This document provides an overview of the first class in a series of 6 classes on personal finance called "MONEY MATTERS". The class covers calculating monthly income, determining deductions, and preparing a budget. Key points include listing sources of income, applying rules to calculate monthly amounts, identifying required and voluntary deductions on a pay stub, and using income and expense information to create a budget and financial plan. The class aims to help participants better understand and take control of their financial situation.

1. MONEY MATTERS
Class 1
Presented by
Susan Huff
MONEY MATTERS Coordinator

2. MONEY MATTERS
 Series of 6 classes
 One hour per class
 Opportunity to earn scholarship money
 Rate your Financial Behavior
 Before / After Class

3. Benefits of GED
 Increase earning power
 More job opportunities
 Jobs with better benefits
 Ability to seek additional education
 Financial Security
 Other

4. Bankruptcy
 1.4 million people in 2008
 Average age 38
 44% couples
 30% women
 26% men
 Every class, race, education,
income level

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. States with highest
rates
 Nevada
 GEORGIA
 Utah
 Tennessee

7. Financial Literacy
 Skill for life
 68.1% high school seniors failed a basic
financial quiz
 only 10% scored a C or better

8. The 1 st Step
Understanding:
1. how much money you have
2. where it goes

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. 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. 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. Monthly Income
Worksheet
Gross Income Income #1 Income #2 Income #3 Total
Wages / Salary
Part-Time Work
Self-Employment
Bonus / Overtime / Tips
Child Support
Maintenance
Rental Property
Disability
Unemployment Insurance
Food Stamps
Pension
Social Security
Interest / Dividends
National Guard Reserves
Tax Refund
Other
Total Monthly Gross Income

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. Monthly Income Worksheet
Gross Income Income #1 Income #2 Income #3 Total
Wages / Salary $2420
Part-Time Work 301
Self-Employment
Bonus / Overtime / Tips
Child Support
Maintenance
Rental Property
Disability
Unemployment Insurance
Food Stamps
Pension
Social Security
Interest / Dividends
National Guard Reserves
Tax Refund
Other
Total Monthly Gross Income $2721

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. Income #2 - Maria
 Child Support for teenage son
$300 per month
 Total Income
 $430 + $ 1720 + 300 = $2450

17. Monthly Income Worksheet
Gross Income Income #1 Income #2 Income #3 Total
Wages / Salary 2420 430
Part-Time Work 301
Self-Employment
Bonus / Overtime / Tips 1720
Child Support 300
Maintenance
Rental Property
Disability
Unemployment Insurance
Food Stamps
Pension
Social Security
Interest / Dividends
National Guard Reserves
Tax Refund
Other
Total Monthly Gross Income 2721 2450

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. Monthly Income Worksheet
Gross Income Income #1 Income #2 Income #3 Total
Wages / Salary 2420 430 2850
Part-Time Work 301 623 924
Self-Employment
Bonus / Overtime / Tips 1720 1720
Child Support 300 300
Maintenance
Rental Property
Disability
Unemployment Insurance
Food Stamps
Pension
Social Security
Interest / Dividends
National Guard Reserves
Tax Refund
Other
Total Monthly Gross Income 2721 2450 623 5794

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. Determine Your
Deductions
 Voluntary Deductions:
 Health Insurance
 Life Insurance
 Retirement – 401 K
 FSA – Flexible Spending Account
 Others

22. Pay Stub
Employee Name Period Ending
James Smith 8-May-09
Description Current YTD
Gross Pay $ 480.00 $ 8,640.00
Federal Income Tax $ 35.60 $ 640.80
FICA $ 29.76 $ 535.68
Medicare $ 6.96 $ 125.28
State Tax $ 8.90 $ 160.20
Disability $ 0.60 $ 10.80
Health Insurance $ 20.00 $ 360.00
Net Pay $ 378.18 $ 6,807.24

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 Total
Total Monthly Gross
Income
(-) Total Monthly
Deductions
(=) Monthly Net Income

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. Financial Problems and
Work
 Pre-employment screening
 Call from Creditors
 Wage Garnishment

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!!