1. Financial Literacy for High School Students

2. Project Overview What do you spend your money on? Future Budget Scenario Checking Account vs. Savings Account Credit Cards and Credit Scores “Who Wants to be a Millionaire?” Careers in Accounting and Finance

3. What do you spend your money on? First Step: Think about what you currently spend money on.. o Food? o Movies? o Clothing? o Transportation & Gasoline? o Entertainment? Wait… How do you pay for those expenses? Traveling through time: What additional expenses will you have to pay when you are an adult?

4. Future Budget Scenario Average Starting Salaries: o High School Graduate: $28,000 yearly (Monthly = $2,333) (After Tax = $1,820) o Two-Year Degree (Some College): $30,000 yearly (Monthly = $2500) (After Tax = $1,950) o Bachelor’s Degree (College) or More: $45,500 yearly (Monthly = $3,790) (After Tax = $2,956) o More expenses when you are grown-up!

5. Guess how much each expense will cost! How much should you spend (dollar amount) per month on each of these categories? o Savings? ____ o Housing? ____ o Food? ____ o Clothing? ____ o Transportation? ____ o Entertainment? ____

6. Actual Amount for Expenses by Salaries High School Graduate: $1,820 Two-Year Degree: $1,950 Bachelor’s Degree: $2,956 Savings (5%)$91.00$97.50$147.80 Housing (27%)$491.40$526.50$798.12 Food (11%)$200.20$214.50$325.16 Clothing (4%)$72.80$78.00$118.24 Transportation(11 %) $200.20$214.50$325.16 Entertainment (7%) $127.40$136.50$206.92 Total Expenses$1,183.00$1,267.50$1,921.40

7. How much money would you have left? What other expenses will you have? o Utilities (Gas, Water, A/C) o Medical o Insurance o School o Vacations o Invest? High School Graduate: Two-Year Degree: Bachelor’s Degree: After-Tax Income:$1,820.00$1,950.00$2,956.00 Less: Expenses(1,813.00)(1267.50)(1,921.40) Money Left$17.00$682.50$1,034.60

8. Checking vs. Savings Accounts Checking Account Daily Use Few or no restrictions on number of withdrawals Debit Card Savings Account Saving Purposes – Infrequent Use Limited number of withdrawals per month Pays higher interest rate than checking account

9. What about Credit Cards? What is a credit card? o Pay with Credit o Use for expensive purchases Pay Monthly Bill o Minimum Amount vs. Pay-in-Full Dangers of Credit Cards

10. Credit Scores Similar to a Report Card o Generally, scores range from 300-800 Credit monitored by an Agency o Grades are monitored by school, teachers, and parents The Importance of a Credit Score o Cars, homes, loans, job applications, etc. Bad Credit = Consequences

11. Who Wants to be a Millionaire? Think back to the budgeting scenario.. If you took $1,000 and invested it, what would happen? If you waited for 50 years, you could be a millionaire!!!! (Or at very least a hundred-thousand-aire!)) How??? Compounding Interest and Smart Investing! o What is compounding interest? Return Rates o Historical Average Return on the Stock Market = 11% o Aggressive Approach (Good Investing) = 15%

12. Path to Becoming a Millionaire! YearTotal Amount: Avg. Market Rate Return = 11% Total Amount: Aggressive Approach/ Return = 15% 0$1,000.00 1$1,100.00$1,150.00 2$1,232,00$1,322,50 10$2,839.4$4,045.56 20$8,062.3$16,366.54 35$38,574.85$133,175.52 50$184,564.83$1,083,657.44

13. Tips to Long Term Investing Understand Options and Returns o Bank Accounts o Stocks o Other Opportunities Be Patient! o Don’t track daily, weekly, monthly changes o Some years you might lose money, don’t worry! Invest Earlier = More Money = Retire Earlier!

14. Careers in Accounting Certified Public Accountant o Audit o Tax Corporate Accountant o Chief Financial Officer (CFO) Forensic Accountant Internal Audit Consultant/Advisor

15. Careers in Finance Banking Corporate Financing Financial Planning o Help others manage money and plan for savings/retirement Venture Capitalist o Fund new businesses with high growth potential

16. Summary Plan Weekly, Monthly, and Yearly Budgets o Understand personal finances first before going on a shopping spree! Difference between Checking and Savings Accounts Credit Cards are NOT a necessity Importance of a Credit Score Invest Early! o Be patient! Maybe consider a career in Accounting and Finance!

17. Sources The Motely Fool o http://www.fool.com/teens/teens01.htm http://www.fool.com/teens/teens01.htm Junior Achievement o http://www.myja.org/programs/saveusa/ja_$ave_USA_middle_school_educators_20 09.pdf http://www.myja.org/programs/saveusa/ja_$ave_USA_middle_school_educators_20 09.pdf Michigan Counseling Association o http://www.michigancounselingassociation.com/uploads/2/6/3/4/2634297/budget__f inancial_education.pdf PEW Research o http://www.pewsocialtrends.org/2014/02/11/the-rising-cost-of-not-going-to-college/ http://www.pewsocialtrends.org/2014/02/11/the-rising-cost-of-not-going-to-college/