Financial

Literacy
Leaders- Jocelyn and Stephanie
Budget- Miguel and Alex
Good vs. Bad Debt- Stephanie and Kimberly
Credit- Jocelyn
Investing- Leo and Melanie
 Budgeting
Things to know:

Save you money -makes you spend on

things you need not want

No Debt - you know how much money

you have and how much you can spend

Build Wealth - The money you dont

spend on unnecessary things you save
and you can do a lot with that much
money
 Budgeting
An estimate of costs, revenues, and resources over a specified period, reflecting a reading of
future financial conditions and goals.

Helps you organize your

Why is it important?
spending and savings
Budgeting is reminding you on things
Enables you to save for
you need or want
expected and unexpected
Gives you control over your money costs

Keeps you focused on your money Helps you determine if you

goals can take debt and how
much
Makes you aware what is going on
with your money
Activity
Here you have $620 for a month, choose what you think is a necessity

House Rent $400

Electric bill $30

Water bill $20

Food $80

New shoes $100

Gas Bill-$40

Clothes-$40

watch-$100
 Good Debt
Helps you generate income and increases your net worth

Good Debt

Its important because it allows you mortgage to buy a home

to manage your finances more Education
effectively

to leverage your wealth

to buy things you need and to handle

 Bad Debt
Does not increase wealth and is used to purchase goods that have no lasting value

Carries a high interest

rate Vacation

Are not affordable Luxury Car

Borrowing money from Credit Card

payday lenders
Borrowing from 401k
 Credit
Credit is borrowed money that you can use to purchase goods and services
when you need them

Why is it important?

lets you take out bigger loans Banks / creditors look at

over time your credit score

Bigger loans means you can determine your interest

buy thing of more value ex:. rates (APR)
house, car,
 Credit
Things to know:

Credit card isn't cash or a cash substitute

Only borrow what you can afford

Start with only one credit card

Make all your payments on time

Credit affects years to come

Establish a credit history

Credit score
 Good vs. Bad Credit
Good BAD

690-719 good 300 - 629 bad

720 - and up excellent 630 - 689 fair

 Activity
Loan Loan Interest Monthly Total
principal term rate payment amount

39,730 36 3.75% 1,280

39,730 36 10.75% 1,419

50,983 48 4.75% 1,165

50,883 36 10.88 1,666

What is Investing?
Things to know

Focuses on building
wealth
Why it's important
Buying something of
Makes achieving your
value so itll benefit
financial goals easier
your future, financially
Wealth creation
Helps you achieve long
term goals
Mutual bonds Bonds
Reduces investment Debt instrument
risk Relatively safe
Collection of stocks
and bonds
Stocks
Partial ownership of a company

Can up and down on a daily basis

Return on Investment
Why is it important?

helps calculate how much

profit you are making

helps the efficiency of a

number of different
investment
Examples:
For example, an investor buys $1,000 worth of
stocks and sells the shares two years later for
$1,200. The net profit from the investment would
be $200 and the ROI would be calculated as follows:

ROI = (200 / 1,000) x 100 = 20%

Investing Activity
Natalie invested $2,500 into a
Apple inc. stock, earning a 6.5% rate.

How long will it take Natalies investment to double?

Invested $2,500
Interest rate is 6.5%

72 6.5 ?