Welcome to Finance


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Introduction to Financial Awareness

Published in: Economy & Finance, Business
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Welcome to Finance

  1. 2. <ul><li>Song: Old Time Calypso ‘Rich Man Poor Man’ – Lord Brynner </li></ul><ul><li>Rich man, poor man </li></ul><ul><li>Who says I’m a poor man </li></ul><ul><li>Ah got plenty dough </li></ul><ul><li>And ah spreading joy for so! </li></ul>
  2. 3. <ul><li>Demonstrate an understanding of basic personal money management skills </li></ul><ul><li>Practise comparative shopping for basic needs especially nutrition needs </li></ul><ul><li>Formulate a personal budget based on current financial resources, as a tool for meeting basic needs and proper financial management </li></ul>
  3. 4. <ul><li>Trainees will: </li></ul><ul><li>List idioms and proverbs that deal with money </li></ul><ul><li>List everything they have spent money for today and yesterday </li></ul><ul><li>Track their spending for a week. </li></ul><ul><li>Categorise their spending into needs and wants. </li></ul>
  4. 5. <ul><li>Define comparative shopping. </li></ul><ul><li>State the benefits of comparative shopping </li></ul><ul><li>Share their experiences of comparative shopping. </li></ul><ul><li>Complete numeracy questions on comparative shopping. </li></ul>
  5. 6. <ul><li>Define ‘budget’ </li></ul><ul><li>State who needs a budget </li></ul><ul><li>State the items in their budget and what percentage is allocated to each item Complete numeracy questions on percentage allocations for a budget. </li></ul><ul><li>Give suggestions of what would happen when income is not enough to meet budget requirements (expenditure). </li></ul><ul><li>Complete their personal budget. </li></ul>
  6. 7. <ul><li>How are you currently spending your money? Have you ever taken careful note of how you spend every dollar? </li></ul><ul><li>Tracking your spending can reveal interesting things about yourself. What do you think those things are? </li></ul><ul><li>List everything you have spent money on today so far. </li></ul><ul><li>List everything you spent money on yesterday. </li></ul>
  7. 8. <ul><li>From today, list everything you purchase everyday (for the next week). </li></ul><ul><li>Put these items into two categories </li></ul><ul><li>A) NEEDS </li></ul><ul><li>B) WANTS </li></ul>Item Cost Need Want
  8. 9. <ul><li>Tracking your spending can reveal: </li></ul><ul><li>Your money wasters </li></ul><ul><li>Your financial priorities </li></ul><ul><li>Your key to future financial success </li></ul>
  9. 10. <ul><li>What is comparative shopping? </li></ul><ul><li>What are the benefits of comparative shopping? </li></ul><ul><li>Share your experiences of comparative shopping </li></ul>
  10. 11. <ul><li>Comparative shopping is purchasing goods and services after you have compared the prices based on their weight and quality. </li></ul><ul><li>Comparative shopping helps you to get the best from your dollar. </li></ul><ul><li>Comparative shopping means you must shop around. </li></ul>
  11. 12. <ul><li>A man will purchase an item he needs worth $1.00, for $4.00. </li></ul><ul><li>A woman will purchase an item she does not need for $1.00, worth $4.00 </li></ul>
  12. 13. <ul><li>How much would Indira save by purchasing a 5 L container of oil (which costs $21.00) instead of buying 5 1L bottles (which costs $4.50 each)? </li></ul><ul><li>Which is cheaper 5 oranges for $15, 6 oranges for $17 or 2 oranges for $5 </li></ul><ul><li>Which is cheaper? Beef sold @ $6.00 per Kg or @ $4.00 per lb? </li></ul>
  13. 14. <ul><li>Types of Budgets </li></ul><ul><li>Personal </li></ul><ul><li>Family </li></ul><ul><li>National </li></ul><ul><li>Corporate </li></ul>
  14. 15. <ul><li>What is a budget? </li></ul><ul><li>A budget is a financial plan of income and expenditure. </li></ul><ul><li>Who needs a budget? </li></ul><ul><li>Everyone </li></ul><ul><li>What items would you put in your personal or family budget? </li></ul><ul><li>In what percentages would you allocate your income to these items? </li></ul>
  15. 16. <ul><li>Income </li></ul><ul><li>Expenditure </li></ul>
  16. 17. <ul><li>Salary/Wages </li></ul><ul><li>Returns from investments </li></ul><ul><li>Interest </li></ul><ul><li>Other </li></ul>
  17. 18. <ul><li>Housing 30% </li></ul><ul><li>Transportation 10% </li></ul><ul><li>Debt 15% </li></ul><ul><li>Savings 10% </li></ul><ul><li>Food 10% </li></ul><ul><li>Recreation 5% </li></ul><ul><li>Other 20% </li></ul><ul><li>Total 100% </li></ul>
  18. 19. <ul><li>Mortgage or Rent </li></ul><ul><li>Utilities </li></ul><ul><li>Insurance (House) </li></ul><ul><li>Taxes (Land & Building) </li></ul><ul><li>Home Maintenance </li></ul>
  19. 20. <ul><li>Car Payments </li></ul><ul><li>Auto Insurance </li></ul><ul><li>License </li></ul><ul><li>Maintenance </li></ul><ul><li>Gasoline </li></ul><ul><li>Parking </li></ul>
  20. 21. <ul><li>Hire Purchase </li></ul><ul><li>Loans </li></ul><ul><li>Credit Cards </li></ul>
  21. 22. <ul><li>Short Term </li></ul><ul><li>Medium Term </li></ul><ul><li>Long Term </li></ul><ul><li>Investments </li></ul>
  22. 23. <ul><li>Groceries </li></ul><ul><li>Eat Outs </li></ul>
  23. 24. <ul><li>Family Recreation </li></ul><ul><li>Individual Recreation </li></ul><ul><li>Couple Recreation </li></ul><ul><li>Children Recreation </li></ul><ul><li>Vacation </li></ul>
  24. 25. <ul><li>Clothing </li></ul><ul><li>Child Care </li></ul><ul><li>Education </li></ul><ul><li>Medical Bills </li></ul><ul><li>Tithing </li></ul><ul><li>Charity </li></ul><ul><li>Gifts </li></ul>
  25. 26. <ul><li>Prepare a budget using the percentage allocations for a family with an income of: </li></ul><ul><li>$2000.00 </li></ul><ul><li>$5000.00 </li></ul><ul><li>$7000.00 </li></ul><ul><li>$10000.00 </li></ul><ul><li>What happens in cases when the income is not enough to meet the budget requirements (expenditure)? </li></ul>
  26. 27. <ul><li>“ Making Money is Pleasurable, Having Money is Difficult” Jan Bann, Chairman - Bann Company </li></ul><ul><li>Six Steps of Financial Planning </li></ul><ul><li>Establish financial goals </li></ul><ul><li>Gather relevant data </li></ul><ul><li>Analyze the data </li></ul><ul><li>Develop a plan for achieving goals </li></ul><ul><li>Implement the plan </li></ul><ul><li>Monitor the plan </li></ul>
  27. 28. <ul><li>Wealth is defined as the difference between total assets and total liabilities. </li></ul><ul><li>Assets _______________________________ </li></ul><ul><li>Liabilities _____________________________ </li></ul><ul><li>Financial Institutions </li></ul><ul><li>Banks ___________________________________ </li></ul><ul><li>Credit Unions _____________________________ </li></ul><ul><li>Trust Companies __________________________ </li></ul><ul><li>Insurance Companies ______________________ </li></ul><ul><li>Stock Exchange ___________________________ </li></ul><ul><li>Offshore Banks ____________________________ </li></ul>
  28. 29. <ul><li>Take out savings first </li></ul><ul><li>A portion of the savings must be used for long term (Investments) </li></ul><ul><li>True savings are not for ‘emergencies’ </li></ul>
  29. 30. <ul><li>Investments refer to the accumulation of some kind of asset in hopes of getting a future return from it. </li></ul><ul><li>Investments can refer to: </li></ul><ul><li>The purchase and production of capital goods. Goods which are not consumed, but used for future production. </li></ul><ul><li>The buying of securities or other monetary or paper assets </li></ul>
  30. 31. <ul><li>Estate refers to all the assets owned by an individual (esp. at time of death) </li></ul><ul><li>Your estate is your legacy </li></ul>