Saving Your Money
MS. MAH
PLANNING 10: FINANCES
 By identifying your needs vs. wants you can
potentially save your hard earned money by not
spending it on unimportant items.
 What would you do if you had to save $20.00 of your
own money next month? How would you save this
money?
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

Save $20.00 a week  $ ____ per month  $ ___ per year
$80 per month and $1,040 per year
Save $20.00 per month  $ ____ per year
 What can you do with the money you have not
spend?
Reasons to Save
 To buy a big item or pay for a big bill that’s coming
 To have emergency funds
 You loose your job
 You get hurt
 Unpredictable expenses
 To build funds to invest
 Can you think of any reasons?
How Can You Save?
 Work more
 Increasing your income can provide you with more money to
save by helping to cover your expenses
 Ex: cut lawn, baby sit, return Arizona or Vitamin Water bottles
;)
 Spend less
 Reduce your spending on wants
 Pay yourself first
 Set aside 10% of your earnings
 Plan for savings and include them in your budge!
Savings Vocabulary
 Interest: money received over time for letting others
borrow your money. Can also be price you pay over
time for borrowing money.
 Simple Interest: interest paid only on the initial
deposit
 Compound Interest: interest paid on the initial
deposit and on any interest that has been earned
Simple Interest
Compound Interest
Rule of 72
 An easy way to calculate approximately how long it
will take for your savings to double at a compound
interest rate.
 Divide 72 by the interest rate to find out the number
of years it will take to double the amount saved.

72/5% = 14.4 years to double
 Divide 72 by the number of years of saving to find
out the interest rate needed to double amount saved.

72/10 = 7.2% interest needed to double money in 10 years
Banking
What are Financial Institutions?
 Banks, Credit Unions, Trust Companies
 Range of services and fees vary
 Competitive: you can switch if unhappy
 Make money by taking deposits and
lending or investing deposits
 Pay interest to depositors for the right
to hold and use their money
Types of Banking Services
 Chequing or savings account
 Debit card
 Credit card
 Telephone and online banking
 Automated teller machines (ATMs)
 Automatic Deposits and payments
 Account transfers
 Line of credit
 Loans
 Other (Traveler’s cheques, US dollar accounts, safety
deposit boxes, etc.)
Comparing Types of Banks
 Location, hours, number of offices,
number of ATMs
 Monthly-fees: cheques, ATM withdraws
 Interest rate earned, minimum deposit
to earn interest, compounding method,
fees charged if below minimum
 Special features: discounts
Types of Bank Accounts
 Savings account: a deposit account where your
money is secure but accessible and usually earns a
very limited amout of interest

Low risk, low interest rates
Types of Bank Accounts
 Guaranteed Investment Certificate (GIC) &
Term Deposits: a deposit where you agree to leave
the money in the account for a fixed period of time
(90 days- 5 years).

Get interest at a higher rate than savings account
Types of Bank Accounts
 Canada Savings Bond (CSB): when you buy a
CSB you are lending your money to the federal
government.


Government pays interest until you decide to cash in (redeem)
the bond.
Can purchase from most financial institutions
Types of Bank Accounts
 Tax-Free Savings Account: can contribute up to
$5,500 annually and investment income earned is
tax-free.

Can invest in guaranteed investment certificates,
term deposits, etc.