Financial

Literacy

Dyamon Manning
Erika Cortez
Jenessys Herrera
Cora Martinez

key words to look out for on slides

budgeting
investment
credit
debit
finance

asset
revenue
equity
economics
income

Budgeting

What is budgeting?
why is budgeting important?
How can budgeting affect you?

what is budgeting?
Budgeting is a process this means budgeting is a
number of activities performed in order to prepare
a budget.
A budget is a quantitative plan used as a tool for
deciding which activities will be chosen for a future
time period
keep track
Control
Restraint

why is budgeting important?

budgeting allows you to

create a spending plan for
your money it ensures that
you will always have
enough money for the
things you need and the
things that are important to
you
save up to 3 month

how can budgeting affect you?

If you've never bothered to maintain a
budget,
starting one will have a big effect on
your life. Once you get the hang of it,
you'll notice other effects on your life,
though
Control,
Restraint
Big Ticket If you have major purchases
in mind a new plasma television, a
vacation in Europe
Retirement

EX

couple: Tim & Sally both work

has 2 kids
Income for Tim and Sally (Monthly
Tim

$3800.00

Sally 1st of the month

$500.00

Sally 15th of the month

$500.00

Total Income:

$4800.00

sally unexpected bonus 29th of the month

$500.00

Expenses for Tim and Sally (Monthly)

Fixed time payments
1st

rent

$1200.00

Irregular payment

food

$900

gas

$300

1st

internet

$40.00

Day care

$400

5th

car payment

$260.00

music classes

$140

6th

telephone

$80.00

cleaning Supplies

$30

10th

cable

$45.00

Total Planned
expenses

$400.00 +
$500.00=$900

11th

car insurance

$210.00

15

gym membership

$75.00

unplanned Expenses

20th

emergency funds

$50.00

purchased
lunches

$45.00

25th

debit payoff

$300.00

car repairs

$145.00

25th

retirement savings

$300.00

hair cuts

$40.00

28th

transit pass

$70.00

total

$670.00

Game time
http://pbskids.org/itsmylife/game
s/mad_money_flash.html

Investmen
t

BEFORE WE START
WHAT DO YOU KNOW ABOUT INVESTMENT?
what do you know about stocks?
what do you know about bonds?
what do you know about mutual funds?

Investment
what is it?
Investing usually involves the
creation of wealth usually in these
three ways; stocks, bonds, and
mutual funds.

STOCKS
A stock is a share of a company that entitles you to a part of
the earnings and assets of that share.
example: youre 18 and decide to invest on a company that
looks like they have earning potential
year
2015
2016
2017
2018
2019
2020
2025
2030

contribution
$0.00
$600.00
$600.00
$600.00
$600.00
$600.00
$600.00
$600.00

interest
$0.00
$142.50
$253.88
$381.96
$529.25
$698.64
$2,012.03
$4,653.72

balance
$350.00
$1,092.50
$1,946.38
$2,928.34
$4,057.59
$5,356.23
$15,425.54
$35,678.52

Bonds
A bond is when you loan your money to a
city, or the government while they promise to
pay you back in full, with regular interest
payments. It is generally less risky to invest
in bonds than stocks.
example:
stadium to be remodeled,
you pay $1,000

mutual funds
An investment vehicle that is made up
of a pool of funds collected from many
investors for the purpose of investing in
securities such as stocks, bonds, and
similar assets.
example: You and 3 others each invest $250
in a mutual fund, within a year it is worth
$4,500.00.
http://guides.wsj.com/personal-finance/investing/what-is-a-mutual-fund

(investing continued)
Remember,
SAVE MONEY, 3 months of expenses before you
begin to invest.
Opening up a savings account and starting a budget
can help .
Budgeting can be simple; after all you don't have to
worry about a mortgage payment or utility bills and
you can start saving from the smallest amount of
money.

Credit

What is Credit?
The ability of a customer to obtain
goods or services before payment,
based on the trust that payment will be
made in the future.
Annual Percentage Rate:

The annual rate that is

charged for borrowing (or made by investing), expressed as a single

percentage number that represents the actual yearly cost of funds over the
term of a loan. This includes any fees or additional costs associated with
the transaction

Why is Credit important?

Credit is part of your financial power. It helps you to get the things
you need now, like a loan for a car or a credit card, based on your
promise to pay later. Working to improve your credit helps ensure
youll qualify for loans when you need them.

What is GOOD credit score?

A good credit score is generally
considered to be 720 or higher. Lenders,
however, can each have different
standards for what they consider to be a
good credit score
So its important to keep building your
score to receive the most favorable
interest rates and highest rates of credit

What is BAD credit?

Bad credit is where in the past you have
failed to keep up with your credit payments
and have not re-payed the lender.

Bad credit can last up to 5-7 years.

Which of the following will hurt your credit

score?
1. Not paying off your loans.
2. Increasing your credit score.
3. Not paying your bills on time.
4. Renting an apartment that is within your budget.
5. None of the above will hurt your credit score.

Debt
http://www.mynewdebtsolution.com/wp-content/uploads/2012/10/debt-solution.jpg

What is Debt?
something , typically money,
that is owed or due.
checks
accounts
tab
arrears

https://www.google.com/search?q=what+is+debt&safe=strict&espv=2&biw=1920&bih=905&source=lnms&sa=X&ei=GvwKVZqtI4PcoAS95IDACA&ved=0CAUQ_AUoAA&dpr=1

http://www.boston.com/mt/real-estate/sponsored/real-estate-talk-boston/GoodDebt-BadDebt.png

Good Debt

Good debt helps you

generate income and
increases your net worth
.
Four notable
examples of good
debt include:
1. Technical or
College Education
2. Small Business
Ownership

http://www.peterbriscoe.eu/wp-content/uploads/2014/10/debt-management-plans.jpg
http://www.investopedia.com/articles/pf/12/good-debt-bad-debt.asp

Bad Debt
A debt that cannot
be recovered.
Some
particularly
notable items
related to bad
debt include:
1. Cars
2. Clothes,
Consumables

Video

http://www.investopedia.com/terms/
d/debt.asp