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Financial Survival 1
Maryland Content Standards on Personal Finance
Short term
Standard Three
• Goals, Spending Plans, and Markets
Short Term Goal Setting
• Short term goals are usually those you wish to accomplish in less than a year.
• Intermediate Goals usually are for one to five years, and
• Long term goals are usually for five or more years.
Setting Short Term Goals
• Financing your Future Activity 1.2.1
Some Short Term Financial Goals
• Pull your credit report at www.annualcreditreport.com
• Write a will
• Adjust your investment portfolio
• Adjust your tax withholding
• Pay down short term debt like credit card balances
Charity and Philanthropy
• Unfortunately, not all charities are legitimate or efficient.
• A good web site to check out charities is www.charitynavigator.org
Short Term Budgeting
• Activity 20.2A and 20.2B from FFFL
• John and Marcia’s Monthly Spending Plan
Short Term Tax Decisions
• Use a tax pro or do it yourself
• Health Savings accounts
• Child Care Savings Accounts
• Adjusting your tax withholding
Spending often requires signing contracts
Short Term Contracts
• Cell phone
• Apartment
• Car Rental
• Merchant Credit Card
• Student loans
Contract Obligations
Most people do not read the contracts they sign.
Young adults (18-24), especially, do not read what they are signing because they only recently became responsible for what they sign.
Cell Phone Contract
• From www.radicalparenting.com
• Cell phone contract for a teenager
Students Need to Know
• Co-signing means responsibility for 100% of the loan balance if the person for whom you have co-signed stops making payments.
Auto Buying Myth
• There is no “three day cooling off period” when you buy a car.
Markets Affect Spending
• Refer to “An Introduction to Market Structure” Handout
What do Consumers need to Know About Market Structures
• Perfectly Competitive:– Chance to negotiate the price?– Expectation of quality differences?– Need to comparison shop?– Expectation of Government regulation?
What do Consumers need to Know About Market Structures
• Monopolistically Competitive:– Chance to negotiate the price?– Expectation of quality differences?– Need to comparison shop?– Expectation of Government regulation?
What do Consumers need to Know About Market Structures
• Oligopoly:– Chance to negotiate the price?– Expectation of quality differences?– Need to comparison shop?– Expectation of Government regulation?
What do Consumers need to Know About Market Structures
• Monopoly:– Chance to negotiate the price?– Expectation of quality differences?– Need to comparison shop?– Expectation of Government regulation?
Supply and Demand Graphs
• Producers provide goods and services
• Consumers buy goods and services
Government Intervention
• Price Floor – When the gov’t says the price of something may not go below a certain set price.
• Price Ceiling – When the gov’t says the price of something may not go above a certain set price.
Price Floors and Price Ceilings
• See Handout from Capstone, “Unit 2, Lesson 14, Secondary Effects: Price Floors and Price Ceilings”
Another Look at Gov’t Intervention
• Lesson 6 – High School Economics in Virtual Economics CD –
• “Price Controls – Too High or Too Low?”
What are the Consequences for Consumers?
• Price Floors – Tend to cause surpluses – Why?
• Price Ceilings – Tend to cause shortages – Why?
• Other unintended consequences?