Travel Time

Diane Jankowski 1

Personal Finance

Needs/WantsOpportunity Costs

The Decision Making ProcessTaxes

Check Writing Tips

MONEY, MONEY, MONEY …

Travel Time

Diane Jankowski 2

Needs/Wants/ResourcesWants: Things a person does not need to

survive, but would like to have (cell phone, computer, cable tv)

Needs: Things that you must have in order to survive (food, water, shelter, clothing, love)

Resources: Things that people can use to make or obtain what they need or want - limited

MUST MAKE A DECISION – Opportunity Cost

Travel Time

3

Opportunity CostOpportunity cost is what you have to forgo when

you choose option A over option B. This must be taken into consideration in order to make the best choice possible.Time MoneySpace

Example: If I choose to go to the football game as opposed to staying home to study, I will not be prepared for the test and therefore get a poor grade.

Diane jankowski

Travel Time

Diane Jankowski 4

BusinessBusinesses supply goods and services to consumers with the motivation to make a profit. The good/service providing must satisfy a customer need or want.

Profit = income – expenses (companies try to keep income > expenses)

Operating in the red means income < expenses (bad)Operating in the black means income > expenses (good)

Companies thrive on competition (the contest between businesses to win customers).

How can there be so many pizza places in Lyndhurst?

Josie’s – $1.00 a slice - caters to high school students

(place order at counter, pay, and eat)

Mr. Bruno’s – over $2.00 a slide - caters to business people

(sit down, look at menu, waitress takes order,

eat, and pay)

Travel Time

Diane Jankowski 5

How much does the average American earn per year?

Things to consider:

Location

Education

Career

PARADE MAGAZINE

www.parade.com/news/what-people-earn/.../salary-guessing-game.html

Play the earnings game and see if you can guess

Travel Time

Diane Jankowski 6

MONEY: Gross or Net?

1. GROSS PAY

The amount you earned

Hourly rate X hours worked

$5.00 x 10 = $50.00

3. NET PAY

The amount you take home

Gross pay – taxes = net

$50.00 - $15.00 = $35.00

2. TAXES Approximately 30% of Gross Pay = income taxes to be paid

gross pay X tax rate (remember to move 2 decimal places to the left from the % symbol before calculating)

$50.00 x .3 = $15.00

Follow the steps below to calculate gross pay, taxes, and net pay

Travel Time

Diane Jankowski 7

The Decision Making Process

Step 1: Identify the situationWhat decision do you need to make?

Step 2: Identify possible courses of actionWhat are all the possible alternatives?

Step 3: Determine the pros and consWhat are the advantages/disadvantages of each alternative?

Step 4: Make a decisionHow would you rank each alternative/choice based upon the

pros/cons?How will you reach your goal?

Step 5: Evaluate your decisionHave you achieved the results expected?

Travel Time

Diane Jankowski 8

TaxesTaxes (required payment to the government)

1. Income Amount paid based on amount earned (Progressive)

2. Sales % added to purchase price of taxable items

3. Property Amount paid based on value of property (land/house)

owned

http://www.khanacademy.org/economics-finance-domain/core-finance/taxes-topic/taxes/v/calculating-federal-taxes-and-take-home-pay

Travel Time

Diane Jankowski 9

Check writing lesson Always begin writing the

amount close to the left edge on the line and in the box by the $

Only use the word “and” where the decimal point appears

Always write cents as a fraction of a dollar (50/100)

Always spell out the month and write the full year (2013) in the date

Never abbreviate the name of a business or person

Checks are legal documents

“Demand Note”

Must be paid on demand

Post dated checks are illegal if given to the payee on a date prior to the date written on the check

Bank will pay the amount written on the line

Be sure to sign the check after double-checking the information

If you make a mistake, VOID the check (save it) and write a new one