________ Total in ______ ______ ______ ______ Expected Actual Donations ______ Savings (for… ______ Save to Buy ______ Junk food _________ Total Out ______ ______

EXAMPLE INCOME Expected Actual OUTGO Expected Actual $3 Allowance $10 _____ Donations ______ $10 $3 Job _____ Savings ______ $10 Gifts _____ Savings (for… $ 3 _________ Save to buy $ 3 _________ Junk food ______ $30 _________ ______ Total in _____ Total Out $30 $42 ______ 2(b). Compare expected income with expected expenses (outgo). 2. If outgo exceeds income, determine steps to balance: I can increase buying less junk income by working more or decrease expenses by________

Another EXAMPLE INCOME Expected Actual OUTGO Expected Actual $3 Allowance $10 _____ Donations ______ $10 $3 Job _____ Savings ______ $10 Gifts _____ Savings (for… $ 3 _________ Save to buy $ 3 _________ Junk food _________ ______ Total in _____ Total Out $30 $12 ______ 2(b). Compare expected income with expected expenses. 2. If expected income exceeds expected outgo, state how you would use the excess money: I could have some for _________ better stuff later.

EXAMPLE INCOME Expected Actual OUTGO Expected Actual $10 Allowance $10 _____ Donations $ 3 $10 $20 $3 Job _____ Savings $10 $20 Gifts _____ Savings (for… $ 3 _____ Save to buy $ 3 _____ Junk food _________ Presents ______ Total in _____ Total Out $30 $50 $12 $ 5 ______ ______ $20 ______ $40 • What actually happened? • This guy should have $10 more now than 1 week ago. If you finish one week of expected and actual by next class. . .

actual income, expenses, and savings for 13 consecutive weeks. p. 3 -7, Req 2 a Track your • • • Income Source Actual ___________ _______ ___________ Total _______ • • • Expenses Where Actual ___________ _______ ___________ Total _______ • How are you going to remember to do this each day? (How about putting it on your pillow? ) • Share this with your merit badge counselor.

p. 8 Req. 3 a, 3 b Discuss with your merit badge counselor Five of the following concepts: a. The emotions you feel when you receive money: When I honorably earn money, I feel ______ Good If I’d stolen the money, I’d feel _____ Bad! b. How the amount of money you have with you affects your spending habits: If I have lots of money, I tend to spend ______ more. If I don’t have my money, it is ______ to spend. harder (Unless I have a credit card, then its easy to spend money I don’t have. ) *

p. 8, Req. 3 c c. Your thoughts when you buy something new: excited happy I usually feel __________ Your thoughts about the same item 3 months later: excited happy I’m usually less _____ about it.

p. 8 Req. #3 c Discuss with your merit badge counselor Five of the following concepts: c. Explain the concept of: buyers remorse Often after buying something people feel _______ sorrow (remorse) and wish they could undo the _____. purchase Especially if they ____ $, when it is time to make borrowed buyer’s _______. payments, they feel sorry or have _______ remorse

p. 8, Req. 3 d, 3 e 3 d. How hunger affects you when shopping for food items: When hungry, I tend to buy more. 3 e. Your experience of buying an item after seeing or hearing advertisements for it. Did the item work as well as Not always. advertised? _______ Often, the ad makes it sound _____ than it actually is. better Once in awhile it is actually better than I expected. _____

p 8, Req. 3 f. Your understanding of what happens when you put money into a savings account: teller’s drawer It goes into the _______, bank’s safe bank’s bank then into the ______ or into the ______ loaned out or invested then, most of it gets __________ interest They pay me _______ for the use of my money. They can afford to because they charge the borrowers higher interest at a ______ rate than the rate they pay me.

Charitable Giving 3 g. Explain its purpose and your thoughts about it: Good charities use money to help the poor and _____, ____ sick buildings for worship _____ and other _____ worthwhile purposes. I think it is a _______ idea to give to a charity or church.

p. 8, Req. 3 h. What you can do to better manage your money: I can save _____ of my earnings for more important more things I’ll need in the future. I can use ____ of it for junk. less I can use my money for more worthwhile purposes. ____

p. 9, Req. #4. Explain the following to your mb counselor: 4 a. The difference between saving and investing, including reasons for using one over the other. • “Saving”* usually means: lowa ____ risk way to accumulate money. • My father seemed to want me to save ever penny I got. • I didn’t like that. But, I learned to stash 10%!

Example Save $100 each month at 5%

Example Save $100 each month at 5%

Example Save $100 each month at 5%

Example Save $100 each month at 5% ûNow earning > $110+ each month

p. 9, Req. 4 a Three Recommended Savings: 1. Save _____% in an Emergency Fund. 10 Try to never, ever spend this money! 2. Save enough for your “______” expenses. for sure Stuff you know you’ll be spending money on once a year! 3. Save whatever you can just to ______. buy stuff

Example Savings Goal:

p. 9, Req. 4 a. Explain the following to your Merit Badge Counselor: 4 a. The difference between saving and investing, including reasons for using one over the other. • “Investing” usually higher means ______ -risk with a higher hope of a ______ return. Stocks & Bonds

p. 9, Req. 4 a (continued). Reasons for saving: People typically save money emergencies for future needs including ______. • Reasons for saving rather than investing: • People who save money in a bank or credit union are much ____likely to lose it. And more likely to be able to get it when less want it they ______ • Banks and credit unions are usually very careful with our $, and (in some states—like Utah) our savings are insured FDIC • by agencies of the U. S. Government: _____ & NCUA _______

p. 9, Requirement 4 a. • Reasons for investing: People invest in hopes of earning ______. more money • Reasons for investing rather than saving: Although the risk of loss is higher, and some work investments require lots more ______, some lots more investments earn _____ money. Stocks & Bonds

p. 9, Requirement 4 b. Explain the concepts of return on investment and risk. expected • Return on investment refers to the amount you receive __ excess of in _____ the amount you invested. (Why would anybody choose 5% when they could invest at 25%? ) • Risk is a measure of the possibility of suffering harm or ____. loss • The higher the rate, the greater the risk ____. • Also: The greater the rate claimed, the higher probability for _______. scams actual

p. 9, Requirement #4 c Explain the concepts of simple interest and compound interest. Suppose you bury $1, 000, and dig it up 20 years from now. • Instead, suppose you put it in the bank and earn 5% for 20 years • PRINCIPAL

p. 9, Requirement #4 c Simple interest. You withdraw the interest, and if you bury your earnings • principal Simple interest is: Interest paid only on the ____ balance. • INTEREST • P R I N C I P A L

p. 9, Requirement #4 c Explain the concepts of simple interest and compound interest. Now, suppose you have them add your interest to your balance. Compound interest: Interest paid on both the principal and previously paid _______ interest. Compound Interest Simple Interest Principal

p. 9, Req. 4 c Explain how these (simple interest & compound interest) affect the results of your investment exercise (p. 12). If I save or invest $1000 and I spend all the earnings as I get it, I do not get the advantage of _______. compounding If I have my earnings added to the investment, I principal earn interest not only on the ____ prior _____ but also on the ______ earnings Thus, I get simple interest and compound interest.

p. 10, Req. 5 Select 5 publicly traded stocks from the business section of the newspaper. [Or, internet] Explain to your merit badge counselor the importance of the following information for each stock: a. Current price: much It is important to know how _____ an investor can buy, and help him decide buy sell ____, hold whether to ___, trade ____, or _____ a avoid stock. The current price may be obtained ______, from on-line stock broker newspaper a ______, or estimated from _____.

p. 10, Req. #5 b Explain to your MB Counselor the importance of: b. How much the price changed from the previous day: It is important to see if the price changed, and much how _____, and whether it went up or down __ ____. If it went down a lot, something might be wrong seriously ______ with the company, Or, something might be seriously ______ with wrong stock market the _______ in general.

p. 10, Req. 5 c. Explain the importance of: c. The 52 -week high and the 52 -week low prices: • It is important to see if the price has been about higher lower the same, or ______, or _____ than it is now. If it went down a lot, something might be wrong seriously ______ with the company, or with the stock market __ _______. in general It might be a good time to ___. buy But it might be a good time to _____ __. avoid it a ______!] [Knowing this is enough to realize you need to know __ lot more

Example p. 10, Req. # 5 Obtain the business section of your newspaper

Example p. 10, Req. # 5 Obtain the business section of your newspaper and obtain the following for 5 stocks: • Usually buy 100 shares at a time. 10/2/04 Date of Newspaper: ____ Name 1 st stock Close Price Net Change 52 -wk high “Name” “Last” “Chg” “ 1 yrhi” _________ ______ Delta. Air 3. 34 +. 19 15. 54 Explain: The importance for this stock: Current price (est: _______) Low enough to buy a bunch 3. 50 _____________ Change from previous day: Gain 19¢ per share (good) _____________ The 52 -week high: _____________ Lost $12. 20 p/share: danger

Example Should I buy? • (on 8/28/06: 68¢, then down to $0)

Example • SATURDAY

p. 10, Req. # 5 Obtain the business section of your newspaper and obtain the following for 5 stocks: (I’ve already given you 1, do the other 4 by next class for another candy) Date of stock quote: ____ Name 2 nd stock Close Price Net Change 52 -wk high “Name” “Last” “Chg” “ 1 yrhi” _________ ______ Explain: The importance for this stock: Current price (est: _______) _____________ Change from previous day: _____________ The 52 -week high: _____________

Will Work for Food Candy Make sure your wrappers get in the garbage!!! Honor System 1. p. 1 If you brought back the packet 2. p. 2 If you wrote a plan… Discuss with family… 3. p. 4 If you did the 1 st week of 13 -week Budget. 4. p. 12 If you completed the five stocks.