Adding & Subtracting Money Amounts

Adding & Subtracting Money Amounts
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  • 0:01 Money In, Money Out
  • 0:42 Why Add Money?
  • 1:14 Addition Example
  • 2:14 Why Subtract Money?
  • 2:51 Subtraction Example
  • 3:58 Lesson Summary
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Lesson Transcript
Instructor: Kevin Newton

Kevin has edited encyclopedias, taught middle and high school history, and has a master's degree in Islamic law.

Some people say money makes the world go around, but as this lesson demonstrates, money gets added and subtracted, just like anything else. Using the example of an allowance, we'll see how adding and subtracting money is really quite simple.

Money In, Money Out

Congratulations, your parents just gave you an allowance! Granted, it's tied to how many chores you do, but still, by the end of the week, you will have money of your own to spend. It's a pretty exciting thought. However, your parents keep talking about things like budgets and financial responsibilities. Don't they realize that those things don't buy the happiness that comes with a new video game?

Being able to manage money is one of the most important things that you can learn to do. Plenty of adults can't do it, but you're not going to be like them. That's because you're going to master the most basic aspect of money management right now - being able to add and subtract money.

Why Add Money?

When they gave you the allowance, your parents made a big deal out of saying that you had to earn it. From helping with the laundry to keeping your room clean, everything you do around the house will have a payment. Now, you could just wait until the end of the week to find out how much money your parents ended up paying you for the chores completed, or you could have a running tally of how much certain things earn you. In other words, knowing how to add money is very important and will be very important for you to be able to figure out how much money you'll have earned by the end of the week.

Addition Example

Let's use an example to make sure that this makes sense. It's the first day of the week and you're off to a great start on this whole chores thing. You got up and the first thing you did was make your bed. That's 50 cents right there. After breakfast, you volunteered to load the dishwasher, netting yourself another 75 cents in less than ten minutes. Finally, realizing that you're running early, you clean out the cat's litter box, earning a big George Washington dollar bill. So how much money did you make?

To find out, we just have to add everything up. Remember, cents are really decimals, so treat them as such. That means lining up the three numbers with the decimals on top of one another. Also, on the 50 cents and 75 cents, be sure that you put a zero to the left of the decimal. Now add them up:

$0.50
$0.75
$1.00
_____
$2.25

A dollar plus 50 cents plus 75 cents gives you an answer of $2.25. Not a bad start for your first day.

Why Subtract Money?

You go on like this much of the week, earning around 20 bucks by the end of the afternoon on Friday. Simply put, this whole allowance thing is working in your favor. That new game is looking closer than ever. However, your best friend calls and says that a group of people are going to the movie theater that night and asks if you can come. You run to your dad and hear those words you knew would come: 'Only if you spend your money.'

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