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MONEY MANAGEMENT By Miss O.

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This For That http://www.youtube.com/watch?v=J 7hNOt2Y0J8&safety_mode=true&p ersist_safety_mode=1&safe=active http://www.youtube.com/watch?v=J 7hNOt2Y0J8&safety_mode=true&p ersist_safety_mode=1&safe=active What did people do before there was money? Barter! Columbus used beads for currency when he bartered with the Indians. Today we use cash and spend with ardor.

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Questions for Real Life In what ways do we still barter today? Why might bills and coins be smarter to use than bartering?

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This For That Currency is another term for money (includes coins and bills). Different countries have different currencies. United States: dollar European countries: the Euro England: the pound China: yen India: rupee Currency used to have value based on that countries (gold, silver, and precious metals)

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Different Countries Currencies

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Exchange Rate Not all currency is equivalent to one another. A dollar is NOT the same value as a British pound.

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Exchange Rate CountryForeign CurrencyUS Dollar Value (France, Germany, Italy, Spain, etc.) Euro 0.78$1.00 United KingdomPound 1.51$1.00 IndiaRupee 0.02$1.00 ChinaYen 0.16$1.00 VenezuelaBolivar 0.16$1.00 RussiaRuble 0.03$1.00 JapanJapanese Yen 0.01$1.00 CanadaCanadian Dollar $0.97$1.00

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Gold Standard The Gold Standard was that every dollar the US made was worth a certain percentage of how much gold, silver, and other precious metals the US owned in their Federal Reserve. The gold standard ended in 1933, because of the Great Depression. FDR ended the gold standard, because he thought if he made more paper dollar bills, he thought he could help the economy get going again.

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What is the US dollar backed by today? Not gold anymore. Full faith of the United States government The paper bill does not have value. But the idea of the dollar has the value the Federal Reserve (part of the government that deals with money) puts on it. Federal Reserve notes (dollar bills) are backed by all the goods and services in the economy. When the US economy is strong, the US dollar is confidently strong.

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What trend do you notice?

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TALK AND TURN: Is the US dollar becoming more or less valuable over time? Why do you think this?

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Inflation A rise in prices dependent on money available. You get less for your money than you used to be able to get.

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Example of inflation You buy a candy bar for 50 cents. A year later, you go to buy the same candy bar and it's 55 cents. You still have only 50 cents, but the price of the candy bar has gone up. We can say that inflation is at work. The price of that bar has been inflated. http://www.bls.gov/da ta/inflation_calculator.h tmhttp://www.bls.gov/da ta/inflation_calculator.h tm :)

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Inflation Calculator Activity http://www.usinflationcalculator.com/ http://www.usinflationcalculator.com/ What did you discover about inflation over time in the United States?

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What causes inflation? Inflation may be caused by an increase in the quantity of money in circulation. This has been seen most graphically when governments have financed spending in a crisis by printing money, leading to hyperinflation where prices rise at extremely high rates. Another cause of inflation occurs when there are many people and organizations who have power to control the economy and raise prices.

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The US produces a lot of paper money every day.

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The US Mint The United States mint manufactures and distributes United States coins and paper bills for circulation through banks.

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How can YOU manage your money? Money is part of our lives. Responsible citizens are aware of how they control their money coming in and going out. Making wise choices with our money will help you be successful in life.

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Where the Money Goes http://www.youtube.com/watch?v=N9iZfxElc1A&sa fety_mode=true&persist_safety_mode=1&safe=ac tive http://www.youtube.com/watch?v=N9iZfxElc1A&sa fety_mode=true&persist_safety_mode=1&safe=ac tive

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Manage means to control My Goal: To teach you ways to control your money now and later (when you are a teenager and adult), so that you can make wise choices and have a successful life.

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You earn money by working. Occupation: specific type of job. What are your natural talents and personality traits that might help you be good at a specific jobs?

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Education It pays to stay in school. How long you stay in school is one of the biggest factors in increasing your earning power. The pay-off is obvious when you look at the average earnings of different levels of education. http://www.themint.org/tweens/learning-and- earning.html http://www.themint.org/tweens/learning-and- earning.html http://www.themint.org/tweens/starting- salaries.html http://www.themint.org/tweens/starting- salaries.html

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Occupation Worksheet What do you NOTICE? What do you KNOW? What QUESTIONS do you have?

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Degrees I can get: 1. High school diploma 2. Trade school (2 years + apprentice) 3. Associates degree (2-year at community college) 4. Bachelors degree (4-year at university) Certificates: teaching and other certifications by taking tests 5. Masters degree (2-year at university) Law Degree (3 years) Medical Degree (5 years) 6. Doctorate degree (2-year + thesis paper) PhD Specialist: internship (3 years)

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How much does a degree cost? CollegeTuition for a year Rounded Tuition Estimated Tuition for 4 years Harvard$40,016$40,000$160,000 University of Maryland $41,473$41,000$164,000 VA Tech$19,105$19,000$76,000 University of Virginia (UVA) $23,984$24,000$96,000 James Madison University (JMU) $15,398$15,000$60,000 Stanford University $60,749$61,000$244,000 University of Alabama $36,667$37,000$148,000

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How to pay for college? 1. Grants: Free money offered by the school, the government, an organization, or a wealthy person to meet the students need, reward merit, or both. 2. Scholarships: an award for certain students who demonstrate excellence in something the college values. 3. Financial Aid: money the school offers to students who need help paying for college and have shown good work ethic to prove their college worthy 4. Student Loans: to help students pay for university tuition, books, and living expenses. You have to pay it back over time WITH additional interest.

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What can I get a Scholarship for? 1. academic excellence (students who go above and beyond in every subject and get good grades) 2. sports excellence (students who go above and beyond in a certain sport and have been offered a position on that colleges sports team) 3. student specific (students who show a certain characteristic or show an interest in a special cause and have volunteered to help their community) 4. career specific (students who plan to get a degree to do a needed job like nursing, teaching, etc.) 5. need based (poor students who do excellently in school but cannot afford to pay for college)

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Get A Job You can get a job as soon as you turn 15 in Virginia! http://www.moneycrashers.com/part-time-jobs- high-school-students/ http://www.moneycrashers.com/part-time-jobs- high-school-students/

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What is an Income? How much money you make from a job Also called wages or a salary Paycheck: a check saying the company or person you work for owes you a certain amount of money that you can cash in at the bank to get cash (dollars and coins) or put in your bank account to save.

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Direct Deposit

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Employee: the person who works FOR the company (employer). Miss O. is the employee of LCPS. Employer: the person or company you work for. Loudoun County Public Schools is Miss O.s employer.

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How to get hired? 1. Think about what you are good at? 2. Look for companies/people who are hiring for certain jobs? (online, signs, newspaper) 3. Write a resume List of experiences and job or volunteer projects you have been a part of 4. Fill out a job application and call the possible employer for an interview 5. Be on time (or early) for your interview

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Dress to impress! List what TO wear for dressing to impress: List NOT what to wear for dressing to impress:

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Lets decode a paycheck:

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What do you NOTICE? What do you KNOW? What QUESTIONS do you have?

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Checks We use checks for paying someone money when we do not have cash available. A check is connected with a persons bank account. The check tells who or what company is being paid and how much money you want taken out of your bank account. Checks will one day go extinct.

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Lets practice writing checks! Remember to write out the money amount in word form. And use cursive to sign your name, verifying that it is actually you who verify that this check is real and that you officially authorize this transaction.

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Bounced Check If you write a check for more than you have in your bank account. Penalty fine plus the amount you wrote the check for when this happens. Some penalty fines are just $20; sometimes these fines are a LOT more, depending on your bank.

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Checks will one day go extinct! Checks are being replaced with the DEBIT card. When a debit card is swiped, money from your bank account is automatically taken out of your account to pay. This is DIFFERENT than a credit card, because it comes directly out of your bank account.

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3 Things to do with your money: 1. Spend 2. Save 3. Give

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1. Saving For the future (college, training, opportunities, etc.) For big fun things (trip or house) For emergencies (to fix your car)* *Very important! Miss O. recommends saving $2,000 and not touching it in case of an emergency. (Emergency Fund) Some people call their emergency fund a rainy day fund.

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Savings Account A bank account where you put money to save for the future. Savings accounts normally have interest.

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Interest A percentage (part) of the money amount you have in that account that the bank adds to your money each month Example: $15,000 1% = $15 $22,000 1% = $22 $45,000 1% = $45

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Different Banks have different deals at different times for different amounts of money. BankSavings Account Interest Capital One1.1% Wells Fargo0.01% Ally Bank1.0% Cardinal Bank1.2% SunTrust0.01% BB&T0.05% USAA0.10%

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Deposit Putting money into your checking or savings account

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Ways people make their money grow: 1. savings account with good interest 2. investing in a business that is doing well in the stock market 3. buying a CD from a bank that says if you promise to not touch the money for 10 years or 20 years, it will grow this certain amount. 4. buying savings bonds from the government (similar to a CD) 5. investing in an idea (check out all the facts before you give money to it Be careful; there are many scams!)

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Saving, Giving, and Spending

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2. Giving Take a small part of your income (what you make) and set it aside to give away to a cause that you feel is important to you.

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Why give? I have found over the years that giving makes you feel good. By giving, you are practicing the quality of generosity. Being a generous person is a valued citizen investing in your community and world, benefiting others who dont have as much as you. Miss O. sets 10% of what she makes aside to give away to a different charity that helps others each month. But do what works for you!

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Charities and organizations that help people, animals, and the environment. Think: what kinds of causes matter to me?

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Save, Give, Spend

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7.50 Once A Week http://www.youtube.com/watch?v =GawH48QNDfc&safety_mode=t rue&persist_safety_mode=1&safe =active http://www.youtube.com/watch?v =GawH48QNDfc&safety_mode=t rue&persist_safety_mode=1&safe =active Starting Balance$7.50 Ice Cream Sandwiches ($0.50 x 5) $5.00 Chicken Enchilada$3.00 Ending Balance (after the gum)$0.00 What does he have left?

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What I learned From: $7.50 Once A Week 1. Plan ahead 2. Compare prices. 3. Earn money when you need extra. 4. Have a money plan. 5. Money management is when you save enough to buy some really cool stuff. 6. Many people call this balancing their budget.

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Sample Budget http://www.moneyandstuff.info/pdfs/SampleBudge tforTeens.pdf http://www.moneyandstuff.info/pdfs/SampleBudge tforTeens.pdf A budget is a money plan. How much money do you have? How much money do you need? W HEN YOU MAKE A BUDGET, START WITH YOUR N EEDS F IRST !

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Needs and Wants A need is something you MUST have to live: Food Shelter Clothing A want is something you WANT to have, but dont need to live:

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Expenses What you spend your money on

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CategoryMonthly BudgetActual AmountDifference INCOME:Estimate Your Income Your Actual Income Wages/Income Paycheck, allowance, birthday money, etc. $200$210$10 Interest Income From Savings Account $5$4($1) INCOME SUBTOTAL $205$214$9 Sample Budget: Lets pretend!

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Sample Budget CategoryMonthly BudgetActual AmountDifference EXPENSES:Estimate Your Expenses Your Actual Expenses Savings Savings Account$10 $0 Bills Taxes From Paycheck $30$32($2) Rent/Mortgage$0 Utilities: electric, cell phone, etc. $30 $0 Groceries/Snacks$15$12$3

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Sample Budget CategoryMonthly BudgetActual AmountDifference EXPENSES:Estimate Your Expenses Your Actual Expenses Car Car Payment$0 Car Insurance$0 Gasoline$20$25($5) Shopping Clothes$40$35$5 Other Shopping$10$0$10

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Sample Budget CategoryMonthly BudgetActual AmountDifference EXPENSES:Estimate Your Expenses Your Actual Expenses Fun Entertainment Movies, pizza, video games, bowling, etc. $20$25($5) Other ExpensesSki club $10 $0 EXPENSES SUBTOTAL $185$179$6 NET INCOME Income Minus Expenses $20$35$15!

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First Rule of Budgeting: Spend less than you earn!

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Bills What comes in the mail, saying that you owe money for a particular service like electricity, cell phone, or cable TV

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What kinds of bills should I plan for? 1. rent or mortgage 2. phone 3. cable TV/internet 4. electricity 5. gas (for a stove) 6. water, sewer, trash 7. credit card(s)

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Activity: Each group gets a different real bill to analyze. What do you NOTICE? What do you KNOW? What QUESTIONS do you have?

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Taxes Money that is owed to the government Federal Taxes are due on April 15 for the federal government (IRS) and are called a 1040. State Taxes are due on May 1 for the state government.

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Tax Man Max http://www.youtube.com/watch?v=aIghpYdQ1dg& safety_mode=true&persist_safety_mode=1&safe= active http://www.youtube.com/watch?v=aIghpYdQ1dg& safety_mode=true&persist_safety_mode=1&safe= active

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Rent Money you pay to a someone who owns the apartment or house you live in each month Another word for rent is to lease.

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Mortgage Money you pay each month to pay for your house to own it until you have paid the whole amount

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Utilities Electricity Gas/Power Water Trash Sewer Cable TV Internet Phone Etc.

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Car Payment Instead of paying $25,000 at one time to buy your car, you pay little amounts of the $25,000 each month until it is all paid off. You are charged interest if you do not pay the whole amount in full. The interest is a percentage of the amount added onto your payment.

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Car Insurance A payment you pay each month to an insurance company, so that if / when you are in a car accident, the insurance will cover the damages. Insurance is like an emergency fund that you pay into each month to protect yourself from having to pay a huge amount if you get into an accident.

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Membership Fees Some people like to be members of clubs or events. To stay being a member, you have to pay a monthly fee.

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Entertainment Fun stuff! Movie tickets Fun snacks What else?

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The Checks IN the Mail http://www.youtube.com/watch?v=GhBa12DobiM&s afety_mode=true&persist_safety_mode=1&safe= active If you have got a bill to pay or something you need to buy just write the check and send it off in the mail