Personal Management Merit Badge
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Transcript of Personal Management Merit Badge
Personal Management Merit Badge
$
Lots of effort , but totally worth it!
HANDOUT
• Fill in the blanks.• OR use your own pages.• You may use the words I’ll suggest,
or -• You may use other words you like
better!Brainless
attendance
HANDOUT
• Boxed portions: To be reviewed with your Merit Badge Counselor.
To help you in the future: Keep it! Read again in 5 yrs!
• If I go too fast, stop me.
• Bring this handout back next time:
2nd ____________
• Name ______________________________________• Date of merit badge classes: 1st ____________
*
• AFTER you’ve completed EVERYTHING (ready to discuss)!
p.2, Requirement #1: Do the following:Choose an item that your family might want to purchase that is considered a major expense.
(b) Write a plan that tells how your family would save money for it.
• We can save money by:__________________________________________________________
Item chosen: _______________Approximate cost: ___________
HDTV
Mostly _______ earnings, but each of us could contribute.
$1,000
p.2, Requirement #1 (continued):
(b)1. Discuss the plan with your merit badge counselor.*
*When are you going to discuss this with your merit badge counselor?
• (FHE?)
2. Discuss the plan with your family.
**When are you going to do this?
3. Discuss how other family needs must be considered in this plan.**
p.2, Requirement #1: Do the following:
(c). Develop a written shopping strategy for the purchase:
1. Determine the quality of the item (using consumer publications or rating systems)._______________________________________Google, Yahoo, EBay, Consumer Reports
p.2, Requirement #1: Do the following:
(c). Develop a written shopping strategy for the purchase:
2. Comparison shop for the item.Find out where you can buy the item for the best price.
Call around
Who you called: What you learned:
____________ ________________
____________ ________________
Gwido’s Pawn Shop Don’t go there!
p.2, Requirement #1: Do the following:
(c). Develop a written shopping strategy for the purchase:
2. Comparison shop for the item.Find out where you can buy the item for the best price.
Study ads
Where you looked: What you learned:
________________ ____________________
________________ ____________________
Newspaper
www.ebay.com
Sears had a great sale
Including shipping…
p.2, Requirement #1: Do the following:
• (1)(c)2
Did you find a great sale or a discount coupon? ________ ____________________________________________
Can you buy the item used? ___________________
Should you wait for a sale? ___________________
Maybe, but________
I could, but already found…
Yes
Consider alternatives:
p.3 Prepare a budget reflecting:
Track your actual.
Your expected income (allowance, gifts, wages), Your expected expenses & savings (Outgo).
1st Week INCOME
Expected Actual
Allowance ______ ______
Job ______ ______
Gifts ______ ______
_________ ______ ______
_________ ______ ______
_________ ______ ______
Total in ______ ______
EXPENSES & SAVINGS
Expected Actual
Donations ______ ______
Savings ______ ______
Savings (for… ______ ______
Save to Buy ______ ______
Junk food ______ ______
_________ ______ ______
Total Out ______ ______
INCOME
Expected Actual
Allowance _____
Job _____
Gifts _____
_________ ______ _____
_________ ______ _____
_________ ______ _____
Total in _____
OUTGO
Expected Actual
Donations ______
Savings ______
Savings (for… ______
Save to buy ______
Junk food ______ ______
_________ ______ ______
Total Out ______
$10
$10
$10
$30
$ 3
$ 3
$ 3
$ 3
$30
$422(b). Compare expected income with expected expenses. determine steps to balance:
working more
EXAMPLE
I can increase income by ___________
2. If outgo exceeds income, or decrease expenses by_______________buying less junk
INCOME
Expected Actual
Allowance _____
Job _____
Gifts _____
_________ ______ _____
_________ ______ _____
_________ ______ _____
Total in _____
OUTGO
Expected Actual
Donations ______
Savings ______
Savings (for… ______
Save to buy ______
Junk food ______ ______
_________ ______ ______
Total Out ______
$10
$10
$10
$30
$ 3
$ 3
$ 3
$ 3
$122(b). Compare expected income with expected expenses.
2. If expected income exceeds expected outgo, state how you would use the excess money: I could have some for __________________
Another EXAMPLE
better stuff later.
INCOME
Expected Actual
Allowance _____
Job _____
Gifts _____
_________ ______ _____
_________ ______ _____
_________ ______ _____
Total in _____
OUTGO
Expected Actual
Donations ______
Savings ______
Savings (for… ______
Save to buy ______
Junk food ______ ______
______ ______
Total Out ______
$10
$10
$10
$30
$ 3
$ 3
$ 3
$ 3
$12
$10
$20
$20
$50
$ 5
$ 5
$ 5
$ 5
$20
$40
• What actually happened?
Presents
• This guy should have
EXAMPLE
$10 more now than 1 week ago.
If you finish one week of expected and actual by next class...
(How about putting it on your pillow?)
p.3-7, Req 2a Track your actual income, expenses, and savings for 13 consecutive weeks.
• Income• Source Actual• ___________ _______• ___________ _______• ___________ _______• ___________ _______• ___________ _______• ___________ _______• Total _______
• Expenses• Where Actual• ___________ _______• ___________ _______• ___________ _______• ___________ _______• ___________ _______• ___________ _______• Total _______
• How are you going to remember to do this each day?
• Share this with your merit badge counselor.
p.8 Req. #3 Discuss with your merit badge counselor Five of the following concepts:
a. The emotions you feel when you receive money:
b. How the amount of money you have with you affects your spending habits:
*
If I have lots of money, I tend to spend ______
If I’d stolen the money, I’d feel _____
When I honorably earn money, I feel ______
more.
If I don’t have my money, it is ______ to spend. harderUnless I have a credit card, then it is still easy to spend money I don’t have.
Good
Bad!
I’m usually less __________ about it.
c. Your thoughts when you buy something new:
Your thoughts about the same item 3 months later:
I usually feel ___________________
excited
happy
excited
happy
(c) Explain the concept of:
buyers remorse
Often after buying something people feel _______ sorrow (remorse)
Especially if they ________ $, when it is time to make payments, they feel sorry or have _______ _______.
borrowed
and wish they could undo the _________.purchase
buyer’s remorse
p.8 Req. #3 Discuss with your merit badge counselor Five of the following concepts:
3d. How hunger affects you when shopping for food items:
Did the item work as well as advertised? ___ _______
If I’m hungry, I tend to buy .
3e. Your experience of buying an item after seeing or hearing advertisements for it.
Not always.
Once in awhile it is actually _____ than I expected.Often, the ad makes it sound _____ than it actually is.better
better
more
then, most of it gets ___________________
then into the ___________
3f. Your understanding of what happens when you put money into a savings account:
They pay me _______ for the use of my money.
They can afford to because they charge the borrowers interest at a ______ rate than the rate they pay me.
interest
higher
It goes into the ______________, teller’s drawer
bank’s safe
loaned out or invested or into the ___________bank’s bank
Charitable Giving
3g. Explain its purpose and your thoughts about it:
I think it is a _______ idea to give to a charity or church.
Good charities use money to help the ____ and _____, build buildings for __________ and other __________ purposes.
poor sickworship worthwhile
I can save _____ of my earnings for more important things I’ll need in the future.
I can use my money for ____ worthwhile purposes.
3h. What you can do to better manage your money:
I can use ____ of it for junk.
more
less
more
• usually means: ___ risk way to accumulate money.
• “Saving”
p. 9, Requirement #4. Explain the following to your mb counselor:4a. The difference between saving and investing, including reasons for using one over the other.
low-
*
• My father wanted me to save ever penny I got, I didn’t like that.
Save $100 each month at 5%
$0$2,000$4,000$6,000$8,000
$10,000$12,000$14,000$16,000$18,000$20,000
Savings $1200 Interest Earned $30
1styear
Save $100 each month at 5%
$0$2,000$4,000$6,000$8,000
$10,000$12,000$14,000$16,000$18,000$20,000
Savings $6000 Interest Earned $830
5thyear
Save $100 each month at 5%
$0$2,000$4,000$6,000$8,000
$10,000$12,000$14,000$16,000$18,000$20,000
Savings $12000 Interest Earned $3530
10thyear
Save $100 each month at 5%
$0$2,000$4,000$6,000$8,000
$10,000$12,000$14,000$16,000$18,000$20,000
Savings $18000 Interest Earned$8730
15thyear
Now earning > $110+ each Now earning > $110+ each monthmonth
p. 9, req 4a
Recommended Savings:
• Save _____% in an Emergency Fund.
Try to never, ever spend this money!
10
• Save enough for your “_____ ______” expenses.
Stuff you know you’ll be spending money on once a year!
for sure
• Save whatever you can just to _____ ______ .buy stuff
Savings Goal:
0%1%2%3%4%5%6%7%8%9%
10%
Emergency For Sure Buy Stuff
p. 9, Requirement #4. Explain the following to your Merit Badge Counselor:4a. The difference between saving and investing, including reasons for using one over the other.
Stocks & Bonds
• “Investing” usually means ______ -risk with a hope of a ______ return.
higherhigher
• Reasons for saving rather than investing: People who save money in a bank or credit union are much ____likely to lose it. And more likely to be able to get it when they ______ ___
p.9, Requirement 4a. Explain the following to your merit badge counselor.
• Reasons for saving: People typically save money for future needs including ____________.emergencies
less
• Banks and credit unions are usually very careful with our $, and our savings are insured by agencies of the U.S. Government: _____ & _______FDIC NCUA
want it
• Reasons for investing rather than saving: Although the risk of loss is higher, and some investments require lots more ______, some investments earn ___ _____ money.
p.9, Requirement 4a. Explain the following to your merit badge counselor.
• Reasons for investing: People invest in hopes of earning __________.more money
lots more
Stocks & Bonds
work
p.9, Requirement 4b. Explain the following to your merit badge counselor.
4b. Explain the concepts of return on investment and risk.
• Return on investment refers to the amount you receive __ _____ of the amount you invested.
in excess
• Risk is a measure of the possibility of suffering harm or ____.loss
0
20
40
60
80
100
120
140
at 5% at 10% at 25%
ReturnInvest
0
20
40
60
80
100
120
at 5% at 10% at 25%
ReturnInvest
• Why would anybody choose 5% when they invest at 25%?
• The greater the rate, the higher the ____.risk
• or: The greater the risk, the higher possible _______ and possible _______.return loss
expected
actual
0
500
1000
1500
2000
2500
3000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
p. 9, Requirement #4c Explain the concepts of simple interest and compound interest.Suppose you bury $1,000, and dig it up 20 years from now
• Instead, suppose you put it in the bank and earn 5% for 20 years
• PRINCIPAL
0
500
1000
1500
2000
2500
3000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
p. 9, Requirement #4c Explain the concepts of simple interest and compound interest.
Simple interest: Interest paid only on the ________ balance.principal
0
500
1000
1500
2000
2500
3000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
p. 9, Requirement #4c Explain the concepts of simple interest and compound interest.
Now, suppose you have them add your interest to your principal balance.
interest.Compound interest: Interest paid on both the principal and previously paid _______
Principal
Compound
Interest
p. 9, Req. #4 Explain how these (simple interest & compound interest) affect the results of your investment exercise (p.12).
If I save or invest $1000 and I spend all the earnings as I get it, I do not get the advantage of _____________.
If I have my earnings added to the investment, I earn interest not only on the ________
but also on the ______ _________
compounding
principal
0
500
1000
1500
2000
2500
3000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
prior earningsAnd, I get compound interest.
and help him decide whether to ___, ___, ____, ____, or _____ a stock.
p. 10, Req. #5 Select 5 publicly traded stocks from the business section of the newspaper.
a. Explain to your merit badge counselor the importance of the following information for each stock:
Current price:
Is important to know how _____ an investor can buy,
much
The current price may be obtained ______, from a ____ ______, or estimated from _________.stock broker
buy sell tradehold avoid
newspaperon-line
p. 10, Req. #5 Explain the importance of:
b. How much the price changed from the previous day:
If it went down a lot, something might be seriously ______ with the company.wrong
It is important to see if the price changed, and how _____, and whether it went __ or ____.much up down
p. 10, Req. #5 Explain the importance of:
c. The 52-week high and the 52-week low prices:
If it went down a lot, something might be seriously ______ with the company, or with the stock market __ _______.
wrong
It is important to see if the price has been about the same, or ______, or _____ than it is now.higher lower
It might be a good time to ___.
But it might be a good time to _____ __.
buy
avoid it
• Knowing this is enough to realize you need to know __ ___ ______!
in general
a lot more
p. 10, Req. # 5 Obtain the business section of your newspaper and obtain the following for 5 stocks:
Date of Newspaper: ________
Name1st stock Close Price Net Change 52-wk high
“Name” “Last” “Chg” “1yrhi”
______________ _________ _________ ___________
Explain: The importance for this stock:
Current price (est: _______) __________________________
Change from previous day: __________________________
The 52-week high: __________________________
9/25/04
DeltaAir 3.26 - .70 15.54
3.00 Low enough to buy a bunchLost 70¢ per share: dangerLost $12.28 p/share: danger
• Usually buy 100 shares at a time.
Should I buy?
• (on 8/28/06: 68¢, then down to $0)
p. 10, Req. # 5 Obtain the business section of your newspaper and obtain the following for 5 stocks:
(I’ve already given you 1)
Date of stock quote: ________
Name 2nd stockClose Price Net Change 52-wk high
“Name” “Last” “Chg” “1yrhi”
______________ _________ _________ ___________
Explain: The importance for this stock:
Current price (est: _______) __________________________
Change from previous day: __________________________
The 52-week high: __________________________
• SATURDAY