1. Banking and money management
Planning 10 – 2017/18

2. Budgeting What is your income? Gross income Net income
Gross minus taxes and dues
What are your expenses?
General guideline…
30% shelter
10% fixed expenses
10% loan payments
10% personal spending
10% savings
The difference is…
Positive or negative?
Track, trim and target…
Negative… where can you trim expenses?
Positive… what will you do with the extra?

3. What expenses will you have???
Rent
Bills, insurance, groceries
Shelter / Fixed expenses
Loans
Credit cards
Payments
Clothes, hair cuts, entertainment
Electronics, hobbies, gifts
Personal Spending
Vacations
Emergency fund
Saving
Set SMART goals…
Specific, Measurable, Attainable, Relevant, Time-related

4. Your Banking Types of accounts Chequing Savings How do I Access Branch
ATM
On-line
POS
Do you know…
Fees?
Access limits?
Who has access?
How to protect your $?

5. To Keep your money safe don’t…
Share your PIN and passwords
Text or personal info
Instagram your credit card or debit card
Fall victim to scams
Remember, if something it too good to be true, check it out and
get some advice!

6. Saving money and the interest you earn
Simple Interest
Compound Interest
$100 paid 2% per year in simple interest will give you $2 per year in interest $100 x .02 x 1 = $2.00
$100 paid 2% compounded annually for 3 years… $100 x .02 x 1=$2 $102 x .02 x 1=$2.04 $ x .02 x 1=$2.08 Your $100 became $ in 3 years
So what’s the big deal about that…

7. The Rule of 72
If you want to know how long it will take to double your money, there is a fairly simple calculation… divide 72 by the rate of interest you are earning on your investment. Example: If you are earning 5% on your money… 72 divided by 5 = 14.4 years to double your money If you are earning 7% on your money… 72 divided by 7 = 10.3 years to double your money

8. What are the different types of CREDIT?
Installment loan
Student loan
Credit card
Credit line
Overdraft
Mortgage

9. What is considered when applying for credit?
Character
Do you pay your bills on time
Do you have a good credit history
How long have you lived in your residence
How long have you held your job
Capitol
What do you have in savings
What do you own
Capacity
Do you have a steady job
How much do you earn
Can you afford the payment
Collateral
Do you have anything you can use as security on a loan

10. Most common ways to hurt credit
Fail to pay bills on time
Not making minimum payments on credit cards
Outstanding fines with ICBC
Not paying phone bills and walking away from contracts
Getting joint credit and assuming the other person will pay
Over drawing an account
Bouncing cheques

11. How much can you afford to borrow
First of all, residents of BC must be 19 to borrow money
When you apply for a loan, the 30/40 rule comes into play…
30% of gross income for shelter cost (mortgage/rent/heat)
40% of gross income for all total payments combined
Let’s assume you are making $45,000 per year ($23 per hour full time)
Max payment for mortgage or rent and heat = $13500 ($1125 per month)
Max total payments = $18000 ($1500 per month)

12. Know what bank accounts you have Know where your money goes
So now what…
Make a plan
Know what bank accounts you have
Save early
Know where your money goes

13. Something to think about…
Considering the average cost of a “special coffee” or tea is about $2.50
If you purchase:
1 per week = $2.50 x 52 = $130 per year
3 per week = $2.50 x 3 x 52 = $390 per year
Think back to the $1000 saving example. If you could save $20 per week, you have your $1000 saved for the year.
Hmmm, $20 per week = $4. per week day
Yes, saving over 14 years really get you
$119,187.26