*we are not actually affiliated with the game show* Hosted by: Peter Martin “ “Great job Peter! This helped me get out of trillions of debt!” - Hopefully the U.S. government someday Special Thanks: Most of the information from this booklet is thanks to my Personal Finance Teacher, Emmanuel Young. Thank you Mr. Young, you have been an awesome teacher to have this semester. About the author : Peter is currently a sophmore in highschool. He enjoys video games, technology, science, and especially filmmaking and visual effects. He plays lacrosse as a sport but enjoys making movies with his friends in his spare time. Finance Edition
Transcript
*we are not actually affiliated with the game show*
Hosted by: Peter Martin
“ “Great job Peter! This helped me get out of trillions of debt!”
- Hopefully the U.S. government someday
Special Thanks:Most of the information from this booklet is thanks to myPersonal Finance Teacher, Emmanuel Young. Thank youMr. Young, you have been an awesome teacher to havethis semester.About the author :Peter is currently a sophmore in highschool. He enjoys video games, technology, science, and especially filmmaking and visual effects. He plays lacrosse as a sport but enjoys making movies with his friends in his spare time.
Finance Edition
2
1. Understanding “Take Home Pay”When many people get their first paycheck, they are surprised to learn that they do not make as much money as they think they do. Net pay measures a person’s earnings after deductions, whereas gross pay measures a person’s total earnings before any deductions. Deductions include federal and state income taxes, FICA, or FederalInsurance Contributions Act, andeven personal retirementand insurance funds.
KEY CONCEPTSQ
UIC
K T
IP: B
UD
GET
ING
: Bud
get
ing
allo
ws
for
you
to
allo
cate
fun
ds
each
mo
nth
for
vari
ous
wan
ts a
nd n
eed
s,
incl
udin
g g
roce
ries
, ret
irem
ent
fund
s, a
nd e
nter
tain
men
t. I
t is
es
sent
ially
a p
lan
for
spen
din
g y
our
mo
ney.
A g
oo
d r
ule
is t
o
spen
d 7
0%, s
ave
20%
, and
inve
st 1
0%.
Her
e is
one
as
an
exam
ple
:
2. Understanding Credit
QU
ICK
TIP
: TIM
ELIN
ES: I
t is
alw
ays
a g
reat
idea
to
p
lan
out
yo
ur li
fe b
y yo
ur p
erso
nal g
oal
s, v
alue
s,
wan
ts, a
nd n
eed
s. T
his
is t
o h
elp
pla
n o
ut y
our
fut
ure
and
allo
ws
you
to r
emem
ber
wha
t yo
u w
ant
or
need
to
sa
ve f
or.
Whi
le t
hey
dif
fer,
the
y ca
n lo
ok
like
this
:There are two types of credit: installment, or a one time use credit like a loan, and revolving, like a credit card. Credit allows you to buy things now, and pay for them later. However, failing to pay back on time adds interest to your payments! There are also down payments for many types of credit in the first place. Your usage of this and your financial history affect your credit score, which can be viewed for free with a report through Transunion, Equifax, and Experian, once per company per year. A good way to keep this score high is to use up to 30% of available credit each month and pay bills on time. Also, always try to pay off as much as possible and not just a minimum balance on your card.
4. Knowing Investing3. Comparing Checkbooks and Bank Statements
Checkbooks are used to keep track of what your credits, money you lose or spend, and debits, money you deposit in your bank as you spend it. After a purchase, you should do this ASAP.
Bank statements are records from the bank that you are given at the end that mark your credits and debits.
Be sure to check them with each other so that you can mark outstanding debits and credits on a reconciliation form!
Tip: Diversifying Investments lowers risk all around, so if lookng to invest, varietize!
Stocks are sold by a company for a “share” in the company, which can be resold for capital gains, but also may give dividends or a say in the company. Highest risk. Bonds are loans returned by a company or government at a time with interest.Mutual funds are offered by a company or individual that contain a variety of investments of stocks and bonds or commodities that have more success due to diversification.
6. The Rule of 725. Interesting...
The rule of 72 is an estimation of how long
it takes for money to double. Use this on
anything with an interest rate to predict
your future!
Simple interest calculates the price of the time it took to pay back a loan. They are measured by the principalXrate(percent)Xtime
Compound interest measures interest on interest, compounded at a certain time, meaning that with higher rates or greater time or more frequent compounding, the price of interest accumulates to be a lot more!
7. Know Your Accounts 8. Back to Basics
CERTIFICATE OF DEPOSIT:Pros: High interest rates, forced savingsCons: Limited Accessibility, time bound
CHECKING ACCOUNT:Pros: Fairly liquid, traceable, protectedCons: Low/no interest rate, sometimes fees for opening accounts
SAVINGS ACCOUNTPros: Protected, high interest rate, safeCons: Not as high as CD accounts, limited less liquid
MONEY MARKET ACCOUNTPros: High interest rate, safe, somewhat liquidCons: Not as high rates as CD accounts, not as liquid as checking account
CASH:Pros: Very very liquid, untraceableCons: Not protected
DEBIT/CREDIT CARDPros: Easily accessible, can be cancelled anytime, discreteCons: Can be linked to valuable accounts (debit especially)
ELECTRONIC BANKING:Pros: Super easy to use, automatic, touch IDCons: Risk of hackers
CHECKS:Pros: Very liquid, protected, traceableCons: Time consuming
10. Insurance9. Finding Good Prices / Making $For most of us, insurance is a must have. Insurance usually charges a monthly fee in exchange for money given out in emergencies with a deductible. There is health insurance, car insurance, homeowners insurance, renters insurance, disability insurance, and much more. This will benefit you greatly when emergencies strike! Just make sure everything you need covered is covered!
