How do we contribute to theeconomic common good?? Be productive!!! What does this mean???
Your Economic Responsibilities Work & pay taxes Spend your money wisely Save a portion of your income
Needs Vs. Wants Needs: Wants Anything that is necessary for Anything that makes your your survival. life more comfortable; however, you can easily leave without. Example: Example: Shelter and Food iPod, Cell Phone, & Jewelry
Parts of a BudgetSpending & Savings A combination of one’s fixed and flexible expenses and remaining disposable incomeInvestment: Anything that a person puts money into with the hopes that the item increases in value over time.Retirement Providing for yourself when you are no longer working.Estate Planning for the smooth transition of property to designated beneficiaries after one’s death.
Spending and SavingsFixed Expenses Flexible Expenses Payment will stay the same Payments will vary in amount every month from month to month Ex:Ex: Electric & Heating Bill Rent Gas for your Car Mortgage Payment Groceries Car Payment Personal Entertainment Insurance Payment
Why do people save money?1. Major Purchases ex: buying a car2. Large annual or semiannual expenses…paying your real estate taxes3. Unexpected Expenses…home repairs4. Long Term Expenses…pay for your retirement5. Accumulate wealth
Benefits of Saving MoneySecurity: Money in a bank can not be lost…FDIC insured!Interest: A payment that financial institutions make to you in exchange for the use of your money while it is deposited.