Impress the fact: where money can be saved and spending
Straight forward-These deductions are for employees-If you have your own business you deduct these things from your employees(more control in entreperneurship)-
Emphasize the difference between fixed and variable. Fixed – rent, insurance, heat, water etc.Variable –food can be, clothes can be, entertainment, Rent (although rent would be variable income for rental properties)When trying to find places to reduce costs, analyze variable costs
Emphasize difference between need and want. Need – food, clothes, shelter, etc…Want- fancy jacket, new video gameWhen trying to reduce spending, analyse wants.Ask for examples, have some fun with it.(no need to spend a lot of time on above)Assets Vs Liabilities –DylanWhat is an Asset? What is a liability?Get examples of both.Show the major differences between the 2.
Impress the fact to start saving earlyPay yourself first – saving a portion of your pay as soon as you get it.The rest are straight forward.
-Downplay GIC’s, put emphasis on learning more. -TFSA: 5000$ maximum per year. Tax free. Invested in mutual funds generally. They do a risk profile on you, explain what that is.-Talk briefly about the TSX averaging 12% over the past 60 years-GIC’s: usually set for a term with a maturity date. Return is guaranteed. -Bonds are set for even longer terms then GIC’s (5, 10 20 year terms)-Both GICs and Bonds are for rookie investors.
Compound is important to start saving early. Emphasize the power of money over time. Two most important parts of saving, time (start early) and consistency (make saving a habit no matter how small)The rule of 72.Also show what a higher compound interest can yield you over simple interest.Use an example of 3% (GIC’s)Use an example of 12% (avrg. Of TSX)
All of this is pretty straight forward. Emphasize the risk of high cost loans, such as cash advances, money marts, etc…
Leveraging debt for assets. Borrow when you don’t need it. Increase your access to money.
Payment History- any missed payments etcTotal amounts owed- less betterLength- longer betterNew credit- less betterTypes of credit – small variety – credit card, mortgage, etc..Making 2 payments in one cycle betters your credit score.
Short term + LT – is it worthwhile to used credit to purchase something?Pay off debt quickly to reduce interest paymentsWould you use a credit card to buy a coach? Explain how Leons etc. Uses compound interest for back pay on all the months you owe for. -Dylan
Stress the negative impact of minimum payments. How much longer it takes to pay off principle and how much more you end up paying.(but always at LEAST pay the minimum)
Dollar and a Dream
Money In and Money OutIncome, Expenses, and Budgeting<br />Dollar and a Dream<br />
Pay Cheques Terms<br />Gross Pay-amount of pay before deductions<br />Net Pay-amount of pay after deductions<br />YTD(Year To Date)-total amount for the year to the current date<br />Deductions<br />CPP (Canadian Pension Plan)- is an insurance program designed to help Canadians provide income for their retirement. It also gives them income if they become disabled.<br />EI (Employment Insurance)- a sum of money paid to people that have become unemployed.<br />Income Tax-a personal tax based on income<br />
Fixed and Variable Expenses<br />Fixed Expenses- don’t generally change from month to month<br />Variable Expenses-can easily change like the amount spent on<br />Why is it important to know the difference?<br />
Needs vs Wants<br />Need-something that is necessary for humans to live a healthy life<br />Want-is something that is desired<br />Why is it Important to know the difference?<br />
Save Now, Spend LaterTechniques, Compound Interest, and Options<br />Dollar and a Dream<br />
Saving Techniques<br />Pay yourself first<br />Save your change<br />Borrow don’t buy<br />Don’t carry cash<br />Don’t spend what you save<br />
Saving Options<br />Savings Account- low interest and liquid<br />Tax Free Savings Account(TFSA)<br />Guaranteed Investment Certificate (GIC)- medium interest and not as liquid as savings account<br />Government Bond<br />Equity Investments- high interest and high risk<br />
Compound Interest<br />http://www.moneychimp.com/calculator/compound_interest_calculator.htm<br />Compound Interest- Interest paid on the original amount invested plus interest<br />Why Save Now?<br />