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CHAPTER10What do other highschool students knowabout money andrelationships?We asked high school students ifthey’ve ever witnessed money affectinga relationship close to them.“Money is always a strain at myhouse. At least every other day, myparents fight about money.”Junior, Michigan“When my parents fight, it isusually concerning a largepurchase that they didn’t discuss.”Senior, Wyoming“My parents fought all thetime about money and are nowdivorcing.”Senior, Alabama“Money was the cause of myparents’ divorce when I was5 years old.”Senior, Oklahoma“I argue with my parents all the timeabout money. I don’t understandwhy they say no to giving me thespending money I ask for, eventhough we seem to be fine financially.”Junior, FloridaSPONSORED BY:LICENSED FOR 2015-2016 SCHOOL YEAR ONLY
UNIT 4: CHAPTER 10Money andRelationshipsgo hand inhand, which means the way you handle yourmoney affects everyone around you. Hard toimagine, right? Well it’s true. Whether yousave, overspend, are generous in your giving,or often borrow from friends—people notice.Your current and future relationships willall be influenced by how you handle money.So let’s make it a priority now to learn moreabout this topic.MONEY AND R ELATIONSHIPS34%of teens receive aweekly allowanceof, on average, justover 16 per week.*28%of teens areborrowing money.On average they owe 252. They mostfrequently owe moneyto their parents,school or friends.*SPONSORED BY:*Charles Schwab Teens & Money Survey (2011)LICENSED FOR 2015-2016 SCHOOL YEAR ONLY
INTRODUCTIONBefore You Begin Learning OutcomesKey TermsOnce you’ve completed this chapter’s videos, you will be asked toreturn to this list of learning outcomes and place a checkmarknext to the items you’ve mastered.Section 1: Understanding Your Money PersonalityIdentify differences among people’s values and attitudesas they relate to money.Evaluate your own money personality.Get to know the language of money.»» Accountability: The quality or state ofbeing responsible, liable or answerable»» Free Spirit: A person who thinksthat everything will work out fine andtypically hates to deal with the details»» Nerd: A person who is picky aboutbudgeting and details»» Time poverty: A situation in whicha person is lacking time, which leadsto stressSection 2: Marriage and MoneyEvaluate how discussing important financial matterswith household members can reduce conflict.Understand how having a budget or a money plan canreduce conflict.»» Value system: A person’s priorities,beliefs and standards that affect how heor she views the worldSection 3: Communication Is KeyUnderstand the value of discussing individual andshared financial responsibilities.Develop communication strategies for discussingfinancial issues.Integrate healthy communication about money withparents, friends and others.210SPONSORED BY:Foundations in Personal Finance High School EditionLICENSED FOR 2015-2016 SCHOOL YEAR ONLY
Measure Your ProgressBefore you watch the Money and Relationships video, take the following survey to see if you have more FreeSpirit or Nerd tendencies. Check the characteristics that best describe you.FREE SPIRITS tend to be:CreativeSpontaneousLess organized and not concernedabout rulesLate for meetings, dates,appointments—most everythingEasygoingNERDS tend to be:Number-oriented (enjoy workingwith numbers)Rule followersOrganizedOn time for everythingSlow and steady when makingdecisionsJOURNAL QUESTION: INTRODUCTIONWhat are your initial thoughts about money and relationships? What do you want to learnabout money and relationships?211Chapter 10: Money and RelationshipsSPONSORED BY:LICENSED FOR 2015-2016 SCHOOL YEAR ONLY
SECTION 1 Information not otherwisesourced in this section isbased on Dave Ramsey’spersonal experiencecounseling families formore than 20 years.10CHAPTER““Your priorities,passions, goals andfears are shownclearly in the flow ofyour money.”DAV E R A MSEYSection 1:Understanding Your Money PersonalityVIDEO 1.1Values and AttitudesHOW DO YOUR VALUES RELATE TOMONEY? If you value security, youare more likely to be a saver. If youvalue freedom and spontaneity,you’re probably more likely to spend.When handling money, it’s difficultto balance who you are with whatyou should do. Being aware of yourmoney personality will help youcreate a plan to accommodate both.When it comes to relating with othersabout money, it’s important to alsoconsider their values.Men, Women and Money (Over-Generalizing)Men and women generally approach money in verydifferent ways. Of course, not all men and women willrelate to money in this way, but there are some patternsthat have proved themselves over and over again.The flow of money in a family represents the1under which that family operates. Where your1money goes is an indication of what is important to you.212SPONSORED BY:Foundations in Personal Finance High School EditionLICENSED FOR 2015-2016 SCHOOL YEAR ONLY
Emergency Fund Savings»» Men: “It’s boring and not2»» Women: “It’s the most3financial plan.”enough.”key to ourShopping»» Men get good deals by4»» Women get good deals by. They want to win.“Personalrelationships are thefertile soil from whichall advancement,all success, allachievement in reallife grows.”BEN STEIN5the process.“. They enjoyAmerican actor, writerand commentator Financial Problems»» Men loseMore teen girls than boysreport saving their moneyfor small purchases likemusic or clothes. (27%boys, 36% girls)»» Women experienceMore teen boys than girlsreport saving their moneyfor bigger purchases, like acar. (48% boys, 37% girls)when money problems6pop up, because money usually represents a scorecardto them.or evenwhen78money problems arise. With women, money usuallyrepresents.9Charles Schwab Teens& Money Survey (2011)JOURNAL QUESTION: VIDEO 1.1Have you ever witnessed money affecting a relationship close to you?213Chapter 10: Money and RelationshipsSPONSORED BY:LICENSED FOR 2015-2016 SCHOOL YEAR ONLY
SECTIONS 2 & 3Section 2: Marriage and Money HOW TEENS LEARN TOMANAGE MONEY 82% Parents 65% Real-Life Experience 49% SchoolCharles Schwab Teens& Money Survey (2011)VIDEO 2.1It takes teamwork! If men and womenare so different, who is supposed todo the financial decision making ina marriage? BOTH! Handling moneyis the responsibility of both peoplein a relationship. Although oneperson might have a natural gift forbudgeting and working with numbers,the decision making has to be donetogether. Communication, teamworkand consistency are all importantelements of handling family finances.»» The number-one cause of divorce in America is money FINANCIAL CONTRACTSAND RESPONSIBILITIESA lease is a contractualarrangement calling forthe lessee (user) to paythe lessor (owner) for theuse of property. A morecommon term is rentalagreement.Contracts or legaldocuments not onlydefine the legal rights orprivileges of the partiesinvolved, but also definethe duties and obligationsof the parties. Contractsand written agreementsare “binding documents,”which when properlywritten and signed becomeenforceable by law. If it’s the number-one problem, that means itis also the number-one opportunity to improve a marriage.10»» When you agree on your spending, that means that youalso agree on your value system.»» Thelikes doing the budget because it gives themcontrol, and they feel like they are taking care of loved ones.»» The11feels controlled, not cared for,and can appear irresponsible to the Nerd.12In a marriage, you are financiallyaccountable to one another. That’swhy having a monthly budget isso important. Not only does it tellyour money what to do, but it alsorepresents two people agreeing onwhat they want their money to do.JOURNAL QUESTION: VIDEO 2.1Would you describe yourself as a Nerd or a Free Spirit when it comesto handling money? Explain your answer.214SPONSORED BY:Foundations in Personal Finance High School EditionLICENSED FOR 2015-2016 SCHOOL YEAR ONLY
Will My Boyfriend’s Credit Score Affect Me?“My boyfriend’s credit is in bad shape, and we’re thinking about gettingmarried someday. Will his bad credit rating affect mine? My credit is ingood shape right now.”DAVE’S ANSWER: Marrying someone with a badcredit rating will not affect your score. In otherwords, the black marks on his credit rating don’tjump across the aisle onto your report as soonas he slips the ring on your finger.After you’re married, your husband will be listedas “spouse” on your report. Then, if they pullyour report for any reason, they’ll see that halfof your “team” has had some problems in thepast. When the two of you decide to buy a home,it may be difficult if there are still problems withhis credit report.But the big issue here is that you seem to havediffering views on money management. Make sureyou go through premarital counseling togetherand begin the process of working together to makemonthly budgets. If you get married, money isgoing to be a big part of your lives for a long time.Agreeing on your goals now will set the foundationfor your dreams.Section 3: Communication Is KeyVIDEO 3.1The Budget Committee Meeting»» The budget committee meeting is a great way to learnhow to communicate and avoid conflict when it comes tomoney and marriage.»» The Nerd should be the one to prepare the budget, but the According to a recentCharles Schwab Teens &Money Survey (2011), 9 outof 10 teens say they were“affected by the recession,”causing major shifts inperspective that includea greater appreciationfor what they have and anincreased awareness offinancial hardship.decision making must be done by both people.»» Remember the basics of budgeting: You spend everydollar on paper before the month begins. Every dollar hasa name or a purpose.215Chapter 10: Money and RelationshipsSPONSORED BY:LICENSED FOR 2015-2016 SCHOOL YEAR ONLY
SECTION 3How to Talk to Your Parents About Money PRACTICAL TIPS FORCOMMUNICATING WITHOTHERS ABOUT MONEY1. Listen. Communicatingwith others isn’t justabout expressingyour own wants andneeds—it’s also aboutlistening to what otherswant and need.2. Pick the right timeand place. Starting aconversation with yourmom or dad two minutesbefore they need toleave for work is notideal. Make sure thereis time for both of youto have a relaxed andcomplete conversation.3. Be honest. Whenit comes to moneyand relationships,honesty is key.4. Seek counsel. You’reyoung, and there willbe money mistakesin your future. Oneof the best ways toavoid these mistakesis to seek advice fromtrusted adults—evenif it’s not the answeryou want to hear.5. Communicate yourmoney goals. Let yourparents and othersclose to you knowabout your goals.Doing this will helpprovide accountabilityand encouragementalong the way.216SPONSORED BY:Some of you have parents who pay for everything. Othershave parents who won’t give you a dime—if you wantsomething, even if it’s important, it’s your responsibility.The rest of you may have parents who fall somewhere inthe middle.You can’t control your parents, but what you can do isto them. If you want to learn how to manage money13before taking on the bills and responsibilities of an adult, youneed to be in open communication with your parents.Talk about your. Share your thoughts on money,14what you want to start paying for, and the things you mayneed help paying for.your parents’ decisions. Don’t beg ormanipulate. The goal here isn’t to get more money out of yourparents. Instead, it’s to become responsible and independentwith the money you have.15Singles and MoneyIt won’t be long before you’re an adultmanaging your own money andpaying your own bills. You’ll find thatmanaging your money alone createssome unique challenges. You go frombeing accountable to your parents to»»making all your choices on your own,which can make it easy to get off trackwhen it comes to your financial goals.Single adults need to be proactiveabout having financial accountabilityin their lives.and fatigue can lead to poormoney management. Young singles who are in collegeor just getting started in their career typically pour allof their time and energy into that. It’s easy to let your16Foundations in Personal Finance High School EditionLICENSED FOR 2015-2016 SCHOOL YEAR ONLY
busy life keep you from reconciling your account, muchless writing a budget each month. If you let this happen,financially you’ll end up just treading water and notgoing anywhere. Even with a tight schedule, managingyour money must remain a priority.»» Beware ofbuying, which can be broughton byor even by the “I owe it to myself”18syndrome. With no one’s opinion or input to worry about,single adults can rationalize almost any expense. Ifyou’re single, you have a greater responsibility to manageyour money because no one is looking over your shoulder.It’s up to you!17BudgetBuilderIs your money personalityand value system evidentin your budget? Go tofoundationsU.com/10 foryour next budget lesson.»» A written plan gives the single person empowerment,self-accountability and. You must do a19budget every month! A written plan gives you peace ofmind and keeps you on track to reach your goals.»» Develop anrelationship. This issomeone with whom you discuss major21and your budget. Accountability friends must love youenough to be brutally honest and promise to do so foryour own good.20““When you learn torespect others, youwill see yourselfimprove in selfesteem, happinessand fulfillment.”SH A RON R A MSEY JOURNAL QUESTION: VIDEO 3.1How will this chapter change the way you talk to your parents about money?MONEY TOPICS TEENSWOULD LIKE TO TALKABOUT WITH THEIRPARENTS1. How to invest money2. Their career aspirations3. How to budget money217Chapter 10: Money and RelationshipsSPONSORED BY:LICENSED FOR 2015-2016 SCHOOL YEAR ONLY
RECAP & REVIEWChapter SummaryCheck for UnderstandingNow it’s time to check your learning! Go back to the Before You Begin section for this chapter and place acheckmark next to the learning outcomes you’ve mastered. Review the Measure Your Progress section tosee if any of your answers have changed.Big IdeasThe following Big Ideas are intended to provide clear focus and purpose to the lessons. Read each statementand think about how what you’ve learned will affect your current and future decisions. Then, in the spaceprovided, write an “I believe” statement for each of the Big Ideas.»» How you handle money will affect your relationships.»» Know your money personality.»» Communication is key!218SPONSORED BY:Foundations in Personal Finance High School EditionLICENSED FOR 2015-2016 SCHOOL YEAR ONLY
Build On What You’ve LearnedDraw a picture of yourself in the space below (a stick figure will work fine). Label your drawing with elementsof your money personality and values. Compare your drawing with your peers’. In what ways are your moneypersonalities and values similar? In what ways are they different?Take Action ChallengeReflect on your self-portrait. Think about your money personality and values. Now consider your spendingand saving habits. In the space below, write about how your money personality and values relate to how youhandle your money.219Chapter 10: Money and RelationshipsSPONSORED BY:LICENSED FOR 2015-2016 SCHOOL YEAR ONLY
RECAP & REVIEWMoney in ReviewMatchingMatch the following terms to the correct definition below.a Nerdc Time Povertyb Value Systemd Free Spirit1. A person who is picky about budgetingand details2. The quality or state of being responsible,liable or answerable3. A situation in which a person is lackingtime, which leads to stresse Accountability4. A person who thinks that everythingwill work out fine and typically hates todeal with the details5. A person’s priorities, beliefs andstandards that affect how he or sheviews the worldIllustrationDraw a picture representation of each of the following terms.Conflict220SPONSORED BY:RespectFoundations in Personal Finance High School EditionLICENSED FOR 2015-2016 SCHOOL YEAR ONLY
Multiple ChoiceShort Answer6. Communicating about financial issues andgoals in a relationship can reduce conflict.11. Describe some general differences inhow men and women relate with money.Circle the correct answer.Respond in the space provided.a Trueb False7. When it comes to managing money, yourpersonality and values have no importance.a Trueb False12. How does communication aboutimportant financial matters in householdsreduce conflict?8. Which of the following present challengesto managing money as a single adult?a Time povertyb Being accountable to no onec Impulse buysd All of the above13. How does having a budget reduce conflictin relationships?9. When it comes to communicating withothers about money, you should not:a Listenb Manipulatec Pick the right time and placed Be honest14. Summarize challenges you’ll face managingmoney as a young single adult.10. When married couples do not share goalsand values in how they manage money,which of the following can occur?a Conflictb Divorcec Stressd All of the above15. Summarize ways that you can overcome thechallenges you listed in question 14.221Chapter 10: Money and RelationshipsSPONSORED BY:LICENSED FOR 2015-2016 SCHOOL YEAR ONLY
DAVE RAMSEY “ Information not otherwise sourced in this section is based on Dave Ramsey’s personal experience counseling families for more than 20 years. 10 CHAPTER Section 1: Understanding Your Money Personality VIDEO 1.1 Values and Attitudes HOW DO YOUR VALUES RELATE TO MONEY? If you
