Managing Your MoneyIntroductionLesson 1: Record keeping made simple introduces students to the concept of record maintenance as an organizational skill. Developing good record keeping habits are just as important as developing good time management skills. In fact, if your records are in order you reduce the time wasted looking for important items. Lesson 2: Introduces students to the concept of budgeting. Developing a workable financial strategy requires a commitment to success. Examine your current financial habits. Is there room for improvement? Do you have a measurable and obtainable goal? Understanding how to develop a reasonable plan is the key to creating a strategy for success. Lesson 3: As a society, we are moving closer to a cashless monetary system. Each year since the 1980’s we are purchasing more items and attending events without cash. The credit card is a convenient and easy way to manage money. But how do we know when to use this form of loan? There are various types of credit cards. Which form of credit best suits your needs? InformationLesson 1: Where Is It? Organizing your important papers reduces chaos, particularly when you need something in a hurry. Some people keep everything in the event that one day it will be needed. That produces a major space problem. Begin by identifying the documents you really need.
Why should you keep this information? Suppose you lose your wallet. Can you list the items in your wallet? Do you know how to replace them? You may be required to provide proof of your identity. Where are your documents? The Free Application for Federal Student Aid (FAFSA) requires the most recent federal tax information. Did you keep a copy? Where is it? It is important to place hard-to-replace documents, such as passports and citizenship papers, in a safety deposit box you can rent at a bank. Be sure to put the key in a safe place that you can remember. Place all other documents in file folders in a metal or plastic filing box or a file cabinet. Lesson 2: Be the Boss of Your Money. Developing a Financial Strategy Good financial planning begins with a determination to live within your means. A workable strategy will allow you to live better on the money you have. It will give you a sense of direction and help you to identify what is important to you. The goal of financial planning is to control your money rather than allow your expenses to control you. That requires examining your attitude toward money and developing healthy spending habits. What is a budget? § A budget is a spending plan. § It simply shows you how you actually spend your money. § It helps you to see how you should spend your money. § It helps to reduce impulse spending. § It will assist you in meeting your goals. Indulge yourself in a little creative dreaming. What do you want to do in the next 12 months? What about the next 2-4 years? What are your long range plans? Answer the questions by filling in the form below.
How much money do you need to accomplish each goal? For example, if you desire to have a vacation this year, determine how much money you need to experience the vacation of your dreams. Include transportation, housing costs, and money for shopping and extra excursions. It never hurts to dream. However, before you actually plan your vacation, you must determine if there are sufficient funds after all other necessary expenses are paid. Remember, written goals are usually attained. Unwritten goals are rarely met. Begin by creating a spending log. Purchase a small pocket size notebook. Record the date that you make a purchase. Under the date, list the purchased item and the amount spent. If you purchased a pair of jeans today, record the appropriate date and use the category “clothing” and the dollar value, $65.
May 30, 2004 Activity: If you pay for most of the purchases by credit card, check card, or check, use the recorded record to determine regular spending patterns. Print three copies of the attached Monthly Income and Expense Form. Fill in the first copy with your information. The second copy is for adjustments and the third copy is your final budget. Start by creating a preliminary budget for yourself. Are you running out of money before the month ends? Adjust your Monthly Income and Expense Form to reflect your new spending plan. Create and maintain a ledger notebook. (This can be set up in Microsoft Excel, Quicken or Money Premium.) Organize the ledger notebook to match the categories on the Monthly Income and Expense Sheet. For example, if you purchase $100 in groceries each week, designate $400 ($100 x 4 wks) per month for groceries in the ledger notebook. The software programs will set up a budget for you. Lesson 3: It’s the weekend and I’m out of money!! Credit Card Management Introduction: As a society, we are moving closer to a cashless monetary system. Each year since the 1980’s we are purchasing more items and attending events without cash. The credit card is a convenient and easy way to manage money. But how do we know when to use this form of loan? There are various types of credit cards. Which form of credit best suits your needs? Objective: At the end of this lesson, students will describe at least two types of credit and create a list of rules for managing credit. Lecture: Joan’s Story. “I have studied Chemistry and Math for the last two weeks, written three papers for Sociology, and completed a final report for English. I do not want to see another formula or write another word. My brain needs a rest. Besides, it’s the weekend. I need a break!”
“Rhonda just called to tell me that the gang is going out tonight for a little fun. Sounds good to me. Oh no, my best outfit has to be taken to the dry cleaners! I might ruin it if I try to wash it. I wonder if I have time to go shopping. Oh yeah! I forgot. I am out of money! My bank account is dry. But I could use my credit card! Oh no, I promised my mom I would only use my Mastercard for emergencies, particularly after racking up a $2000 bill last year. It seems like it is going to take forever to pay off that bill. Is this an emergency? Of course it is!! If I don’t get out of here, I am going to scream!”
Ring, Ring.
“Hello, Rhonda? What’s that? Plans have changed; we are going to Ocean City for the weekend? Sure, I’ll help with the motel cost. But I’ll need a new swim suit. Let’s stop at the Outlet Mall on the way to the ocean. I’ll be ready in 30 minutes, I’ll meet you in the lobby!” Phone call over. “Since my Mastercard is maxed out, I’ll use that new Visa card I got in the mail last month.” One of the most essential facts to remember about credit card use is that it is a loan – borrowed money. Credit is not a bad idea; it is the misuse of credit that is a problem. As you can see from our story, Joan found that credit cards are a convenient way of purchasing the items she wants. Wise management is essential so that you do not run into problems with your creditors. Bad credit can keep you from getting the car you want, or that apartment, and in some cases it might determine if you are hired by a certain employer. Thought Questions. Think about the answers to these questions. Not to be submitted. Q 1. Joan indicates that her master card is maxed out at $2,000. If she makes the minimum payment of $50 per month at 20% annual interest, how long will it take her to pay it off? Q. 2. What advise would you offer Joan concerning her master card bill? Q. 3 Let’s make this scenario a little more personal. Describe what you would do if this were your situation. How would you handle the lack of funds for the weekend excursion? View the following websites:
follow the links to Financial Fitness Tools
Related Web SitesExercise - Now That You've Got Money Handled - Go to this link, scroll down to Chapter 12 and select the "Now that you've got money handled." When you have finished all other Money module assignments, fill out the two windows in this exercise and email your answers to me at anita.crawley@montgomerycollege.edu with Money Handled-extra credit in the subject line for up to 5 points extra credit. Assignments Summary
Thanks to Jackie Lynch for developing the Money Management Module. You may email her at jackie.lynch@montgomerycollege.edu with general questions about Money Management. If you have questions about the assignments for this module, ask them in the Student Lounge area of the Discussion Board. |
