Rebecca Dean Reid Ross Classical High School
ECONOMIC A
CTIVIT
IES
PE
RS
ON
AL F
I NA
NC
E
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FOUR E
CONOMIC A
CTIVIT
IES
Achie
ve F
inan
cial
Sec
urity
and p
erso
nal s
atis
fact
ion b
y
being re
spon
sible
with
…
Earning
Spending
Saving
Investing
CareerChoices
Ability to Find
Employment
Ability to
Advance
Earnings
Standard of Living
Earning is gaining money by working, owning a business, or receiving investment returns. Money gained from earning is called earnings.
Career Choices • Type of career/job
• Place of employment
FACTORS AFFECTING EARNINGS
Ability to Find Employment
• Education level• Employability
skills• Prior job
performance• Economic
conditions• Workplace trends
and opportunities
FACTORS AFFECTING EARNINGS
• Type of career/job
• Education level• Job performance• Economic
conditions• Workplace
trends and opportunities
Ability to Advance
FACTORS INFLUENCING EARNINGS
EARNINGS AFFECT YOUR STANDARD OF LIVING!
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RESPO
NSIBLE
EARNIN
G
involves realizing that career choices greatly affect lifetime earnings and standard of living. Responsible earning considers these factors when making career choices.
SPENDING…
using money to purchase goods and services. The way a person spends money determines the value received and influences the economy.
Each purchase contributes to the demand for the product or service purchased.
LAW OF SCARCITY:
An economic system cannot produce all goods and services that consumers want, and most consumers do not have the resources to purchase everything they want. Choices must be made about how limited resources (time, money) are used.
TRADE-OFFS AND OPPORTUNITY COSTS
When making a choice, other alternatives must be sacrificed.
The highest-valued alternative that must be given up when a choice is made is the opportunity cost of the choice.
The choice of one item while giving up another is called a trade-off.
RESPONSIB
LE S
PENDIN
G
includes researching and planning purchases in advance and making wise choices in light of opportunity costs and trade-offs that apply.
SAVING…
putting aside money for later use.
Money may be “saved” in a bank account or in a wallet.
The form of savings used determines the financial return.
“LATER USES” FOR SAVINGS
Emergencies Recurring expenses Future purchases Financial goals Retirement
BENEFITS OF SAVING
Provide money for future purchases
Can be used to earn income
Produce a healthy economy
Increase personal financial security
Provide growth opportunities for business ventures
RESPONSIB
LE S
AVIN
G
means forming the habit of saving regularly and finding forms ofsaving that yield high returns.
BORROWING
obtaining money, goods, or services at present in exchange for the promise of future payment . . . “Buy now, pay later.”
BORROWING = “BUYING ON CREDIT”
Borrowing means spending future income and includes buying on credit.
Having “good credit” depends on one’s willingness and ability to pay back what is owed when it is due.
Credit purchases are more costly than cash purchases if not paid back quickly.
The wise use of credit can help some individuals raise their standard of living by extending their buying power.
EXAMPLES OF BORROWING
Buying with a credit card
Buying on installment
Payday loans
Cash advances
Layaway purchases
REASONS FOR BORROWING
Major purchases
Emergencies
Convenience
Prepare for future goals
Take advantage of good sales/offers
RESPO
NSIBLE
BORROW
ING
means borrowing only what can be paid back when due.