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What Can You Do With Money?

Family Economics & Financial Education. What Can You Do With Money?. What Can People Do With Money?. Spend it. Save it. Invest it. Donate it. What Can People Do With Money?. People usually spend money before they save, invest, or donate it For example:

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What Can You Do With Money?

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  1. Family Economics & Financial Education What Can You Do With Money?

  2. What Can People Do With Money? • Spend it • Save it • Invest it • Donate it

  3. 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

  4. 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

  5. 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

  6. 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

  7. Savings • What is savings? • 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

  8. 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

  9. 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)

  10. 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

  11. 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

  12. 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

  13. Summary • What can people do with money? • 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

  14. Summary Continued • Why are goals important? • 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

  15. Summary Continued • Why should you save? • For emergencies, unexpected events, or to purchase expensive items • How can you save money? • Savings Account, Money Market Deposit Account, and Certificate of Deposit

  16. 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!

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