DO NOWDO NOW

SILENTLY & INDEPENDENTLY, in today’s SILENTLY & INDEPENDENTLY, in today’s “Terms of the Day” sheet, define the “Terms of the Day” sheet, define the following terms, in your own words.following terms, in your own words.

1.1. IncomeIncome

2.2.Gross IncomeGross Income

3.3.Net IncomeNet Income

4.4.Fixed ExpensesFixed Expenses

5.5.Variable ExpensesVariable Expenses

BudgetingBudgeting

Making the Most of Your Making the Most of Your MoneyMoney

OBJECTIVEOBJECTIVE

SWBAT explain the SWBAT explain the difference between difference between “gross” and “net” pay by “gross” and “net” pay by calculating deductionscalculating deductions

AGENDAAGENDA

1.1. Careers Careers (25 minutes)(25 minutes) Complete research on Google SpreadsheetComplete research on Google Spreadsheet Complete “Job Announcement Criteria” Complete “Job Announcement Criteria”

sheetsheet

2.2. InstructionInstruction1.1. Human Capital – Invest in Yourself Human Capital – Invest in Yourself (5 mins)(5 mins)

2.2. Pay - Gross vs Net Pay - Gross vs Net (5 mins)(5 mins)

3.3. Expenses - Fixed vs Variable Expenses - Fixed vs Variable (5 mins)(5 mins)

3.3. Payroll Activity Payroll Activity (30 mins)(30 mins)

CAREERSCAREERS

1.1. Complete “Career Research” on Google Complete “Career Research” on Google DriveDrive Share with meShare with me

2.2. Complete “Job Announcement Criteria”Complete “Job Announcement Criteria” Find 2 job announcements – 1 for current Find 2 job announcements – 1 for current

qualification, 1 for a potential future careerqualification, 1 for a potential future career DO NOT PRINT ANNOUNCEMENTS!DO NOT PRINT ANNOUNCEMENTS!

Education vs. Income ActivityEducation vs. Income Activity

►Stand with your colored squareStand with your colored square

Everyone standing represents people Everyone standing represents people who started high school. who started high school.

This activity will illustrate the different This activity will illustrate the different paths people can choose during their paths people can choose during their

lifetime and the different results.lifetime and the different results.

Orange Orange

► If you are holding an orange card If you are holding an orange card please sit. please sit.

►These 4 people represent 14.8% of the These 4 people represent 14.8% of the U.S. population who did not graduate U.S. population who did not graduate from high school or earn a GED. from high school or earn a GED.

►Median income is $23,608 per year, Median income is $23,608 per year, the lowest wages of all workers the lowest wages of all workers

►Congratulations! Everyone remaining Congratulations! Everyone remaining finished high school.finished high school.

RedRed

► If you are holding a red card please sit. If you are holding a red card please sit. ►These 7 people represent 28.5% of the These 7 people represent 28.5% of the

U.S. population who graduated from U.S. population who graduated from high school or earned a GED. high school or earned a GED.

►Median income is $32,552 per year.Median income is $32,552 per year.►Congratulations! The remaining Congratulations! The remaining

decided to further their education.decided to further their education.

GreenGreen

► If you are holding a green card please If you are holding a green card please sit. sit.

►These 5 people represent 21.4% of the These 5 people represent 21.4% of the U.S. population who did have some U.S. population who did have some college or training. college or training.

►Median income is $36,348 per year.Median income is $36,348 per year.

YellowYellow

► If you are holding a yellow card please If you are holding a yellow card please sit. sit.

►These 2 people represent 7.5% of the These 2 people represent 7.5% of the U.S. population who received their U.S. population who received their associate degree. associate degree.

►Median income is $39,572 per year.Median income is $39,572 per year.

BlueBlue

► If you are holding a blue card please If you are holding a blue card please sit. sit.

►These 4 people represent 17.6% of the These 4 people represent 17.6% of the U.S. population who received their U.S. population who received their bachelor's degree. bachelor's degree.

►Median income is $53,300 per year, Median income is $53,300 per year, which is significantly more than a high which is significantly more than a high school graduates median income.school graduates median income.

PurplePurple

► If you are holding a purple card please If you are holding a purple card please sit. sit.

►These 2 people represent 7.2% of the These 2 people represent 7.2% of the U.S. population who have completed a U.S. population who have completed a Master’s degree. Master’s degree.

►Median income is $65,634 per year.Median income is $65,634 per year.

BlackBlack

• If you are holding a black card please sit.

• This one person represents 3.1% of the U.S. population who have completed a Professional or Doctorate degree.

• Median income is $79,664 per year.

Human CapitalHuman Capital

►Human CapitalHuman Capital – skills acquired – skills acquired through a process of self investmentthrough a process of self investment

►What are examples of things you can What are examples of things you can do to increase human capital?do to increase human capital? Summer jobsSummer jobs VolunteerVolunteer Extra-curricular activitiesExtra-curricular activities

Education vs. IncomeEducation vs. Income

Higher Education

=

Higher Estimated Lifetime Earnings

DO NOW – share outDO NOW – share out

SILENTLY & INDEPENDENTLY, in today’s SILENTLY & INDEPENDENTLY, in today’s “Terms of the Day” sheet, define the “Terms of the Day” sheet, define the following terms, in your own words.following terms, in your own words.

1.1. IncomeIncome

2.2.Gross IncomeGross Income

3.3.Net IncomeNet Income

4.4.Fixed ExpensesFixed Expenses

5.5.Variable ExpensesVariable Expenses

Income (Gross Pay vs. Net Income (Gross Pay vs. Net Pay)Pay)

Income is any money that you receiveIncome is any money that you receive

►Gross Pay – Income BEFORE Gross Pay – Income BEFORE deductionsdeductions

►Net Pay – Income AFTER deductions Net Pay – Income AFTER deductions (take-home)(take-home)

Four required tax deductionsFour required tax deductions1.1.Federal Income TaxFederal Income Tax

tax levied by the federal government on all earned tax levied by the federal government on all earned incomeincome►Based on income level, marital status, & allowancesBased on income level, marital status, & allowances

2.2.Social Security TaxSocial Security Tax federal old-age (retirement), survivors and disability federal old-age (retirement), survivors and disability

incomeincome►6.2% of GROSS PAY6.2% of GROSS PAY

3.3.Medicare TaxMedicare Tax health insurance for the aged and disabledhealth insurance for the aged and disabled

►1.45% of GROSS PAY1.45% of GROSS PAY

DeductionsDeductions

►Other deductions could include:Other deductions could include: Local TaxesLocal Taxes RetirementRetirement Health InsuranceHealth Insurance SavingsSavings DonationsDonations

►Amounts vary for these….many based Amounts vary for these….many based on your personal financial plan/goalson your personal financial plan/goals

ExpensesExpenses

►Fixed Expenses Fixed Expenses – monthly expenses – monthly expenses that remain constantthat remain constant

►Variable Expenses Variable Expenses – monthly – monthly expenses that fluctuateexpenses that fluctuate

►Periodic Expenses Periodic Expenses – expenses that – expenses that do not occur on a regular basisdo not occur on a regular basis

ExpensesExpenses

►Which type would these be?Which type would these be?

GroceriesGroceries

Magazine Subscription renewalMagazine Subscription renewal

Dinner and a MovieDinner and a Movie

Car PaymentCar Payment

GasGas

ClothingClothing

PAYROLL ACTIVITYPAYROLL ACTIVITY

1.1. Calculate the payroll (net pay) for the 5 Calculate the payroll (net pay) for the 5 examples listed on your sheet.examples listed on your sheet.

1.1. Federal Income Tax - Based on income level, Federal Income Tax - Based on income level, marital status, & allowancesmarital status, & allowances

2.2. Social Security Tax - 6.2% of GROSS PAYSocial Security Tax - 6.2% of GROSS PAY

3.3. Medicare Tax - 1.45% of GROSS PAYMedicare Tax - 1.45% of GROSS PAY

2.2. Then choose your “future” job from the Then choose your “future” job from the “Job Announcement” worksheet you “Job Announcement” worksheet you completed earlier and calculate the “Net completed earlier and calculate the “Net Pay”Pay”