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Similaire à Dollar and a Dream
Similaire à Dollar and a Dream (20)
Dollar and a Dream
- 1. Money In and Money OutIncome, Expenses, and Budgeting Dollar and a Dream
- 2. Pay Cheques Terms Gross Pay-amount of pay before deductions Net Pay-amount of pay after deductions YTD(Year To Date)-total amount for the year to the current date Deductions 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. EI (Employment Insurance)- a sum of money paid to people that have become unemployed. Income Tax-a personal tax based on income
- 3. Fixed and Variable Expenses Fixed Expenses- don’t generally change from month to month Variable Expenses-can easily change like the amount spent on Why is it important to know the difference?
- 4. Needs vs Wants Need-something that is necessary for humans to live a healthy life Want-is something that is desired Why is it Important to know the difference?
- 5. Save Now, Spend LaterTechniques, Compound Interest, and Options Dollar and a Dream
- 6. Saving Techniques Pay yourself first Save your change Borrow don’t buy Don’t carry cash Don’t spend what you save
- 7. Saving Options Savings Account- low interest and liquid Tax Free Savings Account(TFSA) Guaranteed Investment Certificate (GIC)- medium interest and not as liquid as savings account Government Bond Equity Investments- high interest and high risk
- 8. Compound Interest http://www.moneychimp.com/calculator/compound_interest_calculator.htm Compound Interest- Interest paid on the original amount invested plus interest Why Save Now?
- 10. Money In and Money OutCredit and Debt Dollar and a Dream
- 11. Types of Credit Credit cards Student loans Bank loans or lines of credit Overdraft Loan High cost loans
- 12. Responsibilities of Debt Borrow what you can pay Legal commitment Make payments as agree Keep credit card secure
- 13. Credit Score Makeup Payment History – 35% Total Amounts Owed – 30% Length of Credit History – 15% New Credit – 10% Type of Credit in Use – 10%
- 14. Use Debt Wisely Short term implications Long term implications Pay down debt quickly
- 15. Compound Credit Interest credit excel.xlsx
Notes de l'éditeur
- 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)