1. Reading  Harrington

2. Consumers & Savers Chapter 6

3. Consumers  Consumers-anyone who buys goods and services for personal use Sources of income: 1. Wages 2. Wealth (Assets, properties) 2. Wealth (Assets, properties)

4. Savers  Savings- setting aside of money, allowing its wealth to increase  What determines if and how people save?  1. Income levels, as we make more money, we save more  2.Consumer expectations-a) optimistic- spend more/ b) pessimistic- save more  3. Interest rates= high rates, save more  4. Taxes- If Gov’t raises taxes= Less savings

5. Budgeting  Budgeting- a plan for spending & saving your money  *Why budget?  1) create a plan for savings (short term vs. Long term)  2) prevents impulse buying  3) prevents spending beyond our means (Stops debt)

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7. Closure  Fill out the budgeting worksheet

8. Day 2  Budgeting  Pre-budget planning-3 main things  1. list total income (guaranteed income)  2. List monthly expenses (fixed expenses)  3. List future expenses and savings goals

9. Investing your money  3 things to consider  1. Safety- what are the chances of losing your money  2. Rate of return- how much interest can I expect to make? How much will my investment grow?  Liquidity- How easily can our investment be turned back into cash

10. Investment Options  1. Banks  A) savings accounts  High safety, low return, very liquid  B) certificate of deposit (CD)  -must allow bank to keep your cash for a certain period of time  Substantial penalty for early withdraw  Safe, not liquid higher return  (budget worksheet)

11. Investing Continued  Money market Account  Functions primarily like a saving account, as well as limited check writing  The bank invests the $ in the money market  High liquidity, safe, higher return than saving accounts but less than CD’s

12. Investing Continued  Stocks  Share ownership in a corporation  “Dividends” payments to shareholders when a profit is made  Risk can vary, somewhat liquid, moderate return

13. Investing Continued  Bonds- an I.O.U, safe not liquid, moderate return  Mutual funds-a special investment company where people pool their $ together and invest in a variety of locations  A relatively new concept

14. Investing Continued  Pension Funds  Retirement account from your work or employer  -not liquid, very safe, varying return

15. Consumer Credit  Allows us to buy things now & pay for them later  This usually causes people to go into debt.  There is often a heavy cost (interest) we pay for obtaining & using credit