Managing your money: who wouldn't like more money? Here's how to get it.* OBJECTIVE Students should understand * how good spending, saving, and credit practices now can pay off in the future. * BACKGROUND Teens--like people of any age--find it much easier to spend money than to save it, and are likely to keep buying only what they can afford now, rather than wait a bit until they can save enough to buy a more expensive item. As brothers Kyle <noinclude></noinclude> ''This article or section is being rewritten at One derivation of the surname is from the Scottish Highland word caol, 'channel', or 'strait'. There are other possible derivations (see below). and Kent Healy Healy may refer to: Persons with the surname Healy:
tr.v. ex·em·pli·fied, ex·em·pli·fy·ing, ex·em·pli·fies 1. a. To illustrate by example: exemplify an argument. b. , learning how to handle money well is a worthwhile skill of lifelong value. (Note: Some students may be interested in the Healy brothers' Web site promoting their book: coolstuffmedia.com.) * CRITICAL THINKING CAUSE AND EFFECT: When using a credit card or holding a bank loan, why is it best to pay off the debt as soon as possible? (The higher the remaining balance, the greater the interest added to the amount due.) RESTATING A THESIS: Kyle and Kent Healy said, "Our generation is used to instant gratification GRATIFICATION. A reward given voluntarily for some service or benefit rendered, without being requested so to do, either expressly or by implication. ." What does that mean? Do you agree? (Answers will vary.) * ACTIVITY WORK IT OUT: Ask students to think of something that they want but can't afford, then devise a savings plan to earn and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. save enough to buy it. (Don't don't 1. Contraction of do not. 2. Nonstandard Contraction of does not. n. A statement of what should not be done: a list of the dos and don'ts. forget to allow for sales tax sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. .) What can they do without, or with less of, for a while? How much can they expect to save per month? Given that, how long would it take to save that much? Then have them share their plans and ask classmates Classmates can refer to either:
STANDARDS SOCIAL STUDIES, GRADES 5-8 * Production, distribution, and consumption: How personal funds can be earned and allocated to better effect. * Individual development and identity: Taking responsibility for one's own actions is important in saving for the future. RESOURCES * Kiyosaki, Robert T., with Lechtel Sharon L., Rich Oad, Poor Oad for Teens (Warner Books, 2004). Grades 6-12. * Mayr, Diane, The Everything Kids' Money Book (Scholastic, 2000). Grades 6-12. WEB SITES * The Motley Fool for Teens www.fool.com/teens/teens.htm * U.S. Small Business Administration: Teen Business Link sba.gov/teens Money is a big part of life. So why not learn to manage it well? The world of finance--banking, investing, and borrowing--can be pretty complicated. But you can start simply. The key is to believe in yourself, say Kent and Kyle Healy. The 22- and 20-year-old brothers are the co-authors of Cool Stuff They Should Teach in School. Making Money Before you can learn how to manage money, you have to make some. As teens, Kent and Kyle did it by starting a skimboard/skateboard business. Here are some ways you can start earning. * Work. Restaurants, stores, movie theaters, and camps hire teens for various jobs. If you have trouble getting hired or would rather do something different, become your own boss. Neighbors may be willing to pay you to baby-sit, walk dogs, rake leaves, or mow lawns. * Turn items into cash. If you have old toys, books, or sports equipment that you don't want anymore, ask your parents if you can sell them. Have a tag sale tag sale yard sale of used items, usually at very low prices. [Pop. Culture: Misc.] See : Inexpensiveness , or take items to a flea market See computer flea market. flea market yard sale of used items at low prices. [Pop. Culture: Misc.] See : Inexpensiveness or used-books store. * Stay in school. Overall, high school dropouts earn 27 percent less than graduates. The more you learn, the more you can earn. How to Save Once you have some money, start managing it. Here are two tips: * Hold on to your money. This doesn't mean that you should never buy anything. Just don't spend more than is necessary. For instance, compare prices at different stores. If you can save 50 cents on your favorite fruit juice every day for a year, you will have accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. $182.50. Here is another thought: Maybe you don't need so much stuff! Getting by with less today can help you save for the future. * Plan ahead. Say that you want to buy $300 stereo See stereophonic. speakers in September. How much should you set aside each month? (Hint: Divide 300 by 6, the number of months from March to September.) How to Invest "Where will you put the money you save? Why stick it in your sock sock white mark on the feet. In horses this means from the coronet to halfway up the cannon. In dogs and cats, it is white from the paws up to the carpus or hock. drawer A person who orders a bank to withdraw money from an account to pay a designated person a specific sum according to the term of a bill, a check, or a draft. An individual who writes and signs a Commercial Paper, thereby becoming obligated under its terms. when you can put it where it can grow? If you open a savings account Savings Account A deposit account intended for funds that are expected to stay in for the short term. A savings account offers lower returns than the market rates. Notes: , the bank will pay you interest. Interest is a percentage of an account balance, based on the government's current rate. The larger the account balance, the more you will earn in interest. So don't just put some money in a savings account, then forget about it. Keep adding whenever you can. Another option: Buy a U.S. savings bond Savings bond A government bond issued in face value denominations from $50 to $10,000, with local and state tax-free interest and semiannually adjusted interest rates. savings bond A nonmarketable security issued by the U.S. . The plus: You can pay one sum, let it alone, and double your money. The minus: You have to wait a while. With $25, you can buy a $50 Series EE Savings Bond Series EE savings bond A U.S. Treasury obligation that pays a variable interest rate and is sold to investors in denominations as low as $50 at a 50% discount from face value. . It will be worth $50 in cash--in 20 years. It takes time for money to grow, so start early. "If you leave your money [in a savings account] to grow for a long time, $100 can turn into a million dollars," writes Selena Maranjian for The Motley Fool, a Web site that offers financial advice. Kyle and Kent Healy agree. "Our generation is used to instant gratification," they write. "We forget that some things require time." Avoid Debt If you want to borrow money, think it through carefully. Debt is a serious matter. When you owe money on a credit card or bank loan, you are paying interest instead of earning it. Never borrow more than you can afford to pay back promptly. Bank loans are useful if you need to make a large investment--in a home or a college education, say--but do not have the cash to pay for it. A bank will loan you the full amount and allow you to pay back the money in monthly installments. In exchange for the loan, the bank will charge you interest. If you borrow $1,000 at 10 percent interest and pay it back in one year, you will be paying back $1,100 dollars. The longer you take to pay off the debt, the more interest you will owe. Go for it With a little effort, you can become an expert at managing your money. Just remember to think your decisions through. Whether buying or borrowing, consider the consequences before you spend your hard-earned cash. WORDS to Know * balance: the amount of money in an account. * debt: something (especially money) that is owed. * interest: the amount of money earned in a savings account or owed on a loan. * invest: to commit money or other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. in order to gain a financial return. Money-management Tips Here are tips from the Healy brothers on how to stretch a dollar. 1. BE AWARE OF YOUR SPENDING HABITS. When, where, and how do you spend your money? That can mean the difference between digging in the couch A couch, loveseat, sofa, settee, lounge, davenport or chesterfield are items of furniture for the comfortable seating of more than one person. Compare the joiner's settle, with its separate seat cushions. for spare change or flying first class to Fiji. 2. INVEST YOUR EARNINGS. Whenever you earn money, take 10 percent and put it in savings or invest it. Our parents introduced this rule to us at a very young age--even though we were getting paid only a dollar an hour. Today, we thank them for it. 3. CONSIDER OPPORTUNITY COST. Opportunity cost means that when you make one choice, you are giving up another. It can be as simple as getting a summer job instead of just hanging out. Which decision contributes to the life you want? 4. SPEND SMART. Do you go for Money Eaters or Money Makers? Money Eaters are purchases that decrease in value (DVDs, clothes, etc.). Go for Money Makers--investments that increase in value, or items that help you earn money, such as tools if you are repairing bikes for extra money. |
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion