Spend, Save, Pay
How can you use money wisely?
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It costs a lot of money to live. It costs money to eat, live in a house or apartment, talk on the phone, watch television, wear nice clothes, and do many of the daily activities you normally do. Do you play on a sports team? Are you part of a dance team? Do you get to go to a swimming pool in the summer? Does your family take a vacation every year? If any of these are true, then your family is spending money to pay for these goods and services. Life costs money.
People work to earn money. The money they earn can be spent to pay for the things discussed above. After all, no one can just walk into a grocery store, fill up a shopping cart, and walk out without paying. Everyone has to pay for goods and services.
So how do people have the extra money to buy the goods and services they want when they have to pay for other needs, such as food, shelter, clothing, and basic utilities (gas, water, electric, heat)?
People make choices about their money. They can either save it or spend it.
Saving
Spending
Paying Taxes
When you save money, you are setting that money aside to buy things in the future.
When people work and have a job, they make money. The money they make is their income. Saving part of their income can help them pay for things later. But saving money can be difficult, especially today when people can buy things with the click of a button.
People have to be careful how they use their money. If they spend all of it, they won't have any money left over to save for other things in the future. What if an emergency happened, and they needed money? People would have nothing saved if they spent everything they earned.
It's important to put some money aside each month into savings accounts.
When people spend money, they buy things they need and want now. Everyone needs to eat, so people spend money on food. Everyone needs clothes to wear, so people spend money on clothing. Do people need to watch TV? No, watching TV isn't necessary, but does your family spend money to have a TV to watch? Probably so.
When people make an income, they have the ability to spend it on whatever they want. Responsible people first take into account all of their needs and the needs of their families. This includes the need for food, clothing, shelter, bills, etc. Then after hopefully putting some money aside for savings, anything left over can be spent on whatever people want.
Maybe there is a new movie they want to see or a new video game they want to play. Both of these are wants that should only be considered after all needs have been met.
Remember to spend your money wisely: You don't want to run out of money.
Taxes are ways the government collects money from citizens to pay for things that people need, such as schools, roads, and parks. Taxes are fees your parents have to pay to your local, state, and federal government. Without them the government can't function.
Income taxes, property taxes, and sales taxes are a few of the more common types of taxes.
If someone works, he or she will pay income taxes. For example, if a person works for 8 hours making $10 an hour, he or she won't get $80 in a paycheck. Instead, an income tax percentage is taken out of the earnings. If the person had to pay a 10% income tax, he or she would only take home $72. This income tax varies depending on where someone lives and what the percentage rate is there.
If someone owns a property (such as a house, a condo, a building, etc), he or she will pay property taxes. Property taxes are a percentage of the property's total value. These taxes are paid each year.
If someone buy goods, some of them will be taxed. Most food isn't taxed, but clothes and other goods are usually taxed, depending on where you live. So if a pair of pants costs $19.99 and there is a 6.75% sales tax on them, someone is actually paying $21.34 for the pants. Because sellers have to pay the government taxes, they may raise the price of goods to consumer.
If there were no taxes, the federal and state governments wouldn't get any money. The taxes everyone pays go toward many of the things citizens need. For example, taxes help pay for the services of police and firefighters, the salary of the U.S. president, military protection, schools, roads, and national parks.