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Money Matters Class 1: Introduction

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Importance of understanding your finances, your income and understanding your pay stub are covered in Part 1 of the of the 6-part Money Matters series created by the Athens-Clarke County Library. Money Matters is part of Smart investing @ your library®, and is brought to you by a joint grant from the American Library Association and FINRA, the Financial Regulatory Authority Foundation.

Published in: Economy & Finance, Technology
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Money Matters Class 1: Introduction

  1. 1. MONEY MATTERSClass 1Presented by Susan Huff MONEY MATTERS Coordinator
  2. 2. MONEY MATTERS Series of 6 classes One hour per class Opportunity to earn scholarship money Rate your Financial Behavior  Before / After Class
  3. 3. Benefits of GED  Increase earning power  More job opportunities  Jobs with better benefits  Ability to seek additional education  Financial Security  Other
  4. 4. Bankruptcy 1.4 million people in 2008 Average age 38 44% couples 30% women 26% men Every class, race, education, income level
  5. 5. Reasons 2 of 3 lost job 50% experience serious health problem DEBT  Owed more than 1 ½ times annual income  $24,000 income → $36,000 debt
  6. 6. States with highestrates  Nevada  GEORGIA  Utah  Tennessee
  7. 7. Financial Literacy  Skill for life  68.1% high school seniors failed a basic financial quiz  only 10% scored a C or better
  8. 8. The 1 st Step Understanding: 1. how much money you have 2. where it goes
  9. 9. What is Income? Income is the flow of cash or cash-equivalents received from work (wage or salary), capital (interest or profit), land (rent), or other sources (gift)
  10. 10. Monthly Gross Income List each person’s fixed income  Salary and wages  Child support  Alimony  Social security List variable income  Bonus checks  income tax refunds  tips Add
  11. 11. RULES:to calculate monthly income  Weekly Income  Multiply by 4.3 for monthly income  Biweekly Income  Multiply by 2.2 for monthly income  Twice a Month Income  Multiply by 2 for monthly income
  12. 12. Monthly Income Worksheet Gross Income Income #1 Income #2 Income #3 TotalWages / SalaryPart-Time WorkSelf-EmploymentBonus / Overtime / TipsChild SupportMaintenanceRental PropertyDisabilityUnemployment InsuranceFood StampsPensionSocial SecurityInterest / DividendsNational Guard ReservesTax RefundOtherTotal Monthly Gross Income
  13. 13. Income #1 - Joe $1,100 every two weeks Monthly $1,100 X 2.2 = $2420 Part-time $70 per week Monthly $ 70 X 4.3 = $301 Total Income for Joe $2420 + $301 = 2721
  14. 14. Monthly Income Worksheet Gross Income Income #1 Income #2 Income #3 TotalWages / Salary $2420Part-Time Work 301Self-EmploymentBonus / Overtime / TipsChild SupportMaintenanceRental PropertyDisabilityUnemployment InsuranceFood StampsPensionSocial SecurityInterest / DividendsNational Guard ReservesTax RefundOtherTotal Monthly Gross Income $2721
  15. 15. Income #2 - Maria  $ 2.50 per hour plus tips $2.50 X 40 = $100 per week Monthly $100 X 4.3 = $430  Tips average $10 per hour worked or $10 x 40 hours = $400 per week Monthly $400 x 4.3 = $1,720
  16. 16. Income #2 - Maria  Child Support for teenage son $300 per month  Total Income  $430 + $ 1720 + 300 = $2450
  17. 17. Monthly Income Worksheet Gross Income Income #1 Income #2 Income #3 TotalWages / Salary 2420 430Part-Time Work 301Self-EmploymentBonus / Overtime / Tips 1720Child Support 300MaintenanceRental PropertyDisabilityUnemployment InsuranceFood StampsPensionSocial SecurityInterest / DividendsNational Guard ReservesTax RefundOtherTotal Monthly Gross Income 2721 2450
  18. 18. Income # 3 - Matt  Works 20 hours per week at $7.25 $7.25 X 20 = $145 Monthly $145 X 4.3 = 623.50
  19. 19. Monthly Income Worksheet Gross Income Income #1 Income #2 Income #3 TotalWages / Salary 2420 430 2850Part-Time Work 301 623 924Self-EmploymentBonus / Overtime / Tips 1720 1720Child Support 300 300MaintenanceRental PropertyDisabilityUnemployment InsuranceFood StampsPensionSocial SecurityInterest / DividendsNational Guard ReservesTax RefundOtherTotal Monthly Gross Income 2721 2450 623 5794
  20. 20. Determine Your Deductions Money taken from your paycheck to cover things like taxes and health insurance Required Deductions  Federal Tax  State Tax  FICA – social security tax (6.2%)  Medicare (1.45%)
  21. 21. Determine YourDeductions  Voluntary Deductions:  Health Insurance  Life Insurance  Retirement – 401 K  FSA – Flexible Spending Account  Others
  22. 22. Pay StubEmployee Name Period EndingJames Smith 8-May-09Description Current YTDGross Pay $ 480.00 $ 8,640.00Federal Income Tax $ 35.60 $ 640.80FICA $ 29.76 $ 535.68Medicare $ 6.96 $ 125.28State Tax $ 8.90 $ 160.20Disability $ 0.60 $ 10.80Health Insurance $ 20.00 $ 360.00Net Pay $ 378.18 $ 6,807.24
  23. 23. Calculate Your Net Income Take home pay, the money you have left after deductions are made Monthly Net Income Income #1 Income #2 Income #3 TotalTotal Monthly Gross Income(-) Total Monthly Deductions(=) Monthly Net Income
  24. 24. BUDGET A budget is simply a plan showing how you plan to spend your money to meet you financial goals. What do I need to prepare a budget?  List of income  List of expenses, including debt payments
  25. 25. Financial Problems andWork  Pre-employment screening  Call from Creditors  Wage Garnishment
  26. 26. Put Yourself In Charge  Have a plan for your money and stick to it  Prepare a budget for yourself and keep it up to date  Establish a savings habit – save as much as you can and do it regularly!!

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