Personal Financial Literacy

Assets

Puts money in your pocket or increases in value.

Get out and stay out of ___

Debt

Pay __ for your car

Cash

How should you pay for college?

Pay your tuition with cash.

Build __ and _

Wealth, give

Save at least how much money for an emergency fund?

500 dollars

What is an opportunity cost?

What you lose or give up in a decision.

You play video games for 8 hours a week for 10 weeks instead of working overtime that would earn you $1,600 what is the opportunity cost per hour?

8×10 = 80/1600 = $20

Personal finance is….

How individuals and families manage their money.

Financial freedom?

Having enough money to live comfortable without working.

What does financial freedom buy you?

It buys you time.

Salary

fixed amount for doing your job

wages/tips

fixed amount per hour

commission

percentage of a sale

Passive income

Money you get form almost no work

Gross income

money before taxes

Net income

money left after taxes

Disposable

money left after taxes and expenses

If I make $5000 dollars a month and $1000 is taken out for taxes and $2000 for expenses, what is my gross income

$5000

Income tax

A tax collected by the government that depends on how much money you make.

Federal tax

A tax collected to help fund the federal government.

State tax

A tax collected to help fund state governments

FICA

A tax that you pay for things like social security and medicare

Social Security

Helps fund your retirement

Capital gains tax

A tax you pay when you sell something for more than what you payed for.

Estate tax

A tax on someone’s money/property before giving it to an heir.

Fiscal year

Calendar the government uses to track spending, starts Oct 1

Deficit spending

Gov spending more than it has in taxes.

Why do we pay taxes?

We pay taxes for the government and other things like the elders, schools, roads and many other services we have in our country.

Pay for ____

Government services

When does the fiscal year begin?

Oct. 1

W-4 tax form

a tax form that tells your employer how much federal income tax to withhold from your paycheck.

Tax withholding

How much your employer withholds (saves) to use to pay for taxes.

W-2

a tax form from your employer that shows how much income you made from your job and how much taxes they withheld. (YTD)

1040

main form that you fill out to report income and file your taxes. Also shows your standard deductions and how much you have to pay in taxes or get a refund.

1099 tax form

tax from from any other income besides your employer

1089 tax form

tax form from payments you made on things like, tuition, mortgage payments, student loan interest for tax deduction

Itemized deductions

a list of allowable deductions that the government lets you use to lower your taxable income.

Example?

donations to charity or paying tithe.

Standard deduction

the dollar amount people can subtract from their income before the tax is calculated