1. Chapter 2: Saving

2. 2.1 Saving: An Exercise in Character

3. The Five Foundations Save a $500 Emergency Fund Get out of Debt
Pay Cash for Your Car
Pay Cash for College
Build Wealth and Give
Next to each foundation, write down a way you could make this happen.

4. America’s Savings Rate

5. America’s Saving Rate
We are reactionary!!!!

6. Saving for an Emergency Fund
The first foundation is $500 in an emergency fund
Your expenses are different than your parents… think broken cell phone or flat tire
78% of people will experience a major negative event in a 10 year time period
An emergency fund is your money for surprise expenses which prevents you from going in to debt.
Debt never solves a problem.

7. Saving for an Emergency Fund
When you’re on your own, you’ll want to grow your fund to 3- 6 months of expenses.
Will your emergency fund always be the same?
This money should be kept in the bank only!
Could be in a separate savings account.

8. Saving for an Emergency Fund
Saving $500 quick – How can we do this?
Starting your own business
Name
Business
Age
Worth
Sean Belnick
Sells furniture online 14
$42 mill
Fraser Doherty
SuperJam
$2 mill
Cameron Johnson
Greeting cards 9
$3.2 mill
Juliette Brindack
“Miss O” books and website 10
$15 mill
Farrah Gray
Body lotion and food service
6/13
$20 mill

9. Journal Question
What has kept you from saving in the past? How might you change this?

10. Savings by Nation
Find the mean and median for this data.

11. Savings by Nation
What are some possible reasons for the low savings rate in the US?
With a take home pay of $40,000 how much would a family in Japan save? France? The U.S?

12. 2.2 Three Basic Reasons to Save

13. Three Basic Reasons
Emergency Fund
Make Purchases
Build Wealth

14. Emergency Fund and Purchases
Emergencies are going to happen. Period.
Leave. It. Alone.
Is saving just a few dollars a month worth it?
Purchases
Instead of borrowing, use a sinking fund.
Think of something that you need or want…
How much is it going to cost?
How long do you have to save for it?
Cost ÷ Months = $/month to save

15. 3. Wealth Building You need discipline if you want to build wealth.
Wants vs. needs and compromise
Building wealth is a marathon, not a sprint
When should you start building wealth?

17. Journal Question
Why do you think so many people borrow money for large purchases instead of using a sinking fund?