Financial Freedom - Mrs. Nelson Economics

Financial Freedom

A Workbook For Understanding Personal Finance

The Florida Council on Economic Education would like to thank those whose support made this project possible.

813.289.8489

THANK YOU!

?2011 Florida Council on Economic Education



Dear Floridians,

As your state Chief Financial Officer, my primary goal is to help you keep and protect your hard-earned dollars. One of the keystones in protecting your financial health and promoting economic prosperity is having a solid foundation in financial literacy.

Many of us realize the importance of practicing sound financial principles like basic money management and budgeting. However, one in four Floridians do not adequately set money aside, plan for retirement or manage their debt. At the collegiate level, university administrators state that they lose more students to credit card debt than to academic failure.

Financial literacy is one of the most powerful tools that we can give to the young people of Florida, equipping them to achieve financial stability and steer clear of debt and financial fraud.

Along with preparing young people to go out and earn a living, it is equally critical to prepare them to manage what they earn. Those who know how to manage their money have money to start businesses, provide jobs and invest in their communities, including supporting educational opportunities for others.

I commend the commitment and progress that the Florida Council on Economic Education has made in improving the lives of Floridians through financial literacy with the help of dedicated parents and educators.

Together, we can pass on valuable lessons to the next generation, and help foster long-term economic prosperity and freedom.

Sincerely,

Jeff Atwater

The Florida Council on Economic Education gratefully acknowledges and thanks the following individuals for their contributions, time, expertise and advocacy. These educators are the "Best of the Best" and the FCEE is proud of the work they have

done to bring Financial Freedom to the next level.

Project Manager Brett Burkey - 2009 Economic Educator of the Year

Spanish River High School, Boca Raton

Contributors Andrea Caceres-Santamaria - Seminole Ridge Community High School, Loxahatchee Mary Chowenhill - 2011 Economic Educator of the Year, Robert E. Lee High School, Jacksonville

Denny Dawson - Marine and Oceanographic Academy, Fort Pierce Tom Glaser - 1996 Economic Educator of the Year, Mater Academy Charter, Hialeah Gardens Deborah Kozdras - Gus A. Stavros Center for Free Enterprise and Economic Education, USF

Beverly Ledbetter - 2003 Economic Educator of the Year, Pasco High School, Dade City Virginia Meachum - 2010 Broward County Social Studies Teacher of the Year, Coral Springs High

School, Coral Springs Patricia Sibson - 2008 Economic Educator of the Year, Florida Virtual, Jacksonville

Steven Tommeraas - Glades Central High School, Belle Glade

813.289.8489

?2011 Florida Council on Economic Education



FOREWORD

In your hands or on your screen is a road map of the perilous highways and bi-ways of the personal finance world. Though the landscape has changed, success in navigating still remains an achievable goal. A person who attains financial freedom scales that summit by making sound choices, staying true to themselves, living within or even below their means, paying themselves first, and remaining devoted to a solid set of priorities. These principles have always been true; it's just the world we apply them to has changed. The recent housing bubble, the mountains of consumer debt, the rising cost and uncertainty around healthcare, the number of graduates returning to the nest with a suitcase full of college loans, and the ever increasing threat that even the best laid plans can be dashed from one cyber attack are enough to frighten anyone. The American Dream used to mean a house surrounded by a white picket fence, kids, dog, a car in the driveway and a chicken in every pot. Now the American Dream for many is to simply get out of debt. To make matters more complicated, the recent recession and the fundamental causes have resulted in a wave of new rules and regulations surrounding the institutions that manage our financial systems and markets. It seems the challenges may be too daunting to overcome. But the difference between benefiting or becoming a victim of your finances will always boil down to the choices you make. Recently, too many people were dazzled by rapidly rising housing prices, easy credit, and unrealistic expectations. Our society celebrated consumption while disregarding thrift. Apparently, no one thought that a "Home-saving" channel on television would be profitable. Once the momentum was established, it was too great a force for many to ignore. Today, the ashes of that flame-out are everywhere. Though many people are suffering, the aftermath can serve as a great compass for the choices you make forward. It is quite possible that people who paid themselves first, saved instead of recklessly spending, kept their debt load manageable, looked to the future instead of living for the moment, had a true understanding of all opportunity costs and didn't get caught up in the wave of unrealistic expectations are not among the wounded today. The clear point to make here is that those have always been the answers to the mysteries of achieving "Financial Freedom".

813.289.8489

?2011 Florida Council on Economic Education



Financial Freedom Table of Contents Overview................................................................................................................. 1 What Is Financial Freedom?.......................................................................................... 3 Chapter 1: Managing Money......................................................................................... 4

Introduction.................................................................................................................................. 4 Learning the Language................................................................................................................ 4 Step 1: Tracking One Week of Spending Habits...................................................................... 6 Step 2: Setting a Realistic Budget........................................................................................... 10 Step 3: Maximizing Your Purchasing Power by Being an Informed Dollar Stretcher...................................................................................................................................... 11

Chapter 2: Banking Basics............................................................................................ 16

Introduction................................................................................................................................ 16 Learning the Language.............................................................................................................. 17 Should You Use a Bank? ........................................................................................................... 18 What You Need to Open a Bank Account............................................................................... 21 Interest: How is Interest Calculated?..................................................................................... 22 The Rule of 72 ............................................................................................................................ 24 Saving Money .......................................................................................................................... 25 What is a Checking Account? .................................................................................................. 27 How to Manage a Checking Account...................................................................................... 29 How to Write a Check .............................................................................................................. 30

813.289.8489

?2011 Florida Council on Economic Education



The Checkbook Register ...........................................................................................................31

How Banks Make Their Money ............................................................................................... 34

Chapter 3: Job Search ................................................................................................. 35

Introduction................................................................................................................................ 35

Learning the Language.............................................................................................................. 36 Why Consider Getting a Job .................................................................................................... 36

How to Begin the Job Search ................................................................................................ 40

Making Contact with Potential Employers ........................................................................... 44

Follow-up on Job Applications ................................................................................................ 49

Part II: Working for Yourself .................................................................................................... 51

Go It Alone or Have Partners ................................................................................................... 52

Business Plan ............................................................................................................................. 53

Chapter 4: Consumer Credit & Debt ......................................................................... 58

Introduction................................................................................................................................ 58

Learning the Language.............................................................................................................. 59

What is Consumer Credit? ....................................................................................................... 60

What is the Difference Between Credit and Debit? ............................................................. 61

Reading a Credit Card Statement ........................................................................................... 62

What if you are Denied Credit? .............................................................................................. 65

New Credit Card Legislation .................................................................................................... 66

What Is and Is Not Included in a Credit Report? .................................................................. 67

How to Read a Credit Report .................................................................................................. 68

Improving and Maintaining a Good Credit Score ................................................................. 69

813.289.8489

?2011 Florida Council on Economic Education



Good Debt vs. Bad Debt .......................................................................................................... 70

Tying Everything Together ....................................................................................................... 71

Chapter 5: Automobiles and Auto Financing .......................................................... 72

Introduction.............................................................................................................................. 72

Learning the Language............................................................................................................ 74

New or Used: Deciding what is Best for you ....................................................................... 76 Buying New ............................................................................................................................. 77

Estimating Car Costs .............................................................................................................. 78

Financing a New or Used Car ................................................................................................. 79 Car Financing ............................................................................................................................ 80

Shopping for a Car Loan .......................................................................................................... 81

Car Leasing ................................................................................................................................ 81

Chapter 6: Managing Risk .......................................................................................... 83

Introduction............................................................................................................................... 83

Learning the Language............................................................................................................. 84

Auto Insurance 101 ................................................................................................................. 86

Understanding Coverage ....................................................................................................... 87

Factors that Impact your Rates .............................................................................................. 89

Learn the Language .................................................................................................................. 92

Types of Life Insurance ............................................................................................................ 93

Healthcare Insurance 101 ....................................................................................................... 95

Patient Protection and Affordable Care Act (PPACA) ......................................................... 96

Types of Healthcare Insurance ............................................................................................... 97

813.289.8489

?2011 Florida Council on Economic Education



 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download