Difference between revisions of "AY Honors/Household Budgeting/Answer Key"

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{{HonorSubpage}}
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<section begin="Body" />
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{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=1}}
 
<noinclude><translate><!--T:1-->
 
<noinclude><translate><!--T:1-->
 
</noinclude>
 
</noinclude>
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{{honor_desc
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<!-- 1. What is a household budget and what is the importance of having one? -->
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|stage=00
 
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|honorname=Household Budgeting
 
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|skill=1
 
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|year=2012
 
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|category=Household Arts
 
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|authority=South American Division
 
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|insignia_source=SAD
 
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|insignia=Family Budgeting.png
 
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}}
 
  
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==1. What is a household budget and what is the importance of having one?== <!--T:2-->
+
<!--T:2-->
 +
A household budget is (hopefully) a written guide to how you plan to spend your household income. It also shows how much you plan to earn or otherwise receive as a family. Income may include employment, business, investment income and government payments to the family. Expenses will include housing (including rent or mortgage, utilities and property taxes), transportation, food, entertainment, clothing, education and other costs. You should also budget for savings and donations - ideally off the top before you spend the rest of your income.
  
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A household budget is (hopefully) a written guide to how you plan to spend your household income. It also shows how much you plan to earn or otherwise receive as a family. Income may include employment, business, investment income and government payments to the family. Expenses will include housing (including rent or mortgage, utilities and property taxes), transportation, food, entertainment, clothing, education and other costs.  You should also budget for savings and donations - ideally off the top before you spend the rest of your income.
+
<!--T:3-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 1 -->
  
−
==2. Make a list of your family's expenses and classify them as necessary, useful and superfluous.== <!--T:3-->
+
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=2}}
 +
<noinclude><translate><!--T:4-->
 +
</noinclude>
 +
<!-- 2. Define the following: -->
  
−
The list will be accumulated while meeting Requirement #16. The lines between necessary, useful and superfluous are not always clear.  While you definitely need a place to live, most people could live in a less expensive home. Your electric bill is necessary, but everyone can take steps to reduce their electric bill.  Food is required to stay alive, but takeout and prepared food is more costly than simple home cooked food. You might think you can't live without your handphone but your parents or grandparents will remember seeing their first mobile devices.  Discuss these concepts.
+
<!--T:5-->
 +
<noinclude></translate></noinclude>
  
−
==3. Check your family's shopping list for grocery and hygiene products. Are all the items really necessary?== <!--T:4-->
+
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=2a}}
 +
<noinclude><translate><!--T:6-->
 +
</noinclude>
 +
<!-- a. Income -->
  
−
Consider things like:
+
<!--T:7-->
−
*Is there a cheaper way to buy the item? Bulk purchasing, buying wholesale, or growing it yourself are alternatives
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<noinclude></translate></noinclude>
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*Are we wasting food by letting it go bad?
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{{CloseReq}} <!-- 2a -->
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*Do you really need fancy shampoo or soup?
 
−
*Do you really need that junk food in the shopping basket?
 
  
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==4. What is the best day and place to get vegetables, fruits and greens in your neighborhood?== <!--T:5-->
+
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=2b}}
 +
<noinclude><translate><!--T:8-->
 +
</noinclude>
 +
<!-- b. Expenses -->
  
−
In developing countries this may be a local vendor market.  In the developed world the grocery stores are open daily. You may be able to buy direct from farmers in season. The answer is going to depend on where you live.
+
<!--T:9-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 2b -->
  
−
==5. What can you and your family do to save on water, electricity and telephone?== <!--T:6-->
+
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=2c}}
 +
<noinclude><translate><!--T:10-->
 +
</noinclude>
 +
<!-- c. Cash flow -->
  
−
Water should not be wasted.  Ideas to save water include:
+
<!--T:11-->
−
*Use a rain barrel to collect water for the garden\
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<noinclude></translate></noinclude>
−
*Put a brick, plastic bag full of water, or other device in the toilet tank
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{{CloseReq}} <!-- 2c -->
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*Fix all leaks as they are detected. A leak will waste huge amounts of water over time
 
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*Put flow reducers on shower heads
 
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*Run dishwashers and washing machines only when full. This reduces the number of cycles, uses less water and power, and saves on wear and tear on the machines
 
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*Turn off the water while brushing your teeth or soaping up in the shower
 
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*Recycle water you boil pasta or corn in as dishwater or for soup.
 
  
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Electricity use reduction can take many forms including:
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{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=2d}}
−
*Turn off the lights when you leave a roo
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<noinclude><translate><!--T:12-->
−
*Install energy efficient bulbs. Incandesent bulbs are actually being banned in some places
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</noinclude>
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*Don't go crazy on seasonal light displays
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<!-- d. Loan -->
−
*Turn off lights before going to bed
 
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*If you have a/c or electric heat, use windows to keep things cool or blankets and extra clothing to stay warm
 
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*Use a programmable thermostat to turn off heat while you are normally out of the house 
 
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*Turn off and unplug electronics when you are not actively using them
 
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*Replace non-energy efficient appliances and get rid of the extra fridge in the garage (its probably not energy efficient at all)
 
  
−
Telephone costs can be cut by:
+
<!--T:13-->
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*Use email or Skybe instead of long distance
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<noinclude></translate></noinclude>
−
*Get a better long distance calling plan
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{{CloseReq}} <!-- 2d -->
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*Cut out calling features you don't use
 
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*Do you need a landline?  Many are using mobile phones and/or VOIP systems now
 
  
−
==6. What is inflation?== <!--T:7-->
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{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=2e}}
−
A general increase in prices and fall in the purchasing value of money. Since the cost of living goes up over time, you need to increase your income over time as well. 
+
<noinclude><translate><!--T:14-->
 +
</noinclude>
 +
<!-- e. Usury loan -->
  
−
Inflation eats away at the purchasing value of your saving, but inflation also increases the value of hard assets like real estate. Inflation decreases the effective cost of repaying debt over time since you can pay back the debt in less valuable dollars. This is why it is often a good idea to buy a house partly with borrowed money and pay it off over a few years.
+
<!--T:15-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 2e -->
  
−
==7. What taxes does your family have to pay?== <!--T:8-->
+
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=2f}}
 +
<noinclude><translate><!--T:16-->
 +
</noinclude>
 +
<!-- f. Interest -->
  
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This will depend on where you live, but the main types of taxes in the world levied on consumers include:
+
<!--T:17-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 2f -->
  
−
#Income taxes, often deducted by the employer. Often a "progressive tax" that increases in percentage at higher levels of income
+
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=2g}}
−
#Payroll taxes depend on the country but can cover national pension plans, workers compensation plans, unemployment insurance, and similar programs. 
+
<noinclude><translate><!--T:18-->
−
#Sales Taxes, Goods and Services Tax (GST) or Value Added Taxes (VAT) collected whenever you buy various products and services. Usually a fixed percentage of the transaction value
+
</noinclude>
−
#"Sin Taxes" collected at point of sale or buried in the price of cigarettes and alcohol.
+
<!-- g. Principal -->
−
#Property taxes to fund municipal government, roads, schools, protection services, and hospitals. Usually based on the value of your real estate
 
−
#Road taxes may be collected with automobile licensing or imbedded in the price of gasoline.  
 
−
#Poll taxes are levied on every adult regardless of income or ownership of property
 
−
#Customs and Duties are charged when you import something into the country
 
  
−
==8. What kind of shopping should never be done with credit? why?== <!--T:9-->
+
<!--T:19-->
−
Generally no shopping should be done with credit.  You should not be spending tomorrows income today because you don't know for sure if you have income coming tomorrow. 
+
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 2g -->
  
−
Buying a home or car on credit that uses a reasonable amount of your income is considered by most financial planners to be acceptable.
+
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=2h}}
 +
<noinclude><translate><!--T:20-->
 +
</noinclude>
 +
<!-- h. Credit -->
  
−
==9. What is interest? How should it be calculated?== <!--T:10-->
+
<!--T:21-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 2h -->
  
−
Interest is the money you pay on money you borrow from someone else (bank, credit card company, finance company, friend etc)
+
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=2i}}
−
Interest is also one way you can benefit from your savings by loaning your savings to a bank or business (as in buying a bond)
+
<noinclude><translate><!--T:22-->
 +
</noinclude>
 +
<!-- i. Credit score -->
  
−
==10. Investigate what the is interest rate and what are the financial responsibilities in the lines of credit lines for the following:== <!--T:11-->
+
<!--T:23-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 2i -->
  
−
===a. Credit card=== <!--T:12-->
+
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=2j}}
 +
<noinclude><translate><!--T:24-->
 +
</noinclude>
 +
<!-- j. Investments -->
  
−
===b. Overdraft=== <!--T:13-->
+
<!--T:25-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 2j -->
  
−
===c. Personal loan=== <!--T:14-->
+
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=2k}}
 +
<noinclude><translate><!--T:26-->
 +
</noinclude>
 +
<!-- k. Tithe/offerings -->
  
−
==11. What measures should be taken when the family is in debt?== <!--T:15-->
+
<!--T:27-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 2k -->
  
−
Debt results from either spending more then you bring in until all your savings are exhausted (deficit spending), or from buying assets or investing on credit.
+
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=2l}}
 +
<noinclude><translate><!--T:28-->
 +
</noinclude>
 +
<!-- l. Taxes -->
  
−
Deficit spending debt is very serious and must be remedied quickly. The best way out of deficit spending debt is to figure out how to run a budget surplus. You either need to increase the amount of money you earn above your spending, decrease the amount you spend below the amount you earn, or preferably tackle the problem from both sides. As you run a budget surplus you can use the surplus to reduce and eliminate the debt.
+
<!--T:29-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 2l -->
  
−
Another way to get out of debt is to sell assets off to raise cash. Selling investments, real estate, furniture etc may be the only alternative if you suffer some serious unfortunate circumstances, but eventually you will run out of things to sell so running a budget surplus is a much better plan. 
+
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=2m}}
 +
<noinclude><translate><!--T:30-->
 +
</noinclude>
 +
<!-- m. Inflation -->
  
−
Debt incurred to buy income producing assets is more acceptable.  You might use debt to invest in a business or farm that makes a living for you.
+
<!--T:31-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 2m -->
 +
{{CloseReq}} <!-- 2 -->
  
−
Similarly, student debt is sometimes required to get a good education, investing in yourself to enable you to earn a better living. However student debt is often a huge trap that takes people many years to get out of.  
+
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=3}}
 +
<noinclude><translate><!--T:32-->
 +
</noinclude>
 +
<!-- 3. Explain the difference between needs and wants. Make a list of your family's expenses and classify them as needs or wants. -->
  
−
Most people use debt to buy a home or a car. Used wisely, this kind of debt can ok. It is impossible to save enough money to buy a home for cash, while still paying rent out. Home prices will generally rise faster then the interest on your savings account.  Buying a car on credit is a common way to spread out the cost of the car over much of its effective useful life.  Usually you can resell the car and pay off the loan if you have to get rid of the payments. 
+
<!--T:33-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 3 -->
  
−
Don't confuse buying a necessary asset like a home or a car with an unnecessary asset like a pleasure boat or fancy bike. Unnecessary assets are actually liabilities because they tend to cost you money to maintain, store and insure them while they do nothing to provide shelter, earn income, or get you to work or school.
+
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=4}}
 +
<noinclude><translate><!--T:34-->
 +
</noinclude>
 +
<!-- 4. What can you and your family do to save on utilities? How do any of these expenses vary during different seasons of the year in your home? -->
  
−
==12. What percent of the household income should be saved?== <!--T:16-->
+
<!--T:35-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 4 -->
  
−
==13. Investigate at least two methods besides a passbook to invest money saved. What are the advantages and disadvantages of each?== <!--T:17-->
+
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=5}}
 +
<noinclude><translate><!--T:36-->
 +
</noinclude>
 +
<!-- 5. How can inflation affect a family budget? -->
  
−
==14. Do the following:== <!--T:18-->
+
<!--T:37-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 5 -->
  
−
===a. Write and endorse a check=== <!--T:19-->
+
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=6}}
 +
<noinclude><translate><!--T:38-->
 +
</noinclude>
 +
<!-- 6. What are the methods your family uses to pay bills? What other methods could be used? -->
  
−
===b. Write a receipt=== <!--T:20-->
+
<!--T:39-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 6 -->
  
−
===c. Pay for tickets and/or an invoice at an ATM=== <!--T:21-->
+
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=7}}
 +
<noinclude><translate><!--T:40-->
 +
</noinclude>
 +
<!-- 7. What types of taxes exist in your area (city, state/provincial, federal, income, property, sales, payroll, etc.)? What are taxes typically used for in your region? -->
  
−
==15. Keep a personal budget and a log of money coming in and out for six months.== <!--T:22-->
+
<!--T:41-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 7 -->
  
−
==16. Make a family budget and keep an accurate record of inputs and outputs for six months (Pathfinders and youths can do this together with parents); those who live on farms can make records of farming, dairy and livestock.== <!--T:23-->
+
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=8}}
 +
<noinclude><translate><!--T:42-->
 +
</noinclude>
 +
<!-- 8. Explain the difference between good and bad debt. -->
  
−
Your family operates as an economic unit. You can only control what you can measure and understanding how you spend money as a family will help you control spending. The need to write down what you spend will give you a moment to pause and reflect on the need to spend the money, so just the process of tracking spending will usually reduce spending.
+
<!--T:43-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 8 -->
  
−
==17. Read Malachi 3:8-12 and write a minimum of 250 words about the meaning of being a faithful steward.== <!--T:24-->
+
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=9}}
−
{{Bible link|Malachi 3:8-12}}
+
<noinclude><translate><!--T:44-->
 +
</noinclude>
 +
<!-- 9. What is interest? How is it calculated? Calculate how much it would truly cost to finance a $5000 loan with a 7% interest rate over 5 years. -->
  
−
Do Not Rob God
+
<!--T:45-->
−
8 “Will a man rob God?
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<noinclude></translate></noinclude>
−
Yet you have robbed Me!
+
{{CloseReq}} <!-- 9 -->
−
But you say,
 
−
‘In what way have we robbed You?’
 
−
In tithes and offerings.
 
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9 You are cursed with a curse,
 
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For you have robbed Me,
 
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Even this whole nation.
 
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10 Bring all the tithes into the storehouse,
 
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That there may be food in My house,
 
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And try Me now in this,”
 
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Says the Lord of hosts,
 
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“If I will not open for you the windows of heaven
 
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And pour out for you such blessing
 
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That there will not be room enough to receive it.
 
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11 “And I will rebuke the devourer for your sakes,
 
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So that he will not destroy the fruit of your ground,
 
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Nor shall the vine fail to bear fruit for you in the field,”
 
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Says the Lord of hosts;
 
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12 “And all nations will call you blessed,
 
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For you will be a delightful land,”
 
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Says the Lord of hosts.
 
  
−
==References== <!--T:25-->
+
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=10}}
 +
<noinclude><translate><!--T:46-->
 +
</noinclude>
 +
<!-- 10. Investigate what is the interest rate and what are the financial responsibilities in the lines of credit for the following: -->
 +
 
 +
<!--T:47-->
 
<noinclude></translate></noinclude>
 
<noinclude></translate></noinclude>
 +
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=10a}}
 +
<noinclude><translate><!--T:48-->
 +
</noinclude>
 +
<!-- a. Credit card -->
 +
 +
<!--T:49-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 10a -->
 +
 +
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=10b}}
 +
<noinclude><translate><!--T:50-->
 +
</noinclude>
 +
<!-- b. Overdraft -->
 +
 +
<!--T:51-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 10b -->
 +
 +
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=10c}}
 +
<noinclude><translate><!--T:52-->
 +
</noinclude>
 +
<!-- c. Student loan -->
 +
 +
<!--T:53-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 10c -->
 +
 +
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=10d}}
 +
<noinclude><translate><!--T:54-->
 +
</noinclude>
 +
<!-- d. Usury loan -->
 +
 +
<!--T:55-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 10d -->
 +
{{CloseReq}} <!-- 10 -->
 +
 +
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=11}}
 +
<noinclude><translate><!--T:56-->
 +
</noinclude>
 +
<!-- 11. What measures can be taken when a family is in debt? -->
 +
 +
<!--T:57-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 11 -->
 +
 +
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=12}}
 +
<noinclude><translate><!--T:58-->
 +
</noinclude>
 +
<!-- 12. Consider Proverbs 6:6-8 and discuss the value of having an emergency fund. How many months worth of income should generally be saved for emergencies? -->
 +
 +
<!--T:59-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 12 -->
 +
 +
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=13}}
 +
<noinclude><translate><!--T:60-->
 +
</noinclude>
 +
<!-- 13. Read Matthew 25:14-30 and discuss the value of investing money. Identify at least two methods of investing money. What are the advantages and disadvantages of each? -->
 +
 +
<!--T:61-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 13 -->
 +
 +
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=14}}
 +
<noinclude><translate><!--T:62-->
 +
</noinclude>
 +
<!-- 14. What are some advantages and disadvantages of using automatic payments (autopay)? -->
 +
 +
<!--T:63-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 14 -->
 +
 +
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=15}}
 +
<noinclude><translate><!--T:64-->
 +
</noinclude>
 +
<!-- 15. Simulate the following (or equivalents): -->
 +
 +
<!--T:65-->
 +
<noinclude></translate></noinclude>
 +
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=15a}}
 +
<noinclude><translate><!--T:66-->
 +
</noinclude>
 +
<!-- a. Identify an account and routing number -->
 +
 +
<!--T:67-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 15a -->
 +
 +
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=15b}}
 +
<noinclude><translate><!--T:68-->
 +
</noinclude>
 +
<!-- b. Write and endorse a check-->
 +
 +
<!--T:69-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 15b -->
 +
 +
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=15c}}
 +
<noinclude><translate><!--T:70-->
 +
</noinclude>
 +
<!-- c. Reconcile a bank statement -->
 +
 +
<!--T:71-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 15c -->
 +
{{CloseReq}} <!-- 15 -->
 +
 +
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=16}}
 +
<noinclude><translate><!--T:72-->
 +
</noinclude>
 +
<!-- 16. Interview a financial professional or equivalent about personal budgeting. -->
 +
 +
<!--T:73-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 16 -->
 +
 +
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=17}}
 +
<noinclude><translate><!--T:74-->
 +
</noinclude>
 +
<!-- 17. Develop a family budget (this can be done together with parents). Keep a personal budget and record income and expenses for two months. -->
 +
 +
<!--T:75-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 17 -->
 +
 +
{{ansreq|page={{#titleparts:{{PAGENAME}}|2|1}}|num=18}}
 +
<noinclude><translate><!--T:76-->
 +
</noinclude>
 +
<!-- 18. Read Malachi 3:8-12 and discuss what role tithes and offerings could play in a personal/family budget. -->
 +
 +
<!--T:77-->
 +
<noinclude></translate></noinclude>
 +
{{CloseReq}} <!-- 18 -->
 +
 +
<noinclude><translate></noinclude>
 +
==References== <!--T:78-->
 +
 +
<!--T:79-->
 +
<noinclude></translate></noinclude>
 +
 +
{{CloseHonorPage}}

Latest revision as of 23:52, 8 March 2023

Other languages:
English • ‎español
Household Budgeting

Skill Level

2

Year

2023

Version

28.11.2024

Approval authority

North American Division

Household Budgeting AY Honor.png
Household Budgeting
Household Arts
Skill Level
123
Approval authority
North American Division
Year of Introduction
2023
See also
Homemaking Master Award



1

What is a household budget and what is the importance of having one?


A household budget is (hopefully) a written guide to how you plan to spend your household income. It also shows how much you plan to earn or otherwise receive as a family. Income may include employment, business, investment income and government payments to the family. Expenses will include housing (including rent or mortgage, utilities and property taxes), transportation, food, entertainment, clothing, education and other costs. You should also budget for savings and donations - ideally off the top before you spend the rest of your income.



2

Define the following:



2a

Income




2b

Expenses




2c

Cash flow




2d

Loan




2e

Usury loan




2f

Interest




2g

Principal




2h

Credit




2i

Credit score




2j

Investments




2k

Tithe/offerings




2l

Taxes




2m

Inflation





3

Explain the difference between needs and wants. Make a list of your family's expenses and classify them as needs or wants.




4

What can you and your family do to save on utilities? How do any of these expenses vary during different seasons of the year in your home?




5

How can inflation affect a family budget?




6

What are the methods your family uses to pay bills? What other methods could be used?




7

What types of taxes exist in your area (city, state/provincial, federal, income, property, sales, payroll, etc.)? What are taxes typically used for in your region?




8

Explain the difference between good and bad debt.




9

What is interest? How is it calculated? Calculate how much it would truly cost to finance a $5000 loan with a 7% interest rate over 5 years.




10

Investigate what is the interest rate and what are the financial responsibilities in the lines of credit for the following:



10a

Credit card




10b

Overdraft




10c

Student loan




10d

Usury loan





11

What measures can be taken when the family is in debt?




12

Consider Proverbs 6:6-8 and discuss the value of having an emergency fund. How many months worth of income should generally be saved for emergencies?




13

Read Matthew 25:14-30 and discuss the value of investing money. Identify at least two methods of investing money. What are the advantages and disadvantages of each?




14

What are some advantages and disadvantages of using automatic payments (autopay)?




15

Simulate the following (or equivalents):



15a

Identify an account and routing number




15b

Write and endorse a check




15c

Reconcile a bank statement





16

Interview a financial professional or equivalent about personal budgeting.




17

Develop a family budget (this can be done together with parents). Keep a personal budget and record income and expenses for two months.




18

Read Malachi 3:8-12 and discuss what role tithes and offerings could play in a personal/family budget.




References

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