textbook: chapter 9. 1.do you think saving is important? 2.what problems might you face if future if...

Textbook: Chapter 9

1. Do you think saving is important?

2. What problems might you face if future if you do not save?

3. What are some things you should consider when saving your money?

4. What options do you have for saving your money?

What is the First Step to Saving your money?

Budgeting Your

Money!!!

The Latte EffectFacts: •Coffee drinkers spend an average of ________ for their cup of morning coffee

•Experts say that same ______ could provide a shot at a lucrative retirement

Source: http://www.thebostonchannel.com/r/4287774/detail.html

$2

$2

The Latte Effect

• _____ dollars a day, _____ a month, @ 5% interest over 10 years

• That adds up to __________!• In 20 years... it's __________!• Invest that _______ a month of coffee money

for 35 years... you could have __________

- refers what would happen if the money spent on coffee every day was invested in the market

$2 $60

$9,500$25,00

0$60 $68,00

0Compound Interest Calculator

What about 2 coffee drinkers…

• ____ dollars a day, _____ a month, @ 5% interest over 10 years

• That adds up to __________!• In 20 years... it's __________!• Invest that _______ a month of coffee money

for 35 years... you could have __________

Source: http://www.thebostonchannel.com/r/4287774/detail.html

$2 $120

$19,000$50,000$6

0 $136,500

How do I Budget?

IncomeExpenses

FixedVariable

What do we do if we don’t have enough $$$$?

Income- Expenses= Surplus$$ left overThree Choices of where to put it:Spend itSave itInvest it

What else can you do to save?!?!?!!?

CouponsPrice matchingRewards points/cardsRebatesOther ideas from you?!?!?

Let’s watch how it’s done!!Video 1 Video 2

Savings

Are used to meet immediate needs or emergencies.Long Term

Over 1 (one) year. Short Term

Less than 1 (one) year

Give One Get One

What are some methods for saving your money?

3 Common Tools:

Savings accountMoney Market accountCertificate of Deposit (CD)

We’ll talk about the difference!

Pay yourself first(A little can add up)Save this each week

At % Interest In 10 Years$7.00 5% $4,720

$14.00 5% $9,440$21.00 5% $14,160$28.00 5% $18,880$35.00 5% $23,600

Money Market Accounts

Like a Checking & Savings Account Combined

Limit # of checks a monthUsually require a balance in excess of $1000

Average yield 1.5-2%--Better than a Savings Account

Certificate of Deposit

Time DepositBanks pay a fixed amount of interest for a fixed amount of time on a fixed amount of money.

“Two Ways to Think”#1—Save now, Have money for future?

#2—Spend now I might not be here later?

Other considerations to savings:What will saving money result in?

How does age effect investments?

What are three reasons baby boomers aren’t saving?

Which would you choose and why?