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

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

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

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

TAKE A GOOD LOOK AT A PAYCHECK Slide 3 – Paycheck Lesson Reference: Money Management, Activity 1 – Handout 1 5

Slide 4 – Making a Successful Financial Plan Lesson Reference: Money Management, Activity 1 – Handout 2 MAKING A SUCCESSFUL FINANCIAL PLAN 1.Start as early as possible. 2.Set goals. 3.Include both short- and long-term strategies. 4.Support the plan with a practical, working budget. 5.Review the plan on a regular schedule. 6.Do your homework while working on your plan. 7.Put the plan in writing. 6

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

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

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

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

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

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

Slide 4 – Places to Save Lesson Reference: Money Management, Activity 2 – Handout 2 PLACES TO SAVE Savings Accounts Money Market Accounts Certificates of Deposit (CDs) Savings Bonds Insurance 13

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

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

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? Whats the difference? 16

Slide 2 – Returns on Savings Lesson Reference: Money Management, Activity 3 – Handout 2 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 3 - Savings Regulations Lesson Reference: Money Management, Activity 3 – Overhead 2 SAVINGS REGULATIONS Federal Government Insurance Deposits are potentially insured up to $100,000. FDIC (Federal Deposit Insurance Corporation) NCUA (National Credit Union Administration) Truth in Savings 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

Money Management - Activity 4 ACTIVITY 4 Investing for the Long Term Overview The Historical Performance of the S&P 500 Reasons to Invest Investing Considerations Investment Concerns Places to Invest Online Money Management 19

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

Slide 2 - Saving vs. Investing, Historically Lesson Reference: Money Management, Activity 4 – Overhead 2 SAVING VS. INVESTING, HISTORICALLY The S&P 500 stock index has increased almost 200 percent since On average, the stock market returns 12 percent per year, including dividends. Savings rates, by comparison, have been much lower – anywhere from 1.5% to 5%, usually depending on the length of time the savings are deposited. 21

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

QUESTIONS TO ASK BEFORE MAKING AN INVESTMENT 1.How safe is the investment? 2.What types of returns can I expect? 3.What kind of risk is involved? 4.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? 5.Are my investments in a variety of places to spread my risks (diversification)? Slide 4 – Questions to Ask Lesson Reference: Money Management, Activity 4 – Handout 2 23

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 s with unsolicited offers that sound too good to be true. Slide 5 – Internet Privacy & Security Lesson Reference: Money Management, Activity 4 – Overhead 4 24