Using Worksheet 6 as a guide, talk to your parents about their record-keeping system. Offer to assist with organizing the household financial records. Do they have a balance sheet, income statement, or budget to track financial well-being? If not, offer the worksheets from the text as a starting point. Do they handle all financial matters alone or with the help of professionals? What assistance have they received and from whom?

Transcribed Image Text:

FIGURE 2.6 Louise and Larry Tate's Personal Income Statement Your Take-Home Pay Income Wages and Salaries Wage Earner 1 Wage Earner 2 Total Wages and Salaries + Interest, Dividends, Royalties, Other A. Total Income Taxes $57,500 12,000 69,500 720 $70,220 Your take-home pay is your after-tax income-it is what you have available to spend or save. Federal Income and Social Security + State Income 11,830 1.880 Your income statement only makes sense if you know where your money goes. To determine your B. Total Income Taxes $13,710 C. After-Tax Income Available for Living Expenditures or living expenses, keep a small notebook or Take-Home Pay (line A minus line B) $56,510 Your Living Expenses Housing Rent + Mortgage Payments 19,656 + Utilities, Maintenance, Taxes, Furniture, Other 10.820 D. Total Housing Expenditures $30.476 some notepaper in your purse or wallet, and write down all your cash expenditures-do this for a month. You'll probably be surprised to see where your money went. In addition, make use of your credit card bills and cancelled checks to help keep track. Food Food and Supplies + Restaurant Expenses E. Total Food Expenditures Clothing and Personal Care F. Total Clothing and Personal Care Expenditures Transportation Automobile Loan Payments + Gas, Tolls, Parking, Repairs, Other G. Total Transportation Expenditures Recreation Vacation Other Recreation H. Total Recreation Expenditures Medical Expenditures 1. Total Medical Expenditures Insurance Expenditures Health and Life + Automobile + Disability, Liability, Other J. Total Insurance Expenditures Other Expenditures Educational Expenditures (college loan payments) + Child Care, Other K. Total Other Expenditures L. Total Living Expenditures (add lines D-K) Total Available for Savings and Investment M. Income Available for Savings and Investment (line C minus line L) 5,800 1.400 $ 7,200 $ 2,590 2,588 1.550 $ 4.138 2,000 1,700 $ 3,700 $ 410 420 1,260 260 $ 1.940 1,600 180 $ 1,780 $52,234 $ 4,276 If your take-home pay is greater than your living expenses, you can save and invest-but if your take-home pay is less than your living expenses, you've got some changes to make.