What Can You Do With Money?

1. Family Economics & Financial Education What Can You Do With Money?

2. What Can People Do With Money? • Spend it • Save it • Invest it • Donate it

3. What Can People Do With Money? • People usually spend money before they save, invest, or donate it • For example: • The average adolescent spends about $264 per month • How much of this are they saving? • The amount saved is most likely much less than the amount spent

4. Goals • What is a goal? • Something a person intends to acquire, achieve, do, reach, or accomplish • Goals help people focus on items that are most important

5. Types of Goals • There are 3 main types of goals • Short-term goals • Can be achieved in less than one year • Long-term goals • Can be achieved in a time period of more than one year • Financial goals • Specific objectives to be accomplished through financial planning

6. Why are goals important? • Short-term and long-term goals are a necessary component of an effective financial plan • In order to reach short-term and long-term saving goals, individuals may need to change their spending habits

7. Savings • What is savings? • A portion of income that is not spent to purchase necessary or wanted items • Saving should be viewed as an expense • Use the motto “pay yourself first” • Pay yourself first- set aside a portion of money for saving each time a person is paid before using any of the money for spending

8. Why should people save? • For unexpected events and emergencies • Without savings, unexpected events may become huge financial problems • Examples: the car breaking down or having a medical emergency • To purchase expensive items • Examples: a new car or a family vacation

9. How should people save? • Should use an account with a financial institution • A financial institution is a business that holds and protects money for people. • Examples of accounts… • Savings Account • Money Market Deposit Account • Certificate of Deposit (CD)

10. Savings Account • An account with a financial institution • Keeps money safe until the owner needs it • Opening a savings account • Deposit, or put money into the account • The financial institution will pay interest, or additional money, which is calculated by taking a percent of the total amount of money deposited in the account • Money can be withdrawn, or taken out, at any time

11. Money Market Deposit Account • Another type of account with a financial institution • Pays a higher interest rate than a savings account • Money can be withdrawn from the account a limited number of times every month

12. Certificate of Deposit • An account that pays interest on a lump sum of money • Money is required to stay in a CD for a specific period of time • The money and interest earned can be withdrawn at the end of the time period

13. Summary • What can people do with money? • Spend, save, invest, or donate • What is a goal? • Something a person intends to acquire, achieve, do, reach, or accomplish • What are the three main types of goals? • Short-term, long-term, and financial

14. Summary Continued • Why are goals important? • They are a necessary component of an effective financial plan • What is savings? • A portion of income that is not spent to purchase necessary or wanted items

15. Summary Continued • Why should you save? • For emergencies, unexpected events, or to purchase expensive items • How can you save money? • Savings Account, Money Market Deposit Account, and Certificate of Deposit

16. Matching Game • Divide into groups of three and designate one person as the referee • The referee should shuffle the matching game cards and place them answer side down into rows • Try to match the term with the definition by flipping over two cards at a time • Ask the referee if the match is correct • If so, keep the cards and take another turn! • If not, turn the cards back over and wait for the next turn. • Good luck!