Financial Literacy Unit 2 Share, Save, Spend

Front 1

Step one of establishing good financial habits

Back 1

Determine your current situation (Income, Expenses)

Front 2

Step two of establishing good financial habits

Back 2

Identify and prioritize your goals (short term, medium term, long term)

Front 3

Step three of establishing good financial habits

Back 3

Develop a long term plan and adjust your plan and goals over time (add new goals when ones are reached)

Front 4

Step four of establishing good financial habits

Back 4

Organize your records

Front 5

Step five of establishing good financial habits

Back 5

Set up a budget (Realistic, Responsible, Restraint)

Front 6

Step six of establishing good financial habits

Back 6

Keep it simple

Front 7

Step seven of establishing good financial habits

Back 7

Implement your plan (put money away each week towards goals, don't use money for anything else)

Front 8

Define budget

Back 8

A plan for how to use your money in the future during a given period of time. Use a cash flow statement to help prepare budget.

Front 9

How does a budget relate to a roadmap?

Back 9

A budget guides you into better saving and spending habits.

Front 10

What is the share, save, spend method?

Back 10

Method used to divide your money so your money management is balanced and your personal value system is considered

Front 11

How do your values affect your sharing, saving, and spending?

Back 11

-Your values vary from those of others and influence your decisions

-Helps clarify your own ideas and goals about money

-If link goals to values it will be easier to stay motivated to achieve goals

Front 12

What is sharing?

Back 12

Using your time and money to help other people

Front 13

Define altruism

Back 13

Selfless concern for welfare of others

Front 14

Define philanthropy

Back 14

Act of giving away money, goods, services or time to support causes

Front 15

What factors should be considered when deciding on your sharing goals?

Back 15

How much you want to share and how that affects your budget. Consider sharing time if there is no money in budget

Front 16

What are some ways to share?

Back 16

Donate money or belongings, volunteer, service learning

Front 17

What is service learning?

Back 17

Teaching method that combines service to the community with classroom studies.

Front 18

What is the basic idea behind paying yourself first?

Back 18

As soon as you get paid, put money into your savings account first.

Front 19

What are benefits of paying yourself first?

Back 19

-Save money for 401K

-Plan to pay for larger purchases

-Bank interest

-The sooner you start saving, the more like you're going to save in the future

Front 20

What is saving?

Back 20

Putting money away for long term, medium term, or short term goals

Front 21

What are the keys to saving?

Back 21

Patience and discipline

Front 22

How long are short term goals?

Back 22

0-5 years

Front 23

How long are medium term goals?

Back 23

5-10 years

Front 24

How long are long term goals?

Back 24

10+ years

Front 25

How much do you need to save?

Back 25

If you need a set amount of money, consider amount of time you are willing to wait and amount of money you can set aside each month

Front 26

What should you consider when saving in the short term?

Back 26

Saving for emergency funds, purchases, and college

Front 27

What should you consider when saving in the medium and long term?

Back 27

Set saving plans for these goals, save smaller amounts of money regularly, avoid temptation to take out money for some other purpose

Front 28

What is inflation?

Back 28

An increase of the price of goods. If inflation occurs, you need more money to buy things because your dollar doesn't stretch as far.

Front 29

What can you do to achieve your goals?

Back 29

Start with a plan (realistic one, adjust it when goals are reached) Take steps for success (set achievable goals, monitor progress, find a money mentor, break large goals down, avoid unplanned withdrawal)

Front 30

What is a money mentor?

Back 30

A program/person which helps people with financial management and coaches them through financial trouble.

Front 31

What is the 401K tax?

Back 31

A retirement savings plan which allows works save and invest a portion of their paycheck before taxes are taken out.

Front 32

Why do you need a bank?

Back 32

-Place to store money

-Earn interest

-Money is not accessible easily

-Place to apply loans

Front 33

Is a commercial bank profit or non profit?

Back 33

Profit

Front 34

Characteristics of a commercial bank

Back 34

-Privately run

-Gives deposits and loans

-FDIC insured

-Branches worldwide

Front 35

Is a savings and loan associations bank profit or non profit?

Back 35

Profit

Front 36

Characteristics of a savings and loan associations bank

Back 36

-Regulated by government

-FDIC insured

-Originally just offered loans, now offers same as commercial bank

Front 37

Is a credit union profit or non profit?

Back 37

Non profit

Front 38

Characteristics of credit unions

Back 38

-Owned/operated by people who use it

-Distributes profits to members

-Not insured by FDIC

-Must be eligible to join

Front 39

Is a payday lender profit or non profit?

Back 39

Profit

Front 40

Characteristics of a payday lender

Back 40

-Most expensive

-Make ST high-interest loans to tide people over until payday

Front 41

Is a check cashing company profit or non profit?

Back 41

Profit

Front 42

Characteristics of a check cashing company

Back 42

Cashes checks for free

Front 43

What is the FDIC?

Back 43

The Federal Deposit Insurance Corporation which protects future depositor's place in banks and saving associations.

Front 44

What is liquidity?

Back 44

The ease of turning assets into cash

Front 45

Characteristics of a regular savings account

Back 45

Can deposit or withdraw money whenever you wish without penalty

Front 46

Liquidity of a regular savings account

Back 46

High liquidity

Front 47

Interest rate of a regular savings account

Back 47

Low interest rate

Front 48

Characteristics of a certificate of deposit

Back 48

Contract with bank where you agree to keep a certain amount of money for a certain amount of time

Front 49

Liquidity of a certificate of deposit

Back 49

Low because money needs to stay in account for 1 month to 5 years

Front 50

Interest rate of a certificate of deposit

Back 50

Higher interest rate than regular savings account

Front 51

Characteristics of a money market

Back 51

-Money is invested in securities

-Combination of savings and checking accoutns

Front 52

Liquidity of a money market

Back 52

High liquidity

Front 53

Interest rate of a money market

Back 53

Higher interest rate than regular savings account (requires higher minimum balance)

Front 54

Characteristics of a savings bond

Back 54

-Non transferable

-Kids can own

-Loan to government

-Get back principal and interest

Front 55

Liquidity of savings bond

Back 55

Low liquidity, bond doubles in 20 years

Front 56

Interest rate of savings bond

Back 56

-Fixed

-Earned each month for 30 years

Front 57

What is simple interest?

Back 57

The interest paid on the original principal, not on the interest accrued

Front 58

What is compound interest?

Back 58

Figuring interest earnings on both the original amount and any previous interest that has been added

Front 59

What happens if the inflation rate is greater than your interest rate of your savings?

Back 59

You are losing value and the spending of your power of your savings is being reduced

Front 60

What happens if the inflation rate is lower than your interest rate of your savings?

Back 60

The interest earned can be used to cover/off set the increased cost of goods and services.

Front 61

What is the rule of 72?

Back 61

-Simple way to estimate the effect on interest rates

-Dividing 72 by the interest rate will tell you approximately how many years it will take to double your investment

Front 62

What is spending?

Back 62

-Money used for everyday things

-When you put something last you are putting less emphasis on your everyday wants and are being responsible for your personal values and goals

Front 63

What is a spending log?

Back 63

A log used to record what you spend your money on, when you spend it and how much you spend.

Front 64

How much do I want to (or can I) spend?

Back 64

-Most people spend money without really thinking about it

-Make conscious spending decisions

-Most adults with healthy spending habits developed them when they were young

-You will have more options later in life if you plan now for your financial future and set money goals linked to your values

Front 65

What expenses do we spend our money on?

Back 65

-Money going out

-Fixed Expenses (some cost same each month, others have costs that fluctuate each month)

-Variable Expenses

Front 66

What is a surplus budget?

Back 66

-Income greater than expenses

-Money left over after everything is paid for

Front 67

What is a deficit?

Back 67

-Expenses greater than income

-Don't have enough money to cover expenses

Front 68

What should you do if you continue to have a deficit?

Back 68

-Cut back on expenses (bring instead of buy lunch)

-Put less towards savings and sharing

-Pick up extra hours at work/get a second job

-Consolidate debts

Front 69

What are the qualities of a good budget?

Back 69

-Based on your values

-Geared toward your goals

-Practical

-Flexible

-Accessible and easy to use

Front 70

What are fixed expenses?

Back 70

Expenses that have to be paid each month no matter what. List on budget first. Cost the same each month - housing, car loan, student loan, insurance. Have costs that fluctuate each month to month -- electric, gas, cable TV, food

Front 71

What are variable expenses?

Back 71

Expenses that change from month to month; have expense one month but not the next. More difficult to calculate. Use averaging technique.