COA 4131 TEST 1 FDIC insures up to 250 000 Business cycle right now we are in recovery out of the recession When the recession gets really bad it becomes a depression 1930s was the real depression in our country One of the measures of a depression is more then 10 of unemployment Next phase after recovery expansion When one thing happens you just know there is going to be a reaction in some way to be Handle your cash personally You first become aware analysis whats important evaluation how did that go Time value of money Saving early for children college and other needs Parent can set up a custodial account for child usually a savings for college Level of living where we are now Standard of living what you hope or aspire Net worth assets liabilities Most common tax form 1040 Different expenses If you do a monthly statement of what you spend budget Most expensive month is December Some expenses are fixed Which means they are the same each month Mortgage rent car payment insurance Opposite variable expenses Things that is different Food utilities entertainment they change Most expensive budget item for people mortgage Property tax yearly cost set by government Once a year expense Sometimes they can work it out so you pay it monthly Be careful because anyone can be a financial planner There are certain certifications that make someone higher Certified Financial Planner Certified Public Account Watch the credentials There are different money structures and you want to find out how much they are going to charge Federal government is in the news because they shut down The main way the federal government gets income is from OUR individual income taxes The main way it goes out is in Social Security Medicare etc If you decide to not pay your taxes for 4 5 years that is called tax evasion It is illegal It can get you a jail sentence or a fine Tax avoidance is legal Which means you are putting money away The federal government audits people What percent of federal tax returns are audited Less then 1 What are some ways you can keep your money safe CD s US savings bonds o One kind of savings bond is an EE cheapest one and at its maturity it is worth 50 00 o I tracks inflation It gives people a better return o W4 what the employer starts you out with You give it back to your employer and state what you want to be taken out of your check Taxes o W2 receive from employer at the end of the year that states in detail how much was taken out for each deduction Study the presidents and what their money policies were in recent years o Jimmy Carter Democrat o Ronald Reagan Supply side economics He is known for SSE Gov t gets money from interest tax and they decide what they want to do with it Home state California He was a republican o George Bush supply side economics also o Bill Clinton New economy Big tech push He was a democrat o George W Bush Republican Tried to get people more financially literate Jeb Bush his brother Near the END of his presidency recession started o Obama democrat Inherited recession Tried to have economic stimulus package Main company he gave money to GM More and more people hiring outside tax preparer H R block Managing cash and savings Rate of return and yield What to expect back Growth of debit cards More and more people using debit cards Furlough a day week or month without pay You still have your job but they aren t going to pay you Sometimes they use them in hard economic times or recession International currencies o Europe Euro o British Pound o Canada Dollar o Japanese Yen o Brazil Real How much should you spend No more then 35 of your pay should go to rent utilities etc taxes That is the general formula Emergency fund when things get tight and you see things coming you want to start saving money It should be 3 6 months of your tax home pay FICO score 300 850 850 are perfect and almost no one has that It is based on how you pay your bills on time or not and credit Median score 623 Low score under 500 Then they call you a sub prime lender If you have a 720 or more that is good They are some competitors to FICO An elderly person passes on if they have a lot of wealth they might be charged a certain kind of tax Estate tax a tax levied on the net value of the estate of a deceased person before distribution to the heirs
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