Saving
What is the recommended percent should someone put towards their savings
20%
What currency does the US use?
The United States dollar
What is budgeting?
The process of calculating how much money you must earn or save during a particular period of time, and of planning how you will spend it
What is one reason why personal finances are important
Helps make informed decisions
Retirement plan
Saving and Spending
Comparing costs of BIG purchases
Who said that compound interest is the 8th wonder of the world?
Albert Einstein
What are some ways you can save money? (list 2 ways)
- Reduce your expenses
Understanding the difference between needs and wants
Needs can include things like rent, clothing, food, etc.
Include saving in your budget
- Find ways to cut spending
- Determine your financial priorities
What is the US savings rate?
3.60% (for every $100 someone would make they would only save about $3.60)
How can you start budgeting?
Create a budget at the beginning of every month
Track your monthly spending
Prioritize debt payments
List two ways you can manage your personal finances responsibly
Learn to budget
Save first, spend later
Set financial goals
Learning the differences between needs and wants
What is basic investing? (list one)
It's a way to make money work for you.
Different from saving
Your savings grow while you sleep
Why is saving money important? (list 2 ways)
Avoids debt
Allows you to have money for emergencies
Early retirement
Makes life easier
What percent of Americans are in debt?
80%
How can you stay within your budget?
hint: two of them have to do with avoiding...
1. impulsive purchases
2. Keeping up to date with the latest trends (fashion, accessories, etc...)
3. Stay disciplined with your budget
What are things you need to spend your money on
- Insurance for emergencies
- Shelter (housing, rent, owning)
- Transportation (most likely a car)
- Food, clothes, gas
What is compound interest?
Compound interest is when you earn interest on both the money you've saved and the interest you've already earned.
What is the most basic rule on saving money
Spend less than you earn.
Why are most Americans in debt? (list three reasons)
Student loans
Robust personal spendings
Rising balances on credit cards
Inflation
Housing
Mortgages
What is the biggest difference between budgeting and saving?
The biggest difference between budgeting and saving is budgeting makes it easier to reach your financial goals, and while saving is helpful it is not reliable for a long period.
What percent of Americans have $0 in savings
A. 10%
B. 34%
C. 40%
D. 50%
B. 34%
Why is investing important?
An effective way to put your money to work and potentially build wealth
There are risks that you can lose money
In the long term you will end up with more money than you had originally
What country has the highest savings rate?
Ireland with a saving rate of 64.1%
Ex. a person would typically save $64.10 for every $100 they make
How many currencies are around the world?
There are 180 currencies around the world.
What is the simple budgeting rule?
50% of your income is for your needs (rent, grocery, bills)
30% of your income for your wants
20% of your income should be saved
What country has the highest savings rate?
Ireland at 64.1%
What is the most important concept of compound interest?
It is not about how much money you invest, it is about how early you start investing