Unit 6: Personal Finance:
Standard(s)/Element(s)
SS4E2 The student will identify the elements of a personal budget and explain why personal spending and saving decisions are important.
Summary/Overview
The focus of this unit is the self-discipline required to make informed and reasoned decisions concerning wise spending and saving choices.
Enduring Understanding(s)
At the end of this unit the student will understand that
Evidence of Learning
What students should know:
SS4E2 The student will identify the elements of a personal budget and explain why personal spending and saving decisions are important.
Summary/Overview
The focus of this unit is the self-discipline required to make informed and reasoned decisions concerning wise spending and saving choices.
Enduring Understanding(s)
At the end of this unit the student will understand that
- Spending and saving have benefits and costs.
- Personal budgeting means making decisions about benefits and costs.
- What are the benefits and costs of personal budgeting?
- What are the benefits and costs of saving?
- What are the benefits and costs of making purchases?
- Income depends on education and choice of vocation or career.
- Planning and maintaining a personal budget requires that individuals make decisions about their spending and saving.
- Individuals who spend more than their income must use credit.
Evidence of Learning
What students should know:
- Earnings are income from work.
- Income is any money that comes to a family from payments for work or from investments.
- Investments are money placed specifically to earn more money, such as certificates of deposit, savings bonds, or business developments.
- Budgets are formal or informal plans for spending and saving money from earnings.
- Spending is money used for goods and services.
- Savings is money set aside for future needs. Generally large savings earn some interest income from commercial banks or savings and loans.
- Sometimes children save smaller amounts of money in personal banks, such as piggy banks.
- It is important for families to understand their monthly budget.
- If spending and saving totals more than the total income to a family, credit can make up the difference; however, credit has an opportunity cost.
- Credit loans families money for a period of time.
- People who use credit cards pay interest to the bank. It can be called interest expense.
- Credit cards allow families to make consumer purchases with loaned money.
- Decisions about spending and saving involve costs and benefits.
- Costs are a loss or sacrifice, which can be the price of a good or service or the trade-off opportunity.
- Benefit is a gain or advantage, which can be either a good or service.
- Trade offs are the options from which you choose when you have multiple opportunities for using money.
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