Personal Finance

Finance
Finance is the study of ways to manage money. Governments manage money, but individuals must manage money as well. Financiers and financial planners help you decide what to do with your money to pursue your personal goals. A budget is a plan for managing money. You list your income, the money coming in. You list your fixed expenses, like rent and food; you list a few fun things, like movies. ncome is the money that comes in. You may get paid for doing work; you may sell the eggs from your chickens; you may rent out your tractor. !xpenses are reasons money goes out. You have two kinds of expenses" needs, and wants, or necessities and luxuries. Food, housing, and health care are needs; stylish clothes and movies are wants. #pending is when you pay out money in exchange for something you need or want. You can spend money on a popsicle or a motorcycle, to pay back a loan, or to pay tuition at college. $redit is trust. %hen you buy something on credit, you are promising to pay for it later. %hen you buy a toaster with a credit card, the credit& card&company trusts you. You get the toaster now, and you promise to pay for it later. f you rent a truck, you bring back the truck, and you have to pay a fee for using it. %hen you borrow money, you have to pay it back, and you have to pay a fee for using it. #ometimes you have to pay '() interest, sometimes *)&&or *()+

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If you know how to manage money, you are an expert in __ __ __ __ __ __ __. You use finance to try to reach your _____________ ______. ! plan to manage money is calle a __ __ __ __ __ __.

Bu get

Income

"oney that comes in is calle __ __ __ __ __ __. $hen money goes __ __ __ to %uy things, those things are __ __ __ __ __ __ __ __ . $hen you pay out money, you are __ __ __ __ __ __ __ __. 're it is a promise. You %uy a toaster with a
__ __ __ __ __ __

#xpenses

&pen ing

're it

__ __ __ __.

Interest

(he cre it-car -company trusts you to pay for the toaster __ __ __ __ __. (he fee you pay to %orrow money is calle __ __ __ __ __ __ __ __. You get the money now, an you pay it %ack later)P*+& ,-. __ __ __ __ __ __ __ __.

Personal Finance
/ame &a1ing 0ate
%hen you have extra money, you can save it in a bank account. You must force yourself to save money+ You can

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'lass Put money safely in the %ank2

save for a big purchase, like a home. ,he bank will keep your money safe.

you are __ __ __ __ __ __. Putting some of your money into a %usiness. (hat is calle __ __ __ __ __ __ __ __ __. If the %usiness oes well, you make __ __ __ __ __. If the %usiness falls apart, you lose __ __ __ __ __. "oney you get now an promise to pay %ack later is a __ __ __ __. $hen you owe money, you are in __ __ __ __. $hat you gi1e up when you choose one thing2 __ __ __ __.

In1esting

*oan

f you put money into a business, you become the owner of a small percentage of the business. As the business succeeds, you will make money. You will receive a small percentage of the money the business makes. Thats great! f the business fails, you lose your money. Ouch! f you invest wisely, you can make money without doing any work. A loan is a pile of money you promise to pay back. Grandma can give you a loan, or a bank can. You and the lender agree to a schedule to repay it. %hen you owe money, you are in debt. f you borrow money to pay for college, you will be in debt until you get a -ob, earn money, and repay it. You choose, you lose. f you choose chocolate ice cream, you lose vanilla. f you buy stylish clothes, they will cost you the opportunity to buy books.

0e%t

3pportunity 'ost 'apital

__ __ __ __ __ __ __ __ __ __ __

$apital is a pile of money that enables ! %ig pile of money you can you to get something started. You need use to start a %usiness is capital to start a business or buy a house. __ __ __ __ __ __ __. You borrow capital from a bank and repay it over time. ,he government provides streets, schools, courts, and armies. %ho pays for all that. Y/0+ ,he federal government takes *() to 1() of your income as income tax. ,he state of Georgia slaps a 1) sales tax on most things you buy.

(ax

(he go1ernment takes 4-. of your income to pay for roa s an schools. (hat is calle __ __ __.