Casey Middle School

Technology Education •Career Project

 
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Career 9

Technology Education

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Career 9: How much is enough?

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How much money will you need to live the life you want?  Before you focus on your needs, take a look at the incomes of the rich and famous.
 

lebronjames

LeBron James
Pay $48 million
James' reputation took a hit last summer when he announced he was leaving the Cleveland Cavaliers for the Miami Heat on a national televised special dubbed "The Decision." His negative Q score soared 77%. Despite the animosity, James continues to be a hot ticket. His jersey was the NBA's best seller this season and he has the No. 1 basketball shoe on the market. In April, James partnered with Fenway Sports Group to manage his business interests. As part of the deal James received a very small stake in FSG-owned soccer club, Liverpool.
 

Oprah Winfrey
Pay $290 Million
Oprah Winfrey is now well into her next chapter. Her OWN cable network, a joint venture between Winfrey's company Harpo and Discovery Communications, completed its first full year, marked by ratings disappointments and turnover at the top. In mid-2011, Winfrey named herself CEO and chief creative officer, in addition to her previous role as chairman. A new programming line-up, including a nightly talk show with performer Rosie O'Donnell and an interview show featuring Winfrey with high-profile guests, has given the channel a recent boost, but its future remains uncertain.The Mississippi native moved to Chicago after news stints in Nashville and Baltimore. She spent 25 years hosting an eponymous daytime talk show, which ended last year.

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© Gus Ruelas/AP

Justin Bieber
Pay $53 Million

Though he may not know where Germany is, the cherubic crooner has attained international superstardom: his new album My Life 2.0 quickly attained platinum status, his concert movie Never Say Never grossed $100 million globally and Bieber's live shows around the world bring in $600,000 in gross ticket sales per night. The music video for Bieber's hit song "Baby" has been viewed a YouTube record 500 million times.

U2
Pay $125 Million
The ageless rockers are wrapping up the most lucrative tour in the history of music. In April the group's 360 Tour surpassed the Rolling Stones' Bigger Bang Tour, which grossed $554 million from 2005 to 2007. By the time U2's tour ends this summer, the band will have sold $700 million worth of tickets over two years and played to more than 7 million people.
 

© Taylor Hill/Getty Images

© Paul Sancya/AP

Tyler Perry
Pay $130 Million

The producer/writer/actor earns big on TV (where he oversees Meet the Browns and House of Payne) as well as at the box office where his movies have earned $260 million. Perry caters to an audience that traditional Hollywood has struggled to reach with movies about African-American families handling problems using humor and religion.

Bill Gates
Net worth $61 Billion
  williamgates

First part of mission accomplished: Bill Gates, the most generous person on the planet (he's given away $28 billion already), has helped ­eradicate polio in India. In January the country announced its first polio-free year. Gates will continue to chip in $200 million a year to rid the world of a disease that is still endemic in Pakistan, Afghanistan and Nigeria. His Bill & Melinda Gates Foundation is also spearheading a malaria vaccine that is showing promise in ­clinical trials. Meanwhile the vaccine-spreading organization he founded, called GAVI, raised $4.3 billion in pledges aimed at distributing drugs to thwart the deadly infections that cause meningitis, pneumonia, and diarrhea in developing countries. He also has a new endeavor in the works: fixing agriculture. His foundation has committed more than $2 billion to small farmers. Less than one-fourth of his net worth is still held in Microsoft, whose shares are trading higher than they have been in 10 years; the rest is in private equity, bonds and stocks such as Ecolab and Mexican broadcaster Televisa.

Source: Forbes

 

Reality

Possessing millions of dollars would of course be great but the average American family has and spends much less. How much money do you really need? The answer to that question really depends on you and what you value.

 

At this point, you should have some idea about how much you will earn in your chosen career. Just beginning, your pay will normally be at the low end of the wage scale. With experience and additional training, you will increase your worth as an employee, which in turn, should be matched by increases in pay and benefits.

Regardless of where you are in your career, the amount you earn will not be the amount you take home.

 

Before you can answer "how much is enough," you need to ask how much do I get to keep.

 

Federal and state taxes, Social Security, health insurance, and other deductions quickly reduce the amount of money you will have to spend, not to mention sales tax (the tax paid when you buy something) or property tax (taxes paid for owning your home and property).

 

Review the information below and complete Worksheet 9-1

 

The amount of income tax you pay is based a variety of things such as income level and the number of dependent family members. Though the amount may seem high, taxes allow our government to function and provide services such as National Defense, Disaster Relief, and Social Services. The IRS is the federal agency responsible for enforcing US tax laws and collecting taxes.

 

 

Click here if you would like more detailed information.

 

In the steps that follow, you will see the impact of these deductions on your take home pay also called net pay.
 


As mentioned, salaries and wages are somewhat deceiving.  A large portion of your income will be taken to pay state and federal income taxes, social security payments, along with other deductions such as retirement funds and insurance.

 

    The amount before these deductions is your Gross amount. The amount remaining after the deductions is your Net pay. Look at these examples:

     

    Sample Salaries (Federal minimum wage is $7.25 per hour, for information by state, click here.)

     

    The minimum wage is the lowest hourly, daily or monthly wage that employers may legally pay to employees or workers. Equivalently, it is the lowest wage at which workers may sell their labor.

     

    $8.00 hourly = $1,387 monthly (Gross Pay) - taxes = $934 take home pay monthly (Net Pay)
    $10.00 hourly = $1,736 monthly(Gross Pay) – taxes  = $1,288 take home pay monthly (Net Pay)
    $20.00 hourly = $3,467 monthly(Gross Pay) - taxes  = $2,320 take home pay monthly (Net Pay)
    Does not include insurance or other deductions
     

     

    Currently the average American will pay 25% of his/her income in Federal Taxes. In other words, you will likely work three months out of each year for no other purpose than to pay these taxes.

     

    To make the most of your remaining dollars, you need to develop a plan or system for managing your money.

The Final Challenge

 

 

You've found a job, you have a home, and transportation. Now it's time to settle in, get comfortable, create your budget, and pay the bills.

 

Remember, a budget is a plan that helps you manage your spending, savings, and long term investments.  Once you have a clear understanding of where the money comes from and where it goes, you'll be able to put your money to work for you.

 

The Five-Step Budget Process

Making a personal budget is simple:

By now you should know how much your monthly income will be, including the gross and net amounts. The next move will be organizing your monthly expenses. Finally, you must decide what to do with the money that is left after paying your expenses.

Designing a budget to meet your obligations, prioritize your spending, and attain your short- and long-term financial goals takes self control and effort, but you'll find it works and over time becomes easier to manage. The steps below will help you get started. Include your answer on Worksheet 9-1.

 

Step 1: Identify Your Goals—Both Short Term and Long Term
What do you want to do with your money today, this year, forty years from now (financial goals) Are you planning to buy your first house, or a car? Do you have children who will be going to college? How will you fund a comfortable retirement?

 

Step 2: Record Your Income
How much income do you or your family bring home in a month? Besides your paycheck, do you have any other income, such as stock dividends or from odd jobs?

 

Step 3: Determine Your Expenses


What are your regular monthly bills?

 

Rent / mortgage
Home maintenance / improvement
Car Payments/Expenses
Insurance
Credit car payments/interests
Utilities (Gas, electricity, water, telephone)
Entertainment (cable, internet, movies, vacations)


What other expenses do you incur during the month?
Household items (toothpaste, shampoo, trash bags)
Groceries
Clothing
Medical / Dental bills
  hotwings for your Tech-Ed teacher

 

 

Be sure to also list expenses that are paid quarterly and annually (Birthday and Christmas presents).  Don't consider discretionary expenses yet (money you spend by choice on things like entertainment, music, or going out to eat). For right now, write down only the things you must spend money on each month. If your expenses are greater than your income, you will have to increase your income or reduce your expenses to be able to stay out of serious debt. Small savings add up. For example, you might be able to do without eating lunch out every day, buying sodas and snacks twice a day, and so forth.

 

Step 4: Develop a Savings Plan
Now that you know your income and your expenses, how much money is left over for savings? How much do you have to save to meet your goals by the time they come up? And what about emergencies? Even a small contribution will build up over time. Put aside a small amount for discretionary spending, too—movies or going out to dinner occasionally. You won't stick to a budget that doesn't let you have a little fun.

 

Step 5: Use the Plan
Use your budget every day to get used to watching your money. There will be a lot fewer surprises if you follow a budget, and the surprises you do experience are more likely to be pleasant ones.

 

The final question... can you live the want live the way you want doing the job you want to do?

 

In this activity you'll finally answer that question. You'll use the information you've gathered to create a budget . Click here to open the personal budget spread sheet. The spreadsheet will help organize your income and expense information and automatically deduction taxes and calculate  your budget totals.

 

Use the information to complete the questions on Worksheet 9-1.

 

After you have completion, review and oragnaize all your worksheets, then update and complete your PowerPoint slides.

 

Click here and throw some paper and celebrate!