Objectives: Students will demonstrate skills for managing finances.
This project contains three parts: Personal Money Management, Managing Business
Finances, and Preparations for New Business Startup. Each of these lessons is
attached. Print the attachments.
Discuss personal finances such as budgeting, money management, spending habits,
and checking accounts with students. Give each student a copy of activities one and
two and have them complete the activities as directed.
Give each student a copy of the Managing Business Finances project. Show students
how to use each of the formulas and show them examples of how calculate the payroll.
Have each student construct and calculate the payroll for their business. (this can be
done individually or in groups)
Give each student a copy of the Preparations for New Business Startup.
Discuss with students the procedures for acquiring financing for a new business and
review basic financing concepts. Have students complete the eight assignments related
to starting a new business.
PERSONAL MONEY MANAGEMENT
Objectives: Students will be able to understand the relationship between lifestyle and
money management. They will learn suggestions for budgeting, and review how to use
a checking account.
Materials: worksheets for Activities 1 and 2
Tell students: "Today we are going to think about something that some people enjoy
very much: spending money. How many of you enjoy spending money? I think most
people do. But we have to do more than just spend money. We have to plan our
spending, or manage our money; as it is called. Whenever you get a job, your income
increases, and as you get older, your expenses will too.
Detailed planning is required so that you will have enough money to pay your bills and
take care of your responsibilities. Different families have different ways of managing
money and other assets. Family budgets depend on the family's chosen lifestyle and
vice versa. If you live an expensive and lavish lifestyle, you'll need more financial
resources to budget. If you live a more modest lifestyle, you'll find it will be easier for
you to prepare a sufficient budget and still have some money left over for savings. Many
families live beneath their means in order to save generously for the future. But families
don't always have time to teach family members everything that they need to know
about money management.
Activity 1: Give each student a Joe's Budget and Monthly Expenses worksheet. Divide
the class into groups of three or four students and ask them to share with members of
their group how they plan their personal spending. After a few minutes, ask them to
review the case study about Joe on the worksheet. Ask them to prepare a budget based
on the information provided on the worksheet. When students are finished, ask each
group to share their solutions with the class. Next, ask students to work independently
and complete the Monthly Expenses section for themselves. Ask students to discuss
their answers when they are finished and tell whether they think that the budget would
Activity 2: Give each student a Tips for a Checking Account worksheet. Ask students
whether they have a bank account of their own. Ask how many students have savings
accounts and how many have checking accounts. Have them discuss the difference
between savings and checking accounts.
Ask students o read and discuss the suggestions on the top of the Tips for a Checking
Account worksheet. Review the sample check and bank deposit slip, and discuss the
features that are noted. Remind students of the responsibility required for maintaining a
In addition, give information to students about electronic banking transfers, automated
teller machines, debit cards, account information retrieval systems by telephone and on-
line, and other advances in banking technology.
Read the case study below. Use the information to complete the one month budget.
Joe works as a clerk. His take-home salary is $1175 a month. Joe has the following
fixed expenses each month.
Car Payment 205
Total fixed expenses: $890
Joe goes to the movies every weekend. It costs him $10.50 for the movie and popcorn.
Joe eats out a lot. He spends about $12.00 a day on fast food. He buys clothes if he
has the money. He does not plan for clothing expenses.
Joe would like to save some money to buy a DVD player. The DVD player he wants
costs $268.00. How would you help Joe budget his money? Us the following form to
plan a one-month budget for Joe.
Month: Income this month:
Item Budget Amount
Living costs: Rent
Your monthly take-home pay is $1,200. List essential expenses, their percentage of the
budget, and the dollar cost of the item. How much do you spend in all?
Monthly Pay = $1,200
Expenses Percent Cost in $ (% x $1,200)
1. Housing/rent 25% $300 (25% of $1,200)
____________Total $ Expenses
What is your monthly balance?
Pay minus expenses equals balance
$1.200 - _____________ = _________________________
Pay Total expenses Balance
Do you have enough money to make it through the month?
My notes about this lesson:
Tips for a Checking Account
1. Treat your checks as you would cash. Keep them as safe and secure as
2. Don’t make changes on the face of a check that’s issued to you. Don’t take a
check that looks as if it has been altered. The bank may refuse to honor such
3. Avoid carrying checks made out to “Cash.” If they are lost or stolen, you have no
control over who can cash them.
4. For the same reason, never sign your personal check until you have filled in the
amount and the payee.
5. Check all deposit slips to be sure they are legible and correct. If you are
receiving cash back from the deposit, count your money carefully to see that it is
the correct amount. Do both of these things before you leave the bank.
6. Always inspect new check orders for accuracy. Check the spelling of your name,
address, and phone number. Also be sure that your account number is properly
encoded. Immediately report any errors to the bank.
7. If you do not understand a checking procedure, ask someone who works at your
bank to explain it to you.
MANAGING BUSINESS FINANCES
After completing this project, you will be able to do the following:
1. Compute gross pay for hourly and salaried workers
2. Calculate gross pay for regular and overtime wages
3. Calculate net pay, fringe benefits and commission
4. Evaluate the difference between net pay and gross pay
1. Read the following definitions and formulas.
2. Memorize them and make sure you know how to make the calculations.
For some jobs, you are paid a fixed amount of money for each hour you work. Your
hourly rate is the amount of money you earn per hour. Straight-Time pay is the total
amount of money you earn for a pay period at the hourly rate.
Straight-Time Pay = Hourly Rate X Hours Worked
When you work more than your regular hours, you may receive overtime pay. The
overtime rate may be 1 ½ times your regular hourly rate. This is called time and a half.
You may receive double time, 2 times your regular hourly rate, for overtime on
Sundays or holidays.
Overtime Pay = (Overtime Rate X Hourly Rate) X Overtime Hours Worked
Total Pay = Straight-Time Pay + Overtime Pay
A salary is a fixed amount of money that you earn on a regular basis. Your salary may
be paid weekly, biweekly, semi monthly or monthly. Your annual salary is the total
salary you earn during a year. There are 52 weekly, 26 biweekly, 24 semimonthly, and
12 monthly pay periods per year.
Salary per Pay Period = Annual Salary / Number of Periods per Year
A commission is an amount of money that you are paid for selling a product or service.
Your commission rate may be a specified amount of money for each sale or it may be
a percent of the total value of your sales. If the commission is the only pay you receive,
you work on straight commission.
Commission = Total Sales X Commission Rate
Gross Pay = Salary + Commission
Gross pay is the total amount of money you earn. Out of your gross pay employers
withhold money for federal, state social security, and Medicare taxes. These
deductions from your gross pay result in your net pay.
Net Income = Gross Pay – Deductions
Your business may offer several fringe benefits. Fringe benefits include health and
dental insurance, life insurance, pensions, paid vacations, and holidays, unemployment
insurance and sick leave. To compute the value of the benefits, first calculate the pay
1. You are employed in the payroll department at Hampton Computer, Inc. This is a
company that sells microcomputers and related equipment and supplies. Your
present job title is microcomputer specialist. Your immediate supervisor is Mona
Jackson, accounting manager. Lavonne Barnes, a payroll clerk, asks you to
develop a spreadsheet and formulas needed to compute the payroll.
2. Using Microsoft Excel, create a payroll spreadsheet using at least ten employee
names, give each employee an ID number, hours worked, and pay rate (make up
this information). Write a formula that will calculate gross pay for each employee.
Label the cells appropriately.
3. After computing the gross pay, calculate Social Security withholdings at 6%,
Medicare at 1.5% and Insurance at 3.6%. Write a formula that will calculate net pay.
4. Choose three employees who worked 5 hours over time. Insert 2 columns into the
spreadsheet for overtime hours and overtime pay. The company rate for overtime is
1.5. After inserting columns you may need to edit some formulas.
5. Print the spreadsheet with the formulas showing.
6. Compare the following jobs. Using an Excel spreadsheet calculate which job has
the best benefit package and which job has the most attractive pay with the benefits
Annual salary is $30, 680, 2 weeks paid vacation, and health insurance paid by the
company is 3.6%.
Annual salary is $31,500, 2 weeks paid vacation, the company pays part of the health
insurance and the employee pays a premium of $800.00 per year.
PREPARATONS FOR NEW BUSINESS STARTUP
Objectives: The student will improve decision-making skills in Business Financing.
Discuss the overall procedures with the students to give them a global understanding of
the assignment: students are to select a business they would like to start; apply for a
business loan to finance their business startup; and complete other assignments related
to business startup.
Review basic financing concepts with students. Provide students with several interest
rates and mortgage terms.
Have students develop a presentation to give in front of the class in which they describe
the business they want to finance and the financing package they would like to get from
the bank. OR The banker (the teacher) can interview the students using standard
questions to determine the financing options.
Review the basis upon which banks award loans. Have the students complete the
awarding assignment. Give them a definite amount of available bank money so that
they will be able to award four or five loans.
Use the additional assignments to have students complete other future business
Assignment 1: FINANCING YOUR OWN BUSINESS
The bank has several loan types that you may be able to use to benefit the payment
schedule that will serve your purpose:
• A 15 year loan with a fixed interest rate of 13% for the life of the loan.
• A variable rate loan for the first 5 years at 8% and renegotiate during the 5th year.
• A balloon payment calculated over a 20-year period. The interest rate is 10%.
Set your monthly payments low, as you are starting with an unsure monthly
payment. The balance due on the loan will all be due the last payment.
Plan on borrowing $100,000. Calculate your monthly payment with each of these
options. Choose the option you want and be prepared to defend your decision.
Assignment 2: DEVELOP A BUSINESS LOGO
Prepare a logo for your business. You will use this graphic design on your letterhead.
You will also need to develop a slogan for your business. Start designing your
letterhead. Consider what information should be on a letterhead to be an effective piece
to represent your business.
Assignment 3: NEWSPAPER AD Keep in mind that you will be hiring employees soon.
Develop an ad for the newspaper to hire the people you need for your business.
Assignment 4: EMPLOYMENT INTERVIEW
Make a list of all the questions you will ask during your interview with potential
Assignment 5: PLANT LAYOUT
Design a plant layout of your business showing how you will place your business inside
the building, traffic patterns in and out of your major areas, location of your cash
registers, your display counters, your inventory, etc.
Assignment 6: FOOD INDUSTRY ASSIGNMENT
Those of you in the food industry, develop a menu of your food items. The
menu must go to the printer and be back by opening day of the business. Set I your
prices, design the pages, and come up with an attractive arrangement for your menus.
Assignment 7: RETAILING ASSIGNMENT
Those of you who are selling items, prepare a price list of all your products.
Develop an invoice that will have your logo/slogans, etc.