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Money Management

Money Management

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Money Management

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  1. Activity 1………………Saving vs. Investing • Activity 2……….….Saving for a Rainy Day • Activity 3……………………..1 + 1 = Saving • Activity 4…..Investing for the Long Term

  2. Money Management - Activity 1 • ACTIVITY 1 • Saving vs. Investing • Overview • Saving vs. investing • Information on a paycheque • Making a financial plan • Budgeting 2

  3. Slide 1 - Do You Save? Do You Invest? Lesson Reference: Money Management, Activity 1 – Overhead 1 DO YOU SAVE? DO YOU INVEST? 3

  4. 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. 4

  5. TAKE A GOOD LOOK AT A PAYCHEQUE 5 Slide 3 – Paycheque Lesson Reference: Money Management, Activity 1 – Handout 1

  6. MAKING A SUCCESSFUL • FINANCIAL PLAN • Start as early as possible. • Set goals. • Include both short- and long-term strategies. • Support the plan with a practical, working budget. • Review the plan on a regular schedule. • Do your homework while working on your plan. • Put the plan in writing. 6 Slide 4 – Making a Successful Financial Plan Lesson Reference: Money Management, Activity 1 – Handout 2

  7. 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 7

  8. Savings & Investments • Fixed Expenses • Periodic Fixed Expenses • Variable Expenses • Debts BUILDING MY MONTHLY BUDGET Slide 6 – Building my Monthly Budget Lesson Reference: Money Management, Activity 1 – Handout 4 8

  9. Money Management - Activity 2 • ACTIVITY 2 • Saving for a • Rainy Day • Overview • Reasons to save • Concerns and issues with saving • Where to save 9

  10. Slide 1 - Saving for a Rainy Day Lesson Reference: Money Management, Activity 2 – Overhead 1 SAVING FOR A RAINY DAY 10

  11. 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. 11

  12. CONCERNS AND ISSUES • WHEN SAVING • • Safety • • Restrictions • • Liquidity • • Earnings • • Taxes 12 Slide 3 – Concerns and Issues When Saving Lesson Reference: Money Management, Activity 2 – Handout 1

  13. PLACES TO SAVE • Savings Accounts • Money Market Accounts • Guaranteed Investment Certificates • Registered Savings Accounts •Savings Bonds • Insurance 13 Slide 4 – Places to Save Lesson Reference: Money Management, Activity 2 – Handout 2

  14. Slide 5 - Looking at Places to Save Lesson Reference: Money Management, Activity 2 – Overhead 3 LOOKING AT PLACES TO SAVE On 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? 14

  15. Money Management - Activity 3 ACTIVITY 3 1 + 1 = Saving Overview • Types of interest • The impact of saving • Savings regulations 15

  16. Slide 1 - Types of Interest Lesson Reference: Money Management, Activity 3 – Overhead 1 TYPES OF INTEREST Which type of return on your money would you prefer? What’s the difference? 16

  17. 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. 17 Slide 2 – Returns on Savings Lesson Reference: Money Management, Activity 3 – Handout 2

  18. Slide 3 - Savings Regulations Lesson Reference: Money Management, Activity 3 – Overhead 2 • SAVINGS REGULATIONS • Federal Government Insurance • CDIC (Canada Deposit Insurance Corporation): Deposits are potentially insured up to $100,000. • Provincial Government Insurance • Stabilization funds or deposit insurance programs for Credit Unions and Caisse Populaires (vary by province) • Disclosure provisions in Bank Act • Financial institutions must disclose the following information about their consumer savings accounts: • Fees on accounts • Interest rate • General terms and conditions • Defines the year as 365 days for purposes of determining the annual percentage rate of interest. 18

  19. Money Management - Activity 4 • ACTIVITY 4 • Investing for the Long Term • Overview • Historical Performance of the S&P/TSX • • Reasons to Invest • • Investing Considerations • Investment Concerns • Places to Invest • • Online Money Management 19

  20. 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. 20

  21. SAVING VS. INVESTING, HISTORICALLY 21 Slide 2 - Saving vs. Investing, Historically Lesson Reference: Money Management, Activity 4 – Overhead 2

  22. Slide 3 - Places to Invest Lesson Reference: Money Management, Activity 4 – Overhead 3 • PLACES TO INVEST • Stocks • Bonds • Mutual Funds • Retirement Plans/RRSPs • Real Estate • Collectibles/Valuables 22

  23. QUESTIONS TO ASK BEFORE • MAKING AN INVESTMENT • How safe is the investment? • What types of returns can I expect? • What kind of risk is involved? • 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? • Are my investments in a variety of places to spread my risks (diversification)? 23 Slide 4 – Questions to Ask Lesson Reference: Money Management, Activity 4 – Handout 2

  24. 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. • Do not open emails that pretend to come from a financial institution and ask you to reset your password. 24 Slide 5 – Internet Privacy & Security Lesson Reference: Money Management, Activity 4 – Overhead 4