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Family Economics & Financial Education
Life Of…..
Ben West“A Teenager’s Spending Plan”
Funded by a grant from Take Charge America, Inc.
Get ready to Take Charge of Your Finances
Snapshot – Ben West
• Sneak peak into the life of Ben and his family– Ben– James– Brenda– Anna
SnapshotBen’s Income and Expenses
• Ben’s Income– Lou’s Logging Service
•$13.00/hour•15 hours a week
SnapshotBen’s Income and Expenses
• Ben’s Expenses– Social activities with Maria
• $75
– Cellular Phone• Monthly budget is $50, however Ben often uses
more minutes than the plan allows and sends numerous text messages thus increasing his bill
• Spends $90
– Saving• $200
– Other Items
Spending Plan
• The goal is to create a spending plan that balances Ben’s expenses with his income.
• He can not have more expenses than income.
• Spending Plan– Financial statement– Tracks income and expenses– Used to assist with money management and help
individuals reach financial goals– An individual’s perception of needs, wants and
values will affect decisions made when creating a spending plan
SnapshotWest Family Expenses
• Ben’s Expenses• Housing
– Monthly Payment– Utilities– Others – television,
internet and telephone• Transportation
– Vehicle for Ben and Brenda
– Monthly payment and fuel• Insurance
– Homeowners, disability, life, auto, and health
• Food– Groceries– Pack daily lunches with
leftovers• Credit Card Balance
– Currently have $6,500 in credit card debt
– Monthly minimum payment is $160
– They often do not have enough to pay more than the minimum balance
Housing
• Monthly Payment– Housing
payment– Insurance– Property taxes– Repairs– Maintenance
• Utilities– Heat– Electricity– Water– Sewer– Garbage
• Local Antenna
• Satellite Dish
• Digital Cable
• Telephone
• Internet
Housing Others
Transportation
• Monthly Payment– Car payment– Maintenance
• Fuel– An average is listed– This cost may
increase/decrease depending on the cost of fuel
• West Family– Pay for Ben and
Brenda’s vehicle monthly payment and fuel costs
Others
• Dirt bike tools and upgrades
• Snowboarding • Electronics• Hunting• Entertainment• Create Your Own
Goal:To Create A Balance Spending Plan
• Make all choices for the West family and Ben
• Complete a Major Expenditures Summary for the West family
• Complete a Spending Plan for Ben• Answer reflection questions• Write a summary essay
Quick Review
• West Family– Ben, James, Brenda, Anna
• Create a Major Expenditures Summary for the West’s– Housing– Transportation
• Create a Spending Plan for Ben– Social Activities– Cellular Phone– Savings– Others
Snapshot Reflection
• Review Ben’s Snapshot on pages 2-4• Answer questions 1-5 on page 10
Ben’s Paycheck
Personal Information
State the employee’s name, address, and social security number.
Ben’s Paycheck
Pay Period
The length of time which an employee’s wages are calculated.
Ben’s Paycheck
The total amount of money earned during the pay period before payroll withholdings.
Gross Pay
Ben’s Paycheck
The amount of money subtracted from the gross pay for taxes.Payroll Withholdings
Ben’s Paycheck
The amount required by law for employer to withhold from earned wages to pay taxes.Withholding Tax
Ben’s Paycheck
Federal Insurance Contribution Act – includes Social Security and MedicareFICA
Ben’s Paycheck
Net Pay
The amount of money remaining after all payroll withholdings have been removed from gross pay.
Ben’s PaycheckTotals of the deductions which have been withheld from an individual’s paycheck from January 1 to the last day of the pay period indicated on the paycheck stub.
Year-to-Date
Setting Education and Financial Goals
•Short Term – less than one year
•Long Term – more than one year
SMART Goal
SpecificState exactly what is to be
done.
MeasurableInclude how the goal can
be measured.
AttainableDetermine
steps to reach the goal.
RealisticDo not set the
goal for something unrealistic.
Time BoundState when the
goal will be met.
West’s Major ExpendituresHousing
• Choose a house and housing others for the West family
• Refer to the Snapshot on pages 2-4• Remember
– Family size– Lifestyle– Other family dynamics
West’s Major ExpendituresTransportation
• Choose a vehicle for the Ben and Brenda
• Refer to the Snapshot on pages 2-4• Remember
– Ben and Brenda will share the vehicle
West’s Major ExpendituresMajor Expenditures Summary
• Transfer numbers to complete the summary– Total housing cost– Total transportation cost– Insurance– Food– Credit Card Balance
• West family usually only pays the minimum monthly payment
• If they continue this habit, their $6,500 debt will cost $9,120 • It will take 4.75 years to pay in full if only the minimum
payment is paid each month
Ben’s Spending PlanPayroll Withholdings
• Review Ben’s paycheck on page 11– State Withholding Tax– Federal Withholding Tax– FICA
Ben’s Spending PlanSavings
• Review Ben’s Snapshot on pages 2-4– Identify his needs, wants, values
• Review the short term and long term goals set for Ben on page 12
Ben’s Spending PlanOthers
• Social activities with Maria• Cellular phone
– How could Ben decrease the amount spent on his cell phone each month?
• Choose which “others” items Ben would like– Dirt bike tools and upgrades– Snowboarding– Electronics– Hunting– Entertainment– Create Your Own
• Draw an item and identify the cost in the space provided
Ben’s Spending Plan Summary
• Gross Income• Expenses
• Calculate the Difference
• If the difference is a negative number, go back and adjust some of Ben’s expenses.
Negative or Positive Difference?
• If the number on QQ is positive, adjust Ben’s expenses.– Saving additional money for unexpected emergencies or
expenses may be a good idea.
• If the number on QQ is negative, go back and make adjustments to Ben’s expenses.– Changes need to be made consistently throughout the
simulation.– Keep in mind Ben’s needs, wants, values and goals when
making changes.
• If the number on QQ is zero, congratulations! You have balanced Ben’s Spending Plan!
Reflection Questions
• Once the difference equals zero….– Answer questions 17-22 on pages 15 and
16– Answer questions 23-27 on page 18