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• Activity 1………………Saving vs. Investing
• Activity 2……….….Saving for a Rainy Day
• Activity 3……………………..1 + 1 = Saving
• Activity 4…..Investing for the Long Term
Money Management - Activity 1
ACTIVITY 1
Saving vs. Investing
Overview
• Saving vs. investing• Information on a paycheck• Making a financial plan• Budgeting
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Slide 1 - Do You Save? Do You Invest?
Lesson Reference: Money Management, Activity 1 – Overhead 1
DO YOU SAVE?
DO YOU INVEST?
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Slide 2 - Saving vs. Investing Lesson Reference: Money Management, Activity 1 – Overhead 2
SAVING VS. INVESTING
Saving• Short-term.• Postpones spending.• Has safety precautions.
Investing• Long-term.• Exchanges money for something with the
future expectation of receiving a profit.• Has risk factors.
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TAKE A GOOD LOOK AT A PAYCHECK
Slide 3 – Paycheck Lesson Reference: Money Management, Activity 1 – Handout 1 5
Slide 4 – Making a Successful Financial Plan Lesson Reference: Money Management, Activity 1 – Handout 2
MAKING A SUCCESSFUL FINANCIAL PLAN
1. Start as early as possible.
2. Set goals.
3. Include both short- and long-term strategies.
4. Support the plan with a practical, working budget.
5. Review the plan on a regular schedule.
6. Do your homework while working on your plan.
7. Put the plan in writing.6
Slide 5 - Financial Plan Assistance
Lesson Reference: Money Management, Activity 1 – Overhead 3
FINANCIAL PLAN ASSISTANCE
•Bankers
•Certified Financial Planners
•Schools and Courses
•Peer Groups and Investment Clubs
•The Media
•The Internet
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• Savings & Investments
• Fixed Expenses
• Periodic Fixed Expenses
• Variable Expenses
• Debts
BUILDING MYMONTHLY BUDGET
Slide 6 – Building my Monthly Budget
Lesson Reference: Money Management, Activity 1 – Handout 4 8
Money Management - Activity 2
ACTIVITY 2
Saving for a Rainy Day
Overview
• Reasons to save• Concerns and issues with saving• Where to save
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Slide 1 - Saving for a Rainy Day
Lesson Reference: Money Management, Activity 2 – Overhead 1
SAVING FOR A RAINY DAY
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Slide 2 - Reasons to Save Lesson Reference: Money Management, Activity 2 – Overhead 2
REASONS TO SAVE •Provide for unexpected emergencies.
•Purchase expensive items in the future.
•Ensure retirement.
•Plan for investment opportunities.
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Slide 3 – Concerns and Issues When Saving Lesson Reference: Money Management, Activity 2 – Handout 1
CONCERNS AND ISSUES
WHEN SAVING
• Safety
• Restrictions
• Liquidity
• Earnings
• Taxes
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Slide 4 – Places to Save Lesson Reference: Money Management, Activity 2 – Handout 2
PLACES TO SAVE
• Savings Accounts
• Money Market Accounts
• Certificates of Deposit (CDs)
• Savings Bonds
• Insurance
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Slide 5 - Looking at Places to Save
Lesson Reference: Money Management, Activity 2 – Overhead 3
LOOKING AT PLACES TO SAVEOn a scale of 1 to 5 (with 1 being low and 5 being high),
rate the following places to save your money.
Based on the above ratings, where would you save your money? Why?
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Money Management - Activity 3
ACTIVITY 3
1 + 1 = Saving
Overview
• Types of interest• The impact of saving• Savings regulations
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Slide 1 - Types of Interest
Lesson Reference: Money Management, Activity 3 – Overhead 1
TYPES OFINTEREST
Which type of return on
your money would you
prefer?
What’s the difference?
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Slide 2 – Returns on Savings Lesson Reference: Money Management, Activity 3 – Handout 2
IMPACT OF RETURNS ON SAVINGS
This chart shows what happens at several different rates to $100 in an account when no money is withdrawn and interest is compounded yearly.
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Slide 3 - Savings Regulations
Lesson Reference: Money Management, Activity 3 – Overhead 2
SAVINGS REGULATIONSFederal Government InsuranceDeposits are potentially insured up to $100,000.• FDIC (Federal Deposit Insurance Corporation)• NCUA (National Credit Union Administration)
Truth in Savings ActFinancial institutions must disclose the followinginformation about their consumer savings accounts:• Fees on accounts• Interest rate• General terms and conditionsDefines the year as 365 days for purposes ofdetermining the annual percentage rate of interest.
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Money Management - Activity 4
ACTIVITY 4
Investing for the Long Term
Overview
• The Historical Performance of the S&P 500• Reasons to Invest• Investing Considerations
Investment ConcernsPlaces to Invest
• Online Money Management
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Slide 1 - Savings vs. Investing Lesson Reference: Money Management, Activity 4 – Overhead 1
SAVING vs. INVESTING
SAVING • Short-term.• Postpones spending.• Has safety precautions.
INVESTING • Long-term.• Exchanges money for something with the
future expectation of receiving a profit.• Has risk factors.
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Slide 2 - Saving vs. Investing, Historically
Lesson Reference: Money Management, Activity 4 – Overhead 2
SAVING VS. INVESTING, HISTORICALLY
The S&P 500 stock index has increased almost 200 percent since 1970. On average, the stock market returns 12 percent per year, including dividends.
Savings rates, by comparison, have been much lower – anywhere from 1.5% to 5%, usually depending on the length of time the savings are deposited.
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Slide 3 - Places to Invest Lesson Reference: Money Management, Activity 4 – Overhead 3
PLACES TO INVEST
• Stocks
• Bonds
• Mutual Funds
• Retirement Plans
• Real Estate
• Collectibles/Valuables
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QUESTIONS TO ASK BEFORE MAKING AN INVESTMENT
1. How safe is the investment?
2. What types of returns can I expect?
3. What kind of risk is involved?
4. Can I get my money back if I need it? How long will it take and how much will it cost to get it back quickly?
5. Are my investments in a variety of places to spread my risks (diversification)?
Slide 4 – Questions to Ask Lesson Reference: Money Management, Activity 4 – Handout 2 23
INTERNET PRIVACY & SECURITY
• Avoid passwords or screen names that are easy to guess.
• Change passwords often.
• Read privacy policies.
• Check online accounts often. Report unfamiliar transactions.
• Do not open emails with unsolicited offers that sound too good to be true.
Slide 5 – Internet Privacy & Security Lesson Reference: Money Management, Activity 4 – Overhead 4 24
