There’s a lot to learn about money!

Presented by the San Francisco Federal Reserve Bank in Collaboration with Operation Hope

Why is Money Important?

Key Concepts:

• Budgeting

• Rate of Return

• Risk

There’s a lot to learn about money!

What Is A Budget?

• Expense• Income

Budget Game

A plan for spending money

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

What would you do with the money left over at the end of each month?

Is money going to manage you?

Are you going to manage your money?

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

Key Factor #1Saving & Investing

Rate of return

The amount of money you earn on your investment

•Amount

•Rate of Interest

•Time

• What is your return if you invested $500 at 3% for 1 year?

Rate of Return

3% 9% 15% 21%

$1,000

The Rule of 72: 72 divided by the interest rate

How long would it take to double your money?

Key Factor #2 What is the Risk?

How much would I have to pay you to…..

• What is your return if you invested $500 at 3% for 1 year?

Rate of Return

3% 9% 15% 21%

$1,000

24 5 38

1. Spend Less Than You Make

2. Pay Yourself First

Two Rules to Live By

What Happens When You Violate Rule #1?

• Borrow Money

• Credit Card

• Balance of $5,000 at 17% Interest

• Minimum Payment

• 81 years to pay off the balance

You Spend More Than You Make

What Happens When You Honor Rule #1?

• Honor Rule #2: Pay Yourself First

You Spend Less Than You Make

How Much Money Could You Earn If…

Pay Yourself First

At Age 65

5.00%Rate of Return

$420Save $15 everyday for one month

$15Coffee/hot chocolate & snacks

Saved $15/day until you were 65?

$1,000,000

Why is Managing Your

Money Important?

1. Spend Less Than You Earn

2. Pay Yourself First

• Budgeting

• Rate of Return

• Risk

Got Questions?

www.frbsf.org

www.FederalReserveEducation.org

There’s a lot to learn about money!

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