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Financial Literacy

Learn the basics of budgeting, track your expenses, set financial goals, and save wisely to achieve financial independence. Understand the importance of managing money effectively and making informed decisions. Start your journey to financial literacy today!

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Financial Literacy

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  1. Financial Literacy 11th grade- Budget and Savings “It’s not what you make, it’s what you keep.” James Henson, Sr.

  2. Objectives for today • Demonstrate a method to analyze your income and expenses • How much do you really cost? • Understand the basics of a budget • Evaluate choices you can make now for a successful future

  3. What is Financial Literacy? • Understanding how to manage money effectively • Acquiring knowledge and skills to make informed decisions regarding money matters • Helping individuals fulfill personal, family, social and governmental responsibilities

  4. Why do I need to be financially Savvy? • People who are financially literate are more likely to achieve a better quality of life and reach their lifetime goals. • Being financially savvy can: • Help you buy something you need or want (car, computer, etc.) • Save money for emergencies • Afford college tuition • Start a business • Live comfortably in retirement • Lead to financial independence

  5. Financial Literacy: Budgeting • A budget is an estimated list of your income and expenses over a given period of time. • Developing a budget helps you control your money and limit your spending. • Creating a budget plan is an important step every student can take to assess his or her financial wellness.

  6. Financial Literacy: Budgeting How much do you cost?

  7. Financial Literacy: Budgeting Use the steps below to help you create your first student budget plan. • Step One: Assess Your Finances • List all your sources of monthly income- job earnings, savings, parental support, gifts, internships

  8. Financial Literacy: Budgeting • Step two: Determine Your Expenses List all your monthly expenses. Consider: • Meals • Entertainment • Personal care items • Laundry • Telephone • Include money for emergencies. It is recommended to budget 10% of your income. • Examples: lost phone, damaged iPad, book obligations, etc. • Try to keep at least one month of total expenses in savings. • Car expenses, gas, insurance • Clothes • Technology • College classes • School supplies

  9. Financial Literacy: Budgeting • Step three: Total your income and expenses. • If your expenses are greater than your income, you need to find ways to increase your income stream or reduce your spending. • Think about the little things you can cut back on to save dollars here and there. • Consider needs verses wants. • Examples: • Rent an on-demand movie or use Netflix instead of going to the movie theater • Skip the Starbucks and make a coffee at home • Borrow an outfit for a formal event • Walk instead of driving your car

  10. Financial Literacy: BudgetingStep four: Set your financial goals • Start by making a list of your short, medium, and long-term goals and set monetary figures that will help you achieve them: Short-term goals: • Trying a new restaurant • Buying a new game • Taking a weekend ski trip Medium-term goals: • Summer trip with your friends • Studying abroad next year, • Paying for AP exams Long-term goals: • Paying off your student loans • Investing in the stock market • Saving for a down payment for a home • Starting your own business

  11. Financial Literacy: Budgeting • Step five: Track your budget over time • Compare your actual income and expenses with your budget to make sure you’re on target to meet your goals. • You’ll need to monitor your budget periodically in order to make changes when necessary. • Be prepared for the unexpected. (e.g., car repairs, broken cell phone)

  12. Financial Literacy: Budgeting • Start Saving Early • Savings Account • Roth IRA’s • Mutual Funds • Stocks/ Bonds • Pay yourself first • Let your money work for you • Pay your expenses • Read biographies of financially successful people

  13. Financial Literacy: Budgeting Compound Interest-Save and Watch it Grow Thanks to compound interest, small regular savings can add up over time. With compound interest, it is not just your money that earns interest – your interest earns interest as well – creating a snowball effect.

  14. Cost of Waiting

  15. Financial Literacy: Budgeting • Budgeting your money is an important part of financial literacy. • The bottom line is that you are in control of your financial health. • A budget will keep you on track and help you realize your goals.

  16. What can I do now to become financially literate? • 1. Get a good education. • 2. Work smart. • 3. Learn money management skills. • 4. Living below your means. • 5. Save early and often. • 6. Gather information before making decisions. • 7. Have a budget plan. • 8. Ask questions and attend financial seminars • Financial Fitness For Life Council For Economic Education

  17. What can I do now to become financially literate? • For more information go to: • www.360financialliteracy.org • www.macpa.org • www.mdfinancialskills.org • www.mymoney.gov • This information brought to you by the Severna Park High School Business Advisory Board www.sphsbab.org

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