Money Management

One of the hardest things about being on your own is managing money. Your paycheck may look like a lot until you start adding up your bills. In order to get the most out of your paycheck, complete the exercises in this section.

When you get your first paycheck, don’t be surprised by all of the deductions. The amount of money that you earn (gross pay) is not the same as the amount that you have to spend (take-home pay or net pay). Taxes and other payroll deductions make your check smaller than you think. The pay stub on your paycheck should contain the following information.

Earnings Statement Earnings rate hours 5.00 Gross Pay Deductions Statutory Social Security Tax Medicare Tax Federal Income Tax State Income Tax Net Pay 14.42 3.37 17.79 4.30 192.12 144.37 33.77 181.46 43.86 this period 46 232.00 232.00 2328.00 year to date 2328.00

1. If this was your paycheck, how much money would you have to spend?____________ 2. How many hours does this paycheck cover?__________________________________ 3. What were the total earnings for the time period?______________________________ 4. How much has been earned so far this year?__________________________________

SPENDER OR SAVER How do you handle your money? Answer the following questions. Yes No ___ ___ 1. If you received money for a birthday gift, would you save it? ___ ___ 2. Do you ever misplace your money? ___ ___ 3. When you go shopping, do you hear yourself say “I want?”

Where Does Your Money Go? Do you ever stop to think what happened to all your money when you look at an empty pocket only a few days after getting paid or getting your allowance? What you do with your money now is probably a good indication of what you will do with your money when you are on your own. Using this chart below, keep track of your money for a week.

SUND AY

MOND AY

Week of ____________

TUESD AY

WEDN ESDAY

THUR SDAY

FRIDA Y

SATUR DAY

AMOU NT SPENT

1. Is your money going where you want it to go?_________________________ 2. What changes can you make in your spending?________________________ 3. Are you saving any of your income?____________________________ ____

BUDGETING Most people find when they live on their own that they need to plan their expenses. When you make your plan, don’t forget money for savings. You will want to have some money set aside for special occasions like birthdays or vacations and for special purchases like a car or new furniture.

Develop a personal budget with $600 a month take-home pay. Use the work sheet below. The savings amount, 5% of the total, has already been filled in. You may adjust this amount.

Rent & Utilities

Telephone

Food (includes eating out)

Clothing

Transportation If you plan to have a car Car payment $____ Gas & Oil $____ Car Insurance $____ If you plan to ride “Share” Your contribution $____ If you plan to use public transportation Monthly fare total $____

Recreation

Other (specify) __________

Banking Most people use financial institutions like savings banks, savings and loan associations, or credit unions to keep track of their money. These institutions offer a variety of services. The most commonly used services are savings and checking accounts.

Savings accounts provide a safe place to put your money. Your money earns interest as long as it remains in the account. You don’t need a lot of money to open a savings account. You can withdraw your money at any time. Checking accounts provide a convenient alternative to carrying around a lot of cash. When you pay your bills with checks instead of cash, you have a good record of wht money you spent and when you spent it.

Find Out About Savings Accounts Contact a bank in your community. Find out about savings accounts. Record your information in the space provided.

1. Name of the bank? ________________________________________ __________ 2. How much money do you need to open a statement or passbook savings account? ________________________________________ ____________________________ 3. Describe at least one other type of savings account.

Find Out About Checking Accounts At the same financial institution, find the answers to the following questions on checking accounts.

1. How do you open a checking account?_________________________________ __ 2. Is there more than one type of checking account available?___Please describe___ 3. What does it cost to have a checking account? _____________________________ 4. Is there any way to avoid having a service charge on the account? _____________

Writing A Check Regardless of the type of checking account you select, it is important to write your checks properly. What you write on the check tells the bank what to do. Properly written check scan also protect you against potential fraud. Follow these rules when writing checks:

Always write in ink. If you make a mistake start again with a new check.  Date the check when you write it. Never date a check with a future date.  Write the full name of the person or company. Don’t use abbreviations and nicknames.  In the box, write the amount of the check in numbers.  On the line, write the amount of the dollars in words and the cents in numbers. Start on the far left hand side. After the last number, draw a line to 

Name and address of person holding the account ↓ JULIA R. OWENS 123 OAK AVE., #120B-PH 918-572-3344 TULSA, OK 74125-4765

date the check was written ↓ 101(check number) Date_____________________

Pay To The Order Of _______________________________________________ $_____ _________________________________________________________________Dollars HOME TOWN BANK P.O. BOX 5890 TULSA, OK 75338-5786 918-528-1689 Memo ____________________________ ___________________________________ (What the check is for) name as it appears on the signature 23894496 00128450 101 card at the bank

Use the check below to practice check writing. Make this check out to Sports World in the amount of $27.32 for camping equipment.

YOUR NAME 123 OAK AVE., #120B PH 918-572-3344 TULSA, OK 74125-4765

101 DATE _____________________

PAY TO THE ORDER OF _______________________________________ $ ________ ______________________________________________________________ DOLLARS HOME TOWN BANK P.O. BOX 5890 TULSA, OK 75338-5786 918-528-1689 MEMO_______________________________ __________________________________ 23894496 00128450 101

Check Writing Exercise Practice your banking skills by completing the following exercise. Don’t forget to record all of your checks in the check register.

1. On October 3rd of this year, you received a statement from Home Town Bank showing that you have $93.50 in your checking account. Enter this amount on the checking account register on the work sheet on the next page. 2. On October 4th, you bought groceries at Food Town Market. The groceries cost $24.32 and you paid for them with check no. 101. Write out the check, enter the purchase in your register and calculate your new balance.

3. On October 7th, you wanted $10 so you could go to the movies and have a little money for the weekend. Write out check no. 102 for “cash” enter the amount in your register and calculate your new balance. 4. On October 10th, you received your telephone bill from the C&P Telephone Company for $23.20. You paid the bill with check no. 103. Write out the check, enter the amount in your register and calculate your new balance.

5. On October 14th, you cashed your pay check of $112.00 and deposited $92.00 in your checking account and $20.00 in your savings account. Make out the deposit slip for your checking account, enter the deposit in your register and add the amount to your balance. Make out a deposit slip for your savings account. 6. On October 15th, you bought groceries at Food Town Market for $38.72. you paid for the groceries with check no. 104. Write out the check , enter the amount in the register and calculate the

7. Also on October 15th, you bought a new pair of shoes on sale at Fit Well Shoe Store for $19.95. You paid for the shoes with check no. 105. Write out the check, enter the amount in the register and calculate the new balance. 8. On October 18th, you received a check for $15.00 from Aunt Mable for your birthday. You mailed the check to the bank for deposit to your checking account. Make out the checking account deposit slip and add the amount to your register.

CHECK#

DATE

TRANSA CTION DESCRI PTION

AMOUN T OF WITHDR AWAL

AMOUN T OF DEPOSIT

BALANC E

CHECK REGISTER

YOUR NAME 123 OAK AVE., #120B PH 918-572-3344 TULSA, OK 74125-4765

101 DATE _____________________

PAY TO THE ORDER OF _______________________________________ $ ________ ______________________________________________________________ DOLLARS HOME TOWN BANK P.O. BOX 5890 TULSA, OK 75338-5786 918-528-1689 MEMO_______________________________ __________________________________ 23894496 00128450 101

YOUR NAME 123 OAK AVE., #120B PH 918-572-3344 TULSA, OK 74125-4765

102 DATE _____________________

PAY TO THE ORDER OF _______________________________________ $ ________ ______________________________________________________________ DOLLARS HOME TOWN BANK P.O. BOX 5890 TULSA, OK 75338-5786 918-528-1689 MEMO_______________________________ __________________________________ 23894496 00128450 101

YOUR NAME 123 OAK AVE., #120B PH 918-572-3344 TULSA, OK 74125-4765

103 DATE _____________________

PAY TO THE ORDER OF _______________________________________ $ ________ ______________________________________________________________ DOLLARS HOME TOWN BANK P.O. BOX 5890 TULSA, OK 75338-5786 918-528-1689 MEMO_______________________________ __________________________________ 23894496 00128450 101

YOUR NAME 123 OAK AVE., #120B PH 918-572-3344 TULSA, OK 74125-4765

104 DATE _____________________

PAY TO THE ORDER OF _______________________________________ $ ________ ______________________________________________________________ DOLLARS HOME TOWN BANK P.O. BOX 5890 TULSA, OK 75338-5786 918-528-1689 MEMO_______________________________ __________________________________ 23894496 00128450 101

YOUR NAME 123 OAK AVE., #120B PH 918-572-3344 TULSA, OK 74125-4765

105 DATE _____________________

PAY TO THE ORDER OF _______________________________________ $ ________ ______________________________________________________________ DOLLARS HOME TOWN BANK P.O. BOX 5890 TULSA, OK 75338-5786 918-528-1689 MEMO_______________________________ __________________________________ CHECKING DEPOSIT TICKET YOUR NAME 123 OAK AVE., #120B PH 918-572-3344 TULSA, OK 74125-4765 DATE_______________________________ ____________________________________ HOME TOWN BANK P.O. BOX 5890 TULSA, OK 75338-5786 918-528-1689 23894496 00128450 TOTAL ____________________ LESS CASH ________________ NET DEPOSIT ______________ CURRENCY ______________ COIN _____________________ CHECKS __________________

CHECKING DEPOSIT TICKET YOUR NAME 123 OAK AVE., #120B PH 918-572-3344 TULSA, OK 74125-4765 DATE_______________________________ ____________________________________ HOME TOWN BANK P.O. BOX 5890 TULSA, OK 75338-5786 918-528-1689 23894496 00128450

CURRENCY ______________ COIN _____________________ CHECKS __________________

TOTAL ____________________ LESS CASH ________________ NET DEPOSIT ______________

CHECKING DEPOSIT TICKET YOUR NAME 123 OAK AVE., #120B PH 918-572-3344 TULSA, OK 74125-4765 DATE_______________________________ ____________________________________ HOME TOWN BANK P.O. BOX 5890 TULSA, OK 75338-5786 918-528-1689

CURRENCY ______________ COIN _____________________ CHECKS __________________

TOTAL ____________________ LESS CASH ________________ NET DEPOSIT ______________

Balancing Your Check Book Below is the checking account statement you received from Home Town National Bank. The statement covers your transactions for the month of October (the five checks and two deposits you completed in the check writing exercise).

You will notice that one check did not reach the bank before the statement date. You will also notice that you have been charged a service charge for using the bank services. YOUR NAME STREET ADDRESS CITY, STATE ZIP Activity from October 1, 2001 to November 1, 2001 Account Summary Beginning Balance Deposits Withdrawals Service charge Ending balance Account Posting Date 10/03 10/06 10/08 10/12 10/14 10/17 10/20 10/01/01 2 4 11/01/01 $0.00 $ 200.05 $ 96.24 $ 2.00 $102.26 11/5/01 ACCOUNT # 1234

Description Debit Amount Deposits/credits deposit 93.50 check 101 24.32 check 102 10.00 check 103 23.20 deposit 92.00 check 104 38.72 deposit 15.00 Total withdrawals 96.24 Total deposits 200.05

To balance your checkbook, complete the following steps: Step One: Obtain a New Checkbook Balance 1. Enter the ending balance from your checking account register on line A. 2. Enter the amount on any service charges on Line B.

A. $ _________/_____ B. $ _________/_____ C. $ ________/_______

Step Two: Obtain Current Bank Balance 1. Compare the check numbers and amounts on the statement with your check register. Write down any checks that are not listed on the statement. 2. Enter the new balance shown on the statement on line D. 3. Enter the deposits not shown on statement on line E.

CHECKS OUTSTANDING

Number

Amount

TOTAL

D. $ __________________/___________ E. $ __________________/___________ F. $ __________________/___________ G. $ __________________/___________

Check Endorsing In order to cash a check that is made out to you, you must first endorse it by signing your name on the back of the check. There are three types of endorsement: a blank endorsement, a restrictive endorsement and a special endorsement.

Blank- John Jones Restrictive-for deposit onlyjohn jones Special-Pay to the order of Sue Lee John Jones Never endorse a check before you are ready to cash it. Use a restrictive endorsement if you are mailing your check to the bank. Use the special endorsement only when you intend to sign your entire check over to another person.

You have received three checks and plan to do three different things with them. Endorse checks appropriately. Check no. 1: You are mailing this check to your bank. Check no. 2: You want to give the entire check to your landlord, Robert Brown. Check no. 3: You are at your bank and you want to cash the check.

Electronic Banking One form of electronic banking is the automated teller machine (ATM). The ATM is available 24 hours a day, making it possible for people to do their banking after regular banking hours. To use an ATM you need a plastic ATM card and a personal identification number (PIN). Both the card and the number are provided by the bank.

How much do you know about ATMs? 1. You can use the ATM at your financial institution to deposit checks and withdraw cash. Yes ____ No_____ 2. You can use any ATM to make withdrawals. Yes____ No_____ 3. You can use your ATM card in some stores to pay for purchases. Yes____ No____

Money Orders Some people chose not to maintain a checking account and use money orders to pay their bills. Money orders can be purchased at banks, postal offices, and some retail stores. Cash must be used to purchase the money order. A fee, ranging from $.0-$3.00, is charged for issuing it.

• A money order looks and functions like a check. You must fill in a “pay to the order of” line and sign it. You keep a copy or portion of the money order for your records. • Always fill in the payee’s name on the “pay to the order of” line as soon as you receive the money order. Until this information is recorded the money order is the same as a cash and may be used by any one.

3 ways to cash a check without a bank account 1. Take a photo ID and the check to the bank on which the check was drawn. 2. Ask a friend to endorse the check and cash it for you. 3. Go to a check-cashing store. Be prepared to present a photo ID and to pay a fee.

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