Money Doesn t Grow on Trees. Real Money Talk for Grades Notebook Journal. By Kim Smith

Transcription

1 Money Doesn t Grow on Trees + Notebook Journal By Kim Smith

2 Money Doesn t Grow on Trees + Copyright 2014 Knowledge Box Central ISBN # CD Format: Printed Format: Ebook Format: Publisher: Knowledge Box Central All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopy, recording or otherwise, without the prior permission of the publisher, except as provided by USA copyright law. The purchaser of the ebook or CD is licensed to copy this information for use with the immediate family members only. If you are interested in copying for a larger group, please contact the publisher. Printed format is not to be copied and is consumable. It is designed for one student only. All information and graphics within this product are originals or have been used with permission from its owners, and credit has been given when appropriate. This book contains graphics used from and 2

3 Table of Contents Note to Parents/Teacher....6 Introduction...9 Saving 52-Week Savings Challenge The Envelope System...13 Earning What You Need to Know...21 Finding and Applying for a Job...25 Job Application The Resume.34 The Interview...41 After the Hire..47 W The Paycheck...51 Your Money Banking Cashing the Paycheck I have cash, now what?...58 The Savings Account The Checking Account The Bank Statement Reconciliation

4 Table of Contents The Savings Account..59 The Checking Account...64 The Bank Statement Online Banking...70 The Checkbook...73 The Check Card Budgeting Inflation Understanding Inflation Then and Now...84 Real Life.. 88 Necessity or Luxury? No, really!...87 Budgeting and Relationships Smart Budgeting Bills What You Need to Know Debt What You Need to Know About Debt...99 Paying Utilities...99 Credit Credit Report Credit Score Identity Theft

5 Table of Contents Bills (continued) Loans Co-signing a Loan Loans to Watch Our For Loan Consolidation or Credit Counseling? Financial Disaster Automobile Scenario Bankruptcy The Credit Card Financing College Investing The Basic Conclusion Financial Responsibility Pledge Resources Contact the Author

6 Note to Parents/Teacher This book has been written because of a need for realistic learning materials about money management and instilling financial responsibility values for our high school students. The Money Doesn t Grow on Trees series of learning materials is very different from other money books you will find on the market. These books provide parents with the opportunity to not only teach about money and money management, but to teach financial responsibility values. What are financial responsibility values? I can answer that question with another question. Do you know what the Generation of Entitlement is? Chances are that question just sparked a memory of a few teens/young adults in your own life, maybe even your own children. The Generation of Entitlement is a generation of seemingly spoiled and ungrateful people, who are the way they are because they never learned the true value of money and of earning their own. Let me explain further. It s easy to blame parents for raising a generation that seems focused more on what is given to them than on what they can earn for themselves. However, blame is not the point. Learning to break the cycle, is the point. Parents of teenagers learned from their parents how to deal with money matters, or rather, how not to. For generations, parents did not talk to their children about money, and they especially did not include them in any discussion about the family finances. The attitudes of generations in the past was that the family finances were not the business of the children. Fear of the children sharing what the parents earn with others and wanting to shield the children from knowing of any struggle has done nothing to teach them about money and the responsibilities related to it. Children do not need to know all of the details and amounts. They do need to be taught the basics of what it costs to run a household and to provide for them and the family. To make matters worse, parents who grew up during simple times wanted to give their children what they never had. This has been another factor that has contributed to children missing out on appreciating things that are given to them. Children have not learned the behind the scenes stuff involved in giving them the extras. Children used to be given gifts on special occasions and maybe a treat here and there. Nowadays, children are 6

7 showered with so much stuff that they don t even think twice about receiving gifts, and they are much less appreciative. Have you ever been stunned or felt hurt when you gave a gift from the heart to a child/teen when they acted like it was nothing? In today s world, we see more and more young adults that have unrealistic expectations when they leave the nest. Teenagers expect a brand new car for their 16th birthday or graduation present. How many know and appreciate the hard work behind the gift, if parents are financially able to buy them one? How many understand when parents are not financially able to buy them one? Nowadays, a lot of young couples that get married expect to have the things in a very short time that their parents have gained over 25+ years of marriage and hard work, and then when money is tight, they expect their parents to just give them money along the way. This is called the Generation of Entitlement. Normally, if we wait until the junior high and high school ages, it will be too late to instill financial responsibility values. By the time this journal is completed, your teen should have gained a better understanding of real world money issues, and, therefore, he should be on his way to personal financial responsibility. You are preparing your children to leave home. Prepare them along the way, and they will be ready to face a future with realistic expectations. Please keep in mind that you are your children s best example. We can teach children over and over what we want them to do, but if they see us being irresponsible with our finances, then the likelihood of them doing the same is great. If you have trouble managing your own money, then this series of books could be a learning tool for your entire family. The study guide in this journal is written directly to the student, however, I encourage you to be involved and involve your whole family in teaching this book. Adults who have a problem with saving or managing money can also benefit from this book. You may wonder why the first lesson in this book is about saving. Bear with me, I want your children to learn to save quickly, while they are working through this journal. At this age, your teens are more than likely either earning a little of their own money, or they are about to. If/when they are working, we want them to be learning what they should be doing with their money so that they don t just blow it all. 7

8 The lessons following the first one will focus on your teen s journey to getting a job, earning money, and teaching him to be a financially responsible adult so that he doesn t turn out to be one of the many young adults that are being dubbed the Generation of Entitlement, that will expect you to be financially responsible for them well into adulthood. It is our job, as parents, to always be there to help our children when the need arises, when we can help. It is NOT our job to support our children when they are adults. It is our job to teach them how to be financially independent and financially responsible adults. If you have younger children, take a look at our lapbooks for them. They are as follows: Money Doesn t Grow on Trees: Basic Money Talk for Grades K-6 Money Doesn t Grow on Trees: Money Essentials for Grades 5-8 **You may want to take your younger teen s age or maturity level into consideration for this series. If you feel that he/she needs to learn the skills in the book for Grades 5-8, then start with that book. 8

9 Introduction Students: At this age, you are probably thinking about things like getting a job, what you might do after high school, college, career, etc. You may be wondering what you need this book for. You may be planning to get a job, or maybe you are already somehow earning some money of your own. If you are able to walk into a store and make a purchase on your own, then you may think that is all you need to know. You may be able to manage a small amount of money quite well. If so, then you have a good start on being responsible. But there is so much more to being financially responsible than earning a few bucks and then spending it on something that you want. If there is ONE thing that you learn from this book, I hope it is what it means to have financial VALUES. The definition of values is a person's principles or standards of behavior; one's judgment of what is important in life. Learning this definition is so important. Most people have a basic understanding of the word. For instance, you probably have an understanding of your own family s values on certain topics, such as stealing. If you have been taught by your parents that stealing is wrong, then they have instilled that value in you. Parents instill so many values in us. Sometimes, though, parents don t realize that they have missed instilling values about money into their children. Some of the reasons for this are as follows: Parents love you so much that they want you to have things that they didn t have when they were growing up, so they buy you a lot of things without you having to earn them. Parents give you an allowance for doing things around the house that you should be doing without getting paid to do it, because you live there and are a part of the family unit. Much of the time, they let you spend that allowance on whatever you want, without teaching you to save and give part of it. Sometimes you are taught to save and give, but you don t really know why it s important to do so. Parents do not normally talk to you about their own money issues, such as how much they make, or their struggles to pay all of the necessary bills, mostly because it was the same with their parents when they were growing up. It is hard for parents to realize that you are not learning anything about money when they tell you that they can t afford something. 9

10 It may seem, from that list, that parents are to blame for a society of teens and young adults who never learned to be responsible with money and value what they earn. However, it is not my intention to cause any hard feelings. Parents did not learn what you are about to learn from this journal when they were growing up. Therefore, it is NOT their fault. Nor is it the fault of others in generations past who were caught up in the same cycle. Rich or poor, parents did not talk about the finances with their children. It s time to break that cycle. Instead of boring you with details about how mom and dad used to trudge through the snow and rain to walk a mile up hill to walk to school (yeah, right!), we ll just start learning what it means to have financial responsibility values! No eye-rolling...when you finish this journal you will be well on your way to having peace in your adult life. To be able to make and manage money in your adult life will bring you peace. So many people don t have this kind of peace. They are always trying to juggle bills, trying to decide what to pay this payday, and which bill has to wait until next time, and wondering why they never learned to save some money. This leads to a stressful life, not a peaceful life. The first lessons in this journal are about saving money. The reason that these lessons are first is because you need to learn to save before you have anything to save. It is much harder to start saving money after you have tasted the make money, blow money lifestyle. It is much more tempting to spend money on frivolous things now, and then wish you had saved a lot of that money for something later. When the time comes to obtain your own car, or home, you will wish that you had been taught how important it is to save. Enter this book. You can thank me later. As you work your way through this journal, you will run across places that say look it up! This is because one of the skills you need to develop, if you haven t already, is the ability to find out things that you don t know, need to know, or want to know, on your own. Being able to find out what you need to know when you need to know it is key to learning. Never stop learning! Whether you are a work-bound teen, or a college-bound teen, eventually you will be working and making your own money. Be sure to involve your whole family in the things you are learning, you may just bring some enlightenment into your family! 10

11 Lesson 2-Earning Part 1: What You Need to Know As a teen, you are probably thinking about ways to earn your own money. Once you hit your teen years, parents usually start pushing you to do things to earn your own money. You are at the age of being more mature, and becoming more capable of doing so. The course of nature is simple: you grow up, start earning your own money, graduate high school, and either go to college or move out on your own. To put it bluntly, your parents don t want to support you for the rest of your life. Love has nothing to do with it. It is just part of the journey that we all have to take. This is not to say that parents won t be there for guidance and support, and to sometimes help you out when needed. But it is time to prepare for your own working, financially responsible future. When you embark on the journey of job-hunting, you need to realize that teenagers and young adults do not usually land high-paying jobs. Sorry kids, that s reality. Even if you have a college degree, your chances of landing a high paying job are slim. You will have to take what is called an entry level job. That is the starting point. You have to start at the bottom, and work your way up the ladder. The more experience you gain, the more you will be worth in the workforce, and the more you will be paid. Even at that, if you work years at one job and then quit that job to go to another, you might have to start out at entry level, again. It is all too easy to look at your parents at this point and want what they seem to have, which is a little extra money, a nice home, a nice vehicle (or two), and maybe things like an RV or a boat. Your parents didn t always have these things, unless they were born rich, won the lottery or inherited a lot of money when they were younger, in which case, that s a whole different book. Right now, we are talking about people who have worked hard to get where they are and to have the things that they have. Everybody has to start somewhere. It takes years of hard work and struggles through hard times until you finally reach a point in your life that you have built a salary of financial freedom. 21

12 Your parents have probably worked long hours for years, getting raises and promotions along the way. This is why they can afford the things that they can. In order for you to afford what they have, you will need to be either really lucky and get a huge windfall (Look it up!), or do what your parents did, and work for it, for as long as it takes. What Else You Need to Know First of all, you need to know that the government has set rules concerning teenagers working. These rules are called Labor Laws and were put into place to ensure the safety of children under 18. You are not allowed to work jobs involving using any kind of equipment that could cause you to get hurt, or killed. If you are school-age, you are not allowed to work more than a certain amount of hours. This is to make sure that you are able to attend school and get your education without being too tired physically or mentally to learn, and so that work hours would not interfere with school hours. Look up the labor laws on the Department of Labor s website to learn the exact rules and requirements. These rules are federal law, so they are the same in every state in the United States. Sometimes you can get a work permit through your local Department of Labor agency to get a job at a younger age. Your parents can help you to obtain a work permit. Building a Good Work Ethic You may already be earning some of your own money through a job, odd jobs, or an allowance. If you are, then you are on the right track. However, this section will be helpful to you for future job-hunting. If you are not earning some of your own money as of yet, this section will help you in your hunt for your first job. Either way, a job that you have as a teen is more than likely not the job that you will keep for a long period of time. You may enjoy a job as a teen, or you may hate it. Sometimes the jobs that teens work are jobs that you would not like to be doing. It doesn t help that society seems to look down on some jobs. You will hear, if you already haven t, comments like, do you want fries with that? or he ll be flipping burgers the rest of his life. However, jobs in the fast food industry are essential in the world of economics. Keep in mind that it might not be a career job, but it is a money job. Sometimes you have to work money jobs 22

13 as stepping stones to the career job, or your dream job. One of the first things in developing good work ethics that you need to know is that no job is beneath you, as long as you do it to the best of your ability. Besides, these employers are the ones who are willing to hire you without any previous work experience, and they are the ones that you will give you work experience. No matter what kind of job you have at this age, or apply for at this age, it will be so much more for you than a way to make money. Your first job, and the jobs that you may work as a teen, help you to develop some very important skills and values. Your first job will teach you time management skills, how to get along well with co-workers, how to respectfully take orders from someone in authority, how to be a servant to the public (even though you sometimes may not like any of them). It will teach you that doing a good job the first time saves time, and it gives you a sense of accomplishment when you know you have done your best. A job will help teach you self-discipline, because it takes self-discipline to make yourself go to work while your friends or family are doing something fun. You will learn teamwork and about how efficient it is to work as one. A first job is your chance to prove that you are a mature, responsible teen or young adult. You will develop a good work ethic through doing the best job you can do, showing up on time, sometimes filling in for others, and just by letting the boss know that you are dependable and can be counted on whenever possible. These are very important for getting future employment. You will need good work references whenever you apply for a job, after you have your first job. If you are not dependable and don t do a good job, a previous employer can t give you a good reference, and it will be hard to get a job that you want and need. Honesty is another aspect to having good a work ethic. If you are told that you are not allowed to give friends freebies, then you are not to give them freebies. Your honesty and work ethic will be something to cherish forever, and any friend who would expect you to put your own reputation and job in jeopardy over a couple of dollars is no friend at all. Protect your reputation at all costs. If a situation should arise and you need to feed your family, one dishonest act could come back to haunt you and make finding suitable employment very hard, because no one will trust you. Basically, good work ethics go hand-in-hand with good 23

14 values. If you were raised to have good morals and values, then you already know how you should conduct yourself in the workplace. There is so much more that you will learn as you embark on your journey in your working life than we could ever possibly discuss in this workbook. However, you have a running start on what to expect out in the workplace. Answer the questions the below. Questions: 1. What is one of the first things you need to know when developing good work ethics? 2. A first job is your chance to prove that you are a mature, responsible teen or young adult. Briefly explain. 3. Explain why it is not a good idea to give your friends a freebie: 4. A first job is your chance to prove what? 24

15 Lesson 4-Bills Part 1: What You Need to Know A quote from Benjamin Franklin that we learned in an earlier lesson said, In this world nothing can be said to be certain, except death and taxes." One could probably add one thing to this, and that is bills. Unless you are an extremist rebel who lives in a cave, owing nothing to anyone, bills are certain. The bills are what you pay for anything from electricity and water, to vehicle and vehicle insurance, to a mortgage or rent payment. Most people have bills, and unless you plan to live in a cave, or high on a mountain top, where nobody knows that you exist, grow your own food, and totally live off of the land with no electricity, you will pay bills, too. You have learned about budgeting already because you need to know how to budget before you have bills to pay. When you strike out on your own, you will know how to budget your money to pay them. No one likes to pay bills, but they are a part of life, and if you pay them diligently, on-time every month, you will have the peace of mind of knowing that they are paid. It helps to think about those that do without or struggle to pay them. If you have money for your bills, be thankful, and pay them. Sometimes paying the bills and budgeting for them is not so easy. At some point in your life, you will be faced with decisions and struggles of your own. As we said before, life happens, and money could be tight. In that case, a budget actually becomes even more important. You may have to spread your money thin, and you need to be able to know how to spread it. A lot of the decisions that we make concerning how we spend and pay bills are common sense decisions, but somehow people manage to make the wrong decisions. This is mostly due to a simple lack of financial responsibility. Sometimes people choose to buy something they want instead of paying a bill that is due. Buying something new can be exciting. Remember, money can be an emotional thing. The feelings of excitement can become feelings of depression when finances spiral out of control because of overdue bills. 97

16 Do you ever notice that one or both of your parents gets stressed out when paying bills? Have you ever really seen a bill, and how much it is? You probably just assume that your parents have all of that under control, and they probably do. But, do you ever put yourself in their shoes and wonder how they pay all of the bills? It has been their job to pay them in your household. Your parents have probably never showed you the actual bills, or told you how much money they have to have every month to pay them all. Most parents probably never include their children in the financial aspect of the household. If your parents haven t, it is because most parents don t think about including their children in money matters. Children may tell others how much money Daddy makes, or they might tell Grandma how much the Visa bill is. A family s financial business is their own business. However, parents can, and should, involve their children. Children need to be a part of the process in order to learn how to be financially responsible themselves. This doesn t have to be done by telling them details. Instead it can be done by showing them how important it is to be diligent in paying what bills you have. When a child is asking for a toy and he is told that he can t have it because the power bill is due, he needs to be involved in paying the power bill so he can see for himself where the money goes. An explanation about why we have to pay for power, and why we need it should help even the youngest of children to understand why the bill must come first. Why am I telling you this at this stage of your life? The answer is simple. Because you, too, will probably someday have your own children. Questions 1.) Why is it important to be diligent about paying bills on time? 2.) Why should parents include children in bill paying? 98

17 Lesson 4-Bills Part 2-Debt What You Need to Know About Debt We learned what you need to know about paying bills in the last lesson. As long as you are paying bills, you are in debt. Any type of debt is also credit. Rent and utility bills can be considered as debt, because you owe the utility company every month. Even if you are paying for something that you will never own, you are paying a debt. A debt is anything that you owe someone else. A lot of people look at being in debt as owing a large amount of money. However, you can be in debt to someone for services rendered, or to people or companies that provide that service. We know the basic bills that most households have, such as utility bills (electricity, water, etc.) and the mortgage or rent payment. For the most part, debt means to buy now, pay later. Sounds like a good plan, right? This is the allure of debt. It s instant gratification to get what you want right now. Some types of debt seem to be necessary, for instance, a home loan (mortgage) and utility bills. Once you have a home, whether renting or buying, you need furniture. You need utilities. You need a way to get to work, unless you live in the city and walk or use public transportation and therefore have no need for a vehicle. These are the kinds of things that will cause necessary debt. When the time comes you need to be ready, and informed, so that you can make the right choices. Paying Utilities Utility companies allow us to use their service or product now, and pay later, as long as we pay every month. This means that we owe them a debt. If we don t pay them, we lose the service or product. The company will turn off your water or electricity for non-payment. The company may collect a security deposit when you sign up for their services. This is to ensure that if you do not pay your bill, they will have something to cover what you did not pay for. It s really very simple: pay for what you use, or you will lose it. Once you get behind on a utility payment, it s very hard to catch up. If you ever do get behind, most companies 99

18 will work out a payment plan with you, as long as you call them when you realize you are in trouble. Don t wait until the utility is turned off. Normally, once it is turned off, you will have to come up with the past due amount, plus the amount now due, to get service turned back on. The picture on the following page is sample of a utility bill. Some companies now offer paperless billing, which is electronic billing through , instead of getting a paper bill in the mail once a month. This is a good option if you are into conserving the earth s natural resources, but only if you are diligent about checking your and paying your bills on time. Some people need to receive the actual paper bill in order to better keep track of their bills and payments. A lot of people accumulate tons of paperwork from bills of all kinds. As you can see on the sample bill, there is a portion of the bill for you to send with your payment, and a portion for you to keep for your records. Some people file this portion for an indefinite amount of time, because they don t know how long to keep them. For most utility bills, this portion of the bill can be trashed as soon as you receive your next bill, and see that you were credited the correct amount paid. You do not need to keep it for your records unless you are keeping track of your utility usage, or work out of your home and claim utility usage on your yearly tax return that you file with the IRS. For instance, maybe you need to see how much your natural gas bill is so that you can better regulate your thermostat to save money during the winter months. In this case, I would suggest keeping track of the usage in a notebook. The utility company has records that are usually obtainable online, so if you should need a copy of your bill, you can print it out. Or, you may call and ask for one. You can also scan the bill, and file it on your computer. If you work out of your home and will write off part of your utilities, you will need to keep records of what you claim for seven years. Electronic bills received in will have a link to click on to go directly to the company s secure website. You can log-in and then view and pay your bill online. You can download the bill if you wish, to file on your computer. If you are taking the time to download and file your bills and receipts, be sure to back everything up regularly onto a thumb-drive or external hard-drive. Even the IRS accepts electronic receipts, so it is perfectly ok to file them electronically. More on how long to keep your financial files will be in another section. 100

19 Sample Utility Bill Atlantic Electric Company Energy Statement Account Number Bill Date Amount Due Due Date Amount Paid th /1/2010 John Hinkleschweitzer 101 Sunshine Drive Anytown, AS Send Payment To: Atlantic Electric Company 100 Electric Avenue Anytown, AS Detach-Keep Bottom Portion For Your Records Customer Service Emergencies Account Summary Current Charges $ Energy Tax 4.00 Utility Tax.55 TOTAL AMOUNT DUE AMT ENCLOSED DATE PAID Exercise: (You will need to ask your parents for permission to do this exercise). Sit down at the kitchen table with the monthly bills, and watch as your parents pay them. Look at each one, and discuss them with your parents. Here are some points to discuss: How some bills stay the same, while others go up and down. How some bills come unexpectedly like the plumber's bill when the pipes burst but you have to have the money on hand to pay them. What happens if you don't pay your bills on time. 101