Wage vs. Salary Budgeting Credit Cards

1. Personal
Finance Literacy
How to make good financial
decisions

2. Understanding $$
 You only have so much
 You have bills that must be paid
 You have things you would like to do
 Need to find a balance between wants and
needs

3. Getting Paid
 You will either make a wage or salary
 Wage: you get paid by the hour
 Salary: you make a set amount of money
every check
 Easier to budget your money when you make
a salary

4. Your Pay Check
 Gross Pay: total money earned
 Net Pay: total money paid after taxes and
deductions (Social Security, Medicare,
Retirement, etc.)

5. You got paid, now what?
1. Budget your money
2. Pay your bills
3. Decide what to do with the rest
 Disposable income: money left over after
taxes are paid
 Discretionary income: money left over after
needs have been paid for…”fun money”

6. Budgeting Your $$
 Budgets allow people to manage their money
and make good financial decisions
 Fixed Expenses- bills that will be the same
every month such as rent, phone, internet,
car, insurance, etc…
 Variable Expenses- bills that will be different
month to month such as gas, food, utilities,
etc…

7. Where Do You Store Your $$?
 Checking Account: money is available
immediately for you to use via check or debit
card
 Savings Account: money is available for
withdrawal, earns interest
 Investments such as stocks and bonds

8. Other Ways to “Spend” Money
 You can apply for a credit card
 Credit IS NOT free money
 You are loaned a certain amount of money
and you pay it back with interest
 You end up paying back more than you borrow

9. Why Get a Credit Card
 To establish credit/earn a credit score
 You build credit in order to buy a car, home,
expensive items, etc.
 A good credit score is between 700-800
 Good credit= easier to be approved for loans
and lower interest rates

10. How Can You Maintain Good
Credit?
 Pay your bill monthly
 Pay your bills on time
 Don’t open too many credit accounts
 USE CREDIT WISELY!!

11. What If You Go Into Debt?
 You can enter debt management programs to
help make payments
 You can declare bankruptcy…your debt is
removed but you have to wait 7 years for it to
disappear from your credit report.

12. Using pages 545-549, create a
pamphlet
 Create an informational pamphlet about the
importance of budgeting.
1. Title: “Why you need to budget”
2. Terms to Include: budget, income, expenses,
credit, needs, wants
3. Tips on how to make a budget
4. The benefits and consequences of having a
credit card
5. At least 4 relevant drawings or pictures