Personal Finance Q: How many of you have dreamed of retiring and becoming a multimillionaire by the time your 40? Q: How do you think you would achieve.

Personal Finance

Q: How many of you have dreamed of retiring and becoming a multimillionaire by the time your 40?Q: How do you think you would achieve that?

Personal Finance

• A. Personal Financial Planning can help you to achieve these goals by teaching you to spend, save and invest your money wisely, so you are able to live comfortably, have financial security , and achieve your personal financial goals

• 1.Unfortunately, most people never reach their financial goals because, because they fail to plan

• 2. A Personal Financial Plan helps us to identify the financial result we want, figure out how to get there, and stay on track to achieve it

Personal Finance

• B. Goal setting is the foundation of personal financial planning:

• 1. Learning to identify and set clears goals is key to your success in life

• 2.Goals• a. Short Term Goals are goals that you would like to

achieve within 3 months• b. Intermediate Term Goals are goals that you would like to

accomplish within 3 months to a year• c. Long Term Goals are goals that you would like to

accomplish over a year or longer

Personal Finance

• 3. Goals should be: • a. Specific meaning goals should be clearly defined• b .Measurable meaning that you should have

tangible evidence that you accomplished the goal• c. Attainable meaning goals should be achievable• d. Realistic meaning goals should measure

outcome, not activities• e. Time-limited meaning goals should be linked to

a time frame

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• C. The Financial Planning Process:• 1. Set Goals• 2. Analyze Information• 3. Create a Plan• 4. Implement the Plan• 5. Monitor and Modify the Plan

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• D. The first step in your personal financial plan is choosing an occupation (how you earn your living)

• 1. One can have a career or one can have a job• 2. A Career-is a commitment to work in a field you find

interesting and fulfilling; a job is work you do mainly to earn money

• 3. Your choice of career will affect the money you make, the people you meet, and how much spare time you have

• 4. Having a college education does not guarantee that you will meet your financial goals, however, acquiring more education increases your potential earning power (the amount of money you earn over time)

Personal Finance

• 5. Employment Search Strategies (how to look for a job)• a. Online Employment Sites- Careerbuilders.com,

Monster.com, etc.• b. Job Fairs- at a job fair, recruiters from local, national

and international companies set up booths where you can discuss job opportunities and submit your resume

• c. Employment Agencies-match job hunters with employers

• d. Networking- Talking with people with similar career interest

Personal Income

• A. The money you earn from your chosen occupation or other sources is called income

• 1. Types of Income• a. wages- paid by the hour (eg. $20.00 per

hour)• b. salary- you receive a set amount of

payments (eg. $70,000 per year)

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• 2. Gross Income-is the total amount of income from your wages/salaries before payroll deductions

• 3. Net Income- is the total amount of one’s income after payroll deductions are deducted (Take Home Pay)

• 4. Discretionary Income-money you have left after paying your essentials, such as rent, utilities, clothing, transportation,etc.

• 5. Payroll Deductions- are money subtracted from your gross income; the biggest deduction for most people are payroll taxes

Personal Finance

• B. Payroll Taxes- taxes that are deducted from your gross income

• 1. Federal Income Taxes-fee paid to the federal government to help support federal government programs; this money is collected by the employer each pay period and paid to the IRS (Internal Revenue Service)

• 2. State Income Taxes- fee paid to the state where you reside, to pay for state government programs; this money is collected by the employer each pay period and paid to the Treasury Department in the state you reside in

PAYROLL TAXES CONTINUED

• 3. Social Security Tax (FICA)- is a federal program that collects taxes from most employees to fund federal programs for the elderly, the blind and low income families/individuals

• 4. Medicare – are taxes collected from most employees to fund medical benefits for individuals 65 years of age or over

Personal Finance

• C. Benefits- non-cash compensation paid to employees: • 1. Many occupations have employee benefits• 2. Benefits include the following• a. Health Insurance• b. Life Insurance• c. Paid Vacation• d. Pension (retirement plan)• 3. Companies are not required by law to offer or to pay

for employee benefits

Assignments

• 1. Each student will choose 3 careers that interest you. Go to Careerbuilders.com, and find out the educational requirements and the salaries for each career: prepare a paragraph of your findings

• Due today…all late assignments will be deducted by 25 points per day

Personal Finance

• A. Glass Ceiling invisible barrier that prevents minorities and women from getting high level executive jobs in Corporate America

• 1. Although the media prints that more and more women are in the executive suite, it is very misleading:

• a. More and more women and are bumping into the glass ceiling

• b. The overall global labor remains sharply segregated by sex• c. Women and minorities are concentrated into certain jobs,

mostly staff and support jobs that offer little opportunity for getting to the top

Personal Finance

• d. The highest ranking women and minorities in Corporate America are in non-operating areas such as Human Resources, Public Relations, etc.

• e. Women and minorities are locked out of jobs in the “business mainstream” that lead to executive level positions

• Q? : What do think is the biggest barrier for women and minorities to reach these executive level positions

Personal Finance

• f. According to studies by Korn/Ferry International, an Executive Recruiting firm the biggest barrier is the “Old-Boy Network”, which means that the male corporate leaders tend to select people that are very much like them

• g. One study found that female executives managed less people, had less freedom to hire and fire, and had less direct control of the company’s assets than their male counterparts

SECTION 1 PERSONAL FINANCIAL PLANSection #1

• A. Scenario: You are 25 years of age, and have been working at your current job or profession for the last 3 years. You are single, no children and have been living at home with your family, since completing your formal education (2-4 college education, Technical school, or Trade School) and have saved $10,000. You’re ready to move on. You have found an apartment, buying new furniture and a new car. In addition to your savings account you have a checking account where your monthly pay check is deposited into.

• B. You are putting together a financial plan to achieve your intermediate goals/objectives

• 1. Employment-Research an occupation you are interested • 2. Go to Salary.com and research the entry level salary for the specific job you are

interested in• 3. To calculate your take home pay after taxes go to

www.adp.com/.../calculators.../payroll-calculators/salary-payc• 4. Please keep a journal of your findings and also submit your findings for homework…

due date next class period…all late assignments will be deducted by 25 points per day

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• h. Globally, women make up 3.9% of Chief Executive Positions, 8.5% of Operations Positions(management), 17.5% of Financial Strategy Roles, and 18.9% of Shared Services (Human Resources, IT, etc.)

• i. Studies also found that African Americans, Hispanics and Asians earn 21% less than their white counterparts in the same job

Personal Finance

• B. How to break the glass ceiling• 1. Women and minorities must be better than their

competition for promotions• 2. Look at your company’s philosophy- if there are no

women or minorities in executive positions this is a bad sign

• 3. Don’t waste your time- look for a company that values diversity

• 4. If you have a lot invested stay and fight- unequal pay and consideration for promotions is considered discrimination under the civil rights act

Assignments

• 1. Research the average costs of a private/public college education in the U.S. and choose one of the following countries and compare/contrasts the costs of a private/public education of that country with the U.S. prepare a paragraph of your findings

• Mexico Germany• Japan U.K.• Canada Australia• Write a short paragraph of your findings

Personal Finance

• A. The second step of your personal financial plan is to determine the costs of your education

• 1. Education is defined as the level of formal knowledge and training one receives, post high school

• 2. Most students use student loans, grants, scholarships, and money from parents, to fund their post high school education

• a. Federal student loans offer many advantages private student loans do not offer such as low fixed interest rates, income based repayment options, forgiveness and postponement options

• b. The current rate for student loans from July 1, 2014 to June 30, 2014 is 4.66%

Section 2 Personal Financial Plan

• Section 2: Education: Research the college, technical school or vocational school you plan on attending after graduating from GCIT

• 1. Research the total costs of your education (tuition, fee’s, door room, meal plan, books )

• 2. Assume you are taking out a student loan to pay for your education; go to student loan

• 2. Assume you are taking out a student loan to pay for your education; go to student loan calculator.com, plug in the total amount of your student loans , and calculate your monthly student loan payments after you graduate

• 3. Keep a journal of your findings.. This is the second step of your Personal Financial Plan

• 4. Add this information to your journal…also submit for homework…all late assignments will be deducted by 25 points per day

PERSONAL FINANCIAL PLAN

A. Real Estate-is classified as land and anything attached to it, such as buildings and natural resources

1. One major factor people make when considering housing decisions is lifestyle (how you choose to spend your time and money)

2. One basic consideration, about housing is whether to rent or buy3. Renting is a good choice for young adults who are beginning their careers4. Renting also appeals to people who want mobility, and do not want to devote time and money for property maintenance (mowing the lawn, shoveling snow, property repair, etc.)

Personal Finance

• 4. When you rent the place where you live, you become a tenant

• 5. The landlord is the person who owns the property you are renting

• 6. When you rent a rental unit you sign a legal document called a lease, which defines the condition of the rental agreement between the tenant and the landlord

• 7. Most people who rent live in apartments• a. These units may be located in a two-story house, high-

rise building or an apartment complex

Advantages of Renting• 1. Mobility – You can vacate/leave the property when your lease

ends, or if you find a job in another city, you can give notice to your landlord and move quickly and simply

• 2.Fewer Responsibilities – Tenants are not responsible for making major repairs or maintaining the property, that’s the landlord’s responsibility

• 3. Low initial Costs- when you sign a lease, you normally pay a security deposit, which is paid to the owner of the property to guard against any financial loss or damage that the tenant may cause

• a. When the tenant moves out , the landlord may return the security deposit, minus any charges for damages the tenant may have caused or for any unpaid rent

Factors that affect the cost of renting

• 1. Location- The amount of your monthly rent will depend on the location, or neighborhood in which you choose to live

• 2. Living Space- The size of the rental unit will also affect the cost of a rental unit

• 3.Utilities- In some rental units, the tenant may have to pay for utilities, such as electricity, gas, water and trash

• 4. Renters Insurance- A type of insurance that covers the loss of a tenant’s personal property as a result of damage or theft

PERSONAL FINANCE• A. Buying a Home• 1. Few people have enough money to pay for a house in full, so they

have to finance it with a home mortgage loan (long term property loan)

• 2. To buy a house also requires a down payment, which is usually 20 percent of the purchase price

• 3. Homebuyers often use a real estate agent (person who is licensed to facilitate the buying/selling of real estate) to help them find a home

• 4. The Real Estate agents fee is normally paid by the seller, not the buyer

• 5. You must 18 years of age to but real estate on your own in the U.S.

Personal Finance

• B. Types of Homes• 1. Residential Property is property in which an individual or

family lives in; there are 3 types of residential property:• a. Single Family Homes- the most popular type of residential

property, is usually on its own lot, with it’s own yard• b. Multi Unit Housing- usually single buildings, divided into

individual units (eg. Condo’s, townhouses, duplex, lofts, etc.• c. Manufactured Homes- There are 2 types of Manufactured

Homes, Mobile Homes and Prefabricated Homes

Personal Finance

• A. Home Values- several factors affect the value of a house including its size, condition, quality and location

• 1. Location is extremely important• 2. The distance between your home/work,

available public transportation, the quality of the local school system and public services also affect a home’s value

• 3. Home Equity-is the value of the property minus the amount still owed for the mortgage loan

Personal Finance

• B. Income Property- property used to generate income• 1. With income property the owner generate income 2

ways, they can collect rent or sell the property for a profit• a. Rental Property- is any type of dwelling unit or property

rented for a length of time• b. Undeveloped Property- is unused land intended only for

investment purposes; with undeveloped land no rent is paid to the owner; the financial gain on this type of property comes from the sale of the property after it has risen in value

•

Assignments

• II. Groups: Prepare a PowerPoint presentation . on the global housing market (including the U.S.) within the last 10 years; include any specific changes in the market, new technologies in the industry, current status, etc.

• 1. Due Date: 10/15/2014…no late assignments accepted.

Section 3 Personal Financial Plan• 1. Research apartment rentals in the State of New Jersey and choose an apartment

that’s within your budget (.30 of your Gross Income) include the following: • a. Name/location of apartment• b. Security Deposit (how much is required)• c. Monthly rent• d. What utilities are included

• 2. Research the costs of any utilities that you as a tenant would be responsible for that’s not covered in the monthly rent; Gas, Electric, Water: If required to pay for utilities estimate $125.00 monthly for gas and electric

• 3. Also research the costs of Cable Television Providers, Cell Phone Providers and Internet Providers)

• 4. Estimate $12.00 per month for renter’s insurance• 5. Journalize your findings for your personal financial plan, and submit for homework…

due date..next class period…all late assignments will be deducted by 25 points per day

Personal Finance• I. Types of Taxes as individuals we know that we pay federal and state income

taxes on the salaries/and or wages that we earn• A. Taxes are classified as:• 1. Progressive Tax Rate are taxes that impose a higher tax rate on those with

higher incomes• 2. Regressive Tax Rate are taxes that impose a higher tax with lower incomes• 3. Proportional Tax Rate imposes the same tax rate on all regardless of income• a. The U.S. has a Progressive Tax Rate• b. The Progressive Income Tax is used as income redistribution, meaning that

the taxes paid by those earning higher incomes is used to pay for social welfare programs such as benefits for the elderly and retired, the sick or invalid, dependent survivors, single mothers, unemployed, work injured and low income families

Personal Finance

• B. What is taxed in the U.S.• 1. Personal Income Tax- your income• 2. Sales Tax-goods/services you purchase• 3. Property Tax-real estate • 4. Wealth Tax- estate and gift taxes (estate taxes are taxes

on property one receives after someone’s death); gift taxes are (taxes on money or property that you give someone during your lifetime, it’s taxed on the basis of its value)

• 5. Excise Taxes- are taxes on certain items such as air fare, gasoline, alcohol, tobacco products and phone service

Personal Finance

• A. Credit Facts• 1. Nearly 33% of all teens owe money to either a person or

a company, with an average debt of $230.00• 2.Approximately 30% of teens say they understand how

credit card interest works and the accompanying fees• 3. Approximately 30% of teens say they know how to

establish good credit• Q: How many of you have credit cards?• Q: Is the card in your name?• Q: If so, how did you get the card?• Q: How long have you have it?

Personal Finance

• B. Credit- is an arrangement to receive cash, goods or services now and pay for them in the future

• 1. Consumer Credit-is the use of credit for personal use• 2. A common form of consumer credit is a credit card

account issued by a Financial Institution, such as (eg. Banks, Credit Unions, Merchants, etc.)

• 3. Consumer credit is a major force in the U.S. economy- (any analysis of the U.S economy includes consumer credit spending which is a major force in the economy)

• 4. Credit Cards enable consumers to make purchases they may not be able to afford at the moment

Personal Finance

• A. Types of Credit- 2 basic types of credit• 1. Closed-End Credit-is a one time loan that is

paid back over a specified period of time in payments of equal amounts (eg. Vehicle loans, mortgage loans, furniture loans, etc.)

• 2. Open-End Credit-is a loan with a certain limit on the amount of money you can borrow for goods/services (eg. Department store (Macy’s) and bank credit cards (Visa, MasterCard, etc.)

Personal Finance

• B. Alternative Types of Credit Cards• 1. Debit Cards- Let’s the consumer electronically

withdraw money from their checking/savings accounts• 2. Store – Value Cards (Pre-paid cards)- Cards that are

prepaid, providing the card holder with immediate money

• 3. Travel and Entertainment Cards- (eg. American Express) are not really credit cards, used primarily for business, entertainment and travel; the balance is due in full each month

Personal Finance

• C. The Language of Credit• 1. APR (Annual Percentage Rate) the cost of using

credit; the amount of interest you pay annually• 2. Credit Report is a detailed record of your

personal credit and financial transactions• 3. Credit Score is a rating used by companies to

help lenders decide whether or not, and how much credit can be extended to borrowers

Personal Finance• A. Creditworthiness- Before financial institutions extend credit to

consumer they consider the applicant’s Capacity, Character and Capital known as the “3 Cs of credit”

• 1. Capacity is the applicant’s ability to repay the loan• a. To determine capacity lenders will verify the applicant’s employment

and income• 2. Character shows whether he/she has proven to be trustworthy in

repaying debts• a. To determine character they will check the applicants credit report

and ask for credit references• 3. Capital is the amount of money the applicant has beyond debts• a. To determine the amount of capital the applicant has, they will look

at the applicants savings account, checking accounts and investments

Section 4 : Personal Financial Plan• 1. Section 4: Assume you have excellent credit and are applying

for an auto loan• a. Choose a new or used vehicle• b. Research auto loans for people with excellent credit (Name

lender and interest rate)• c. Your down payment will be 10% of the list price• d. You will finance the car for 5 years• Go to the following website to figure out your monthly payment

www.lendingtree.com/partners/autotrader/AutoHowMuchCalc.asp

• Journalize your findings for your personal financial plan, and submit for homework…due date..next class period…all late assignments will be deducted by 25 points per day

Section 5 : Personal Financial Plan

• 1. Section 5: Research credit cards and choose a credit card that best fits your needs and include the following:

• 1. APR (Annual Percentage Rate)• 2. Repayment terms• 3. Application process for applying for the card• 4. Annual Fees if any• 5. Penalties for being over the credit limit or late payments

• Journalize your findings for your personal financial plan, and submit for homework…due date..next class period…all late assignments will be deducted by 25 points per day

Assignments

• Individual: Each student will research the history of credit, credit cards and the 3 credit bureaus and prepare a 2 page paper on their findings….APA format, Abstract, Reference Page, Running head

• Due Date 10/15/2014 • All late assignments will be deducted by 25

points per day…no exceptions

Groups

• Each group will choose a different country and compare/contrasts the following:

• 1. Type of Tax (Progressive, Regressive or Proportional) (Tax rate on families/individuals)

• 2. The different types of taxes that are imposed in comparison to the U.S.

• 3. Include a brief history of the country, type of government, political and economic conditions/stability

• 4. Prepare a 7-8 PowerPoint, oral presentation, individual names on slides

• 5. Due Date Oct.

Personal Finance

• A. Banking- one of the most important components of a personal financial plan is managing your finances

• 1. Today, with more than 11,000 banks, 2,000 savings and loan associations, and 12,000 credit unions in the U.S., there is a vast array of financial institutions to choose from to help manage your financial needs

• 2. These financial institutions make money by lending consumers and consumers money via loans.

Personal Finance • B. . Types of Financial Services- To remain competitive in the global marketplace,

financial institutions have expanded the range of products that they offer. These services are divided into 4 categories:

• 1. Savings (Time deposits) money that is deposited in an account for months or years• Types of Savings Account• a. Regular Savings Account- are good if you make frequent deposits and withdrawls; they

require little or no minimum balance; however the interest earned on these type of accounts are relatively low compared to other savings options

• b. Certificates of Deposit (CD) is a savings option in which money is deposited for a stated period of time, to earn a specific rate of return (interest); offers a higher interest rate than a regular savings account

• c. Money Market Accounts type of savings account offered by banks and credit unions that pay higher rates, have higher minimum balances than regular savings accounts; Minimum balance is $1000-2500, and only allow 3-6 withdrawls a month

• d. U.S. Savings Bonds- (Patriot Bonds) are another savings option; you can purchase these bonds from the federal government in amounts that range from $25- $5,000.00

Personal Finance

• 2. Payment Services- are the 2nd category of financial services; the most commonly used payment services are checking accounts

• Types of Checking Accounts• a. Regular Checking Accounts- usually do not require minimum

balances• b. Interest Earning Checking Accounts are a combination of

checking and savings accounts; these accounts pay interest if you maintain a specific minimum balance

• “Many checking accounts offer overdraft protection, which is an automatic loan to cover checks that the balance in the account won’t cover”

Personal Finance• 3. The 3rd category is Borrowing- If you need to borrow money, financial

institutions have many options for borrowing– Auto Loans– Mortgage Loans– Personal Loans– Student Loans

• 4. The last category of financial services are other financial services such as financial planning services, income tax assistance, bond and mutual fund investment assistance, etc.– Financial Planning Services– Income Tax Assistance– Bond/Mutual Fund investment Assistance, etc.

Personal Finance

• C. Problematic Financial Institutions• 1. Pawnshops

– Make loans based on the value of tangible possessions such as jewelry or other valuable items

– Many low and moderate income families utilize these organizations to obtain cash loans quickly

– They charge higher fees than other financial institutions (interest)– They have become the “neighborhood bankers” and the “local

shopping malls” because they provide both lending services and retail shopping services, by selling items that the owners do not redeem

– While most states regulate Pawnshop rates, 3% or more a month is common

Problematic Financial Institutions Cont’d

• 2. Check Cashing Outlets– There are more than 6,000 check cashing outlets in the

U.S.– You are not required to have an account with these

organizations– They charge anywhere from 1-20% of the face value of

a check, however the average is 2-3%– For low income families these rates can be a significant

portion of their household budget– They also offer other services such as utility bill

payments, money orders, private postal boxes, etc.

Problematic Financial Institutions

• 3. Payday Loans– Also known as cash advances, check advance

loans, and delayed deposits– Interest rates range from 659-1300%– These type of financial institutions have increased

in recent years due to the economy– The most frequent user of these types of

institutions are workers who are trapped by debt, or people who have been driven into debt by misfortune

Section 6 Personal Financial Plan• 1. Remember, you have saved $10,000.00 while living with your parents for the past 3 years. • 2. Deduct from the $10,000 the amount of the security deposit for your new apartment the

amount of the down payment for your new car• 3. Calculate your savings account balance, so far• 4. Remember to “Pay Yourself First”, save at least 10% of your disposable income monthly;

Calculate how much of your disposable income you can save annually• 5. Research and choose a financial institution and choose a checking account and a savings

account that they offer• a. What is the name of financial institution• b. What type of savings account is it• c. What type of checking account (interest bearing, non interest bearing)• c. What is the annual interest rate on this savings/checking account• 6. Your paycheck will be directly deposited into your checking account for living expenses and

10% of your monthly income will be deposited in your savings

• Journalize your findings for your personal financial plan, and submit for homework…due date..next class period…all late assignments will be deducted by 25 points per day

Group Assignments• Groups: Each group will choose two of countries and

compare/contrasts their financial institutions and the services they provide to those of the U.S., include the following:

• 1. Types of personal accounts they offer to the consumer market• 2. Types of Consumer Loans• 3. Types of Business Loans Offered• 3. Types of Financial Institutions• 4. Alternative Financial Institutions• 5. Related bank fees and charges• PowerPoint Presentations, Oral Presentations, 7 slide minimum,

individual names on slides… • Due Date 10/29/2014 All late assignments will be deducted by 25

points per day…no exception

Countries

• 1. Japan 8. Greece• 2. Ireland 9. Switzerland• 3. Mexico 10. China• 3. Colombia• 4. Germany• 5. Brazil• 6. France• 7. Italy

Personal Finance

• A. Consumer Choices• 1. When consumers purchase goods/services, they usually

decide what is a priority for them, and then they will choose a brand name or generic product

• 2. Brand Name- is the trade name for a product or service produced by a particular company (eg. Kellogg’s, Nike and Pepsi, etc. )

• a. Buyers often associate quality with brand names• 3. Generic Product- plainly labeled, unadvertised

products that are sold at lower prices than brand name products

Personal Finance

• B. Deciding when to buy• 1. Prices for many items change during different

times of the year, therefore postponing or planning a purchase can sometimes save you money (eg. You would save money if you bought an air conditioner in the winter – there’s less demand for them during that time of the year)

• 2. Stores often run special promotions during and after holiday’s, just before the school year begins, and at the end of a season

Personal Finance

• 3. There are 3 factors that affect a consumer’s decision on where to shop: types of goods and services sold, prices and convenience

• 4. Types of Stores• a. Department Stores- sell a wide variety of goods,

(furniture, clothing, jewelry, etc.); brand name products; prices may be higher than other types of stores (eg. Macy’s, JC Penney’s, etc.), because of some of the services they offer, (eg. gift wrapping, personal shoppers, etc.

Personal Finance

• b. Discount Stores – also sell a variety of goods, but at lower prices; sell goods at lower costs because they offer fewer services and keep a large quantity of goods in their inventory ( eg. Wal-Mart, Kmart, Target, etc.)

• c. Off-Price and Outlet Stores- carry well known brand names at a bargain prices; they offer big discounts because the items may have flaws, out of season or discontinued (eg. T.J. Maxx, Stein Mart, etc.)

Personal Finance

• d. Limited Line Retailers (Specialty Stores) sell an assortment of goods in 1 product line (eg. Foot Locker, Kay’s Jewelry Store, etc.)

• e. Superstores-are like supermarkets but sell items such clothes, books, sporting goods etc. (eg. Wal-Mart, etc.)

• f. Convenience Stores provide easy access to products that consumers buy often or as a necessity; the world’s largest chain of convenience stores are run by 7-Eleven

Section 7 Personal Financial Plan

• Section 7: Go online and choose any furniture store and provide the following:

• 1. Choose furniture to furnish your new apartment• 2. Also include pots/pans, dishes, kitchen utensils, linens, etc.

(everything needed for everyday living)• 3. Electronics• 4. Provide prices and pictures of your purchases• 5. Deduct the costs of these items from your savings account• 6. Journalize your findings for your personal financial plan,

and submit for homework…due date..next class period…all late assignments will be deducted by 25 points per day

Section 8 Personal Financial Plan

• Section 8: Go to Netgrocer.com or any online grocer and buy groceries for a month….Buy breakfast, lunch and dinner for a whole month…and deduct this from your checking account….use the same amount of money on groceries for the 12 month period of this project!

• 1. Document your purchases on the monthly menu template handout

• 2. Turn in menu template with your name on it next class period…all late assignments will be deducted by 25 points per day…no exceptions

Section 9 Personal Financial Plan• A. Expenses All expenses are either fixed expenses or variable expenses• 1. Fixed expenses do not vary from month to month, such as rent, cable,

Internet fees, etc.• 2. Variable expenses may change from month to month, such as food, clothing,

etc.• a. Research the costs of miscellaneous monthly expenses (eg. Toilet tissue, soap,

detergent, shampoo, etc.)• ... Clothes• ... Dry cleaning• Entertainment Expenses• b. How much do you spend on entertainment monthly; list individual activities

and their prices Journalize your findings for your personal financial plan, and submit for homework…due date..next class period…all late assignments will be deducted by 25 points per day

Automobile Insurance

• A. Insurance- Is a protection against risk• 1. Auto Insurance policies can protect your car as well

as the cars and properties of others• 2. Types of Auto Insurance

– a. Collision- Covers damage caused by an auto accident– b. Comprehensive-Covers damage/loss due to theft,

vandalism, etc.– c. No-fault- Type of arrangement where drivers involved in

accidents collect money from their own insurance carriers3. Auto Insurers use the following criteria to set their rates:

Auto Insurance Cont’d

– a. Age/Gender of the driver– b. Driving Record of the insured –

accidents/tickets– c. Value/Type of car being covered– d. Area where the driver lives/works– e. Amount of driving done each year

Section 10 Personal Financial Plan

• 1.Section 10: Assuming you have an excellent driving record, and are age 25, go online and research auto insurance quotes and choose an Automobile Insurance Policy that fits your needs

• A. Choose Liability Insurance Only• B. How much are your monthly payments• C. Who is Insurance Carrier

Section 11 Personal Financial Plan

• Section 11: You’re not finished yet. Now you have to calculate how much gas you will use in a typical month. To do this figure you will drive the typical 12,000 miles per year. Go to http://www.edmunds.com/calculators/true_fuel.html?fuelcost=2.50

• Journalize your findings for your personal financial plan, and submit for homework…due date..next class period…all late assignments will be deducted by 25 points per day

Section 12 Personal Financial Plan• Section 12: • 1. Transfer all of the information from your journal to the budget sheet

handout• 2. Prepare a PowerPoint Presentation of your Personal Financial Plan

including a Pie Chart with the following breakdown: (In percentages)• a. Rent• b. Car• c. Auto Insurance• d. Student loans• e. Food• f. Miscellaneous• g. Entertainment Expenses• 3. This Personal Financial Plan is for an annual budget

Foreign Exchange Market

• A. Foreign Exchange Market is a global decentralized market for the trading of currency