Notesale: Turn your study into money

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Financial literacy
➢ Is the ability to understand how money works
...
Financial Planning/Goals setting and valuing - Setting short-term, mid-term
and long-term goals financial goals is important step becoming financially
secured
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Short-term financial goals
These are your immediate expenses
...

For example:
•

Emergency fund

•

Payment toward rent, insurance, or student loans
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Medium or Mid-term goals fall between short and long-term goals
and tend to take a few years to achieve
...


•

Paying off debt
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These goals may
take several years or even decades to reach
...

For example:
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Retirement fund

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Paying off a mortgage

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Starting a business

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Saving for child’s college tuition

BUDGETING
➢ Is a financial planning tool that allows you to plan how much you will
spend or save each month
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HOW TO MAKE A BUDGET IN FIVE (5) SIMPLE STEPS
1
...
It creates the foundation of how much you can
afford to spend
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Create a List of Monthly Expenses
•

It is a list of your monthly expenses as follows:
o School supplies
o Rent or board
o Groceries
o Food
o Transportation
o Internet or data load

o Utilities
o Miscellaneous
o Insurance

3
...


•

VARIABLE EXPENSES- more flexible and often include wants
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Determine average monthly cost for each expense
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5
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Look for places you can reduce your spending
like eating out less, or eliminate a category
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SCHOOL SUPPLIES
2
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RECREATION
4
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THE UNEXPECTED

SPENDING
•

the act of giving money for goods and services

Consumer spending

o Is the total money spent on final goods and services by individuals and
households for personal use and enjoyment in an economy
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KEYNESIAN ECONOMICS
o John Maynard Keynes was an early 20th-century British economist, known as
the father of Keynesian economics
...
He
argued that a government jobs program, increased government spending, and an
increase in the budget deficit would decrease high unemployment rates
...
Conversely, if an
economy's saving is higher than its investment, it will cause a recession
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INVESTING
•

Is the act of allocating resources, usually money, with the expectation of
generating an income or profit

TYPES OF INVESTING

•

Stocks- A buyer of a company's stock becomes a fractional owner of that
company
...


•

Bonds- are debt obligations of entities such as governments, municipalities and
corporations
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•

Funds- are pooled instruments managed by investment managers that enable
investors to invest in stocks, bonds, preferred shares, commodities etc
...
The fund itself holds
individual stocks, in the case of equity funds, or bonds, in the case of bond
funds
...

You can actually pay more or less than the value of the underlying
holdings in the fund

•

Hedge Funds- are a type of investment partnership
...
It is often use
leverage (i
...
, borrowed money) to amplify their returns, but they can also place
bets against the market to make money—even if the market goes down
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•

Real Estate- is tangible property, such as land or buildings, that the owner can
use or allow others to use in exchange for payment
...
When you own a plot of land, you own real estate
...
g
...
g
...
g
...


•

Stockbrokers and Stock Trades- is an institution or individual that executes
buy-or-sell orders on behalf of a customer
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SAVINGS
•

Is the money a person has left over when they subtract their consumer
spending from their disposable income over a given time period
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Transactions on a basic savings account are updated either in a passbook when
then customer visits their financial institution, or on a statement issued
periodically (often monthly)
...
They may
be accessible from any mobile device, including a tablet or smartphone
...
These are different from money market
mutual funds offered by investment companies, which are not insured
...
A CD usually pays a higher rate of interest than traditional and
online accounts because a fixed amount of your money is invested with the
institution for a specific length of time
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TYPES OF BANKS
•

Retail banks- checking and savings accounts are often kept with a retail bank,
which focuses on consumers (or the general public) as customers
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•

Commercial banks focus on business customers, which are also called
business banks or corporate banks, manage payments for customers,
provide lines of credit to manage cash flow, and offer foreign exchange services
for companies that do business overseas
...
If a
company wants to go public or sell debt to investors, it often uses an investment
bank
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•

Private Banks provide services exclusively to wealthy clients, usually those with
at least $1 million of net worth
...


•

Central banks manage the monetary system for a government
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•

Credit unions are similar to banks, but they are not-for-profit organizations
owned by their customers
...
) Credit unions offer
products and services more or less identical to retail banks
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•

Online banks operate entirely online; there are no physical branch locations
available to visit with a teller or personal banker
...
Internet banks often offer competitive
rates on savings accounts, and they’re especially likely to offer free checking
...
Also like credit unions, they tend to
be active in only a single community
...
This type of bank helped make homeownership mainstream, using
savings deposits from customers to fund home loans
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Financial scam/fraud
Happens when someone deprives you of your money, capital, or otherwise harms your
financial health through deceptive, misleading, or other illegal practices
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Never Wire Money to a Stranger - Wiring money is a great way to quickly get cash
to someone you know and trust, but when a stranger demands payment via a wire
transfer service like MoneyGram or Western Union, it’s a sure sign you’re about to be
scammed
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Don’t Give out Financial Information - Never reveal sensitive financial information
to a person or business you don’t know, whether they reach out to you via phone, text,
or email
...

3
...


4
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You should also use a different password for every website you visit
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Never Give out Your Social Security Number - If you receive an email or visit a
website that asks for your Social Security number, don’t do it
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6
...
Once you
install the program, turn on the auto-updating feature to make sure the software is
always up to date
...
Don’t Shop with Unfamiliar Online Retailers - When it comes to online shopping,
only do business with familiar companies
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Don’t Download Software from Pop-Up Windows - When you’re online, be wary of
pop-up windows that appear and claim your computer is unsafe
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Make Sure the Websites You Visit Are Safe - Before you enter your financial
information on any website, double-check the website’s privacy rules
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Only Donate to Known Charities - Some scammers create bogus charities to steal
credit card information

Insurance
➢ Insurance is a contract, represented by a policy, in which an individual or entity
receives financial protection or reimbursement against losses from an insurance
company
...


•

Health

Insurance

Health insurance is a type of insurance coverage that typically pays for medical,
surgical, prescription drug and sometimes dental expenses incurred by
the insured
...


•

Auto Insurance
Auto insurance also protects your vehicle against theft, vandalism or a natural
disaster, such as a hurricane or other weather-related incidents
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Types of Taxes
•

Taxes that are based on how much money a company earns are
called corporate taxes

•

Taxes that are based on how much money a person earns are called income
taxes
...


•

Taxes that are based on how much a person owns are called a property taxes
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Financial Stability
Financial stability isn’t about being rich
...
It’s more of a
mindset
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10 Steps to Reach Financial Stability
1
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2
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3
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Even better is to find a job that you enjoy
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Start

a

Budget

A budget is just a tool to help you spend money on the things you want to spend money
on
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Live

below

Your

Means

Living below your means works in tandem with budgeting
...
Then you can work with that
number to make sure you don’t overspend
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Create

an

Emergency

Fund

An emergency fund is a way to protect yourself from the unexpected
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7
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8
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Retirement

9
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Enjoying your life will help to
keep you happy and healthy
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Stick

Don’t worry about doing things perfectly

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