Personal Management

1

An Eagle Required

Merit Badge

Merit Badge Presentation by Steve Brown (adapted from Robert Casto)

Instructor / Presenter

Steve Brown

sbrown@bsatroop3.com

312-218-5126

Troop 3

Original Slide Deck credit to Robert Casto from the Dan Beard Council

Why Eagle Required

Personal management is about mapping a plan for your life that will involve setting short-range and long-range goals and investigating different ways to reach those goals. Education, training, and experience all help make your goals become a reality. To achieve your goals, you will choose the best path and make a commitment to it, while remaining flexible enough to deal with changes and new opportunities.

Let’s Get Started

• Pay attention
• Have fun
• Scouts are courteous and kind
• Learn
• Ask Questions

– Even if it isn’t in the MB book

Introduction

• How many of you:
• Have a credit card?
• Have made a major purchase like a car?
• Have a retirement plan?
• Know the difference between growth and income producing stock?

​

Most people between 11-17 have none of these, or know anything about them.

Older means more responsibilities

• Some of you will get a job soon
• HS graduation is not that far away!
• Some may go directly to work, full time or part time, some may go to college
• Either way, you’ll be responsible for you
• Managing money and finances
• Managing time

Adult Handbook

• Doesn’t exist, but personal management can help you succeed where others fail.
• Older does not always equal WISER!
• When you’re 18 you can sign contracts!
• These are legally binding
• “I didn’t know what I was signing” won’t get you off the

hook if you make a mistake.

• Many adults get themselves into money troubles through poor financial decisions.
• Knowledge is power to control your future.
• Must live with your choices and their consequences.

Lots of Homework

• 1: Discuss large purchase with family
• 2: Track your budget for 13 weeks
• 8: Track your time for 7 days
• 9: Plan a project

​

• You will start the work here if you haven’t already and will have to complete this requirement later.
• My email is sbrown@bsatroop3.com. Be sure to copy your parent on any email communication

Requirement 1

Do the following:

1. Choose an item that your family might want to purchase that is

considered a major expense.

2. Write a plan that tells how your family would save money for the purchase identified in requirement 1a.
1. Discuss the plan with your merit badge counselor.
2. Discuss the plan with your family.
3. Discuss how other family needs must be considered in this plan.
3. Develop a written shopping strategy for the purchase identified in requirement 1a.
• Determine the quality of the item or service (using consumer publications or ratings systems).
• Comparison shop for the item. Find out where you can buy the item for the best price. (Provide prices from at least two different price sources.) Call around; study ads. Look for a sale or discount coupon. Consider alternatives. Can you buy the item used?

Should you wait for a sale?

1a

• Pick a major item that your family would like to buy
• Automobile
• Appliance
• Boat
• Furniture
• Vacation

• You want to pick something that will take a while to save for
• How long? Expensive enough so it takes 6-12 months of saving.

Requirement

Item that is a major expense

1b

• Document how you are going to save the money needed to make this major purchase
• The amount saved each week or month should be reasonable and not jeopardize family needs
• Special activities to generate money?
• What contributions can each member of the family make?

Requirement

Write a savings plan

1c

• Sales, price reductions, seasonal discounts, phase outs, etc
• Comparison shop: Check at least 3 stores (ideally one being brick and mortar) our sources for the item
• Consider alternatives such as used, refurbished, older version, smaller, fewer features, generic brand

Requirement

Develop a shopping strategy

1c

Research Options

• Consumer Reports
• Best Buy
• Amazon Reviews

​

Pricing Thoughts

• Accessories
• Shipping?
• Extreme Outliers
• Financing
• Prior year model
• Warranty
• Nuance

​

Buyer Beware!!

​

​

Requirement

Example Large Purchase

Cannon – EOS Rebel T8i

Requirement 2

Do the following:

1. Prepare a budget reflecting your expected income (allowance, gifts, wages), expenses, and savings. Track your actual income, expenses, and savings for 13 consecutive weeks. (You may use the forms provided in this pamphlet, devise your own, or use a computer- generated version.) When complete, present the results to your merit badge counselor.
2. Compare expected income with expected expenses.
1. If expenses exceed income, determine steps to balance your budget.
2. If income exceeds expenses, state how

you would use the excess money (new goal, savings).

• What is a budget?
• Plan for how money will be used
• Income : Money that is received
• Expenses : Money that is paid
• Net : Amount left over after tallying all income and expenses
• Goal is to never go negative
• Live within your means

Requirement

2

What is a Budget?

Requirement

2

Example Family Budget

• Goal is to manage our money
• Organize information so we can make informed decisions
• What decisions do we need to make?
• Saving for a specific goal
• Determining if income is sufficient
• Investing for the future
• Building a safety cushion
• Preparing a budget is the first step in Money Management

Requirement

2

Budget

• Think of a budget in terms of your goals
• Most of us want to plan ahead and avoid negative consequences
• With our goals and plans, we can turn that into an action plan
• A budget is a plan that lets us obtain the financial goals we set

Requirement

2

Personal Budget

• What happens if you don’t stay within your budget?
• What does a poorly managed budget look like?
• If you do not have enough money, what can you do?
• How do you handle the big purchases like college, car, house?
• What if you forget something?

Requirement

2

Budget

Checkpoint

Requirement 3

Discuss with your merit badge counselor FIVE of the following concepts:

1. The emotions you feel when you receive money.
2. Your understanding of how the amount of money you have with you affects your spending habits.
3. Your thoughts when you buy something new and your thoughts about the same item three months later. Explain the concept of buyer’s remorse.
4. How hunger affects you when shopping for food items (snacks, groceries).
5. Your experience of an item you have purchased after seeing or hearing advertisements for it. Did the item work as well as advertised?
6. Your understanding of what happens when you put money into a savings account.
7. Charitable giving. Explain its purpose and your thoughts about it.
8. What you can do to better manage your money.

3a

• How do you feel when you receive money?
• Is the feeling the same when the amount is small or large?
• What is your first impulse with that money?
• How do you feel about spending $50 you worked for compared to received as a birthday present?

Requirement

Emotions

• If you have a small amount of money, how would you spend it?
• Now consider you have 10x that amount? How would you spend it?
• What things do you have give up with little money?
• “luxury item” vs. staple

Requirement

3b

How amount of money affects spending habits

3c

Requirement

Buyer’s Remorse

• The sense of regret after having made a purchase.
• Do you always feel remorse?
• Why do you feel bad later?
• Worried you paid too much
• Could have gotten something better
• Ended up not using it
• Someone else got one

Requirement

3d

How being hungry affects shopping

• You feel deprived and more foods sound good
• Will buy more than you need
• Will buy food less healthy
• Cost is not front of mind
• Easier to justify the expense
• Hard to think about long term

3e

• Advertising is a HUGE business
• We respond negatively to blatent

attempts at persuasion

• So ads must be subtle and leave impressions
• They create positive memories and

emotions

• How do you feel after seeing

/hearing an ad?

• When does an ad work its magic?
• What makes a good ad?

​

_•• https://www.youtube.com/watch?v=b0AGiq9j_Ak https://www.youtube.com/watch?v=BfJCiNF8WDc https://www.youtube.com/watch?v=nzX6k_HYgo4

Requirement

Experience after hearing ads for something

3f

• Place to keep money
• Bank pays interest while holding
• Very liquid, money always available
• Insured up to $250k by FDIC
• Accessible in person and debit card if offered
• Local and Internet choices

– Differentiated by interest rates, location, accessibility, minimum deposit/balance, fees, ATM’s, rewards

Requirement

Savings Accounts

How does a bank work!?!?

Requirement

3f

How is Interest Paid?

3g

Requirement

Charitable Giving

• Purpose?
• Support a valued cause
• Reduce tax burden
• 4 Tips from Warren Buffett

1. Relevance

• What issue do you care about?
• Where do you want to make a difference?
• Solve a specific problem?

2. Impact

• Money to one or multiple recipients?
• Offer time instead of money?
• Local, national, or international?

3. Management & Operations
• Clear mission and communications
• Consistent financials and open accountability
• Can demonstrate where the money goes

3h

• Track your monthly spending
• Develop a budget you can follow
• Budget for savings (Rainy Day)
• Pay bills and avoid late charges
• Review credit report yearly
• Payment history
• How much credit you have & use
• # of Inquiries, etc.
• Eliminate debt (rate source Wallethub)
• Fair Credit: 23.9%
• Good Credit: 21.2%
• Excellent Credit: 15.7%
• Use safe financial institutions
• Follow long term strategies

​

Requirement

What can you do to better manage money?

Requirement 4

Explain the following to your merit badge counselor:

1. The differences between saving and investing, including reasons for using one over the other.
2. The concepts of return on investment and risk.
3. The concepts of simple interest and compound interest and how these affected the results of your investment exercise.

4a

Requirement

Saving vs Investing

4b

• Abbreviated as ROI

• Used to compare the efficiency of different investments
• Measure is a percent
• Example

20% = ($1200 - $1000) / $1000

• Limited as it doesn’t consider time

Requirement

Return on investment and risk

4c

Requirement

Simple

vs Compound Interest

Requirement 5

Select five publicly traded stocks from the business section of the newspaper. Explain to your merit badge counselor the importance of the following information for each stock:

1. Current price
2. How much the price changed from the previous day
3. The 52-week high and the 52-week low prices
4. Extra credit: For the 13 weeks you are tracking your budget, track the performance of these stocks

Requirement

5

Common Stocks

https://finance.yahoo.com/

Requirement

5

Common Stocks

Requirement

5

Common Stocks

Stock Measures

Current price to buy a share of the stock Change from previous day’s price Range: High and low price for the day

52 week: High and low price last 52 weeks Open: Starting price for the day

Vol / Avg: Number of shares sold and how many are

usually traded in a day

Mkt cap: Value of the company (shares * price)

P/E: Profit divided by earnings. Used to compare different companies

Div/yield: Latest dividend and effected rate over the course of a year

EPS: Earnings per share

Shares: Number of shares outstanding

Beta: Measure of risk in relation to the market Inst own: Percentage of shares held by institutions

Requirement

5

Important Numbers

Requirement 6

Pretend you have $1,000 to save, invest, and help prepare yourself for the future. Explain to your merit badge counselor the advantages or disadvantages of saving or investing in each of the following:

1. Common stocks
2. Mutual funds
3. Life insurance
4. A certificate of deposit (CD)
5. A savings account or U.S. savings bond

6a

• Advantages
• Potential for growth
• Unlimited income potential
• Can also return interest (dividends)
• Lots of choices
• Benefits those who choose well

• Disadvantages
• Can lose initial investment
• No guaranteed profit
• Must setup an account
• Per transaction fees
• Could be difficult to sell

Requirement

Common Stocks

Amazon vs. Dow Jones:�1/1/2000 – 11/15/2021

Amazon vs Dow Jones: �11/15/2021 – 12/23/2023

6b

Requirement

Mutual Funds

• Advantages
• Same as stocks + expert managing your portfolio
• Less risk spread on many stocks
• Less research needed
• Dividend reinvestment
• Lower cost of entry

• Disadvantages
• Same as stocks
• Expenses to pay managers
• Less potential gain
• Less control over choices
• Limits on buy/sell frequency

6c

Requirement

Life Insurance

• Advantages
• None, not an investment. It is an expense. Used to provide a benefit in the event of death.
• Fixed value of the policy
• Heavily regulated by government

• Disadvantages
• Not an investment
• Some policies are complex and give poor returns
• Term/ Employer Sponsored/ Whole

6d

Requirement

Certificate of Deposit (CD)

• Advantages
• Considered very safe
• Easy to buy from a bank
• Predictable rate of return
• Wide selection of maturities
• Can automatically reinvest
• Insured by FDIC
• Better return than savings account

• Disadvantages
• Require set time frame
• Early withdrawal penalties
• Low rates of return for short time

frames

• Inflation risk as rates fall behind

6e

Requirement

Savings Account or U.S. Savings Bond

• Advantages
• Generally exempt from state income tax
• May be exempt from federal income tax
• Virtually guaranteed rate of return
• EE bonds bought at ½ face value
• Earn interest for up to 30 years

• Disadvantages
• Taxed if not used for education
• LOW returns

Wells Fargo Personal Acct

Requirement

6

Real life example

Requirement 7

Explain to your merit badge counselor the following:

1. What a loan is, what interest is, and how the annual percentage rate (APR) measures the true cost of a loan.
2. The different ways to borrow money.
3. The differences between a charge card, debit card, and credit card. What are the costs and pitfalls of using these financial tools? Explain why it is unwise to make only the minimum payment on your credit card.
4. Credit reports and how personal responsibility can affect your credit report.
5. Ways to reduce or eliminate debt.

7a

Requirement

Loans Interest APR

• Loan: Something borrowed, especially a sum of money expected to be paid back

– E.g. Money from a bank to buy a car, house, or other large item

• Interest: Money paid regularly at a particular for the user of the money lent, or for delaying the repayment of the debt

– E.g. 12% a year would be 1% per month

• APR: Annual percentage rate is the actual percent of interest you will pay in the course of a year

– The balance of your loan can be calculated daily which is 12/365% or

.033%. This is charged on the balance

daily and ends up being more than the advertised rate of 12%

7b

Requirement

Ways to borrow money

Bank Loan: Sign contract with bank, fixed rate Credit Union: Same as bank but better terms Secured Loan: Large item guarantees amount

borrowed

Credit Cards: 0% new purchase or low rate cards Cash Advance: Cash from credit card, high rate Payday Loans: Short term, high rate, charges if

late

Family & Friends: Negotiable terms and rates Social Lender: Online sites doing micro loans

like kiva.org. Also called peer to peer loan.

HELOC: Borrow against the equity in your home Margin Loan: Borrow against value of stocks Pawn Shop: Give them something, they give you

cash, you pay off to get item back or they

keep it

Tax Loan: Borrow against expected tax refund

7c

Requirement

Charge Credit Debit

CARDS

• A credit card is an unsecured loan
• More convenient than carrying money
• Don’t have to have full amount in cash
• Safer if it gets stolen
• Many charge no interest if paid in full monthly
• High interest rates on balances
• Low minimum payments
• Expensive to get cash

7d

Requirement

Credit Reports

• Record of a borrower’s credit history reported by lenders
• 3 Reporting Agencies
• Equifax, Experian, Trans Union
• Fair Credit Reporting Act
• Free copy from each agency every 12 months
• Many credit cards now provide a report

​

• Payment History
• Ontime
• Late
• Amount of Debt Owed
• How long you’ve been using credit
• New or recent credit inquires
• Every store wants you to have their card
• Car loan inquiries
• Types of credit used

​

​

Requirement

7d

Credit Report Items

7e

Requirement

Reduce or Eliminate Debt

“Those who understand interest earn it, those who don’t, pay it.” – Albert Einstein

•

• 7 Strategies you can employ

1. APR: Best bang for the buck
2. Highest payment
3. Highest balance
4. Lowest number of payments
5. Lowest balance
6. Lowest payment
7. Custom: Mom & Dad first

http://www.zilchworks.com/debt-reduction-strategies.asp

Requirement 8

Demonstrate to your merit badge counselor your understanding of time management by doing the following:

1. Write a “to do” list of tasks or activities, such as homework assignments, chores, and personal projects, that must be done in the coming week. List these in order of importance to you.
2. Make a seven-day calendar or schedule. Put in your set activities, such as school classes, sports practices or games, jobs or chores, and/or Scout or place of worship or club meetings, then plan when you will do all the tasks from your “to do” list between your set activities.
3. Follow the one-week schedule you planned. Keep a daily diary or journal during each of the seven days of this week’s activities, writing down when you completed each of the tasks on your “to do” list compared to when you scheduled them.
4. Review your “to do” list, one-week schedule, and diary/ journal to understand when your schedule worked and when it did not work. With your merit badge counselor, discuss and understand what you learned from this requirement and what you might do differently the next time.

8a

Requirement

Time Manage- ment

• Create a list of all the tasks and activities you have over the course of the next week

• Ideas
• Homework
• Chores
• Projects
• Meetings
• Practice

• Do not include things like meals and items you cannot avoid

​

• List in order of importance

8b

Requirement

Calendar

• Make a seven-day calendar adding items such as

• School classes
• Sports practice
• Music practice
• Jobs
• Chores
• Club meetings
• Church
• Scout meetings
• Walk / feed dog
• Wake and bed time

• Plan when all the tasks from your “to do” list will be done between your set activities.

8c 8d

Requirement

Follow Plan

Review & Report

• Follow the schedule for one week
• Keep a daily diary or journal each day
• Write down when each task was completed

• Review your “to do” list, one-week schedule, and diary/ journal
• What worked and what didn’t?
• Write a letter to me presenting what you learned from the experience and what you might do differently the next time.
• Mail or email the letter to me

Requirement 9

Prepare a written project plan demonstrating the steps below, including the desired outcome. This is a project on paper, not a real-life project. Examples could include planning a camping trip, developing a community service project or a school or religious event, or creating an annual patrol plan with additional activities not already included in the troop annual plan. Discuss your completed project plan with your merit badge counselor.

a)

b)

Define the project. What is your goal?

Develop a timeline for your project that shows the steps you must take from beginning to completion.

Describe your project.

Develop a list of resources. Identify how these resources will help

you achieve your goal.

If necessary, develop a budget for your project.

c)

d)

e)

Requirement

9

Written Project Plan

• Choose a project that will take time to complete

•

•

•

• NOTE: This is not a real-life project you have to do
• Some Examples Are …

Canoeing , camping, hiking trip Community service project

School or religious event or activity

• Get approval of project from counselor

• Write our project and e|mail to counselor

a)

b)

Define the project. What is your goal?

Develop a timeline for your project that shows the steps you must take from beginning to completion.

Describe your project.

Develop a list of resources. Identify how these resources will help you achieve your goal.

If necessary, develop a budget for your project.

c)

d)

e)

• Rest of class time while signing cards can be

used to work on this requirement

Requirement 10

Do the following:

1. Choose a career you might want to enter after high school or college graduation.
2. Research the limitations of your anticipated career and discuss with your merit badge counselor what you have learned about qualifications such as education, skills, and experience.

Requirement

10

Careers

• Financial Careers

• Financial controller
• Accounting
• Purchasing
• Stock Broker/ Day Trader
• Banker

• Time Management Careers
• Business Management
• Project Manager
• Logistics

My Contact Info

• EMAIL:

sbrown@bsatroop1003.com

​

• Rest of class time is available to work on requirement 9
• Great time to ask questions!