Unit 1: Wants & Needs
Explain the difference between a WANT and a NEED.
WANTS: something that is not necessary to live, but can improve your life
NEED: something that is necessary to live or be successful in life
TRUE or FALSE:
It is ok to give someone a blank check.
FALSE: because they would be able to write in any amount on the line and cash it in at the bank.
What is the definition of HOURLY WAGE?
The amount of money an employee is paid per hour
What is the definition of CHECKING ACCOUNT?
A bank account used to write checks for payment; allows for the use of a debit card
What is the definition of FIXED EXPENSE?
An expense that is regularly scheduled and is predictable
Classify each item in the list as a WANT or a NEED:
-Electricity
-House Plant
-Food
-Water
-Brand New Car
WANTS:
-House Plant
-Brand New Car
NEEDS:
-Food
-Water
-Electricity
What is the definition of RECONCILE?
Comparing two records of an account in an effort to match them.
What is the definition of ANNUAL SALARY?
The amount of money an employee is paid per year
What is the definition of a SAVINGS ACCOUNT?
A bank account used to save money
What is the definition of VARIABLE EXPENSE?
An expense that is not regularly scheduled and is unpredictable
If you spend $36 per WEEK on coffee, how much money do you spend per YEAR on coffee?
$36 x 52 weeks = $1,872 per year
TRUE or FALSE:
A check with a manually-written “VOID” is used to communicate to the bank account information only, without payment
True: if a check has VOID written in PEN, the check can not be used for anything else besides account information.
Using the 2,000-workhour approximation, if you are paid an hourly wage of $15 per hour, how much will you make per year?
$15 x 2,000 = $30,000 per year
What is the difference between a SAVINGS ACCOUNT and a CHECKING ACCOUNT?
Savings Account:
-Money withdrawn in person, at the bank, or ATM
-Pays higher interest
Checking Account:
-Money withdrawn with a check, ATM card, Debit card, or in person
-Pays lower interest
Using the Spending Guidelines Budget Wheel, what are the guideline percentages for the following categories?
-Housing
-Transportation
-Food
-Savings
-Cloths
-Entertainment
-Debts
-Miscellaneous
Spending Guideline Budget Wheel Percentages:
-Housing 30%
-Transportation 11%
-Food 20%
-Savings 10%
-Clothes 5%
-Entertainment 12%
-Debts 5%
-Miscellaneous 7%
If you spend $5,616 per YEAR on groceries, how much do you spend per MONTH?
$5,616 / 12 moths = $468 per month
TRUE of FALSE:
You do not need to sign a check with your signature to make it valid.
FALSE: you need to sign your check with your signature in order for the bank to take it.
If you make an ANNUAL SALARY of $30,000, how much do you make PER MONTH?
$30,000 / 12 months = $2,500 per month
Marvin got paid $857.00 from his job this week. He elected to deposit 10% into his SAVINGS ACCOUNT and the rest into his CHECKING ACCOUNT. How much did he deposit into his SAVINGS ACCOUNT and CHECKING ACCOUNT?
Savings Account:
$857.00 x 0.10 = $85.70 into Savings Account
Checking Account:
$857.00 - $85.70 = $771.30 into Checking Account
Anne gets paid biweekly (26 paychecks per year). Her biweekly GROSS INCOME is $3,000. What is her biweekly NET INCOME and her MONTHLY NET INCOME?
*Hint: we will estimate her net income by multiplying her gross income by 70% as a decimal.
Biweekly Net Income:
$3,000 x 0.70 = $2,100 biweekly
Monthly Net Income:
$2,100 x 26 paychecks = $4,550
If you spend $450 per MONTH, how much do you spend per WEEK?
*Hint: Convert Month to Year to Weekly
$450 x 12 months = $5,400 per year
$5,400 / 52 weeks = $103.85
TRUE or FALSE:
You put the date on the check in the top right corner.
TRUE
Using the 2,000- workhour approximation, if you are paid an annual salary of $72,000, how much money do you make PER HOUR and PER 40 HOUR WORKWEEK?
Per Hour:
$72,000 / 2,000 = $36 per hour
Per 40 Hour Workweek:
$36 per hour x 40 hour workweek = $1,440 Per Week
Nick's semimonthly net income is $1,200. If he saves 10% of his income each paycheck, how much will he save EACH WEEK and AT THE END OF YEAR (24 paychecks)?
Each Week:
$1,200 x 0.10 = $120.00 each week
End of Year (24 paychecks):
$120.00 x 24 paychecks = $2,880 per year
Rick gets paid weekly. His weekly GROSS INCOME is $720. What is his WEEKLY NET INCOME and his MONTHLY NET INCOME?
*Hint: We will estimate his net income by multiplying his gross income by 70% as a decimal.
*Hint: multiply by 52 then divide by 12 for monthly net income
Weekly Net Income:
$720 x 0.70 = $504 per week
Monthly Net Income:
$520 x 52 weeks = $27,040 per year
$27,040 / 12 months = $2,184 per month