Family Economics

1
Family Economics Financial Education
3.19.2.G1
Get ready to Take Charge of Your Finances
Life Of..
Monica Erickson
A Teenagers Spending Plan
2
Snapshot Monica Erickson

• Sneak peak of the life of Monica and her family
• Monica
• Sharise
• Tyrone
• Grandma and Grandpa

3
SnapshotMonicas Income and Expenses

• Monicas Income
• Lucys Luscious Cakes and Pastries
• 10.00/hour
• 15 hours a week

4
SnapshotMonicas Income and Expenses

• Monicas Expenses
• Saving for culinary school
• Half of monthly income
• Pebblebrook Culinary Team
• 60.00
• Transportation
• Subway or city bus pass
• Other Items

5
Spending Plan

• The goal is to create a spending plan that
  balances Monicas expenses with her income.
• She can not have more expenses than income.
• Spending Plan
• Financial statement
• Tracks income and expenses
• Used to assist with money management and help
  individuals reach financial goals
• An individuals perception of needs, wants and
  values will affect decisions made when creating a
  spending plan

6
SnapshotErickson Family Expenses

• Monicas Expenses
• Housing
• Monthly Payment
• Utilities
• Others television, internet and telephone
• Transportation
• Vehicle for Sharise and the family
• Monthly payment and fuel
• Insurance
• Health, life, auto

• Food
• Groceries
• Eat out three times a week and pick up take-out
  once a week
• Saving
• Down payment on a condominium or apartment
• Monicas future education expenses
• A portion of child support from Monicas dad is
  saved for future education expenses

7
Housing

• Monthly Payment
• Housing payment
• Insurance
• Property taxes
• Repairs
• Maintenance

• Utilities
• Heat
• Electricity
• Water
• Sewer
• Garbage

8
Housing Others

• Satellite Dish
• Digital Cable
• Telephone
• Internet

9
Transportation

• Monthly Payment
• Car payment
• Maintenance
• Fuel
• An average is listed
• This cost may increase/decrease depending on the
  cost of fuel

• Erickson Family
• Pay for Sharises vehicle monthly payment and
  fuel costs
• Monica
• Pays for her public transportation pass

10
Others

• Cellular Phone
• Culinary Upgrades
• Electronics
• Clothes
• Entertainment
• Create Your Own

11
GoalTo Create A Balance Spending Plan

• Make all choices for the Erickson family and
  Monica
• Complete a Major Expenditures Summary for the
  Erickson family
• Complete a Spending Plan for Monica
• Answer reflection questions
• Write a summary essay

12
Quick Review

• Erickson Family
• Monica, Sharise, Tyrone, Grandparents
• Create a Major Expenditures Summary for the
  Ericksons
• Housing
• Transportation
• Create a Spending Plan for Monica
• Savings
• Public transportation costs
• Others

13
Snapshot Reflection

• Review Monicas Snapshot on pages 2-4
• Answer questions 1-5 on page 10

14
Monicas Paycheck
State the employees name, address, and social
security number.
15
Monicas Paycheck
The length of time which an employees wages are
calculated.
16
Monicas Paycheck
The total amount of money earned during the pay
period before payroll withholdings.
17
Monicas Paycheck
The amount of money subtracted from the gross pay
for taxes.
18
Monicas Paycheck
The amount required by law for employer to
withhold from earned wages to pay taxes.
19
Monicas Paycheck
Federal Insurance Contribution Act includes
Social Security and Medicare
20
Monicas Paycheck
The amount of money remaining after all payroll
withholdings have been removed from gross pay.
21
Monicas Paycheck
Totals of the deductions which have been withheld
from an individuals paycheck from January 1 to
the last day of the pay period indicated on the
paycheck stub.
22
Setting Financial Goals

• Short Term less than one year
• Long Term more than one year

23
Ericksons Major ExpendituresHousing

• Choose a house and housing others for the
  Erickson family
• Refer to the Snapshot on pages 2-4
• Remember
• Family size
• Lifestyle
• Other family dynamics

24
Ericksons Major ExpendituresTransportation

• Choose a vehicle for the Erickson family
• Refer to the Snapshot on pages 2-4
• Remember
• Family size
• Sharise often transports clients in her vehicle

25
Ericksons Major ExpendituresMajor Expenditures
Summary

• Transfer numbers to complete the summary

26
Monicas Spending PlanPayroll Withholdings

• Review Monicas paycheck on page 11
• State Withholding Tax
• Federal Withholding Tax
• FICA

27
Monicas Spending PlanSavings

• Review Monicas Snapshot on pages 2-4
• Identify her needs, wants, values
• Review the short term and long term goals set for
  Monica on page 12

28
Monicas Spending PlanTransportation

• Monica will pay for her public transportation
  pass
• She does not have a vehicle or other form of
  transportation and needs to get to school and
  work

29
Monicas Spending PlanOthers

• Choose which others items Monica would
  like
• Cellular Phone
• Culinary Upgrades
• Electronics
• Clothing
• Entertainment
• Create Your Own
• Draw an item and identify the cost in the space
  provided

30
Monicas Spending Plan Summary

• Gross Income
• Expenses
• Calculate the Difference
• If the difference is a negative number, go back
  and adjust some of Monicas expenses.

31
Negative or Positive Difference?

• If the number on TT is positive, adjust Monicas
  expenses.
• Saving additional money for unexpected
  emergencies or expenses may be a good idea.
• If the number on TT is negative, go back and make
  adjustments to Monicas expenses.
• Changes need to be made consistently throughout
  the simulation.
• Keep in mind Monicas needs, wants, values and
  goals when making changes.
• If the number on TT is zero, congratulations!
  You have balanced Monicas Spending Plan!

32
Reflection Questions

• Once the difference equals zero.
• Answer questions 17-21 on pages 15 and 16
• Answer questions 22-26 on page 18