Personal Management Learn to Manage Your Money

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  • 1.Personal Management Learn to Manage Your Money A Session in Planning for Personal Responsibility

2. Goals of the Course

  • How to Manage Money Your Own and Others
  • How to Save Money
  • What is a Budget?
    • Uses for planning
      • To purchase goods and services
      • To plan for the future
    • Uses for monitoring
      • How well you adhere to the budget
      • When there is more or less money remaining than expected
  • Saving and Investing
    • What is Saving?
    • What is Investing?
    • How do they benefit you?

3. Goals of the Course - continued

  • Investing in
    • The Stock Market
    • Mutual or Index Funds
    • Insurance
    • Certificates of Deposit
    • Savings Bonds
  • Borrowed Funds
    • Components of a Loan
    • Repayment Methods
    • Credit Cards
    • Debits Cards
  • Credit Reports
    • What they mean

4. Goals of the Course - continued

  • Time Management
    • Making sure you can accomplish what you need to do
    • Finding time
    • Being efficient and effective
  • Project Management for a Goal
    • Planning for a goal
    • Components to attaining the goal
      • Resources
      • Tools
      • Guide or Plan
  • Planning for the future
    • College?
    • Work?
    • Both?

5. Personal Management Requirements

  • Do the following:
    • Choose an item that your family might want to purchase that is considered a major expense.
    • Write a plan that tells how your family would save money for the purchase identified in requirement 1a.
      • Discuss the plan with your merit badge counselor
      • Discuss the plan with your family
      • Discuss how other family needs must be considered in this plan.
    • Develop a written shopping strategy for the purchase identified in requirement 1a.
      • Determine the quality of the item or service (using consumer publications or rating systems).
      • Comparison shop for the item. Find out where you can buy the item for the best price. (Provide prices from at least two different price sources.) Call around; study ads. Look for a sale or discount coupon. Consider alternatives. Can you buy the item used? Should you wait for a sale?

6. Personal Management - Requirements

  • Do the following:
    • Prepare a budget reflecting your expected income (allowance, gifts, wages), expenses, and savings. Track your actual income, expenses, and savings for 13 consecutive weeks. When complete, present the results to your merit badge counselor.
    • Compare expected income with expected expenses.
      • If expenses exceed income, determine steps to balance your budget.
      • If income exceeds expenses, state how you would use the excess money (new goal, savings).
  • Discuss with your merit badge counselor FIVE of the following concepts:
      • The emotions you feel when you receive money.
      • Your understanding of how the amount of money you have with you affects your spending habits.
      • Your thoughts when you buy something new and your thoughts about the same item three months later. Explain the concept of buyer's remorse.
      • How hunger affects you when shopping for food items (snacks, groceries).
      • Your experience of an item you have purchased after seeing or hearing advertisements for it. Did the item work as well as advertised?
      • Your understanding of what happens when you put money into a savings account.
      • Charitable giving. Explain its purpose and your thoughts about it.
      • What you can do to better manage your money.

7. Personal Management - Requirements

  • Explain the following to your merit badge counselor:
    • The differences between saving and investing, including reasons for using one over the other.
    • The concepts of return on investment and risk.
    • The concepts of simple interest and compound interest and how these affected the results of your investment exercise.
  • Select five publicly traded stocks from the business section of the newspaper. Explain to your merit badge counselor the importance of the following information for each stock:
    • Current price
    • How much the price changed from the previous day
    • The 52-week high and the 52-week low prices

8. Personal Management - Requirements

  • Pretend you have $1,000 to save, invest, and help prepare yourself for the future. Explain to your merit badge counselor the advantages or disadvantages of saving or investing in each of the following:
    • Common stocks
    • Mutual funds
    • Life insurance
    • A certificate of deposit (CD)
    • A savings account or U.S. savings bond
  • Explain to your merit badge counselor the following:
    • What a loan is, what interest is, and how the annual percentage rate (APR) measures the true cost of a loan.
    • The different ways to borrow money.
    • The differences between a charge card, debit card, and credit card. What are the costs and pitfalls of using these financial tools? Explain why it is unwise to make only the minimum payment on your credit card.
    • Credit reports and how personal responsibility can affect your credit report.
    • Ways to eliminate debt.

9. Personal Management - Requirements

  • Demonstrate to your merit badge counselor your understanding of time management by doing the following:
    • Write a "to do" list of tasks or activities, such as homework assignments, chores, and personal projects, that must be done in the coming week. List these in order of importance to you.
    • Make a seven-day calendar or schedule. Put in your set activities, such as school classes, sports practices or games, jobs or chores, and/or Scout or church or club meetings, then plan when you will do all the tasks from your "to do" list between your set activities.
    • Follow the one-week schedule you planned. Keep a daily diary or journal during each of the seven days of this week's activities, writing down when you completed each of the tasks on your "to do" list compared to when you scheduled them.
    • Review your "to do" list, one-week schedule, and diary/journal to understand when your schedule worked and when it did not work. With your merit badge counselor, discuss and understand what you learned from this requirement and what you might do differently the next time.

10. Personal Management - Requirements

  • Prepare a written project plan demonstrating the steps below, including the desired outcome. This is a project on paper, not a real-life project. Examples could include planning a camping trip, developing a community service project or a school or religious event, or creating an annual patrol plan with additional activities not already included in the troop annual plan. Discuss your completed project plan with your merit badge counselor.
    • Define the project. What is your goal?
    • Develop a timeline for your project that shows the steps you must take from beginning to completion.
    • Describe your project.
    • Develop a list of resources. Identify how these resources will help you achieve your goal.
    • If necessary, develop a budget for your project.
  • Do the following:
    • Choose a career you might want to enter after high school or college graduation.
    • Research the limitations of your anticipated career and discuss with your merit badge counselor what you have learned about qualifications such as education, skills, and experience.

Source: BSA Advancement ID#: 11Pamphlet Revision Date: 2003 Requirements last revised in 2004 11. How to Manage Money Your Own and Others

  • Managing money is a critical skill you will need
    • Personal finances
    • Business finances
    • Wise use of a scarce resource
    • It really does not grow on tress
  • Benefits
    • More funds to use as you wish
    • Greater responsibility liberates you to do your things
    • Being able to have fun

12. How to Save Money

  • Saving money requires discipline, but is not difficult
    • Monitor your spending
    • Know your limits of what you can afford
    • Need vs Want
      • Needs are top priority
        • Food, Shelter, Basic Transportation
      • Wants are luxuries
        • DVDs, Game, CDs
    • Set a budget and adhere to it
    • Know how you spend and what you spend with
      • Cash is king
      • Credit is a tool, but can be dangerous
    • Know your limits

13. What isBudget?

  • Budget = Plan
    • You figure out what you need and what you want
    • Set up how to achieve the plan
    • Track it and work it
  • Plan Why? What for?
    • The plan is your self-designed roadmap
      • You determine what you want
      • Then devise how to achieve it
    • You are in control
    • What a bargain!

14. Why do I care about a Budget?

  • Your budget is your plan
    • To have fun
      • Buy camping gear and Scout stuff
      • Buy your car, your gas, your insurance
      • Go on a date and buy dinner and a movie
    • To plan for the future
      • College?
    • Without a plan you will be adrift

15. How do I track what I spend?

  • Watching your cash is all it takes
    • First, track what you earn
      • Your chores and allowance
      • Your job
      • Christmas and birthday money
    • Next plan what you expect to spend
      • Based on experience
      • Categories by type
        • Food, Gas, Entertainment, Books, Scouts
      • Give each category a set amount you expect to spend
    • Then track what you earn and spend
      • How well you adhere to the budget
      • Where did you over spend?
      • Where did you save? (That is, not spend it all?)

16. Now I have a Budget, what do I do?

  • Now you work it!
    • How did you do against plan?
    • Were you over? Under?
    • Refine the plan and work it until you are comfortable
      • Do not be afraid to change it
      • Make it work for you within reason of what you can afford
      • Strive for success!
  • Revisit it often
    • Be diligent to track what you earn and spend
    • It does not take long
    • Tremendous benefit to you

17. Saving & Investing

  • What is Saving? What is Investing?
    • What is the difference?
    • And why do I care
  • You care as it will help you understand how to make more money off the money you already have!
  • How do I decide?
    • Study your options
    • Define your tolerance for losing money
  • What is my benefit?
    • Youmaybe able to earn more money

18. Saving & Investing

  • What is Saving?
    • Saving is where you place your money in a financial institution and allow it to earn interest
      • Bank
      • Credit Union
    • Generally earn lower interests rates
    • Relatively safe investments
      • Insured by Federal Deposit Insurance Corporation (FDIC)
      • Maximum of $100,000 insurance
      • If the institution goes under, you are guaranteed your investment up to $100k
    • You have fairly easy access and liquidity to your cash
      • Automatic Teller Machine
      • Branch office

19. Saving & Investing

  • What is Investing?
    • You use your cash to support a business or government
    • Fosters growth as permits the recipient to use your cash
    • Based on an expectation of earning money
    • Generally a higher return than a savings account
  • How is it different than saving?
    • Business
      • Stocks
        • May lose value
        • You could lose your entire investment
      • Corporate Bonds
        • Guaranteed, but payout may vary on type
    • Government
      • Bonds
        • But your return may vary here as well

20. Save or Invest?

  • The decision to Save or Invest that is up to you!
    • It is not an easy decision
    • Determine your Risk Tolerance
      • What are youwillingto lose?
      • What can youaffordto lose?
      • Not sure? Ask questions!
    • Get advice!
      • From whom?
        • Parents
        • Professionals
        • Prospective Investment companies
      • Study your options!
      • Decide wisely, based on the above

21. Investment Options

  • The Stock Market
    • Buy from a broker
    • Invest in companies buy purchasing shares
  • Mutual or Index Funds
    • Types of stocks, all grouped together & managed by someone
    • Buy shares of the fund
  • Insurance
    • Generally life insurance