Review• Old Assignments – Friday! Printouts

• Keyanna Burgher• Anti Bully Day Feedback

• Letter home• Self Assessment

The TALK

Stats – Investor Education Fund• Youth Financial Literacy Study 2012• http://

www.getsmarteraboutmoney.ca/en/research/Our-research/Documents/infographic-2012-financial-literacy-study.pdf

• Stats:– 9 out of 10 have a financial product– 7 out of 10 have a savings account as a primary financial

product– ½ have debit and 1/3 have a chequing account– 2 out of 10 have RESP– 3 out of 10 actively saving for post-secondary– Parents - financial information then banks and friends– High interest but relatively low levels of knowledge: buying a

car, living costs after college, moving out, managing debt– ¼ of students say their school taught them what they needed

to know about finances

Psychographic Segments• Conscientious Consumers

– Traditional cautious, researching things before they buy them and looking for value for money, worry about finances and social issues, environmentally and socially responsible, even split

• Trendy Techies– Friends and advertisers both have a big effect on how this

group buys, cutting edge, latest gadgets, buy things on a whim, “important to treat myself on a regular basis”, even slip – males edged out a bit higher

• Stylish Spenders– Loves to shop and style is important, clothing, mainly female

Money Management

Unit 3 – Life Transitions

Outline for Money Management:• Lifestyle choices and values• Challenges, joys and problems of independent living• Financial goals, lifestyle goals and financial planning• Income, Expenses and Budgets• Banking• Savings and Investments• Credit and Debit• Insurance• Income Tax• Action Plan Research Project

– Car (new vs old, all costs!!!!), Wedding, Dream House, Post Secondary

Assessment and Evaluation:• Journals• Assignments

– Money Tracking and Banking– City Sheets– Savings – Income Tax– Insurance

• Guest Speaker:– INSURANCE– BANKER and/or INVESTOR– LOANS– I WISH I KNEW THEN WHAT I KNOW NOW

• Exam and Action Plan

Financial Planning• The saying “Money can’t buy happiness is likely very true. • It is also true that the lack of money can cause problems

and limit your personal and career options.• The world of money is one area where people, especially

young people, often feel that they are not in control. • They may at times even feel that they are out of control. • You can an now to take control of your financial affairs. • Perhaps you have already started to do so. • Financial planning will help you to get the most from your

spending, to save for the future and to avoid debt problems.

• Decision Making Styles – Review • Lifestyle – Is quite simply the way you live. You have a

current lifestyle and you also have visions of a lifestyle that you aspire to live in the future.

• Lifestyle choices are influenced by a number of factors including:– – – –

• Discussion: $500, lottery, extra $20, leisure time/cost, any job?

• Lifestyle choices reflect your VALUES!

Level A – Variety of lifestyle choices and clarify personal values to lifestyles

• Lifestyle Choices Organizer - groups of two (teacher selected)

• Time, Life Cycles – Affect Goals• Lifestyle Possible challenges, joys and problems• Clarifying Lifestyle Priorities –Reality Check• How do you balance out your reality check?

– Surplus or deficit– Is it easier to make more money or cut back on expenses– Priorities?

Needs, Wants, Priorities• Why is it important to separate your needs and wants?• What is an example of a need and want in your life?• What do you want to know about managing your needs

or wants in your own life?

• Shopping – group, put three on the board from each group – 2 minutes (bought recently)

• Needs: a necessity, something required, something essential for life

• Wants: a desire, something wished for, something non-essential

• Go through SHOPPING LIST – Categorize– You will soon learn that needs and wants vary from

person to person and from time to time

• 1-2-3 System– 1- essential for healthy living (basic food, clothing ,shelter)– 2 – are not essential but important (bike, transit pass,

entertainment, education, etc.)– 3 – not essential and not important (popcorn at the movies,

the new music, video games, etc.)

• Shopping List – Rank based on the 1-2-3 system – Cost and amount spent on non essential purchases – what else

could you have done with the money (winners vs losers)

Point Out• What students define as a need or want influences the

lifestyle you may have and that influences how much money you’ll need.

• Because needs are essential, they are necessary expenses, but expenses for wants can be reduced or even eliminated.

• Distinguish needs from wants and to set priorities is an important skill that will help you start managing your money now and throughout your life.

• Use this skill immediately to start managing your money and plan their transition from secondary school.

• Quick Quiz Handout• Journal: #8

– Identify a need or want a recent purchase filled, and whether or not the purchase was necessary.

– Discuss with your parents how they distinguish between needs and wants and how they set priorities.

– Discuss with your parents how they learned about finances and if they believe their high school education helped prepare them or how the school could have helped more.

Examples – Needs vs Wants• $2.50 coffee a day = $912.50• Pack of cigarettes a day $10 x 365 = $3650• Movies twice a month = $240 no food

• Tips on Saving Money - http://www.dumblittleman.com/2011/06/30-easy-ways-to-save-money-and-no-you.html

Income, Expenses, Budgets

Money Management

Budgeting• The first step in managing your money is knowing

where it’s coming in and where it’s going out – and making sure the “in” exceeds the “out” so you have enough for your needs, and can save and invest for your future.

• Budgets aren’t difficult!• Budgeting doesn’t mean doing without. It’s just an

organized way to manage your money.• Step 1: NEED TO KNOW WHAT YOU MAKE• Step 2: NEED TO KNOW WHAT YOU SPEND

Income• What types of income do you have?

Types: Allowances Gifts Wages Tips Occasional work GST rebates Bonuses Social Assistancebusiness Investmentsrentals Grants and Scholarships

Child Tax Benefit

The Canada child tax benefit (CCTB) is a non-taxable amount paid monthly to help eligible families with the cost of raising children under 18 years of age.

Universal Child Care BenefitThe universal child care benefit (UCCB) is a taxable benefit paid monthly to help eligible families provide child care for their children under six years of age.

Quebec

What do these words mean?

$$$$$$$$$$$$$$$$$$$• YTD• Income• Gross income• Net Income• How much do you save

for yourself?

$$$$$$$$$$$$$$$$$$$• YTD means Year to Date- the

amount of money you have made from January 1st to the date of payment.

• Income money you receive from work, gifts, business, investments, etc.

• Gross income total income before any taxes or other costs are deducted

• Net income is the amount you actually get to deposit….after all deductions have been subtracted. ( Remember to pay yourself first

• Try to save at least 10% of your income!

• Many paycheques are bi-weekly (every two weeks) or semi-monthly (twice a month), and other types of income may be monthly, quarterly, annual or irregular.

• You can convert income to a monthly amount using the following formulas:

• a) Semi-monthly income x 2 = monthly income• b) Weekly income x 4.33 (or 52/12) = monthly income• c) Bi-weekly income x 2.17 (or 26 / 12) = monthly

income• d) Quarterly income / 3 = monthly income• e) Yearly income / 12 = monthly income

Is everyone paid the same?

What deductions can I expect?• Your pay statement must identify each deduction taken

from your pay.

Your wages CAN ONLY be deducted for:

• Statutory requirements such as Income Tax, Canada Pension Plan, Employment Insurance, pension plans or union dues.

• Voluntary deductions such as Canada Savings Bonds, charitable contributions and social funds where the employee gives specific consent.

• Voluntary employee purchases.

• Deductions agreed to by a majority of employees for items such as group insurance or other employee benefits.

Income Taxa) A percentage of gross income sent to the Governments of Canada and the province or territory to pay for federal, provincial and territorial government services

• Income tax is not always deducted at source; e.g., if you do occasional or contract work that is not regular employment. If you have this kind of income, you still have to report it and pay tax on it.

2012 Tax Rates

Federal Tax Rate Provincial Tax Rate• 15% on the first $42,707 of

taxable income, + • 22% on the next $42,707 of

taxable income (on the portion of taxable income over $42,707 up to $85,414), +

• 26% on the next $46,992 of taxable income (on the portion of taxable income over $85,414 up to $132,406), +

• 29% of taxable income over $132,406.

• Manitoba 10.8% on the first $31,000 of taxable income, +12.75% on the next $36,000, +17.4% on the amount over $67,000

• Saskatchewan 11% on the first $42,065 of taxable income, +13% on the next $78,120, +15% on the amount over $120,185

• Alberta 10% of taxable income

Employment Insuranceb) A percentage of gross income paid by employees and employers to provide temporary payments if workers become unemployed

Your employer remits this payment and adds to it by making a similar-sized contribution on your behalf. Self-employed people are generally ineligible to collect employment insurance and so do not have to contribute to it.

Year Rate Max. Annual EE Premium

Max. Annual ER Premium

2012 1.83 $839.97 $1175.96

Canada Pension Planc) A percentage of gross income paid by employees and employers to provide income when workers retire or become disabled

• In 2008, employees contributed 4.95% to a maximum of $2,049.30 per year. Your employer remits this payment and matches it, for a combined contribution to CPP of 9.9% of your income. (Self-employed people pay both the employee's and employer's share.)

Other deductions

d)Deductions the employer makes under an agreement with the employee or the employee's union or other agent, including:

– • private pension plans– • health insurance premiums– • union dues and professional fees– • food and clothing deductions– • transfers to the employees' Registered Retirement Saving

Plan– • purchases of investments like bonds or shares– • charitable donations

Are these deductions lost?These deductions are not lost, but pay for social and personal benefits:

a) Social benefits such as employment insurance, public pensions, health, education and other benefits paid for by government

b) Personal benefits such as private pension plans, union and similar membership dues, voluntary savings, etc.

Your wages CANNOT be deducted for:

Actions taken by others. • For example:

- A customer leaves a bar or restaurant without paying their bill- A driver leaves the gas station without paying

Your wages CANNOT be deducted for:

Mandatory Training

Improper use of company equipment

Breaking equipment (plates)

Cash Shortages However, if there are repeated errors, you could lose your

draw. (Wilful destruction – garnish wages) Responsibility Respect

Other• Government of Saskatchewan

– Major changes to labour laws and standards in the near future!• Overtime

– After 8 hours a day or 40 hours a week (32 hours in a week with a public holiday), overtime is payable at a rate of 1.5 times your regular wage.

• Vacation Pay– Casual and part-time employees often receive their vacation

pay on each paycheque.– How many annual holidays do employees get?

a) Employees get a minimum of three weeks of annual holidays after each year of employment.

b) Employees who complete 10 years of work with the same employer get a minimum of four weeks of annual holidays.

Replacing lost income• If your work income stops – for example, if you lose

your job or can’t work for some other reason – you need other sources of income.

• Suggestions:– Employment Insurance– Insurance (mortgage, credit card, disability, workers

compensation)– Savings– Property (rent or sell)– Loans

Plan ahead—before a crisis hits—so you can handle the unexpected. Experts recommend putting aside at least three months’ worth of household expenses for an emergency fund. Know where you can turn for assistance if your income drops.

Expenses• Know what you spend!• HOW?

– Keep every receipt– Smart phones/Record/Software– Bank and credit statements– Do this for at least three months– Illregular expenses (gifts, donations, car/home repairs,

vacations)– Total expenses at the end of the month

Expenses and Spending• Discretionary spending: Spending on wants rather than needs;

includes items like restaurant meals, video games and concerts• Impulse spending: Spending decisions that are made on the

spur of the moment, as opposed to planned spending decisions• Fixed expenses: Are expenses that’s don’t generally change from

month to month, like rent, most utilities, transit passes and car payments.

• Variable expenses: Are expenses that can easily change, like the amount spent on food, entertainment or clothing.

• Irregular expenses: Expenses that don't come up regularly or often, like car repairs or new appliances. To estimate irregular expenses, review your bills or expense records for the previous year, total the cost of irregular expenses in various categories, and divide by 12 to arrive at an average monthly cost.

• Cook at home• Make your own coffee• Make a list before shopping• Go grocery shopping while you are in a

hurry• Pay attention to expiration dates to

perishable goods• Buy in bulk• Buy generic• Land lines or just cell• Borrow books instead of buying or buy

used• Price check before buying anything• Coupons• Avoid impulse buying• Movie Theatre deals (cheap night)• Regulate electric us• Plan vacations ahead of time• Keep distance from lavish, high-roller

friends

• Use grocery store bags to line trash cans / reuse them.

• Consolidate and pay off debt as soon as possible.

• Pay bills on time to avoid fees (automatic)

• Bank balance and avoid over draft fees

• Avoid ATM fees• Avoid credit cards with annual fee• Bottle your own water• Avoid vending machines (markup)• Keep your car as long as possible

(balance b/w the money spent on repairs vs monthly payments – keep while repair costs are low)

• Avoid buying a new car• Ride bike or carpool• DVD – online memberships/libraries

30 Tips for Saving Money

EXTREME COUPONING• http://tlc.howstuffworks.com/tv/extreme-couponing/vid

eos/coupon-stockpiles-videos.htm

• http://www.ovguide.com/tv_season/extreme-couponing-season-1-219591

What is a budget?• A budget is a written document or electronic file that

helps you take control of your personal finances. It is an excellent money management tool that helps you achieve your financial goals.

• It is especially important if:– You find that money is tight– You don’t know where your money is going– You have problems paying off your debt– You don’t save regularly– You want to find ways to make your dollar stretch

Budgeting• What does a budget include?

– A budget compares expenses with income to show whether income will exceed expense (a surplus) or expenses) will exceed income (a deficit).

• Value of doing a budget?– Helps people keep their expenses lower than their income and

live within their means.– Allows people to find out where they can reduce spending.– Allows people to plan accurately for their future.

• How do you get your budget in balance?• Surplus – Deficit

The budgeting process?• Phase 1

– Assess your personal and financial situation (needs, wants, values, life situation).

• Phase 2– Set personal and financial goals.

• Phase 3– Create a budget for fixed and variable expenses based on

projected income.

• Phase 4 – Monitor current spending (saving, investing) patterns.

• Phase 5 – Compare your budget to what you have actually spent.

• Phase 6– review financial progress and revise budgeted amounts

Action Plans• Well-written personal and financial goals should

be……SMART– Realistic

• Student wouldn’t be able to buy brand new car.– Specific:

• To save $15 000 for a down payment– Time Frame:

• Pay off credit card within the next 18 months– Action to be taken:

• To start an automatic deposit savings account with monthly withdrawals from my chequing account.

Till Debt Do Us Part• Video – Till Debt Do Us Part

– Sharon and Brad (Second Marriage, six kids, Season 8 Episode 100)

– Dream House Disaster (Season 9 Episode 1)– Liz and Will (Engaged and spending, Season 8, Episode 95)– Julia and Guy (two teachers Season 8 Episode 92)

• JOURNAL 8– Summary and Principle 15

Income Tax

Banking

Savings

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