Family Economics & Financial Education 3.19.2.G 1 Get ready to Take Charge of Your Finances Life Of….. Monica Erickson “A Teenager’s Spending Plan”

Family Economics & Financial Education 3.19.2.G1

Get ready to Take Charge of Your Finances

Life Of…..

Monica Erickson“A Teenager’s Spending Plan”

3.19.2.G1

© Family Economics & Financial Education –Updated April 2010 – Get Ready to Take Charge of Your Finances – Life Of...Monica – Slide 2 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of

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Snapshot – Monica Erickson

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

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SnapshotMonica’s Income and Expenses

• Monica’s Income– Lucy’s Luscious Cakes and Pastries

•$10.00/hour•15 hours a week

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SnapshotMonica’s Income and Expenses

• Monica’s Expenses– Saving for culinary school

• Half of monthly income

– Pebblebrook Culinary Team• $60.00

– Transportation• Subway or city bus pass

– Other Items

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Spending Plan

• The goal is to create a spending plan that balances Monica’s 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 individual’s perception of needs, wants and values

will affect decisions made when creating a spending plan

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SnapshotErickson Family Expenses

• Monica’s 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– Monica’s future education

expenses– A portion of child support

from Monica’s dad is saved for future education expenses

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Housing

• Monthly Payment– Housing

payment– Insurance– Property taxes– Repairs– Maintenance

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

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• Satellite Dish

• Digital Cable

• Telephone

• Internet

Housing Others

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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 Sharise’s

vehicle monthly payment and fuel costs

• Monica– Pays for her

public transportation pass

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Others

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

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Goal:To 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

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Quick Review

• Erickson Family– Monica, Sharise, Tyrone, Grandparents

• Create a Major Expenditures Summary for the Erickson’s– Housing– Transportation

• Create a Spending Plan for Monica– Savings– Public transportation costs– Others

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Snapshot Reflection

• Review Monica’s Snapshot on pages 2-4• Answer questions 1-5 on page 10

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Monica’s Paycheck

Personal Information

State the employee’s name, address, and social security number.

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Monica’s Paycheck

Pay Period

The length of time which an employee’s wages are calculated.

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Monica’s Paycheck

The total amount of money earned during the pay period before payroll withholdings.

Gross Pay

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Monica’s Paycheck

The amount of money subtracted from the gross pay for taxes.Payroll Withholdings

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Monica’s Paycheck

The amount required by law for employer to withhold from earned wages to pay taxes.Withholding Tax

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Monica’s Paycheck

Federal Insurance Contribution Act – includes Social Security and MedicareFICA

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Monica’s Paycheck

Net Pay

The amount of money remaining after all payroll withholdings have been removed from gross pay.

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Monica’s Paycheck

Totals of the deductions which have been withheld from an individual’s paycheck from January 1 to the last day of the pay period indicated on the paycheck stub.

Year-to-Date

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Setting Financial Goals

•Short Term – less than one year

•Long Term – more than one year

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Erickson’s 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

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Erickson’s 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

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Erickson’s Major ExpendituresMajor Expenditures Summary

• Transfer numbers to complete the summary

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Monica’s Spending PlanPayroll Withholdings

• Review Monica’s paycheck on page 11– State Withholding Tax– Federal Withholding Tax– FICA

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Monica’s Spending PlanSavings

• Review Monica’s Snapshot on pages 2-4– Identify her needs, wants, values

• Review the short term and long term goals set for Monica on page 12

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Monica’s 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

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Monica’s 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

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Monica’s Spending Plan Summary

• Gross Income• Expenses

• Calculate the Difference

• If the difference is a negative number, go back and adjust some of Monica’s expenses.

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Negative or Positive Difference?

• If the number on TT is positive, adjust Monica’s 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 Monica’s expenses.– Changes need to be made consistently throughout the

simulation.– Keep in mind Monica’s needs, wants, values and goals

when making changes.

• If the number on TT is zero, congratulations! You have balanced Monica’s Spending Plan!

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Reflection Questions

• Once the difference equals zero….– Answer questions 17-21 on pages 15 and

16– Answer questions 22-26 on page 18

Documents

Family Economics & Financial Education 3.19.2.G 1 Get ready to Take Charge of Your Finances Life Of….. Monica Erickson “A Teenager’s Spending Plan”