Living in New Jersey

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Living in New Jersey

• High cost of living

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Jerseys High Cost of Living

• Garden State now leads the nation in
  homeownership costs
• 30 of families budget goes towards paying for
  the house

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Jerseys High Cost of Living

• 1 in 6 homeowners now pay more than 3,000 a
  month for their home

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• N.J. is the
• the 4th most
• expensive state
• to live in

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Jerseys High Cost of Living

• Price of homes
• In year 2000 avg. home value 170,800
• In year 2006 avg. home value 333,900

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• How People Survive in Expensive Areas

-People skip essential insurance. -They take on
a lot of credit card debt. -They band together
as a family unit under one roof. -They rent
out living space. -They delay having children.
-They work several jobs. -They do work shifts
within the family.
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Jerseys High Cost of Living

• Median rent in N.J.
• 1,085 month (2 bedroom apt)
• Average rent in the country is 728 month

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Real Value of NJ Minimum Wage

• Yearly income in N.J. at minimum wage is 14,872.
• 2 adults working full-time at minimum wage
• income will exceed the federal poverty guideline
  by 9,094 per year.

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Reality vs. Government
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Is Doing Well in School Important?
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Value of Education

• A high school diploma is no longer a ticket to
  the middle class
• A car mechanic must be able to read at a level
  equivalent to a junior in college

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Value of Education

• New Jersey students of today will require MORE
  knowledge and skills than EVER before!
• More than 2/3s of new jobs will require at least
  some post-secondary education

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Value of an Education

• Over an adults working life
• High School grad - 1.2 million
• Associates degree - 1.6 million
• College grad - 2.1 million
• Masters degree- 2.5 million

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2005 Census Statistics

• White males made 48 more than white females

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Department of Commerce 2005
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Why stay healthy

• Studies show that women who are obese earn 17
  percent lower wages on average than women who are
  not
• Salary 40,000/year
• Less 6,800 (17 of 40,000)
• Salary 33,200/year

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Its not fair, but it is reality

• Overweight people in this country have lower
  paying jobs and do not get the same fair
  treatment as thinner, less qualified applicants
  for jobs.

Stay HEALTHY!!!!
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Bundle of Joy

• Bundle of Money

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Baby, thats pricey

• It costs a middle income family 250,000 to raise
  a child from birth to 17 y.o.
• Doesnt include the cost of college

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Baby, thats pricey

• In the first year alone, the costs of a baby can
  reach between 9,000 and 11,000
• Where does all the money go to

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Baby, thats pricey

• Here are the top 9 expenses for a newborn
• 1) Medical
• Delivery of a baby
• 5,000-8,000 -vaginal delivery
• 12,000 -cesarean delivery (if there are
  complications, cost dramatically increase!)
• Wellness visits and immunizations and sick visits
  to the doctor add up

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Baby, thats pricey

• 2) Maternity Leave
• Generally lasts up to 8 weeks, then no more pay

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Baby, thats pricey

• 3) Child Care
• 5,000 per year for day care
• 20,000 per year for a live-out nanny.

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Baby, thats pricey

• 4) Diapers and wipes
• Average baby goes through 10 diapers a day
• 2,000 per year

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Baby, thats pricey

• 5) Formula and breast feeding expenses
• Breast feeding requires the purchase of
• a breast pump
• nursing bra
• nursing pads
• nursing tops
• breast feeding pillow

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Baby, thats pricey

• 6) Baby gear
• Crib
• Changing table
• Rocker or glider
• Car seat
• Stroller
• Monitor
• Diaper bag

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Baby, thats pricey

• 7) clothing and shoes
• Babies need a new wardrobe every 6 months

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Baby, thats pricey

• 8) baby food
• 4-6 months old begin eating baby food
• expensive because it is pure with very little
  preservatives

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Baby, thats pricey

• Life insurance premiums

Lots of things to think about when you get older
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BUDGET
How do you feel about money?

• A budget is a PLANNED system of spending and
  saving money.
• -Money personality profile

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• Put your name in your book.
• Turn to page 2, take the True/False test
• Wants vs needs
• (page 4 exercise 1A)

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Wants vs. Needs

• Spontaneous spending- instant pleasure but is
  death to budgeting
• Designer sun glasses
• New shoes/sneakers
• Brand name jeans
• Need to practice delayed gratification

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Goals!!!!!!

• Everyone needs to make GOALS
• Short term goals (immediate)
• Rent
• Groceries

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Goals

• Long term goals (involve substantial amounts of
  money)
• Car
• Prom
• College tuition

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SMART goals
What do other teens spend their money on? P. 9)

• S- specific
• M- measurable
• A- attainable
• R- realistic
• T- time bound
• (p. 5)
• Do exercise on p. 6

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Companion Expenses

• What are companion expenses?
• What do they have to do with new purchases?

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Fixed or Flexible? (hand-out)

• Fixed expenses- re-occurring or promised amounts
• Food
• Basic housing
• Basic clothing
• Rent/mortgage payments
• Car payments

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Fixed or Flexible?

• Flexible expenses- wants that can be indulged or
  deferred depending on cash flow
• Entertainment
• Eating out
• Fancy cars
• Sound systems

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Savings

• Emergency Funds
• Short term savings for emergencies (should have
  enough in this account to cover 2-3 months worth
  of expenses)

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Savings

• Long Term Savings
• After you have met the Emergency Fund
  Savingsstart saving for college, a dream
  vacation, retirement

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Project

• You will put together your own Financial Plan for
  your class project.