Personal Management

Learn to Manage Your Money

A Session in Planning for
Personal Responsibility
 Goals of the Course

• How to Manage Money – Your Own and Others’

• How to Save Money
• What is a Budget?
– Uses for planning
• To purchase goods and services
• To plan for the future
– Uses for monitoring
• How well you adhere to the budget
• When there is more or less money remaining than expected
• Saving and Investing
– What is Saving?
– What is Investing?
– How do they benefit you?

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 Goals of the Course - continued

• Investing in…
– The Stock Market
– Mutual or Index Funds
– Insurance
– Certificates of Deposit
– Savings Bonds
• Borrowed Funds
– Components of a Loan
– Repayment Methods
– Credit Cards
– Debits Cards
• Credit Reports
– What they mean

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 Goals of the Course - continued

• Time Management
– Making sure you can accomplish what you need to do
– Finding time
– Being efficient and effective
• Project Management for a Goal
– Planning for a goal
– Components to attaining the goal
• Resources
• Tools
• Guide or Plan
• Planning for the future
– College?
– Work?
– Both?

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 Personal Management – Requirements

1. Do the following:
a. Choose an item that your family might want to purchase that is considered a
major expense.
b. Write a plan that tells how your family would save money for the purchase
identified in requirement 1a.
1. Discuss the plan with your merit badge counselor
2. Discuss the plan with your family
3. Discuss how other family needs must be considered in this plan.
c. Develop a written shopping strategy for the purchase identified in requirement
1a.
1. Determine the quality of the item or service (using consumer publications or rating
systems).
2. Comparison shop for the item. Find out where you can buy the item for the best price.
(Provide prices from at least two different price sources.) Call around; study ads. Look
for a sale or discount coupon. Consider alternatives. Can you buy the item used?
Should you wait for a sale?

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 Personal Management - Requirements

2. Do the following:
a. Prepare a budget reflecting your expected income (allowance, gifts, wages),
expenses, and savings. Track your actual income, expenses, and savings for 13
consecutive weeks. When complete, present the results to your merit badge
counselor.
b. Compare expected income with expected expenses.
1. If expenses exceed income, determine steps to balance your budget.
2. If income exceeds expenses, state how you would use the excess money (new goal,
savings).
3. Discuss with your merit badge counselor FIVE of the following concepts:
a. The emotions you feel when you receive money.
b. Your understanding of how the amount of money you have with you affects your
spending habits.
c. Your thoughts when you buy something new and your thoughts about the same item
three months later. Explain the concept of buyer's remorse.
d. How hunger affects you when shopping for food items (snacks, groceries).
e. Your experience of an item you have purchased after seeing or hearing
advertisements for it. Did the item work as well as advertised?
f. Your understanding of what happens when you put money into a savings account.
g. Charitable giving. Explain its purpose and your thoughts about it.
h. What you can do to better manage your money.

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 Personal Management - Requirements

4. Explain the following to your merit badge counselor:

a. The differences between saving and investing, including reasons for using one
over the other.
b. The concepts of return on investment and risk.
c. The concepts of simple interest and compound interest and how these affected
the results of your investment exercise.
5. Select five publicly traded stocks from the business section of the
newspaper. Explain to your merit badge counselor the importance of the
following information for each stock:
a. Current price
b. How much the price changed from the previous day
c. The 52-week high and the 52-week low prices

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 Personal Management - Requirements

6. Pretend you have $1,000 to save, invest, and help prepare yourself for the
future. Explain to your merit badge counselor the advantages or
disadvantages of saving or investing in each of the following:
a. Common stocks
b. Mutual funds
c. Life insurance
d. A certificate of deposit (CD)
e. A savings account or U.S. savings bond
7. Explain to your merit badge counselor the following:
a. What a loan is, what interest is, and how the annual percentage rate (APR)
measures the true cost of a loan.
b. The different ways to borrow money.
c. The differences between a charge card, debit card, and credit card. What are
the costs and pitfalls of using these financial tools? Explain why it is unwise to
make only the minimum payment on your credit card.
d. Credit reports and how personal responsibility can affect your credit report.
e. Ways to eliminate debt.

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 Personal Management - Requirements

8. Demonstrate to your merit badge counselor your understanding of time

management by doing the following:
a. Write a "to do" list of tasks or activities, such as homework assignments,
chores, and personal projects, that must be done in the coming week. List these
in order of importance to you.
b. Make a seven-day calendar or schedule. Put in your set activities, such as
school classes, sports practices or games, jobs or chores, and/or Scout or
church or club meetings, then plan when you will do all the tasks from your "to
do" list between your set activities.
c. Follow the one-week schedule you planned. Keep a daily diary or journal during
each of the seven days of this week's activities, writing down when you
completed each of the tasks on your "to do" list compared to when you
scheduled them.
d. Review your "to do" list, one-week schedule, and diary/journal to understand
when your schedule worked and when it did not work. With your merit badge
counselor, discuss and understand what you learned from this requirement and
what you might do differently the next time.

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 Personal Management - Requirements

9. Prepare a written project plan demonstrating the steps below, including the
desired outcome. This is a project on paper, not a real-life project.
Examples could include planning a camping trip, developing a community
service project or a school or religious event, or creating an annual patrol
plan with additional activities not already included in the troop annual plan.
Discuss your completed project plan with your merit badge counselor.
a. Define the project. What is your goal?
b. Develop a timeline for your project that shows the steps you must take from
beginning to completion.
c. Describe your project.
d. Develop a list of resources. Identify how these resources will help you achieve
your goal.
e. If necessary, develop a budget for your project.
10. Do the following:
a. Choose a career you might want to enter after high school or college
graduation.
b. Research the limitations of your anticipated career and discuss with your merit
badge counselor what you have learned about qualifications such as education,
skills, and experience.

Source:
BSA Advancement ID#: 11
Pamphlet Revision Date: 2003
Requirements last revised in 2004

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 How to Manage Money – Your Own and Others’

• Managing money is a critical skill you will need

– Personal finances
– Business finances
– Wise use of a scarce resource
– It really does not grow on tress
• Benefits
– More funds to use as you wish
– Greater responsibility liberates you to do your things
– Being able to have fun

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 How to Save Money

• Saving money requires discipline, but is not difficult

– Monitor your spending
– Know your limits of what you can afford
– Need vs Want
• Needs are top priority
– Food, Shelter, Basic Transportation
• Wants are luxuries
– DVD’s, Game, CD’s
– Set a budget and adhere to it
– Know how you spend and what you spend with
• Cash is king
• Credit is a tool, but can be dangerous
– Know your limits

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 What is Budget?

• Budget = Plan
– You figure out what you need and what you want
– Set up how to achieve the plan
– Track it and work it

• Plan – Why? What for?

– The plan is your self-designed roadmap
• You determine what you want
• Then devise how to achieve it
– You are in control
– What a bargain!

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 Why do I care about a Budget?

• Your budget is your plan

– To have fun
• Buy camping gear and Scout stuff
• Buy your car, your gas, your insurance
• Go on a date and buy dinner and a movie
– To plan for the future
• College?
– Without a plan you will be adrift

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 How do I track what I spend?

• Watching your cash is all it takes

– First, track what you earn
• Your chores and allowance
• Your job
• Christmas and birthday money
– Next plan what you expect to spend
• Based on experience
• Categories by type
– Food, Gas, Entertainment, Books, Scouts
• Give each category a set amount you expect to spend
– Then track what you earn and spend
• How well you adhere to the budget
• Where did you over spend?
• Where did you save? (That is, not spend it all?)

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 Now I have a Budget, what do I do?

• Now you work it!

– How did you do against plan?
– Were you over? Under?
– Refine the plan and work it until you are comfortable
• Do not be afraid to change it
• Make it work for you – within reason of what you can afford
• Strive for success!

• Revisit it often
– Be diligent to track what you earn and spend
– It does not take long
– Tremendous benefit to you

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 Saving & Investing

• What is Saving? What is Investing?

– What is the difference?
– And why do I care

• You care as it will help you understand how to make

more money off the money you already have!

• How do I decide?
– Study your options
– Define your tolerance for losing money

• What is my benefit?
– You may be able to earn more money

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 Saving & Investing

• What is Saving?
– Saving is where you place your money in a financial institution
and allow it to earn interest
• Bank
• Credit Union
– Generally earn lower interests rates
– Relatively “safe” investments
• Insured by Federal Deposit Insurance Corporation (FDIC)
• Maximum of $100,000 insurance
• If the institution goes under, you are guaranteed your investment up
to $100k
– You have fairly easy access and liquidity to your cash
• Automatic Teller Machine
• Branch office

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 Saving & Investing

• What is Investing?
– You use your cash to support a business or government
– Fosters growth as permits the recipient to use your cash
– Based on an “expectation” of earning money
– Generally a higher return than a savings account
• How is it different than saving?
– Business
• Stocks
– May lose value
– You could lose your entire investment
• Corporate Bonds
– Guaranteed, but payout may vary on type
– Government
• Bonds
– But your return may vary here as well

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 Save or Invest?

• The decision to Save or Invest – that is up to you!

– It is not an easy decision
– Determine your Risk Tolerance
• What are you willing to lose?
• What can you afford to lose?
• Not sure? Ask questions!
– Get advice!
• From whom?
– Parents
– Professionals
– Prospective Investment companies
• Study your options!
• Decide wisely, based on the above

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 Investment Options

• The Stock Market

– Buy from a broker
– Invest in companies buy purchasing “shares”
• Mutual or Index Funds
– Types of stocks, all grouped together & managed by someone
– Buy “shares” of the fund
• Insurance
– Generally life insurance
• Bonds
– Assets of a company, backed by the company
• Certificates of Deposit
– Guaranteed return after a specific period of investment

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 What about getting a loan?

• Borrowed Funds
– Using your word (and sometimes your assets) to get money
– You must repay it
• What makes up a loan?
– Principle
• What you borrow
– Interest
• What is costs you to borrow that money
– Term
• How long you borrow the money
• When you must repay it by
• Repayment Methods
– Generally monthly, but not always

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• Other loan options
– Credit Cards
• You have time to repay the amount
• Interest is charged
• VISA, MasterCard, Discover are examples
– Charge Card
• You are expected to pay the amount in full each month
• American Express is most common example
• These options require
– Discipline
– Maturity
– Failure to control Credit and Charge usage will cause problems

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 Debit Cards and Credit Reports

• What about my Debits Card?

– Not a loan
– It is CASH as it comes directly from your bank account!
– Easy to over draw your account
• When you take out more money than you have
• “Bouncing” checks

• So what is my Credit Report?

– A scorecard on how well you manage your funds
– Rates
• Income to Debt
• How well you manage finances
• Your trustworthiness

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 Managing your Time can help Manage your Finances

• Time Management
– Making sure you can accomplish what you need to do
– Finding time
– Being efficient and effective

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 Managing your Financial Project

• Project Management for a Goal

– Planning for a goal
– Components to attaining the goal
• Resources
• Tools
• Guide or Plan

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 What does your future hold?

• Planning for the future

– College?
– Work?
– Both?
• It is up to you to decide what you will do
– Any requires planning
– Both will brings rewards
• Financial
• Personal growth
• Make a plan as appropriate!
– Seek out mentors
• College will have financial aid counselors
• Ask people you trust regarding work plans

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 Guest Speakers

• The following people responded as willing to be

considered as a guest speaker for this project

Name Contact Information

Ed Holbren ms401678@yahoo.com
Gene Thorncroft GKJMTh1@aol.com
Craig Barnwell p.barnwell@comcast.net
Steve Campbell smcdesigns@bellsouth.net
Chuck Murray murray70email@gmail.com

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