Terms and Concepts You Should Know for the Final Exam

I hope you enjoyed taking the course in Consumer Math at WHAE.

In the penultimate class, we will review key terms that you should know for the final exam.

Here is a summary of the key terms and questions that will be on the exam:

·         Percentage Change Formula – be able to calculate what the change in price was when     

          given an old and a new price

·         Percentage Discount Formula – you get x% off – the new sale price is?

·         Percentage Mark-up Formula – you want to make x% profit over the cost of an item –

          how much should you charge?

·         Future value formula – how much will the value of a savings or retirement account be worth if it grows at x% per year, over a 10, 20, 30, or 40-year period?  Be able to write out the formula to solve – extra credit for using Excel to find the exact answer (future value)

·         What is depreciation?  By how much per year does the average car depreciate in value? 

·         Be able to use Bankrate.com to calculate the total interest paid on a car loan or a mortgage

·         What web sites would you go to for used car pricing information?

·         What is net worth? How do you calculate it?   What is an asset?  What is a liability?

Give 3 examples of a current liability.

·         What is a budget? Surplus? Deficit?  Is a budget more related to net worth or net income?  Why?

·         What is meant by the risk vs reward of an investment?  Which investments are risky?  Which investments are least risky?  Which investments give higher rates of return – risky ones or less risky ones? 

·         What is the max percentage you should allocate to housing as far as your budget is concerned?

·         What’s the most you should pay for a house as a multiple of your annual gross income?

·         When would you not consider buying a home?  Why?

·         What is liquidity mean as far as investing is concerned?  Which investments or assets are liquid? Which are illiquid? 

·         What are the advantages of a Roth IRA and a 401K? 

·         What are the biggest expense categories (as a percentage of your gross income)?

·         Why are many younger folks net worth negative while early retirees net worth positive?

·         List 3 good uses of credit (debt).  List 3 bad uses of credit (debt). 

·         What is the most important variable that the credit bureaus use in the calculation of your FICO score?

·         Why should you pay down your debt as fast as possible?

·         What is an emergency fund?  About how much should you set aside for it in terms of number of total avg monthly expenses?

·         What is a W-4 form?  What are exemptions/allowances on a W-4 used for?  What other info is required when filling out a W-4 form?

·         What is a W-2 form?  What key info do you find on it?

·         What’s the difference between APY and APR?

·         What is the FICA tax?  How much do employees typically pay in to FICA as a percentage of their gross income?

·         Be able to convert a decimal to a percentage to a fraction – esp for 1.0, 2.0, 0.5, 0.3333, 0.6666, 0.25, 0.2, 0.125, three-eighths, seven-eighths

·         What is a credit vs a debit (in a checking account registry – transaction history)

·         How much of a percentage gain do you need to get back to break-even after suffering a loss of x%?

·         How to factor in the cost of CT state sales tax into the final purchase price

·         What is the historical rate of inflation in the U.S. and what does that do to the price of an item over a 1-year, 2-year and 3-year period?

·         If you double your money, what percentage increase is that?  Same question for tripling your money.

If you have any questions, please ask.   Good luck!

Budgeting and Personal Cash Flow Tracking

A budget is simply a plan for how to spend your money.  

One of the best ways to plan ahead for expenses is to apply zero-dollar budgeting to the envelope expense allocation system.    

Years ago, smart budget conscious folks used to split up their monthly paycheck (i.e. cash) into 10 or so envelopes, allocating a certain percentage (and dollar amount) to each.  The envelope expense allocation strategy basically forces you to limit or cap the amount that you could spend for each expense category. When you wanted to buy a pair of shoes, for example, you would literally draw money from the clothing envelope and no more.  You would therefore be very conscious of the amount of money that you could spend that month for an expense category. 

If you exceeded your monthly budget for one expense category, which would happen occasionally, you would have to use what was left over from the other envelopes, and no more.  

That's the envelope part.

The zero-dollar budgeting part means that every dollar had to be accounted for.  You had to "spend" or allocate each and every dollar.  In other words, every dollar has a job.  Even the excess amounts - that goes into your Savings envelope.   If you're not generating surpluses across the non-savings envelopes, you won't be able to save anything towards your retirement account, your rainy day fund, or towards the purchase of a big-ticket item like a car or a home.  In this way every dollar that comes in (i.e. your income), is accounted for.

This approach is great because you would force yourself not only to live within your means, but also to save for important things like your retirement, healthcare, etc.

Here is an example of how you would break up your cash flows using the envelope system:

As you can see, every dollar is accounted for, after savings has been factored into the equation.  In the end, what you spend or account for must equal what you take in (i.e your income).

There are many budgeting apps out there that can help you budget your money (i.e. track your cash flows).  Here are some that I recommend:

• Mint.com (free)
• Quicken $30
• neobudget.com $5/th
• moneywellapp.com $60 one-time fee

I also recommend checking out Kiplingers magazine and David Ramsey's Total Money Makeover, and DavidBach.com for learning how to take control of your money.

To access the Budgeting and Cash Flow Tracking exercise, please click on this link.

To access the Cash Flow Budgeting Powerpoint presentation, please click on this link.

To access the Net Worth vs Net Income Powerpoint presentation, please click on this link.

For homework, please complete the Kiplinger's article question and Cliff's Wonderful Financial Adventure exercise sheet.

Hi students!

Today's class is about how to use Excel's financial functions and Bankrate.com's financial calculators to solve real-world financial challenges.  

There are 6 questions.  You can access the spreadsheet by clicking on this link.

When you're done, save your spreadsheet with your name on it, in this manner:

    JohnSmith_ExcelFin_022717.xls   

Submit your answers by attaching your spreadsheet in an email and send it to:

                                         rwiegs@gmail.com

Today's lesson on how to use percentage change, mark-ups and discount formulas

In today's lesson, we're going to learn how to use percentage formulas to calculate:

a) percentage changes

b) % mark-ups and 

c) % discounts 

                                      all vital to business transactions and dealings.

To access the Excel spreadsheet, please click on this link.


                                                Percentage change formula:

Percentage markup:

Percentage discount:

Sale price = Marked Price x (1- % Discount)

% Discount= (Sale price - Marked Price) / Marked Price

Welcome to WHAE Personal Finance Class

Hi and welcome to West Haven Adult Ed. Consumer Math class with Richard Wiegand!

For a copy of the syllabus and course expectations, please click on this link.

The class will meet Mondays from 6:30 - 8:00 PM from September 11th through December 4th - except for holidays, snow-days or cancellations.  Please check the West Haven Adult Ed. web site for cancellations or postponements.


Today's lesson is about how to maintain a checking account registry using Excel. We will also discuss the cost of CT Sales tax on the purchase of goods and services in the state of CT.  To access the Len Lombardo Checking Account Registry, please click on this link.   To access the CT Sales Tax exercise, please click on this link.



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The text for the course is entitled Personal Finance by Margaret Magnarelli.  To access the pdf, please click on this link.

Unlock Your Potential

Success is goals, and all else is commentary. All successful people are goal oriented.  They know what they want and they are focused single-mindedly on achieving it, every single day.  

Your ability to set goals is the master skill of success...Without goals, you simply drift and flow on the currents of life.  With goals, you fly like an arrow, straight and true to your target.  

Clear goals increase your confidence, develop your competence, and boost your levels of motivation.  As Tom Hopkins once said, "Goals are the fuel in the furnace of success."

Join the Top 3 Percent

Mark McCormack in his book What They Don't Teach you at Harvard Business School tells of a Harvard study conducted between 1979 and 1989.  In 1979, the graduates of the MBA program at Harvard were asked, "Have you set clear, written goals for your future and made plans to accomplish them?"  It turned out that only 3% of the graduates had written goals and plans.  13% had goals, but they were not in writing.  Fully 84% had no specific goals at all, aside from getting out of school and enjoying the summer.

Ten years later, in 1989, the researchers interviewed the members of that class again.  They found that the 13% who had goals that were not in writing were earning, on average, twice as much as the 84% of students who had no goals at all.  But most surprisingly, they found that the 3% of graduates who had clear, written goals when they left Harvard were earning, on average, 10 times as much as the other 97% of graduates all together.  The only difference between the groups was the clarity of the goals they had for themselves when they graduated.

What an eye opener!  


This excerpt was taken from Brian Tracy's book entitled, Goals! How to Get Everything You Want Faster than You Thought Possible.

Time Value of Money and Gilbert the Retired Millionaire

Here are some important links from this week's class:

Time Value of Money Questions

Time Value of Money Spreadsheet: Simple vs Compound Interest

Gilbert Millionaire Excel Spreadsheet

Saving for Retirement Powerpoint

Carmax.com, Trulia.com, Rent.com and Bankrate.com computer lab exercise

In this computer lab, we will consider the cost of financing a used car, and the cost of renting an apartment or buying a home in 4 locations across the country.

Here is the link for the Carmax.com exercise.

Here is the link for the Buying a Home Mortgage term comparison exercise.