View
30
Download
0
Category
Preview:
DESCRIPTION
Major Expenditure Mania. Get Ready to Take Charge of Your Finances. My Money Bag. Are your money bag expenses the same as the person sitting next to you?. How do people decide how to spend money?. Need- something required to live . Want- something unnecessary but desired. - PowerPoint PPT Presentation
Citation preview
2.15.2.G1
Major Expenditure Mania
Get Ready to Take Charge of Your Finances
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 2
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
My Money Bag
Are your money bag expenses the
same as the person sitting next to you?
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 3
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
How do people decide how to spend money?
Need- something required to
live
Values what is
important to a
person
Want- something
unnecessary but desired
Consider needs versus wants
Depends on personal values
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 4
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
Meet the Lopez Family!
Zach and Anita Lopez have four children, two girls and two boys ages 7-13 Family enjoys spending time together, especially
during meal times when the family sits around their large dining room table enjoying home-cooked food
Currently do not own a vehicle of their own but have been looking to purchase a vehicle to use for family outings and vacations
Save a large amount of money every month to help pay for their children’s future college education
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 5
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
The Lopez Family
How do your values, needs, and wants influence the spending decisions in your
money bag?
What does the
family... Value? Need? Want?
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 6
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
What is a Spending Plan?
Everyone has an individualized spending plan
Spending plan – financial
statement that assists with
money management
Income – money earned
Expense –
money spent
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 7
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
Why is it important to create a spending plan?
Helps to determine needs versus wants
Prevents overspendingWhat information would you need to add
to your money bag in order for it to become a completed spending plan?
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 8
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
What are Taxes? Required citizen charges by the
government• Provide public goods and services
One of the largest expenses RequiredGross
Income- money earned before taxes are deducted
Taxes
Net Income- (take-home
pay)money left after taxes have been deductedExpenses paid from net income
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 9
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
What are Major Expenditures?
Major Expenditures-
largest expenses in most spending
plans
Major Expenditures
Savings
Insurance
HousingTransportation
Food
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 10
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
Typical Major Expenditure Amounts
30%
20%15%
10%
7%
18% HousingTransportationFoodSavingsInsuranceOther
How might the Lopez families major expenditure percentages be
different than the typical percentage amounts?
• A reference• Provides guidance• Adjust percentages
to meet individual values, needs, wants
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 11
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
What is Savings?
How much?
Why?
What?Income not spent on current expenses
Provides money in case of an emergency
Recommended – at least 10% of net
income
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 12
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
Pay Yourself First! Set aside money for saving before
spending any money Save then spend! 10-20% of net income is
recommendedDid you account for savings as an
expense in your money bag? Underline the expenses in your money bag that are related to
savings.
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 13
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
Lopez Family Savings DecisionsHow much money do you believe the
Lopez family would choose to
save?The minimum recommended- 10% of net
income
20% of net income
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 14
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
Insurance Arrangement between an individual
and an insurance company Protects people financially from
unexpected expenses caused by accidents or illness
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 15
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
Types of Insurance
Did you account for insurance as an expense in your money bag? Place an
arrow next to all of the expenses in your money bag that are related to
insurance.
Health Automobile Home• Pays for a
portion of health care bills
• Required by law• May pay for: • automobile
damages • injuries to people
involved in an accident
• Helps pays for damages to a home and its contents
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 16
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
Housing
Rent or Own?• Rent – make monthly payment to
owner of home• Own – take out a loan and make
monthly payments to pay back loan Total cost of a home
• What may a person have to pay for to live in a home?
What should a person consider when choosing a
home to live in?
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 17
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
Housing Expenses
Monthly payment
Move-in costs
Utilities
Insurance
Taxes- Paid by owner of home
Maintenance
Circle all of the expenses in your money bag that are related to
housing.
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 18
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
Other Items to consider …Condition
and required
maintenance
Size
Location
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 19
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
Lopez Family Housing Decisions
Both of these houses fit into the Lopez families spending plan. Which
housing option would be best for the Lopez family?
Three bedroom house with a large family room, dining room, and kitchen
Five bedroom house with a small kitchen
and an area for a small dining room table connected to
the kitchen
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 20
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
Transportation
What expenses should be considered when purchasing an
automobile?
What types of transportation options are available?
If an automobile is purchasedconsider the total cost
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 21
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
Expenses of Owning an Automobile
Monthly payment –
if a loan is taken outLicense and Registration-
Required by lawInsurance –Required by law
Maintenance
Fuel
Optional Upgrades
Place a star next to all of the expenses in your money bag that
are related to transportation.
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 22
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
Other items to consider …
Typical use
Condition and
required maintenan
ce
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 23
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
Lopez Family Transportation Decisions
As the Lopez family considers purchasing a vehicle, which option would be the best for
their family?
An economy car that gets
excellent gas mileage
A large suburban that can hold up to seven people
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 24
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
Food…
Least expensive
Most expens
ive
Meals from scratch at
home
Convenience foods at home
Fast Food
Sit-down
restaurant
What options are available for purchasing food?
Place a square around all of the expenses in your money bag that
are related to food.
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 25
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
How does the cost of eating out compare to preparing meals at
home? A spaghetti dinner for one person
• In a restaurant - $12.00• At home - $1.30 -hamburger ($.50 for 1
serving) -spaghetti sauce ($.70 for 1 serving)
-noodles ($.10 for 1 serving)At home In a
restaurant1 meal $1.30 $12.001 meal per month for 6 months
$7.80 $72.00
1 meal per month for 1 year
$15.60 $144.00
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 26
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
Other items to consider…
TimeSpecial dietary needs
Nutritional Value
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 27
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
Lopez Family Food Decisions
Which food option would be the best for
the Lopez family?
Cook convenience meals at home since the family
doesn’t have much time to cook
meals from scratch
Cook meals from scratch at home with one family
outing to a restaurant every
month
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 28
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
What expenses are not included in the major expenditure
categories?
Clothing Donations
Personal Care
Entertainment
What category does the remaining expenses
in your money bag fit into?
© Family Economics & Financial Education –December 2010 – Get Ready to Take Charge of Your Finances – Major Expenditure Mania – Slide 29
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.15.2.G1
Summary Everyone has an individualized
spending plan based on values, needs, and wants
Major expenditures make up the majority of a spending plan• Savings, insurance, housing, transportation,
and food• Percentages are provided for guidance• Actual amounts should be adjusted to meet
individual values, needs and wants Should choose an expenditure option
that meets needs and wants but also fits spending plan
Recommended