Vocabulary
Designer clothes, Netflix, a new phone, and a skateboard are examples of this
Wants
This payment method is easy to use and efficient BUT it can make you more likely to overspend and wont work if your phone is dead!
Electronic Wallet
What are the two types of interest?
Simple and Compound interest
Give an example of a short term financial goal
Setting aside allowance for 2 weeks to buy a specific video game
Saving $5 every day to buy ice cream at the end of the week
Not buying coffee every morning and using that money for 1 month to buy school supplies instead
Using money or something that belongs to someone else and promise to return it or pay it back when you are done
Borrowing
Taking money out of an account.
Withdrawal
You can save a lot of money by buying things at a discounted price with this payment method BUT make sure you use it before it expires!
Coupons
Explain when interest is good
When interest is on the money in your savings account. The bank is saying “thank you” for letting them hold your money.
Give an example of a long term financial goal
Saving $1000 to buy a laptop by the age of 15
Opening a savings account at 12 to have money grow with compound interest until 16 years old
Putting 50 cents in my piggy bank every day to save money to buy a bike in 2 years
A way for people to share the resources that they have with others, such as money, time, a helping hand, or other goods and services.
Donating
The money that we earn from working a job. We use this money to pay for our expenses.
Income
This payment method is like cash but in a card form. It is used to withdraw money form the bank immediately BUT you don't get any rewards/benefits from paying with this method.
Debit Card
What is the amount of money borrowed from the bank called?
Principal
The money you spend to pay for bills, groceries, rent etc.
Expenses
Explain why you would choose to borrow instead of trade
You can borrow if you do not have any/enough goods, services, or money to trade. When you need/want something (ex. like a house) and do not have enough money to buy it at once. Borrowing is helpful if you want something for a short period of time and you do not want to give up something that you have to get it.
What the lender (ex. a bank) charges an individual to borrow money OR the extra money earned on top of the money in our savings account
Interest
A piece of paper that people would write an amount of money on and sign BUT it can "bounce" and is not used very often anymore.
Cheque
Extra money earned on your original savings (principal) plus all the interest you've already accumulated
Compound interest
What are S.M.A.R.T. goals?
Specific, Measurable, Achievable, Realistic, Timed
What is the main reason people trade?
Mutual benefit: "win-win" scenario where both people involved gain something positive
An amount of money we save when things are on sale that is then subtracted from the original price of the item
Discount
Good for making large expenses, online shopping, and can earn rewards or cashback for using it BUT you will be charged interest if you do not pay your bill on time!
Credit Card
A hockey player opened a savings account in February with a deposit of $2,500. The bank account has an interest rate of 2% per month
What is the principal?
How much interest will be added to the deposit in March?
The principal is $2,500
In March, $50 of interest will be added making the total deposit become $2,550
How does spending money impact earning?
We cannot spend more than we earn or else we risk going in debt and not having enough money for things that we NEED (rent, food etc.). We have to be responsible, not overspend, and budget our money.
Kate lends you $35 so that you can buy a new yo-yo but says that she will charge you 5% interest every day if you do not pay her back by Friday. It's now Sunday (2 days later) and you finally pay her back.
How much extra do you have to pay her?
$38.50
0.35 x 5 = $1.75 1.75 x 2 days late = $3.50 interest $35+$3.50= $38.50