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Why do we care about Personal Financial Literacy?

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Laura Nelson

on 8 April 2014

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Transcript of Why do we care about Personal Financial Literacy?

Section #2: How do you spend your money?
Why do we care about Personal Financial Literacy?
So answer this question:
Section#1: You have to earn money
Money doesn't grow on trees.
You've got some choices to make.
After high school, you can:
further your education
enter the workforce
enlist in the military
What's the difference?
Community College:

Do not offer 4-year degrees.
Offer 2-year programs ending with an associate's degree.
Can lead to professional certifications.
4-year College:
Offers a 4-year degree program ending with a bachelor's degree.
Offers degrees beyond a bachelor's degree including both masters and doctorate programs.
Trade School:
Students are taught the skills needed to perform a particular job.
What's the difference?
Associate's Degree
Bachelor's Degree
Master's Degree
Doctoral Degree
The percent of the population that is currently without a job, but actively looking for one.
Looking at schools?
try these resourses!
Answer the following interview Questions:
1. Tell me about yourself.
2. What are your 3 top strengths?
3. What is your biggest weakness?
4. Give an example of how you work well with others.
5. How do you handle stress and pressure?
How to get a job:
1. Dress nice.
2. Fill out an application.
3. Interview.
4. Be professional.
Paychecks are great!
But wait! What's the difference between wages and a salary?
Wages are earned by the hour ($7.50 per hour) and a salary is earned yearly ($45,000 per year)
Well, then what's the difference between a job and a career?
A JOB is employment simply to earn money - usually not a long-term commitment. A CAREER is a long-term commitment and usually requires formal training or education.
Montly expenses
Rent or Mortgage
Car Payment
Fixed Costs vs. variable costs
What does this mean?
Personal Income (PI)


disposable personal income (dpi)

Total amount of money earned
Money earned minus any taxes
Intro: American Spending Habits
In the US we have a progressive tax, which means the more you make, the more you pay in taxes!
These are the taxes that are taken out
Ways to pay
credit & debit
online banking
or shopping
What's the difference?
Debit: money is withdrawn from your account immediately

Credit: the credit card loans you the money and bills you later
What happens when you can't pay what you owe?
Good debt
Bad debt
Education - college loans

Home - mortgage

Credit Card - when you
ALWAYS pay on time
Credit Card - when
you can't pay it back
How do personal financial decisions (good or bad) impact the economic stability of the country?
So where should I put my money?
Savings Account
Certificates of Deposit
Money Market Accounts
Savings Bonds
Mutual Funds
Too much debt leads to...

The legal status of when a person cannot repay the money they owe to creditors. Can effect your credit score, your privacy and even ownership of belongings.
When you owe more money than you can repay on your home's mortgage, which can often lead to the bank seizing your home from you.
Both of these can have very damaging long-term financial effects!
What does this mean?
You invest money in their bank and in return,
you earn money called interest.
stock market 101
You have MONEY.
Companies need investors.
Research, product development, etc.
You invest in companies...
and when companies profit,
you get paid dividends ($).
But if they lose...so do you!
Uhh...I'm not sure if I'm ready for the Stock Market! How else can I save money?
A savings account through your bank is the most basic account. You will earn money through an interest rate, but access to this money is usually limited to a few times per month and only by withdrawl in person or by ATM.
Why do I need a savings account?
Accidents and emergencies happen - it is always good to have money available just in case you need to pay for medical bills, car repairs or other major expenses.
The most basic of spending methods...
Easy to budget - when it's gone, it's gone!

Accepted everywhere and with no penalties!
Harder to handle - change can be excessive.
Buyer Beware!
Buying products online and using the electronic banking system sure is easy....almost TOO easy!

Don't forget that by hitting "Add to Cart" you are still deducting money from your account OR adding debt to your credit card!
Why use checks?
They are substitute form of payment for when you don't have cash on hand.

Can also be used for making large payments when carrying cash isn't logical, or using a debit card isn't allowed, (car down payments, apartment rent, etc.)
so why does this all matter?!
You've got things you want to do and have in your life, right?
All this doesn't come cheap and it doesn't come easy.
So what do I have to do to get all those things?
1st: Know your options, set your goals and do what it takes to succeed.

2nd: Budget your money, live within your means and SAVE, SAVE, SAVE!

So what do you do now?
Go through your Personal Financial Workbook - is it totally finished? Do you have full and complete thoughts or sentences written for every question?
Go get a project information sheet from your teacher and get started on putting all this information together!
FINISH YOUR WORKBOOK! Almost every question should have at least a full and complete thought and/or sentence written.
Full transcript