chapter 7 budgeting 101 principles of investing. before we begin please have your notebook and your...
TRANSCRIPT
Ch 7 Essential Questions 1. How is money active?2. What are the reasons why people do not
budget?3. What are some common problems
associated with budget failures?4. What are the benefits of a budget?5. What is a zero-based budget and how
does one complete it?
Lesson 11. How is money active?
Explain why money is “active”Define cash flow plan and state when a cash
flow plan should be developedState and explain 5 ways money can be utilized
2. What are the reasons why people do not budget?State and explain 4 reasons why people do not
budget
DO NOW Write down 3-5 different ways
you use your money. Write down what you think are
the 3 most important categories in a budget.
How Money is ActiveMoney is always moving Money can be utilized in many ways
including the following: earn it, spend it, save it, invest it, and give it
Reasons Why People Do Not Budget
A budget has a negative connotation because it has been used to control them.
You fear what you may find so you don’t create a budget.
It has been used to abuse themMost people have never had one that really
worked so they don’t want to try another budget.
Lesson 11. How is money active?
State and explain 3 ways to use a checkIdentify and explain 4 advantages of using checksIdentify and explain 4 disadvantages of using checksIdentify and define the parts of a check Practice writing 3 checks Identify and define the parts of a checkbook registerPractice recording 3 checks into a checkbook register
2. What are the reasons why people do not budget?
DO NOW List 3 ways you use a checkList 3 advantages of using
checksList 3 disadvantages of using
checks
Ways to Use a Check1. Make a payment2. Cash it3. Write it out as cash
This can be done in one of two ways
Advantages of Using Checks
1. Safety or Security2. Convenience 3. Records of your Transactions 4. Proof
Disadvantages of Using Checks
1. Security Concerns2. Time3. Recordkeeping4. Not being able to use them all the
time or everywhere
Activity 1How to Write a Check
Definition- an order to a bank to pay a specified sum to the person or business named on the check
Only 51% of teens know how to write a check
I explained the parts of a check. Then I modeled and demonstrated how to write a check by using the one below
Activity 1 - How to Write a Check All of you are now going to practice writing checks by
writing 3 checks on your own or with the person sitting next to you
Check Number 1Check amount: $70.00 Date: January 10, 2015
Who the check is being paid to: AT&T Check Number 2
Check amount: $90.00 Date: January 21, 2015 Who the check is being paid to: Comcast
Check Number 3Check amount: $125.00 Date: February 11, 2015
Who the check is being paid to: ShopRite
Activity 1- How to Write a Check After you write a check you then have to
record the check information into your checkbook register
This is very important! All of you are now going to practice recording
the checks into a checkbook registerOn your own or with the person sitting next
to you, record the 3 checks you just wrote into the checkbook register
Students volunteer to demonstrate how they recorded the 3 checks they wrote in the checkbook register
Lesson 11. How is money active?
State and explain 4 reasons why it is important to budget one’s checkbook
Explain the process of fixing an error/s in one’s bank statement
Describe how to balance or reconcile (think scale!) one’s account after receiving one’s bank statement
Practice recording 14 transactions into a checkbook register and then balancing or reconciling a checkbook
2. What are the reasons why people do not budget?
DO NOW List 3 reasons why it is important to
balance your checkbookWhat should you do if you find an error
in your bank statement? (A record, usually sent to the account holder once per month, summarizing all transactions in an account)
Reasons to Balance your Checkbook
1. To keep track of your money2. To catch mistakes3. To avoid overdrafts 4. To help with budgeting
Your Bank Statement1. When you receive your bank statement,
compare your check register to the bank statement to make sure that neither you nor your bank made a mistakeThis is called balancing or reconciling your account
If you find an error on your statement you must notify your bank within 60 days from the date of the statement
Activity 2- Balancing your Checkbook
Definition- a book of blank checks with a register for recording checks written
Only 34% of teens know how to balance a checkbook and reconcile an account register to a bank statement
Activity 2- Balancing your Checkbook
All of you are now going to practice filling out the check register and balancing or reconciling your checkbook
Students volunteer to demonstrate how they balanced their checkbook by recording all of their transactions and deposits into their checkbook register and calculating the correct adjustments to their balances.
Lesson 23. What are some common problems
associated with budget failures?State and examine 4 common problems associated with budget failures
4. What are the benefits of a budget?State and examine 6 benefits of a budget
DO NOW List 3 reasons why you think people fail
at maintaining or following a budgetList 3 benefits of having a budget
Common Problems Associated with Budget
Failures 1. The budget doesn’t work because
things are left out2. The budget is too complicated3. You don’t actually create a budget4. You write a budget, but don’t live on it
Benefits of a Budget1. Removes the management by crisis from your finances2. Managed money goes further than money that is not
managed3. Managed money removes many of the money fights
from your marriage4. Budgets remove guilt, shame, and fear from
relationships5. A written plan can remove many overdrafts and stress
from your life 6. A written plan can show you where you’re over
spending in certain areas of your life
Discussion Questions 1. Of the 5 ways one can utilize money, which 2 ways are the most
important and why? Please explain 2. Which advantage of using checks is the most important for
consumers and why? Please explain 3. Do the advantages of using checks outweigh the
disadvantages? Please explain 4. Due to the tech-savvy world we live in today, should paper
checks and checkbooks be a thing of the past? Please explain 5. Which advantage of a budget is the most important for families? 6. Only 32% of Americans, or nearly 1 in 3 Americans, put together
a budget each month. Why is this so and how can we convince more Americans to create a monthly budget? Please explain
Students wrote their thoughts down and then shared their thoughts with the class- interactive instruction
Lesson 34. What are the benefits of a budget?5. What is a zero-based budget and
how does one complete it? Define a zero-based budget and practice completing 2 zero-based budgets
DO NOW List 3 reasons why students should
learn how to budget.What age do expect your parents to
stop supporting you financially?How much do you think you spend a
month?
According to Dave…86% of teens agree with the following
statement: I expect and would like my parents to stop supporting me financially before age 25
On average, teens spend $19 per week
Activity 3Student Budget
Definition- cash flow plan; assigns every dollar to a specific category/expense at the beginning of each month.
Only 41% of teens know how to budget their money
Activity- Student Budget All of you are now going to read through the first scenario
(Marcus) and create a zero-based budget for MarcusBudgets will vary!Monthly Total
This column shows you how much you are spending on necessities each month.
If you do not know the amount, write down your best estimate.
AccountWrite in how this area is paid—by check, automatic bank
draft, cash, etc.
Activity- Student Budget All of you are now going to create your own personal
budget based on your income and expensesBudgets will vary! BUT must include Giving and
Saving as funded categoriesYou all need to get in the habit of putting something
away in these categories, even if it isn’t the full 10-15%. Teenagers tend to spend a lot of money on clothes
and entertainment, so make sure those categories are appropriately funded
Finally, Remember, the point is to spend every dollar on paper before the month begins!