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There’s a lot to learn about money!

There’s a lot to learn about money!. Why is Money Important?. Presented by the San Francisco Federal Reserve Bank in Collaboration with Operation Hope. There’s a lot to learn about money!. Key Concepts: Budgeting Rate of Return Risk. What Is A Budget?. A plan for spending money. Expense

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There’s a lot to learn about money!

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  1. There’s a lot to learn about money! Why is Money Important? Presented by the San Francisco Federal Reserve Bank in Collaboration with Operation Hope

  2. There’s a lot to learn about money! • Key Concepts: • Budgeting • Rate of Return • Risk

  3. What Is A Budget? A plan for spending money • Expense • Income Budget Game

  4. Budget Game Debrief • What do you notice about the data? • Why do you suppose there is a difference? • Why do people create budgets? A Budget Gives You Control

  5. Are you going to manage your money? Or… Is money going to manage you? What would you do with the money left over at the end of each month?

  6. Where can I save or invest my money? Types of Accounts: Saving and Investing • Savings Accounts • Certificates of Deposits (CD) • Stocks and Bonds • Real Estate

  7. Key Factor #1 Saving & Investing • Rate of return • The amount of money you earn on your investment • Amount • Rate of Interest • Time

  8. Rate of Return • What is your return if you invested $500 at 3% for 1 year? $15 5 24 8 3 How long would it take to double your money? The Rule of 72: 72 divided by the interest rate

  9. Key Factor #2 What is the Risk? • How much would I have to pay you to…..

  10. Rate of Return • What is your return if you invested $500 at 3% for 1 year? $15 5 24 8 3

  11. Two Rules to Live By • Spend Less Than You Make • Pay Yourself First

  12. What Happens When You Violate Rule #1? You Spend More Than You Make • Borrow Money • Credit Card • Balance of $5,000 at 17% Interest • Minimum Payment • 81 years to pay off the balance

  13. What Happens When You Honor Rule #1? You Spend Less Than You Make • Honor Rule #2: Pay Yourself First

  14. Coffee/hot chocolate & snacks $15 Save $15 everyday for onemonth $420 Rate of Return 5.00% At Age 65 Pay Yourself First How Much Money Could You Earn If… Saved $15/day until you were 65? $1,000,000

  15. Why is Managing Your Money Important? • Spend Less Than You Earn • Pay Yourself First • Budgeting • Rate of Return • Risk

  16. Got Questions? www.frbsf.org www.operationhope.org www.FederalReserveEducation.org

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