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Personal Finance

Understand the foundations of personal finance with our comprehensive guide to budgeting. This resource breaks down income sources, including gross and net income, and essential deductions like taxes and insurance. Learn to categorize expenses into fixed, variable, and periodic types, while utilizing practical advice, such as building an emergency fund. Additionally, explore the time value of money with concepts like compound interest and the Rule of 72. Equip yourself with the knowledge to make your money work for you!

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Personal Finance

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  1. Personal Finance • Intro • 12 Principles • True False review - discuss

  2. Unit 2: Budget: Make the Most of Your Money • Part 1: Income A. Cash Flow (in / out) i. Income ii. Deductions • Taxes -Federal Income Tax -State Income Tax -Federal Insurance Contributions Act (FICA) - Social Security and Medicare

  3. b. Gross Income- c. Net Income- Other Payroll Deductions? – brainstorm Gross Income minus….. Federal / State/ City Income Tax FICA Life Ins Credit Union Savings STRS 403B Health Vision Dental Union Dues = $1100/per pay = Net Income

  4. Part 2: Expenses After you know your net income- now the hard part… Dave Ramsey video Ch 7 part 1 A. Fixed B. Variable C. Periodic *pitfall = variable and periodic *common advice- • Start- $1000 cash • Finish- have 3-6 months salary on hand for emergencies • PYF Review Exercise 2C

  5. Monthly Expenses Fixed: brainstorm • College Savings • Car Ins • Car • Home Security • Mortgage • Home Ins / Tax • Home Equity Loan • Furniture Loan • Savings • =$2000 / month

  6. Variable: - brainstorm • Natural Gas • Electric • Water Sewer • Phone (home/cell) • TV/Internet • Gasoline • Babysitter • Church/Charity • =700/month • Deductions + Fixed + Variable = $3800/month

  7. Unit 3: Make money work for you :Savings: The time value of money • A=P (1 + i)n • Compount Interest “the most powerful force in the universe” • Rule of 72 • Review Unit 3 answers • Average Savings Rates • Japan 13%, Germany 12%, UK 7%, • France 15%, Canada 7%, US…..? • -0.6% • Dave Ramsey Ch 1

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