Money Sense for Kids:

Kids! Watch Your Money!

MONEY SENSE!

Team Leader:

Benjamin Tan Kye Jyn

Team Members:

Kevin Jerrold ChanTimothy Ethan Lee Shao Jie

How to save money

1. Beginning with a Budget (savings plan)

What is a budget

Why is it useful?

2. Follow the budget

Many fail to follow their budget/spending plan

Do not change your budget

3.Prioritise your expenditures

Start by making a list

Things I need to have Things I should have Things I would like to have

4. Plan for emergencies

Important emergencies

Not be able to retrieve money quickly

It is best to set aside enough money earlier

to be prepared

Spending money wisely

1. Buy quality, not quantity

Quantity is not equal to quality

It is better to buy something good once, than many cheap but bad ones

Buying many cheap things tends to be more expensive

2. Don’t make hasty decisions

Don’t buy something when you are in a hurry

Think about whether you really need it

3. Differentiating need and want

Need, or influence

Spend according to what you need, and not what you think looks good

4. Be satisfied

Be satisfied with what you already own

Realise that there are others who are less fortunate than you

Inflation

INFLATION

What is Inflation?

It can be defined as either:

(1) A rise in prices OR

(2) A fall in the value of money

INFLATION

This means

1) An increase in the cost of things that are necessary for humans to live such as bread, butter, milk, cheese, coffee, oil, clothing, … … etc.

INFLATION

(2) A decrease in the value of money so that it takes more dollars to buy the same goods and services it did in

the past.

INFLATION

Example 1:

20 years ago, the value of $1 can buy 1 cup of coffee and 2 pieces of bread.

But today, $1 can only buy one cup of coffee.

This means there is a decrease in the value of money. The same amount of money buys fewer items.

INFLATION

Example 2:

20 years ago, a fillet-o-fish burger

cost $2.50.

Today, a fillet-o-fish burger costs $3.80.

This means there is an increase in the price of the burger. It takes more money to buy the same burger.

Effect of Inflation

Savers and investors lose purchasing power.

Inflation makes your money less valuable with the passage of time.

How does Inflation affect Savings?

$1 in your piggy bank remain as $1 after 10 or 20 years.

$1 deposit in bank with current interest rate of 0.1% becomes only $1.01 after 10 years.

How does Inflation affect Savings?

With the present inflation rate of 3-5%, the effective value of $1 is only $0.95-$0.97.

What do we do to ensure that we have enough money to deal with inflation?

How to GROW your

savings?

How to GROW your savings?We need to grow our savings over time. Otherwise, with inflation our money will lose its value.

How to GROW your savings?

So how do you protect your money from inflation?

There are some things you can consider like putting your money in the bank, investing, etc.

Bank Accounts

Put your money into a bank account

These banks give you interest on your savings, about 0.1% .

This will help to offset the impact of inflation.

Bank Accounts

There are some local banks which provide savings accounts for children.

Examples:

POSBkids Account

e$aver kids! (Standard Chartered)

Mighty Savers Programme (OCBC)

Is Bank Interest enough?

Inflation is currently about 3-5%, however.

Is the interest provided by banks enough to match this?

Investments

These are some ways through which people grow their savings.

These investments help them to earn money though profits which are quite high.

Investments

Examples:

Limited edition comicsStamp, coin collectionShares and government bondsProperties, REITS

Money Concepts

“Value for Money” vs “Cheapest”

“Value for Money” - Not necessarily “cheapest”

Go for “Value for Money”!

Which is better “value for money” 50 cents plain beehoon OR

$1.20 Japanese rice set with chicken and vegetables

A can of Coke at $1.50 OR

A glass of freshly squeezed honeydew juice at $2

“Need vs Want”

Need?

Want?

Needs are...

Things that you REALLYhave to get or have

Often essential thingssuch as food, clothing, housing, education

ESSENTIALS

Wants are...

Non-essential things thatyou desire

Nice to have butcan do without them

Prioritise your spending –needs first, then wants

Control spending on wants – SAVE!!!

DO YOU REALLY

NEED THESE?

Telling needs from wants

Haagen Dazs ice cream

Milk

Handphone

Buy iPhone because my friend has it and to play online games anytime anywhere

Billabong PVC pencil case costing $20

PVC pencil case at Popular costing $3

“Spending vs Investment”

???

Spending...

Money is used to purchase something

Value of item or service purchased is temporary

SPENDING

Investment

Money is used to purchase something

Value is preserved or transformed into something long-lasting

Spending vs Investment

If you have $100,

Spend 3 whole days in the games arcade Take swimming lessons for 6 weeks

If you have $1000,

Go on a 3D/2N shopping holiday in Bangkok Buy a laptop for your school needs

Is the richest man in the world the happiest man?

Does it mean the more money I have, the happier I am?

Are all happy people rich?

Is Money = Happiness?

Money ≠ Happiness

Money is to serve our needs

Manage it wisely!

If you have more than what you need, consider donating to charity

Don’t Let This Happen!

Let This Happen!

References

http://www.the-money-cafe.com/Spending-Money-Wisely.html

http://www.christiananswers.net/q-eden/wise-spending.html

Questions????