1. Personal Finance Chapter 6

2. © EMC Publishing, LLC Saving for an emergency fund Saving Goals Short-Term

3. © EMC Publishing, LLC Saving for an emergency fund Saving for a purchase – Furniture – Computer – Bicycle or car – Spring break trip Saving Goals Short-Term

4. © EMC Publishing, LLC Saving for an emergency fund Saving for a purchase Saving for college Saving Goals Short-Term

5. What do you think? Discussion © EMC Publishing, LLC Do you plan to go to college, a trade school, or a job-training program? If so, how are you going to pay for it? How much do you need to start saving now to cover your costs?

6. © EMC Publishing, LLC Which of these would you most likely not have to save for in the short-term? A.A candy bar B.College C.A new bicycle D.A spring break trip E.A new computer

7. © EMC Publishing, LLC Which of these would you most likely not have to save for in the short-term? A.A candy bar B.College C.A new bicycle D.A spring break trip E.A new computer

8. © EMC Publishing, LLC Finishing college or graduate school Saving Goals Medium-Term and Long-Term

9. © EMC Publishing, LLC Finishing college or graduate school Buying a second vehicle or a luxury car Saving Goals Medium-Term and Long-Term

10. © EMC Publishing, LLC Finishing college or graduate school Buying a second vehicle or a luxury car Providing for a family Saving Goals Medium-Term and Long-Term

11. © EMC Publishing, LLC Finishing college or graduate school Buying a second vehicle or a luxury car Providing for a family Remodeling a home Saving Goals Medium-Term and Long-Term

12. © EMC Publishing, LLC Finishing college or graduate school Buying a second vehicle or a luxury car Providing for a family Remodeling a home Retiring Saving Goals Medium-Term and Long-Term

13. © EMC Publishing, LLC Start with a plan Saving Goals Achieving Your Goals

14. © EMC Publishing, LLC Start with a plan. Take steps for success. – Set achievable goals. – Break large goals down into smaller goals. – Monitor your progress. – Find a mentor to help. – Avoid unplanned withdrawals. Saving Goals Achieving Your Goals

15. © EMC Publishing, LLC Pay yourself first (place money in savings). Saving How-To Lifetime Savings

16. © EMC Publishing, LLC Pay yourself first. Pay fixed expenses. Saving How-To Lifetime Savings

17. © EMC Publishing, LLC Pay yourself first. Pay fixed expenses. Use only discretionary income for pleasure spending. Saving How-To Lifetime Savings

18. © EMC Publishing, LLC Pay yourself first Pay fixed expenses Use only discretionary income for pleasure spending Add new goals. Saving How-To Lifetime Savings Short-Term Goals MP3 player $175 Blue jeans $35 Tennis racket $100 Guitar lessons $125 Tennis shoes $50 Bicycle $115

19. © EMC Publishing, LLC Which of the following would not necessarily help you succeed in saving more? A.Set realistic savings goals. B.Break large goals into smaller goals. C.Buy a new MP3 player because your buddy bought a new one. D.Monitor your progress. E.Avoid withdrawing money from savings to buy something other than your goal.

20. © EMC Publishing, LLC Which of the following would not necessarily help you succeed in saving more? A.Set realistic savings goals. B.Break large goals into smaller goals. C.Buy a new MP3 player because your buddy bought a new one. D.Monitor your progress. E.Avoid withdrawing money from savings to buy something other than your goal.

21. © EMC Publishing, LLC Regular savings accounts Saving How-To Kinds of Savings Accounts

22. © EMC Publishing, LLC Regular savings accounts Certificates of deposit (CDs) Saving How-To Kinds of Savings Accounts

23. © EMC Publishing, LLC Regular savings accounts Certificates of deposit (CDs) Money market accounts – Securities (such as Treasury bills, savings bonds, and certificates of deposit) Saving How-To Kinds of Savings Accounts

24. © EMC Publishing, LLC Regular savings accounts Certificates of deposit (CDs) Money market accounts Savings bonds Saving How-To Kinds of Savings Accounts

25. © EMC Publishing, LLC Regular savings account Certificate of deposit (CD) Money market account Savings bonds Saving How-To Kinds of Savings Accounts

26. One difference between types of savings accounts is liquidity. Liquidity is the ease of turning assets into cash. A regular savings account has high liquidity. Other types of savings accounts have lower liquidity. © EMC Publishing, LLC

27. Annual percentage yield (APY) Saving How-To Earning Interest

28. © EMC Publishing, LLC Simple v. compound interest (advance to see sample) Saving How-To Earning Interest

29. © EMC Publishing, LLC Present value = $100,000 Interest Rate = 8% Year Total including simple interest Total including compound interestDifference 1$108,000 $0 2$116,000$116,640$640 3$124,000$125,971$1,971 4$132,000$136,049$4,049 5$140,000$146,933$6,933 6$148,000$158,687$10,687 7$156,000$171,382$15,382 8$164,000$185,093$21,093 9$172,000$199,900$27,900 10$180,000$215,892$35,892 Simple v. Compound Interest (compounded annually)

30. © EMC Publishing, LLC Which of the following is not a kind of savings account? A.Certificate of deposit B.Normal checking account C.Money market account D.Savings bond E.Government security

31. © EMC Publishing, LLC Which of the following is not a kind of savings account? A.Certificate of deposit B.Normal checking account C.Money market account D.Savings bond E.Government security

32. What do you think? Discussion © EMC Publishing, LLC What are you saving for? Why is it difficult to save money? What are some tips you use to save money?

33. © EMC Publishing, LLC