Scouting/BSA/Personal Management Merit Badge

The requirements to this merit badge are copyrighted by the Boy Scouts of America. They are reproduced in part here under fair use as a resource for Scouts and Scouters to use in the earning and teaching of merit badges. The requirements published by the Boy Scouts of America should always be used over the list here. If in doubt about the accuracy of a requirement, consult your Merit Badge Counselor.

Reading this page does not satisfy any requirement for any merit badge. Per National regulations, the only person who may sign off on requirements is a Merit Badge Counselor, duly registered and authorized by the local Council. To obtain a list of registered Merit Badge Counselors, or to begin a Merit Badge, please contact your Scoutmaster or Council Service Center.

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.
   1. Determine the quality of the item or service (using consumer publications or rating systems).
   2. 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?

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).

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.

Requirement 4

Explain the following to your merit badge counselor:

A. The difference between saving and investing, including reasons for using one over the other.

B. The concepts of return on investment and risk.

C. The concepts of simple interest and compound interest and how these affected the results of your investment exercise.

Explain the differences between saving and investing, including reasons for using one over the other:

Saving has a guaranteed low return with loss of money possible if you go over the insurance amount of $250,000 per account named depositor, per insured bank.(as of 6/7/09) Investing has a risk of losing you money but chance of a higher return.

Explain the concepts of return on investment and risk:

Risk - Possibility of your investment losing the money you put in.
RoI = (gain from investment – cost of investment)/cost of investment

Explain the concepts of simple interest and compound interest and how these affected the results of your investment exercise:

Simple interest is calculated on principal only, Compound interest is calculated on total of principal plus the interest earned.

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:

A. Current price.

B. How much the price changed high and the 52-week low prices.

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:

A. Common Stocks

B. Mutual funds.

C. Life insurance

D. A certificate of deposit (CD).

E. A savings account or U.S. savings bond

A-

B-an investment program funded by shareholders that trades in diversified holdings and is professionally managed.

C-insurance that pays out a sum of money either on the death of the insured person or after a set period.

D-a certificate issued by a bank to a person depositing money for a specified length of time.

E-a bank account that earns interest/U.S. savings bonds are debt securities issued by the U.S. Department of the Treasury to help pay for the U.S. government's borrowing needs. U.S. savings bonds are considered one of the safest investments because they are backed by the full faith and credit of the U.S. government

Requirement 7

Explain to your merit badge counselor the following:

A. What a loan is, what interest is, and how the annual percentage rate (APR) measures the true cost of a loan.

 What a loan is: A loan is a financial transaction in which one party (the lender) agrees to give another party (the borrower) a certain amount of money with the expectation of total repayment. The specific terms of a loan are often spelled out in the form of a promissory note or other contract. The lender can ask for interest payments in addition to the original amount of the loan (principal). The borrower must agree to the repayment terms, including the amount owed, interest rate and due dates. Some lenders can also assign financial penalties for missed or late payments.

 What interest is: An interest rate is the price a borrower pays for the use of money they do not own, for instance a small company might borrow from a bank to kick start their business, and the return a lender receives for deferring the use of funds, by lending it to the borrower. Interest rates are normally expressed as a percentage rate over the period of one year.

 How the annual percentage rate (APR) measures the true cost of a loan: You can think about the interest rate as a percentage of the money borrowed to be paid. The best way to compare mortgage loans is by comparing the Annual Percentage Rate, or APR on each prospective loan offer.

By law, every mortgage loan offer, usually in the form of a disclosure called a Good Faith Estimate, must disclose APR associated with the loan. When we talk about real estate loans, interest rates are also sometimes referred to as mortgage rates.

B. The different ways to borrow money.

C. 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.

D. Credit reports and how personal responsibility can affect your credit report.

E. Ways to reduce or eliminate debt.

Requirement 8

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

A. 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.

B. 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 church or club meetings, then plan when you will do all the tasks from your “to do” list between your set activities.

C. 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.

D. 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.

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. Define the project. What is your goal?

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

C. Describe your project.

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

E. If necessary, develop a budget for your project.

Requirement 10

Do the following:

A. Choose a career you might want to enter after high school or college graduation.

B. Research the limitation of your anticipated career and discuss with your merit badge counselor what you have learned about qualifications such as education, skills, and experience.

External links

Personal Management Merit Badge with Workbook PDF, current requirements, and resources for the Personal Management Merit Badge.