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FINANCIAL LITERACY

FINANCIAL LITERACY. Introduction-Facilitator. CONTACT INFO:. Introduction . What is your name? What would you like to learn from this program?. Overview. $ MONEY - What is it? What do we do with it?. Budgeting -How do we use it? How do we find more money?. Save it (Money in).

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FINANCIAL LITERACY

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  1. FINANCIAL LITERACY

  2. Introduction-Facilitator CONTACT INFO:

  3. Introduction What is your name? What would you like to learn from this program?

  4. Overview $ MONEY - What is it? What do we do with it? Budgeting -How do we use it? How do we find more money? Save it (Money in) Spend it (Money out) • Savings • Investing basics • Educated Consumer • Banking • Credit & Credit cards • Debt & Financial Woes • Credit Bureau, Ratings, Scores & Reports • Income Tax basics

  5. Module One: Exploring Your Relationship with Money

  6. Money What is Money? Discussion/Activity

  7. MoneyMessages • “ Our feelings about money today almost always can be traced back to an incident from our past, our first experience or message about money”- Suze Orman

  8. Money What is your first memory of money? Discussion/Activity

  9. Money If I give you $1,000,000 What would you do with it? Handout/Activity

  10. Money If I give you $10,000 What would you do with it? Handout/Activity

  11. Activity – 5 mins Rate yourself from 1-10 on your current financial knowledge 1= Very Low 10 = Very High Handout/activity

  12. Money In groups, make a list of what would happen if you do not know how to manage your money. Handout/Activity

  13. GoalSetting Important to set goals Write them down Start with the end result in mind Build a plan to reach your goals Goals should be SMART

  14. Goal Setting Set goals to apply what you learned today. Remember, goals should be SMART Specific Measurable Achievable Realistic TimeframeAttached Handout

  15. Module Two: Budgeting – Developing a Money Action Plan

  16. Budgeting – Module 2 • What is budgeting? • Budgeting exercise • Budgeting tips • Goal setting

  17. What is Budgeting?

  18. Spending Money What do you spend money on? How do you make sure you don’t spend too much? BUDGETING!

  19. A plan for your money Detailed or simple to use – your choice! A big picture of where your money comes from – and where it goes A way to identify spending or saving that you may want to change A way to work towards your future financial goals…..and more! What is a Budget?

  20. Steps to Making a Budget List your income List your expenses Determine if you have any money left over List your debts Decide how much money you can put towards your debt Make short and long term goals Be sure to include savings in your budget

  21. As a group of 3 or 4 complete the budgeting sheet based on a scenario. BudgetingActivity

  22. Activity – Create a budget! (10min) Scenario 1Single motherOn social assistanceNon-smokerMonthly income (~$1200) Scenario 2Single guyMakes minimum wageSmoker Wants a carMonthly income (~1280) Activity

  23. Activity – Create a budget! (10min) Scenario 3Married father of 2Works full-time for $15/hrHas credit card debt of $5,000Monthly income ($2400) Scenario 4 Married, no kidsBoth work full timeAnnual income of $60,000Monthly income ($5000) Activity

  24. What did you learn from this exercise? Were you realistic? Did anyone include savings in their budget? Practice Makes Perfect!

  25. Benefits of Budgeting You have a plan for your money Less stress Compare one month to another See how your spending habits affect your budget Find ways to save money Use last month’s budget to plan for the next

  26. Budgeting Tips Keep your budget flexible Keep your budget simple Be honest and realistic Try keeping track of every dollar you spend for a month…it may surprise you! Requires some trade-offs and sacrifices Budget for the unexpected Budget for large items that occur once a year Keep accurate records

  27. Do you know where these things are? Birth certificates/other ID /Social Insurance Card Lease / Mortgage documents Tax papers / Receipts for taxes Banking / Investment statements Insurance documents Warranties/guarantees for items purchased Receipts for major purchases Final will and testament Handout

  28. Module Three: Savings

  29. Savings – Module 3 • Needs vs. Wants • “Finding Money” activity • Paying Yourself First! • Compound Interest • Goal Setting and Resources

  30. FACT: An adult who invests $1,000 a year for 7 years between the ages of 19 and 26 and then invests nothing more will have more money at 65 than one who waits until he turns 26 to invest $1,000 a year, every year, for the following 40 years! Introduction to Saving

  31. Write down how oftenyou buy the item Daily? Multiply by 30 Weekly? Multiply by 4 Finding Money

  32. How often do you buy the item… If Amount Is: Then: Weekly Multiply by 4.33 Every Two Weeks Multiply by 26; Divide by 12 Twice a Month Multiply by 2 Four Times a Year Divide by 3 Twice a Year Divide by 6 Once a Year Divide by 12 Handout/Activity

  33. Finding Money Activity!!Write a list of things you buy often For example: parking.. Coffee.. Convenience purchases.. Magazines/newspapers.. Gas.. Cigarettes/alcohol.. Renting movies.. Downloading songs, videos, texting messages Handout/Activity

  34. Finding money… What can you do with this money? • Spend it • Save it

  35. Look at this!

  36. What is the Golden Rule of Saving?

  37. Pay Yourself First!!!

  38. The Magic of Compound Interest

  39. Compound Interest Interest paid on original amount PLUS any interest earned Example: $100 paying 6% compounded annually Year 1 $100 x 1.06 = $106 Year 2  $106 x 1.06 = $112.36 Year 3  $112.36 x 1.06 = $119.10 Year 4  $119.10 x 1.06 = $126.25 Year 5  $126.25 x 1.06 = $133.83

  40. Are they needs or wants?

  41. Activity List as many things as you can think of that you need to buy List the things you want to buy Handout/Activity

  42. Needs vs. Wants What’s the difference between a “need” and a “want”? Discussion/activity

  43. Needs vs. Wants A need is something you must have to live your daily life. Food,clothing, and shelter are the usual needs.

  44. Needs vs. Wants A want is a way to meet these needs with more style, comfort, or ease.

  45. Why Save Money? To buy large items (vehicle/house) Surprise Bills or Emergencies More Choices (vacations, new wardrobe) Retirement Help family Children’s Education Less Stress

  46. Saving is a Habit Start small Don’t dip into savings Try forced savings technique

  47. Saving Early As an example…. MR. START EARLY saves $3600 per year for 7 years in an investment earning 8% interest MR. WAIT LONGER starts saving $3600 per year for 17 years in an investment earning 8% interest, 7 years LATER than Mr. Start Early.

  48. Saving Early

  49. Small Changes = Big Money Can you cut down on the following? Sodas, Cigarettes, Lattes, Cable TV, Cell phone bill, Games, Bottled Water, Sweets, New Gadgets, Shopping, Driving a big car, Eating out… $497,107 $994,215 What if you can make small changes in your spending habits and start saving X amount of money per day or per week?

  50. BUT….What if you are the one paying the interest? Guess how much a $200 guitar bought on a credit card with 28% interest cost after 4 years?

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