Managing Your Personal Finances

723 Pages·2015·159.89 MB·English

by  Joan S. Ryan

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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
Managing Your
Personal Finances
7e
Joan S. Ryan Christie Ryan
M.B.A., Ph.D., C.M.A. MA, LMHC
Clackamas Community College Institute for Family Development
Oregon City, Oregon Vancouver, WA
Australia • Brazil • Mexico • Singapore • United Kingdom • United States
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m
Mike Flippo/Shutterstock.co
©
Secure Students’
Financial Futures
While focusing on the student’s role as citizen,
student, family member, consumer, and active
participant in the business world, Managing Your
Personal Finances 7e informs readers of their various finan-
cial responsibilities. Students will discover new ways to maxi-
mize their earning potential, develop strategies for managing
resources, explore skills for the wise use of credit, and gain
insight into the different ways of investing money. Special
features in each chapter focus on current trends and issues
that consumers face in the marketplace and help students
learn to secure their financial future. The 7th edition provides
updated coverage of timely topics including social media,
health care, and identity theft, to increase student awareness
in these critical areas of personal finance.
• Ensuring that basic personal financial management skills
are attained, this content is aligned with the Jump$tart
Turn the page to learn
Coalition’s national standards for personal financial literacy.
more about how to secure
• To prepare students to become knowledgeable and ethical students’ financial futures
consumers, this content meets the standards for personal with Managing Your
financial literacy established by the National Business Personal Finances 7e!
Education Association (NBEA).
iii
Copyright 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
Presenting the
Most Comprehensive
2
Unit
Managing Credit
7 Credit in America New Net Links direct students to the
Net Link Go to ngl.cengage.com/mypf to learn more
aRbeoseurtv cer ewdeitb sciatred. laws and regulations at the Federal companion website for additional
8 Credit Records and Laws
Net Link Go to ngl.cengage.com/mypf to learn more
about the Consumer Financial Protection Bureau (CFPB). activities related to chapter content.
9 Costs of Credit
Net Link Go to ngl.cengage.com/mypf to learn more
about wage garnishment and how it affects consumers.
10 Problems with Credit
Net Link Go to ngl.cengage.com/mypf to learn more
about Consumer Credit Counseling Services (CCCS).
© bikeriderlondon/Shutterstock.comPPrroojfeilcet DMonanaladg Tinrgu mCrpedit and Debt
Unit 2 begins with an introduction to credit in
Chapter 7—what it is and why it is important to
you personally and as a part of the U.S. economy.
Credit has many advantages for those who use it wisely,
but it can also be a trap and cause financial problems.
In Chapter 8, you will learn about credit bureaus, credit
ratings, and credit reports. You will examine your rights
and responsibilities as a credit user. You will also discover
the many credit laws that have been enacted to help
protect consumers.
In Chapter 9, you will study the responsibilities of
consumer credit along with the high costs of credit.
You will learn how to compute the true cost of credit
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155 Pay, Benefits, and Work
76815_ch07_ptg01_155-175.indd 155 24/11/14 2:48 PM 2.1 Gross Pay, Net Pay, and Benefits
2.2 Thriving at Work
Consider This is a real-world scenario
Consider This…
that connects students to the chapter
Christine was just hired for her first job. It is part time with flexible
hours so she can also attend school. Her pay rate is just above mini-
content and gets them engaged. mum wage, and she can work some overtime hours if she wishes dur-
ing the peak season. As a part-time employee, her benefits include
paid time off for sick days, vacation (one week after her first year of
employment), and holidays. She does not have health insurance cov-
erage or other benefits such as a retirement plan or profit sharing.
She doesn’t mind not having health insurance because she is covered
under her mother’s health insurance plan. For now, Christine is sat-
isfied with her overall benefits package. However, she realizes that
eventually (when she finishes school) she will need a job with bet-
ter benefits so she can provide for her future financial security. What
types of benefits might an employer offer Christine?
2.1 Gross Pay, Net Pay, and Benefits © Pan Xunbin/Shutterstock.com
34
Lessons make the text easy to use in
The essential Question What components make up an employee’s total
compensation?
all classroom environments.
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An Essential Question frames the
LO 1-1 Gross Pay, Deductions, and Net Pay main idea that students will explore in
When you work for an employer, you agree to perform certain tasks in
etixocnhsa nargee sfuobrt praacytmede.nt. Gross pay is the total amount you earn before deduc- the lesson.
Hourly Wages
A fixed hourly rate earned by employees is a wage. Your wage rate is multi-
plied by the number of hours you worked, and typically those hours are listed
on some type of time card or other record.
If you work for $10 an hour and you
agree that you will work 30 hours a week, Clearly stated Learning Objectives
your gross pay from wages would be $300
per week ($10 3 30 hours). The regular
rate of pay times the regular hours worked preview the concepts and guide
is your gross pay for the week.
H Roautrel y 3 WHoorukresd 5 GPraoyss students through the lesson.
$10 3 30 hours  5 $300
Overtime
Overtime is time worked beyond your
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Chapter 2 Pay, Benefits, and Work 35
76815_ch02_ptg01_034-056.indd 35 24/11/14 2:49 PM
iv Preface
Copyright 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
Personal Finance Program Available!
2.1 Assessment Engaging features within each
Lesson Assessment give
Key Terms review a. benefits
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2. A plan that allows employees to share a f. overtime
portion of the company’s income g. profit sharing understanding of the terms and
34.. ACeeo fsmi xtpeoed sn tarsniavnteiuo fanol rta hhmaigto hue nnptce ooruffor garmrgoeassns ecpemayploy- hij... vwsaealsagtreeyd content before advancing to the
5. A fixed hourly rate of pay
6. Forms of employer compensation in addition to pay
7. Total earnings before deductions are subtracted next lesson.
8. Incentive pay based on quality of work, years of service,
CheCoKr pyroofitusr undersTanding • Key Terms Review
LO1-1 9. What is included in gross pay? List some required and optional
LO1-210. dLiesdt ubcetnioenfist sf rpormov gidreodss tpoa my.ost full-time, permanent employees. • Check Your Understanding
LO1-2a11p. Fppolalrn yesm? pylooyueers, wKhnat ois wthel aedvdangtaege of cafeteria-style benefit • Apply Your Knowledge
LO1-112. I21f66 y 0bo hiuwor euaernskn lpyue aprl a mpyacohyn etisch k$?s 3?W6 W,h0a1ht0a ,it s w iysh oyauotru iors vhyeooruutirrm lbye irw araetetee ko?lfy ppaayy ibf aysoeud woonr k • Think Critically
LO1-213. Assuming you could contribute up to 5 percent of your gross pay of
$30,000 into a 401(k) and your employer would match your contri-
bution up to 1 percent of your salary, what total amount would be
contributed to your account each year?
Think CritiCally
LO1-114. Wyohuy t harinek s athlairsi eisd f aeimr?p Eloxypelaeisn o yfoteunr aenxcswluedre.d from overtime pay? Do The Essential Question at
LO1-215. As an employee, would you consider paid vacations and holidays
motivational? Why or why not?
the beginning of each lesson
The essential Question Refer to The Essential
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5 net pay), benefits, and incentives.
Assessment page, allowing
Chapter 2 Pay, Benefits, and Work 45
students to revisit the main
76815_ch02_ptg01_034-056.indd 45 24/11/14 2:50 PM points of the lesson and assess
their comprehension.
Solve Problems
and Explore Issues
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for federal and state taxes if he increased his allowances to two? (Use
the withholding tables in Figure 2.3 and Figure 2.4.)
Lo1-112. Achleexcki sw. oArsk as fsoarla arnie adn enmupall osyaelaer,y s hoef $is3 n6,o0t0 g0i vaennd agneyt so 1v2e rmtimonet hplayy p. Yaye-t
she works more than 60 hours each week.
a. Do you think she should be entitled to overtime pay?
b. Compute her overtime rate. How much additional pay would she
earn each week if she were paid for her overtime hours?
Lo2-113. Uabsese tnhtee efoisrmm uanlad g aivnennu ainl ctohset Mofa athb sMeninteueteis mto bcaosmedp uotne tthhees era ftaec otsf:
■ Number of employees: 45
Chapter Assessments give Apply WhAt you KnoW ■ Number of 8-hour shifts: 3
students the opportunity to tie lloo11--11 12.. WUafinnshiddna gwtt h itosehr teksht epeada t gey5r r6aoo nshlsldo tp uafaerxysd wlefaoristarth l a hwwnoe ilhtedhokihnu?ogrll ydta ienbmgle pasl moinyo eFueing wtusrh efoo 2 re. 3ea arancnhsd $o 1Ffi 2gt huaenres eh 2:o.u4,r Ext■■■ ENWAnvuoemdrrkab gheYero uoohrfos uwu lororlsyrt k wddLuaaEgryisena :ig n$r a8annn aaivvneerraagggee mmoonntthh:: 62224
■ A single person, one allowance, who made $109 last week
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encourage critical thinking. 54 Unit 1 Managing Careers and Money
76815_ch02_ptg01_034-056.indd 54 Preface v
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What Are Work Ethics?
Work ethics or codes of conduct exist both formally and informally throughout cor- feature that enriches students’ knowledge
porate America. Companies are finding that employees, customers, and others are
looking at their values, integrity, and sense of fairness in the workplace.
Aco rmecpeannti ecso wrphoorasete l esatuddeyrs choipn ctlhuedye tdr uthstaP at noldu tavsatalnunedsni nthgie neym rgepslpo eyacete. s M wCaananyt rUto.S ew. coeorkmr fpo ari- n... by acqLuO 1a-2in tBienngef itths aenmd I nwceinthtiv reesal-world issues.
nies, both large and small, are participating in integrity websites—places for cus-
tomers and other stakeholders to go and examine values policies, from employee
and customer privacy statements to workplace ethics enforcement. To attract and Many employers offer benefits, which are forms of employer compen-
rinectareina sciunsgtloy mawerasr,e s toofc tkhheo nldeeerds, faonr dv afilnuaens,c tiarul spta, ratnnedr sc,o cmommiptmaneinest. are becomGingr aphic Design sation in addition to pay. Common benefits provided wholly or in part by
Mthaen bye estm epmlopyleoryse aerse, duesifninge ad waso prke oepthleic ws theos ta fdohre prere t-oe mhipglho yemtheincat ls pcrreinecnipinlegs t. oW soelrekc t employers include health insurance, retirement savings plans, paid sick leave
efWtuat■hklh l iiencdInssga y ifftao’a sclr cet weeigodmoan rlw?p:kl ioftohyre aeans f eiuntlclh ldiucadayle ’sd g iplievamiyn.gm ath aet ewmoprklo, yaesrk c yoonusirssteelfn ttlhye hsieg qh-uqeustailoitnyGcsitnos oew rsmbpfaptoetpweisrfrhko,rea s—ir,mcr.e e i Tando, hfestoteos riy ogmc fknot,neem aonrnsmw udcu s rhceninoaaicgpwtae tc ti tveovoai msi tduuepesa uceal ut scce sotor-hn loa-rt, W•h Afdaoedtrs d’isngite niiowt sn oclaifoklt mtwera patiruneoti.ne wgr giosr arnpkeh eiidcnse  d.a  n.d . auSnencdeu mvraiptcylao tayinomdne snM, ta encdodim cpaprroee fntista axstehisoa)nr.i ,nB wge.no Serkfoiemtrss eo’ bfctoeenmne pfaiertens soaarftefie orrneeqd, u atinorde fd um lbla-ytt cilmahwien ,(g sp uSecorhmc iaaas-l
76815_ch5022_p tg0U1_0n34it-0 516. inddM 5a2naging CareerasTse123c■■■■■ lMat... fh ndoaIWWWWDDIwaEsfdernbx eeop aii oohhpylhtssMe ue uun oalcccemae nltrrllo wdoriddt iiidnsobbshdm n ie ts.ktiIreeioaht el chapfb o feaeaay cl afelwnstlseay n h sse i cuiphysyiirteC tttssi or’aeuu egssoeuccru adaarh oheuetrhytt?ti srod iio ?tavioo aio ahnatrconnbmn aesldr uo i vii a?nniryseuCenafho st fdwww n aueaamimovchh nmtit eliidhde ccc?yauelhhf leomud a aluyyyleil onr’oorso?-r e cuufdaa.u lecdbf ttasco eitricoislaineiginenodgh vdni tesaia t tonl?raoedr g ecswwoat. hlormE,oi arcdpnkaco aghlf en od spsyrio le ettalhruhmcsateotimteo n cdmna om ..uma HAunkpesoreeat tw i nhtdy yieoeyc?coatuhilu dlEJNiitaipsaphtawetkciymdn ceiooe.ocnn cesuroao m e ci•••••••hrig Hitmettfadtdnbwlncvl a? hiobhoieognnl eietlfg p irc sio oGGAg2EehGGCAfCeeteo weoeegc ncto hedehsmrsT rr0alderna no rslerrrrr tpso eriorstsirebei saaaase,gx2’en mdtv- i mee .sip uprtw aieaatysdtppppt naii0 dnadl srnoTc nl b-apatnvcltmaemhhohhna.tat . eeitho aehtglhsrpvhcttnniiyiiindTiisSoccccurae e slrsioeoeir mtie.tdchty© mypokcik/Shutterstock.comd agh tildoygniloydsmnskddda.o-tyo eg nh i eumi liyi aenrsu eeeenoeciaymere2lpetnt l cteds’gsssa4ss vtonvrxislio rut/aistn iiisoea.a r1vet eg,p gggs d twt1Oadl itgd rcgio l iyso/naesnnent 1 obntoerrou eoewf4hedcuensreoeeeane gr s b s r tea g v a rrr pwos2t tts ieortdsmsss:iugebhcoryte5r lrrredi faeef1tioarse sitoke eom e roenhct epPpts eens.vmt uioflseMrsira ssiaedhoumhtgi e sr stmci clkeoynp a nrr siaitnaeocotirtpotnootrttrnggsteyher s neo mlu iu damr o.dqe,rvewsd.a aed gstyei mhyeuea etsrdleau pohsamyes no iasebviracorri t g indwegoetkeegtorf n-sd nr jdnnu -- - s t t GMcp$dcmdaaashctcthwriAcwaWAloytcbinehoieookoaraltnddr4eateeiorsieiosgutrqoihal eerpemmulnyd vvk5lned elahrrat httsum en s oete?et ni,ckew .heye atpp.gciTlr0eeyat p rrwt voy io,diro ivlAoAl waavtthoWhn o0snsiaa wtlhiiecus etenadnantoosslurtegmrs0tkioo otslne solnhkiee yypeaaor hcA f.ysc r i n titds ei ommndiom ndy.he armkptnoytalsHt, ceseeoh bnsh cr te s.eHhpilgDuMeeiaaag ela.snl tp tned aa ooyo ieeif ennss ngdtw trnHnglrw’eotosetwigw hi aset’euttk he vo ops cg ri ruo bss .ptmoeii sa eleo os softfa tnphsail?rb aehh csk h io o rfa rknlestgehetadti, w oykaeie t Yrsohophn msdcsnc pn ite nsay ?n mo o u ieiteknaeioiwwtf drstsdoatn ashvfbcfr ocih m Du ih pfunlaeoj unemgdcioehtitoaodi alaezosncsloagymlteten? rnrat r lue ie h,ice krt y thi rgw om d foyynesstil fsgec,seth iosi nhefe oa onelsshee’tcai r thaio en rlcaeoslpdnausaritrgonaemaa gceg hw lidrgrm pe t sic ttgratrt? rtvetyehoi.e hpyt etcmmohe spha n ew?rseaende pDinH aotmierpiif.r, ct crain asnti de iWti gsyroghritaes lc ahys i--aeoknls wlh ae r a n e yct hme-tr laeho t deaot eourto-r The Career Clusters icons are being used with permission of the: States’ Career Clusters Initiative, 2007, www.careerclusters.org Pc1a6lra eCneanrr tppcwovfCOVcmPGneiaoaaiecrieoeehdFFEotascenyncmrtenhnereavruu uemetokiaise ertem rllsptdf,lsi aerllnat piluto r--g amlmemoonaohht t tlntm wf iapioVnasiopfmatem noC nyrat elslsp.l Daiyind ot ,re eeImamdTle di yr o Ts,nagctrmlaeso s heweyeyuupyt(hm uea s ,iecaspwseoet ssaabueeCt uoM plt rn smeisoaomilcym litev ktnrhynohethwola,aeeasae aadaieyl rn gteayhawernnolteo mh.inypnsssiioevernsen,n rs ss o ti)ncf nct eac nwo r.isehot rgtL nrrehge ae wPmeoeeegr .ude,e mfaenaru enematt iyptkssiteghehlhdet aha drpmkwh anesoern raar’ lhtrn sn ielneioarFi ll e Hoe dnma liKydyvos5 nh lti geabw iueiopa0otgsde c,nne arpre rll osaa iltetogiiaee eptfnhyedni u,nykm nig…aad s p aoesstJgo diicyu a ecpidnvraohaft ns.y ea to l f mo .iJoya oianltDan umtd lsefeyr yhosg ltr mpeoaeruy eemre , yh,afe a rs pp pi,awisUu laLefv daenol avnaeioafia n otndnedl atbhyrhy eia end weeotoaes lar ee td or alyhtrrhhPdssi a r cedeD eiprees rsiilaqtSaa.eniaaertra r tystuol lEac yeto aiesrofdlmi,whdmst uan rfo auea.emeos dt olpsncnevhdsre utl imboadttka olinyscNtbi vt)ye p(Map t iyuDhaeasem ttli ,oseyriowce loa e.swfasaymear y nyEleimYwdp.hltn.o q y emo agi I e rVua c itsnueiinrdphotiaantb’ rrts ll c meec ,o vlmhaoDD edslaytetuafs, oicwe lffaanbdopoueareyynoyyee-rrss.,l
44 Unit 1 Managing Careers and Money health insurance. (Group insurance is covered in more detail in Chapter 23.)
Most plans today are covered partly by the employer and partly by employee
contributions. Typically, employers will pay most, if not all, of the group
76815_ch02_ptg01_034-056.indd 44 24/11/14 2:51 PM health insurance premiums for employees, while employees must pay for
Global View
In Australia, “career break schemes” help employees who are on a career break to main-
allow an employee to negotiate a fixed tain their skills and knowledge by providing train-
period away from work of up to several years ing courses or by ensuring access to current
Gitnolt eoprebnraasotli noVanilae filw ncoa fnnecnaeet.uctrieo nshs orewles vant fwsppeccoafhehhinrart ei ilsesrmoe eeda d-demurisnsuec a a cfasiuernttnei satotdquaghn uaieepnales lialln.yn o rs Dtgsattlsyuu- v at ordaii inmfginyl v augeeoobxa lrtpvrlw heaefeeoo.n r fsrirCtuee ekfal nles ar-cftdtmeeaoi emdgjirolr eye spbsb t cw,h.ar opCfeaomfaaas.r eyrkkmEe - amfsoeiontcrupmhrd l bteo se brhmayneeoentaenrrsdksst-, weTHgaabrooheslweriaek it ir-enmn rfr eot iwkglhrah eote termUC kdon pr fsiilafntoieetftyirdoseiif nrCeSamgtscaa attctiotloaei onrslr?ee?ny e tI.Afu r T rrsbnehor e,ste disomaee kw isal casocrcrrtih bkibvee.eim tntiheeeesfs im mtlse. aaakdvea t iilot- ©Redshinestudio/Shutterstock.com
40 Unit 1 Managing Careers and Money
Communication Connection
When a budget involves together, providing for overall needs and sharin7g68 15_ch02_ptg01_034-056.indd 40 24/11/14 2:52 PM
two or more people, it is of expenses. Communication Connection
essential for each person to If you were living with one or two roommates,
communicate his or her needs to the other per- how would you go about preparing a budget? offers speaking and writing activities
son or persons. Often, negotiating is required What kinds of expenses would you share with
sbomAote e fh iatntehm,gr a(t ismlht)y e eegb taobu.c duaWhgdl ohepgnteee gnirts s eoooivsnnn enee’ns o ppivtfre a erltlpishukoaeeenrisler y ddna o tenfomoed rd ib npsae a rag itrsoreeuorsnciu ta’cptien e blsdsisev fatiiunnhrglgee. osid bloyetohn’i snte’ sobgr uss mmo?d laWgeektelyh eti?n?a s tHuPa krro geeiwnp reod avcusrae eponr yfao oc ershn xufiepalmd’emsrm nenislaneyer esybc do wuosnd foat guwrneildbhdt. ua pbttre eiyo oterouait c aiwhe f sopa uaemrlrde-- © oculo/Shutterstock.com related to the chapter content.
Balancing Your Budget
When your budget isn’t balanced, there are three basic things you can do.
You can cut your expenses, you can borrow money or dip into savings, or you View Points
can increase your income. Dipping into savings is not a good thing because it
Viewpoirenductess yo upr abriloity vtoi mdeeet e moergpenpcy noeerdst inu thne fiu-ture. It isn’t always easy to Downsizing has been defined as the work and their loyalty are not important to man-
increase income either, such as working more overtime or getting another job. elimination of part of the workforce, agement anymore.
taaibnesos wufote rri ssss.tuuyoohofraeSFt dpuemoip nxslmoeee,e dnra ieetv stt’c,n,sei o ml hmmehsatteooosvsa smrr iaebner e atgess el e toda yrrrnioioiho focutfuuiui cn swsaru gntatilh tcitvyhhn tatoiognooeu u i ndtcrtnh h o ibeasawnnu tnkr.node gF quoge toueg hiocthine rd i erictst dnahh ain.ceelstod re smem higacoaoaesrys stt at po raarr stu-cil cntfolcreuv.yos reF umncro air rnn7ti sge 0ri x ni oastgefmof c 1p6to0hl8se ett ,sd o l.i e if1Wg gy5hroe htpusee es nwm.r chBtoeheunvinetts ietpclanhoflraf emleocy repc rtet.deh isMtveuoiertlsat i eeviont neoswargp,g g i aejtaedohccnmobih iamwszeil eanamlnyvtnts iue iyoiizsn n nitya ns .eb bi gsmaEuet rcscs osc oai tnuronnheetf oa. cs stemrsEe e fimrianfacvin pt icocdedlieore o da,ygnw ebeottrneee v alstntei,uoens rper vndrne aem ws rcmt teoohaiacnrnesukittidnr---, TDpHthoooihsiw  nyis oitdsn uuoc eeoak?sgu rtl ehdCee y rwsotiiauttth eim Ctohaafek tlechl leat yioem csso unopof pmeoayrc tph l easiayd caeh ?r osWiledh eain?t © Vectomart/Shutterstock.com
to a location with lower rent, you will find your costs actually go up for a
month or two. You have to pay for moving costs, new deposits, installation
vvii Preface and startup fees, and so on. In the long run, however, you can reduce your
fixed costs. As another example, you can reduce insurance premiums by shop- Arbitration is a formal process whereby an arbitrator (a neutral third party with
ping around and switching insurance carriers every few years, but to do this, expertise in legal issues) makes a formal decision that has the same effect as a
you need a good driving record. When you purchase a car, you should con- court order.
sider not only the payment but also the fuel economy and insurance costs Sometimes contract negotiations fail, and the parties cannot reach agree-
associated with the type of car you purchase. ment. When this occurs, the union may decide to strike, or refuse to work
Copyright 2016 CenVgaargiaeb Llee acronsitnsg a. rAel le aRsiigehr ttso R cehsearnvgeed .i nM tahye n sohto bret croupni.e dY,o suc acnanne dea, to ro duut plleiscsa,t ed, in whole or in part. Due to electrounnicti lr iagnh tasg, rseoemmee ntht iirsd r peaacrthye cdo. nBteefnot rme tahyi sb ec asnu phparpepsseend, sftrroimke sth ree qeuBioreo ka vanodte/ obry e Chapter(s).
Editorial review has despemenedd tlhesast aonny csluoptphriensgs eadn cdo netnetnetr dtaoiensm noent mt, aatnerdia sllayv ea fofenc tg tahse boyv ecroamll bleianrinningg experience. Cengage Learning reseruvneiso tnh em reigmhbt etors r.emove additional content at any time if subsequent rights restrictions require it.
trips, avoiding trips, and carpooling. Many variable costs reflect current trends
and values. For example, you may spend more on communicating (your cell Types of Unions
phone and Internet bills) than you spend on groceries. You might consider less Unions are self-governing organizations. They are organized around employ-
expensive options to save money on these variable costs. ees and their needs for representation. Union leaders work full time in their
Often, both single people and married couples find that much of their positions. They often have lawyers on their staffs and hire experts such as
income goes unaccounted for. Or it ends up in miscellaneous expenses. Watch- economists to advise them on contract issues and economic needs. Dues col-
ing and then avoiding these types of spending will help balance your budget lected from members are used to pay the salaries of union staff members and
and provide more room for saving and investing. to provide the budget to pay for other experts, services, and union activities.
CheCkpoint Craft Unions
What are three things you can do to balance your budget? Membership in a craft union is limited to those who practice a specific craft
or trade. For example, bricklayers, carpenters, or framers each have their own
84 Unit 1 Managing Careers and Money union and receive work assignments through the union. Major craft unions
exist in the building, printing, and maritime trades. Railroad employees also
belong to a craft union.
Industrial Unions
76815_ch04_ptg01_079-102.indd 84 24/11/14 2:53 PM Members of an industrial union are skilled, semiskilled, or unskilled employ-
ees in a particular industry, no matter their skill or trade. This gives workers in
the same industry more leverage in bargaining employment contracts. Exam-
ples of these unions are the AFL-CIO, Teamsters, and United Auto Workers.
Most of this country’s basic manufacturing industries (steel, automobiles, rub-
ber, glass, machinery, and mining) are unionized.
Retail Workers and Health Care Industry Workers
Members of a retail union include people employed in grocery stores, phar-
macies, chain drug stores, and department stores. Health care employees are
often represented by service employee unions that bargain on their behalf with
hospitals, clinics, and other health care providers.
50 Unit 1 Managing Careers and Money
76815_ch02_ptg01_034-056.indd 50 24/11/14 2:54 PM
Math Minute ×+÷
Cost of Absenteeism
Math Minute offers a Absenteeism is a major issue for employers because it reduces
productivity. Newer work models allow more flexibility and in turn
help reduce absenteeism, but it is still a recurring problem for business
review and practice in basic owwhnilee ras. rMatoes ot fla 5b.0o ri se hxpigehr.ts agree that an absentee rate of 2.0 is low,
Bascom’s Health Foods Market operates 24 hours a day, 365 days a
math skills linked to the yoef a1r2.  Eemmppllooyyeeeess wwoorrkk t3h0r edea y8s-.h Oounr a svheifrtasg. eIn, aa nto atvael roafg 1e8 m0 ohnotuhr,s aa rteo tal
missed from work each month, which is the equivalent of 7.5 days
(180 hours 4 8-hour shift 4 3 shifts). The rate of absenteeism is deter-
chapter topics. mined as follows:
Rate of Absenteeism 5 Work Days pAebrs eMnot nDtahy 3s p Neur mMboenrt hof Employees
Using this formula, Bascom’s absenteeism rate is 2.08%, or 7.5 4
(30 3 12). The following formula determines the cost of absenteeism:
Cost of Absenteeism 5 Annual Lost Time 3 Average Wage Rate 3 2
The formula multiplies the cost of wages by 2 to include the costs of
benefits paid to absent employees and the costs of paying temporary
employees to replace the absent employees.
UNIT 4 ProfIle Bascom’s average wage rate is $7.50 per hour. Using the formula, the
cost of absenteeism is determined as follows:
Warren Buffett A n nu a l L os t T im e  55  128,106 h0 ohuorus rpser month 3 12 months per year 
Wa1r9r3en0 .E Adsw aa rcdh Bildu,f fBetutf wfeatst bdoisrpnl ainye Od mana hina,t eNreesbtr iansk ma,a oknin Agu agnuds ts 3av0-, Cost 5 2,160 ho$u1r6s ,320 $07 3.5 02  55  $$1362,,240000  wanangueas lp caoisdt  toof  aabbsseenntt eeemispmloyees
magazines. iFnogr ma ownheiyle. ,H hee wwoenrkt eddo ionr htios dgroaonrd sfealtlhinerg’s ggurmoc,e rCyo sctao-rCe.o Ilna , hainghd Banasde idt so ann tnhuea pl creocset dfoinrg a nexoathmeprl eb,u csoinmepssu btea stehde oanb stehnet efoelilsomw rinagte
school, he also delivered newspapers, sold golf balls and stamps, and detailed information:
chaiBrss uc tfhofie letdath ranolwo somofadB Csod.u  n1eiHftvef0ieeyee.tl s toAh v Sepeitesn ecriardtvogoe ieualdcl nlee1 d td 1P his n,raee ettht ef Nteearh resebreiswdet oW deu i.)Yng.ho htarhtrk teh o Sisnstt ooSficccrkkhs t om Esohxalc arokhrfeea sBtn ouagfnse i dsn(t eNoisncsYkv aeS t(sE ttthih)nr eweg eU hd sneuhnirvai renherges- Unit Profiles Gea(is1mr o4e$lp4 1dm l2shot iopyseseueienerrd’ sssh   4fwoorpou o8emrr-.krh a wo2tue4ors rd kstahw eyiofsat ca 8h4 -m h m2oo ousnhnrt ithsfhh.t ,sOi )fw.tn sTh ahaicve hde aariasvy .egt Ahreae, gt aoee tqt awoult iaaovglaf e olee frin ga1tth4 eot4 f h9o duarys s
ssafhoariidipittorIsyymeenm hr oo iabo 1nffCtym 9iiNPn os51eetgle6rtun9.bao mn6htBrwias2eboeyns .ciknl f avaoIoa. anu r UfBni ms nOteniuha ei1fmo vdafa9feet ta r5B t hhssta0uiia agts,emf.y e afep Beriea1atnnyr 6tryn e t1.1Pendi 9nH9aae 5rgh6rr,ets 10 i nhhsB.t iehBimuspre usfsbnafhf,ae sf iBectttpretthu,at r e bnf’ashlfeons eadfgrt de’iteasrn g nrsbdveer eeeevdbcgsee uat rtnmmiyoen ei peent aihen gnarcet t o snmbfUtnieuorionrsmlcslimihkinvo, ie einpiicrsnn-sss- sahnodw dceasscer ibreea hl poewo ple © simo988/Shutterstock.com S olutio n: 911$ 4,27 4402 , 873 ( 332 164 2 $ 33 1 5 2 28     ) 515  ,5 7   $2$  28440 1.h6,,749o37%u62r  s wra alnoatngestu e oaasf nlp  ancabouidssaet l tnlooytf e aaebbisssemenntt eeemispmloyees
LUCAS JACKSON/Reuters /LandovBtcihrnoahienTvmoarekikkhr se smretcdhoixon aiutarngnrgese t, hi rmtHnCooh eluaeEs l tttoOywoh ft ca oh,rtk wiraehcsln ad ehyoyd ’.es,cf a olBawwar msyrete,ge a lp1eBxll-atst9ukhtni 9lfniseyfe0ho e sm iatwtnBtr ’paen su1nh e,pf r9oufurse6lfoandat6cntdect r teiaw.iucrnnevra di as2no l0iufags 0 e“ bfc8dviiura lbmclrluoiyro.eem Fnn Hiopatnlreiavybr nee eetisv seht.ae siennBn, dtgfumui ,fr”waafm eldoalt’yersst tphreesye anptepdlie idn tthheis stkeixllts 76815_ch4028_p tg0U1_0n34i-t0 516. inddM 4a8naging Careers and Money 24/11/14 2:56 PM
is also one of the world’s greatest philanthropists. In June 2006 he announced to their own lives.
that he would be giving 99 percent of his fortune away to charity, committing
85 percent of it to the Bill and Melinda Gates Foundation. This donation
became the largest act of charitable giving in U.S. history.
Think CritiCally
1. How did Mr. Buffett’s childhood experiences and his education help him to WORKSHEET 3
succeed as an investor and as a business executive? Week 2: Investment Choices
2. Anhaiss t akio nbnoialwlliloylen. dHagieree i ,sa Mvnedrr. ywB vueofafcletahtlt a tiobs oahunet li pnfi fnoluathenencritasi?al lp mraacnti,c ebso. tWh hnaatt idooneasll yh ea nddo iwntiethr- Dpstuoirrccekhc(ast)si oey,no tush: e dR ececlcoiodsriend gt ot hp per uicnreac mhaate st eha]ne, dteh nseyd mn oubfm owlb eoeefrk t oh1fe [s fhsotaorr cethks( eys )os tyuoo cpuku (wrsc)a hynaots ueto dd /keweceoidpue l adtn oldi kh eao ntldoy onpneu wrtco hs taaonscedk, (fason)r d ya oynuoy u wnrea twnott atlo
investment in each stock, including broker fees for new transactions. (Note: Remember that the total amount
you have to invest may be greater or less than the initial $10,000 amount due to any gains or losses made.)
496 Unit 4 Providing Financial Security Stock Symbol CWElnoedsee ko a f1t Sh#a orfes InAvmesotmunetnt
76815_ch20_rev02_473-506.indd 496 24/11/14 3:27 PM
UNIT 4 ProjecT
Assessing Your
Unit Projects
Financial Security
Total Investment $
are designed to
Overview
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Complete Worksheet 4 (Week 2: Gains or Losses) provided for you in the
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radicisrAYckeooyscm u tac, hpwysoyloiisisulctlhen eebmsgd.e aF ptgtoheiircrvas tetio,nhn nave ,na e py dshtuo iyyurnpop gsuoo his tnoaehr sueie nolt dnidfc oitbavhweli igd slaii ussntita mtilinh nsuegtvo l epaocstotfkii oisnsn nttgtoh, wcwwakthie sti eh naor revmne o y ploaovr rueete ys taucparomkiecni narisneleg agrd dvs taoayhymt ait voote e f yd r aotiosnruk ads dsho .liamenvsgees ancprooeeFemu idbngp uudtuoir ltfe tiso neiUrntg at4 ao is.nn 1ifdut iensemhr ateobnoswecdtr iasea y oalt frhci nnaceel o cofdmuur dltapauettor ron uetr unosv) mdar, ielyneuaorgecouh p(u ccaesoa rfinmiuno ttddpueesorr.tuee eR snrgtmad otr aihasnlteu.eerm s ht h)ao nawfand c m ctaoolulrmocshw pt oeumd tueo t snioene ywtce ohyrmeoesunt- Stock Market Simulation 427
on the New York Stock Exchange (NYSE). From the stock listings, you will 76815_stock_rev02_422-432.indd 427 24/11/14 3:05 PM
choose the stocks in which you would like to invest. After one week, you will
compute your gains or losses on your initial investments based on a data sheet
that contains updated stock information provided by your instructor. After
computing your first-week gains and losses, you will then have the oppor-
tunity to “move some shares of stock.” For example, if some of your choices
aren’t doing as good as you had hoped, you may decide to sell them and pur-
chase new stock instead. At the end of Week 2, you will once again compute
yieanxlosBfpouoee rrdrf moteosrn aeswdto mihimonoange k w pirgneiralsoglie vnhyairosedc lueophrdr yoc blohnoyuo st ishydceoeees suc c biorod afrie snps etwosodtrhrc auokatictn,o thk noaoir nwi.dndea wvtoaefh r ,ssi cthyohoec euykt o s icuhso oranuirgetlhda tit hfn ifirionsnrtk g syi neouegupk .o d aYfad oitvnueivdc see hss fttorionuocmgldk. © STILLFX/Shutterstock.com
Investing Advice UUnniitt 44 PPrroojjeecctt 449977
This section contains advice that you received when you consulted the fol-
lowing sources: your full-service broker, a financial news magazine, an econo-
mist, a financial adviser, and a friend who is a successful investor.
Full-Service Broker: 76815_ch20_rev02_473-506.indd 497 24/11/14 3:08 PM
Nhtaowh nois“aelwteWlto  eptcivehtkee war awrfot,ro oefwir nsamne ’ ti’owvn wlw ee a tl esbhliStl-nel ek,em naneD uov bioewctnunhw nlt l ,hil i fomotil sanst ahergbrgleefuke .rebl .lccTt uIo.m hflrBl ip aIsmurk o wklwrlae aerimttrkl ilefeoa o gtrnyr ki oe.vMa enuYeltmd ,so y suIloo.a swusAmtt on sailiugdosaxhsln dudmtg roeecaonrvonnr ’enttctn hhsef ioa scdktn.ro heg Inrbae’m stteii nad ayecrvbeo oermouns ubrtcai tuernst krtyrgnoiei snetciksnd gk;. © rosedesigns/Shutterstock.comSimulation
422 Unit 4 Providing Finwanciaal Seclukritys students through a realistic
stock market experience.
76815_stock_rev02_422-432.indd 422 24/11/14 3:06 PM
Preface vii
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