MONEY, MONEY,
MONEY …
Personal Finance
Needs/Wants
Opportunity Costs
The Decision Making Process
Taxes
Check Writing Tips
Needs/Wants/Resources
 Wants: Things a person does not have to survive, but
would like to have (cell phone, computer, cable tv)
 Needs: Things that you must have in order to survive
(food, water, shelter, clothing, love)
 Resources: Things that people can use to make or
obtain what they need or want - limited
MUST MAKE A DECISION – Opportunity Cost
Opportunity Cost
 Opportunity cost is what you have to forgo when you
choose option A over option B. This must be taken into
consideration in order to make the best choice
possible.
 Time
 Money
 Space
Example: If I choose to go to the football game as opposed
to staying home to study, I will not be prepared for the test
and therefore get a poor grade.
Business
Businesses supply goods and services to consumers with the motivation to
make a profit. The good/service providing must satisfy a customer need or
want.
Profit = income – expenses (companies try to keep income > expenses)
Operating in the red means income < expenses (bad)
Operating in the black means income > expenses (good)
Companies thrive on competition (the contest between businesses to win
customers).
How can there be so many pizza places in Lyndhurst?
Josie’s – $1.00 a slice - caters to high school students
(place order at counter, pay, and eat)
Mr. Bruno’s – over $2.00 a slide - caters to business
people
(sit down, look at menu, waitress takes order,
eat, and pay)
How much does the average
American earn per year?
Things to consider:
 Location
 Education
 Career
PARADE MAGAZINE
 www.parade.com/news/what
-people-earn/.../salaryguessing-game.html
 Play the earnings game and
see if you can guess
MONEY: Gross or Net?
Follow the steps below to calculate gross pay, taxes, and net pay
1. GROSS PAY
3. NET PAY
 The amount you earned
 The amount you take home
 Hourly rate X hours worked
 Gross pay – taxes = net
 $5.00 x 10 = $50.00
 $50.00 - $15.00 = $35.00
2. TAXES
 Approximately 30% of Gross Pay = income taxes to be paid
 gross pay X tax rate (remember to move 2 decimal places to the
left from the % symbol before calculating)
 $50.00 x .3 = $15.00
The Decision Making Process
Step 1: Identify the situation
What decision do you need to make?
Step 2: Identify possible courses of action
What are all the possible alternatives?
Step 3: Determine the pros and cons
What are the advantages/disadvantages of each alternative?
Step 4: Make a decision
How would you rank each alternative/choice based upon the
pros/cons?
How will you reach your goal?
Step 5: Evaluate your decision
Have you achieved the results expected?
Taxes
 Taxes (required payment to the government)
1.
Income
 Amount paid based on amount earned (Progressive)
2. Sales
 % added to purchase price of taxable items
3.
Property
 Amount paid based on value of property (land/house) owned
 http://www.khanacademy.org/economics-financedomain/core-finance/taxes-topic/taxes/v/calculating-federaltaxes-and-take-home-pay
Check writing lesson

Checks are legal documents

Always begin writing the amount close
to the left edge on the line and in the
box by the $

“Demand Note”

Must be paid on demand


Only use the word “and” where the
decimal point appears
Post dated checks are illegal if given
to the payee on a date prior to the
date written on the check

Always write cents as a fraction of a
dollar (50/100)

Bank will pay the amount written on
the line

Always spell out the month and write
the full year (2013) in the date

Never abbreviate the name of a
business or person

Be sure to sign the check after doublechecking the information

If you make a mistake, VOID the
check (save it) and write a new one