Take It To The Bank. A Guide to Saving and Investments

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Barbara Chase
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1 Take It To The Bank A Guide to Saving and Investments

2 Copyright Copyright Texas Education Agency, These Materials are copyrighted and trademarked as the property of the Texas Education Agency (TEA) and may not be reproduced without the express written permission of TEA, except under the following conditions: 1) Texas public school districts, charter schools, and Education Service Centers may reproduce and use copies of the Materials and Related Materials for the districts and schools educational use without obtaining permission from TEA. 2) Residents of the state of Texas may reproduce and use copies of the Materials and Related Materials for individual personal use only, without obtaining written permission of TEA. 3) Any portion reproduced must be reproduced in its entirety and remain unedited, unaltered and unchanged in any way. 4) No monetary charge can be made for the reproduced materials or any document containing them; however, a reasonable charge to cover only the cost of reproduction and distribution may be charged. Private entities or persons located in Texas that are not Texas public school districts, Texas Education Service Centers, or Texas charter schools or any entity, whether public or private, educational or non-educational, located outside the state of Texas MUST obtain written approval from TEA and will be required to enter into a license agreement that may involve the payment of a licensing fee or a royalty. For information contact: Office of Copyrights, Trademarks, License Agreements, and Royalties, Texas Education Agency, 1701 N. Congress Ave., Austin, TX ; phone ; copyrights@tea.state.tx.us 2

3 Pay Yourself First So you have your first job. Before you spend money, Pay Yourself First Why Save? Emergencies Unforeseen opportunities Retirement 3

4 Time and Money The more money you invest, the more money it will earn. The higher the rate of interest, the more money it will earn. The sooner you invest, the more time your money has to earn more money. 4

5 Worth the Wait Yes, it does take discipline and commitment to save money, but there is satisfaction in watching your money grow and having the money to make some dreams come true. 5

6 Ways to Save Savings Account - lower rate of interest, but you can withdraw money whenever you want to without penalty. Money Market - works like a checking account but pays you interest. Certificates of Deposit -You agree to keep your money on deposit for a specific length of time for a higher rate of interest. 6

7 Savings vs. Investment Saving is used for short-term goals or emergencies. Investing is for long-term goals and it is riskier business. There is no guarantee the money will grow, but there is potential for great growth. 7

8 Rule of 72 This is a simple way to see your money grow: Divide 72 / your interest rate = the number of years for your money to double Divide 72 / by years = the rate of interest needed to double your money 8

9 Risky Investments When we think of investments, we think of stocks and risks involved - but all investments have risks. The risk also comes with the potential for greater rewards. 9

10 Other Investments U.S. Savings Bonds Money Market Mutual Funds Corporate and Government Bonds Real Estate Mutual Funds Collectibles 10

Time of investment is two to thirty years If you take out money

11 US Savings Bonds A bond is an agreement where the borrower (usually the Federal Government) uses your money for a set period of time. Time of investment is two to thirty years If you take out money before the end of the agreed time, you pay a penalty and lose some money. 11

12 Money Market Mutual Funds Offered by banks and credit unions Works like a checking account You can take out money without penalty May limit number of checks written each month Usually requires a minimum balance 12

13 Corporate or Government Bonds U.S. Savings bonds are safer than corporate bonds Corporate bonds yield higher rate of interest Time of investment is two to thirty years 13

14 Real Estate Property investors purchase real estate in hopes of generating a profit when it is sold This is less liquid than other investments because you have to sell it to gain a profit 14

15 Mutual Funds Offered by mutual fund companies which are companies that invest shareholders money in a variety of ways Considered to be very safe, but are not insured by the federal government like bank accounts 15

16 Collectibles Items that are rare in number such as paintings, sculptures, antiques, baseball cards or coin collections They are less liquid than other investments 16

17 References and Resources Microsoft Clip Art: Used with permission from Microsoft. Textbooks: Madura, Jeff, K. Michael. Casey, and Sherry J. Roberts. Personal Financial Literacy. Boston: Pearson Addison-Wesley, Print. Websites: It s Easy to Understand What s Going on with Your Money Mint automatically organizes your spending into categories like rent, gas, clothes, lattes and shows you where your money goes in easy-to-understand charts. NEFE High School Financial Planning Program NEFE HSFPP." NEFE High School Financial Planning Program NEFE HSFPP. National Endowment for Financial Education 17

Take It To The Bank. Management of Financial Resources: Bank Accounts, Savings and Loan Associations and Credit Unions

Take It To The Bank. Management of Financial Resources: Bank Accounts, Savings and Loan Associations and Credit Unions Take It To The Bank Management of Financial Resources: Bank Accounts, Savings and Loan Associations and Credit Unions Copyright Copyright Texas Education Agency, 2013. These Materials are copyrighted and