1. S AVINGS

2. L EARNING O UTCOMES Section 1: An Exercise of Character Section 2: Three Basic Reasons to Save Section 3: The Power of Compound Interest

3. S ECTION 1

4. F OUNDATION S TONES Key Areas of Money Finance that Everyone Needs to Follow to Get Ahead: 1. Save for an Emergency fund High School Student = $500 Financially Independent = 3 – 6 months of expenses 2. Get out of Debt 3. Pay Cash for Items High School: Pay Cash for Car, Pay Cash for College Independent: Pay off Your House Early 4. Build Wealth Save 10-15% of Income for Retirement 5. Give

5. S AVING M ONEY THE A MERICAN W AY Money Magazine: 78% of us will have a MAJOR negative event in a given 10-year period Need an Emergency Fund (Rainy Day fund) 2006 Americans saved -.6% of their income. Means they SPENT more than they MADE. 2012 – Americans saved 3.3% of income Experts believe you need to save 10-15% of your income

6. F IRST FOUNDATION Save for an Emergency Fund High School $500 in an emergency fund How Can I Save $500 quickly? Portion some of your allowance Hold an Auction of unused items Become an “entrepreneur” (Teen Based Business) Part-Time Job Help your Parents Communicate Money goals to parents Allows you to have money available for any surprise expense. If you don’t have money saved – you’ll have to go into debt for emergencies When you get out of college make sure to grow it to 3-6 months KEEP YOUR EMERGENCY FUND SEPARATE FROM YOUR SAVINGS ACCOUNT OR YOUR SPENDING MONEY!!!!

7. S ECTION 2

8. T HREE B ASIC R EASONS TO S AVE 1. Emergency Fund 2. Purchases 3. Wealth Building

9. E MERGENCY FUND Emergencies WILL Happen Beginner fund of $500 Later you should increase to 3-6 months of expenses Open a Separate Savings Account & Leave it Alone Separate from you checking account/spending account Separate from purchases account (sinking fund) It’s NOT an Investment – It’s Insurance FIRST SAVINGS PRIORITY Do it NOW!

10. P URCHASES Pay Cash using a Sinking Fund instead of borrowing Sinking Fund – way to save for large items coming up. Calculate the expected cost of the item and how long you have until you need to purchase it. Divide total cost by number of months until you purchase Ex: Spend $200 on Prom 5 months away 200/5 = $40 a month saved towards prom.

11. W EALTH B UILDING Discipline is the Key Ingredient Building Wealth is a Marathon not a sprint!!! 80% of millionaires are 1 st Generation Millionaires….meaning they started with nothing and saved over time. -Millionaire next Door Compound Interest is a Mathematical Explosion. You MUST start NOW!!!

12. S ECTION 3

13. P OWER OF C OMPOUND I NTEREST Interest: the money the principal (original amount) earns. Typically a percentage of the principal paid on a monthly, quarterly, or yearly basis. Compound Interest Formula FV = PV(1+r/m) mt FV = Future Value PV = Present Value R = Annual Interest Rate M = Number of Times per year interest is multiplied T = Number of years you invest

14. C OMPOUND I NTEREST Inflation Persistent rise in price of goods/services over time. Time Value of Money Certain amount of money today has a different buying power in the future. Inflation drives prices up changing the value of money.

16. D ISCUSSION Q UESTIONS : 1. Explain the importance of the Foundations. 2. What does it mean to have a negative savings rate? 3. How can having an emergency fund protect you and grow your wealth? 4. Come up with 3 specific ways you can come up with $500 quickly. 5. What excited you about investing? What is the key ingredient in building wealth? BE SURE TO ANSWER THESE QUESTIONS – IN DETAIL – AND UPLOAD YOUR RESPONSES TO THE NOTES/PODCAST ASSIGNMENT ON CANVAS.