What Can You Do With Money? Family Economics & Financial Education What Can You Do With Money? © Family Economics & Financial Education – March 2006 – Get Ready to Take Charge of Your Finances – What Can You Do With Money Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

What Can People Do With Money? Spend it Save it Invest it Donate it © Family Economics & Financial Education – March 2006 – Get Ready to Take Charge of Your Finances – What Can You Do With Money Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

What Can People Do With Money? People usually spend money before they save, invest, or donate it For example: The average adolescent spends about $264 per month How much of this are they saving? The amount saved is most likely much less than the amount spent © Family Economics & Financial Education – March 2006 – Get Ready to Take Charge of Your Finances – What Can You Do With Money Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

Goals What is a goal? Something a person intends to acquire, achieve, do, reach, or accomplish Goals help people focus on items that are most important © Family Economics & Financial Education – March 2006 – Get Ready to Take Charge of Your Finances – What Can You Do With Money Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

Types of Goals There are 3 main types of goals Short-term goals Can be achieved in less than one year Long-term goals Can be achieved in a time period of more than one year Financial goals Specific objectives to be accomplished through financial planning © Family Economics & Financial Education – March 2006 – Get Ready to Take Charge of Your Finances – What Can You Do With Money Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

Why are goals important? Short-term and long-term goals are a necessary component of an effective financial plan In order to reach short-term and long-term saving goals, individuals may need to change their spending habits © Family Economics & Financial Education – March 2006 – Get Ready to Take Charge of Your Finances – What Can You Do With Money Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

Savings What is savings? Saving should be viewed as an expense A portion of income that is not spent to purchase necessary or wanted items Saving should be viewed as an expense Use the motto “pay yourself first” Pay yourself first- set aside a portion of money for saving each time a person is paid before using any of the money for spending © Family Economics & Financial Education – March 2006 – Get Ready to Take Charge of Your Finances – What Can You Do With Money Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

Why should people save? For unexpected events and emergencies Without savings, unexpected events may become huge financial problems Examples: the car breaking down or having a medical emergency To purchase expensive items Examples: a new car or a family vacation © Family Economics & Financial Education – March 2006 – Get Ready to Take Charge of Your Finances – What Can You Do With Money Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

How should people save? Should use an account with a financial institution A financial institution is a business that holds and protects money for people. Examples of accounts… Savings Account Money Market Deposit Account Certificate of Deposit (CD) © Family Economics & Financial Education – March 2006 – Get Ready to Take Charge of Your Finances – What Can You Do With Money Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

Savings Account An account with a financial institution Keeps money safe until the owner needs it Opening a savings account Deposit, or put money into the account The financial institution will pay interest, or additional money, which is calculated by taking a percent of the total amount of money deposited in the account Money can be withdrawn, or taken out, at any time © Family Economics & Financial Education – March 2006 – Get Ready to Take Charge of Your Finances – What Can You Do With Money Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

Money Market Deposit Account Another type of account with a financial institution Pays a higher interest rate than a savings account Money can be withdrawn from the account a limited number of times every month © Family Economics & Financial Education – March 2006 – Get Ready to Take Charge of Your Finances – What Can You Do With Money Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

Certificate of Deposit An account that pays interest on a lump sum of money Money is required to stay in a CD for a specific period of time The money and interest earned can be withdrawn at the end of the time period © Family Economics & Financial Education – March 2006 – Get Ready to Take Charge of Your Finances – What Can You Do With Money Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

Summary What can people do with money? What is a goal? Spend, save, invest, or donate What is a goal? Something a person intends to acquire, achieve, do, reach, or accomplish What are the three main types of goals? Short-term, long-term, and financial © Family Economics & Financial Education – March 2006 – Get Ready to Take Charge of Your Finances – What Can You Do With Money Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

Summary Continued Why are goals important? What is savings? They are a necessary component of an effective financial plan What is savings? A portion of income that is not spent to purchase necessary or wanted items © Family Economics & Financial Education – March 2006 – Get Ready to Take Charge of Your Finances – What Can You Do With Money Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

Summary Continued Why should you save? How can you save money? For emergencies, unexpected events, or to purchase expensive items How can you save money? Savings Account, Money Market Deposit Account, and Certificate of Deposit © Family Economics & Financial Education – March 2006 – Get Ready to Take Charge of Your Finances – What Can You Do With Money Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

Matching Game Divide into groups of three and designate one person as the referee The referee should shuffle the matching game cards and place them answer side down into rows Try to match the term with the definition by flipping over two cards at a time Ask the referee if the match is correct If so, keep the cards and take another turn! If not, turn the cards back over and wait for the next turn. Good luck! © Family Economics & Financial Education – March 2006 – Get Ready to Take Charge of Your Finances – What Can You Do With Money Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona