2011 Dollars & Sense: How to Be Smart About Money Curriculum

Chapter Four – Components of Personal Money Management

Goals and Objectives:

• Understand the differences between gross pay and net pay (take-home pay).

• Learn the different type of payroll taxes, what these taxes are used for, and how to

set up your employee pay for tax purposes.

• Calculate your net worth by outlining your assets and liabilities.

• Learn what your personal documents are, what laws are in place to protect your

financial information, and how to recognize and prevent identity theft.

Reading Comprehension Questions:

1. What is the difference between an asset and a liability?

2. What is the difference between gross pay and net pay?

3. What is a balance sheet?

4. Give several examples of personal documents.

Solving Everyday Math Problems Use the following math problems to further students’ understanding of key concepts in each chapter.

Q: Gregory’s part-time warehouse job pays $12 per hour. He works 23 hours in a two-week pay period. What is his gross pay? Social Security takes 4.2 %, and Medicare takes 1.45 %, from his paychecks. What is his take-home pay?

A: 23 x 12 = 276

276 x .042 = 11.59

276 x .0145 = 4.00

276 – 11.59 – 4.00 = $260.41

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Q: Dolores owes $2,600 on her credit card and $1,100 in car payments. She is able to make a credit card payment of $250 and pay off $300 toward her car. What is the total of her net liabilities?

A: 2,600 – 250 = 2,350

1,100 – 300 = 800

2,350 + 800 = $3,150

Q: Jenny is calculating what her estimated net worth will be in one year. She expects to earn $250 per month take-home pay from her part-time job. She’ll receive $300 in gifts for holidays. She owns a used car, worth $1,100, and $400 in jewelry. She owes her parents $600 and will pay $25 per month toward this debt. What is her estimated net worth in one year?

A: Estimated assets:

250 x 12 =3,000 + 300 + 1,100 + 400 =4,800

Estimated liabilities:

600 – (25 X 12) = 300

Estimated net worth = 4,800 –300 = $4,500

Journal Topics: Below are journal prompts to be used for student journaling. The objective is for students to write as freely and openly as possible. Punctuation, grammar, and style are not important.

1. A significant portion of your gross pay goes to taxes. How do you feel about money that you earn going to taxes? How do such taxes benefit society?

• Helpful hints: What are the types of taxes? Do you currently benefit from these taxes? Will you some day? What things do you rely on every day that are supported by taxes?

2. Think ahead 10 years. What assets do you plan on having? Liabilities? Will you be satisfied with your net worth?

• Helpful hints: Assets can include money, investments, possessions, real estate, and other quantifiable goods. Liabilities might include loans and taxes that you might not anticipate.

3. Why do you think there is an upward trend in people stealing others’ identities for financial gain? What safeguards can you take now, and in the future, to prevent this? Why is it important?

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• Helpful hints: Methods used in identity theft are diverse and constantly evolving with trends and technologies. Think of all the ways people could gather personal information from you.

In the news…

Use the following blog or news article to expose to students to financial media coverage and to challenge them to reflect.

Getting Students Involved in Summer Working Opportunities

By Carol Carter

Students of all ages can start developing work skills and experience during the summer that will help them assess their strengths and challenges and give them the chance to address them early on. Middle school students have many working opportunities that they can get involved in during the summer. They should be encouraged to try a variety of jobs so they can learn what they do well and pick up transferable skills like responsibility, communication, punctuality, and time management. If a student has a passion for animals, they could potentially become a zookeeper, veterinarian, or wildlife photographer. Next summer, have your student volunteer to pet-sit while neighbors are on vacation, be in charge of feeding and cleaning up after family pets, or walk dogs at the animal shelter. Whether high school students are required to earn their own money or not, they should have a job during the summer. Volunteering, part-time work, and odds-and-ends jobs like babysitting, house-sitting, and household chores help young adults start creating a work ethic that they will take with them to their independent years in college and their career.

Encourage students to get a head start on developing job skills, getting to know themselves, and maybe even making some money, by getting them involved. Below is a list of common jobs from www.careerkids.com for students of any age.

• Babysitting

• Pet sitting

• Yard work

• Bicycle repair

• Camp counseling

• Refereeing and umpiring

• Computer tutoring or training (this can be a good resource if you live near a retirement community)

• Garage sales

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• House sitting (picking up mail, packages, feeding animals, watering plants while neighbors are away)

• Car washing/detailing

• DVD rental (if the family has a large collection)

• Recycle pickup (they make their money when they take the recycling to the service center)

• Library pickup and return

Reflection:

1. Have you had a summer job? If so, what lessons did you learn from the experience? Were there any negative experiences? If so, what were they and how did you handle them?

2. What is your ideal summer job? What short- and long-term benefits would you hope to gain?

3. What constitutes a strong work ethic?

4. What qualities do you think employers look for when hiring a student?

5. How has the nation’s economy affected working opportunities available to teens?