Lesson #3: Maximize Savings

How to Manage Money

Length: 30 mins

❏ Learn the pros and cons of savings and investing strategies
❏ Exercise skills needed for saving and investing
❏ Examine how saving and investing is part of financial well-being

❏ Speaking and Listening: Comprehension and Collaboration
❏ Speaking and Listening: Presentation of Knowledge and Ideas
❏ Language: Vocabulary Acquisition and Use

❏ Numbers and Quantity: Quantities
❏ Modeling
❏ Statistics and Probability: Making Inferences and Justifying Conclusions

What do you think “saving for a rainy day” means? Discuss the meaning of this phrase. 

An emergency fund is important. What do we gain by being prepared for unexpected events? What would we do if we didn’t have an emergency fund and something actually happened? Discuss the importance of having an emergency fund. 

      What are some long-term expenses you might have in the future? Are you planning to go to college or trade school? Do you want to own a car and/or eventually buy a home? Just as we set aside money for emergencies, we should also set aside money for our long-term goals. The earlier you start saving, the more your money will grow.

        1. What do you do with the money you earn (from jobs, allowance, gifts, or other)? Do you spend it? Save it? Keep it at home? Deposit it in a bank account?
        1. Not all banks or savings accounts are the same and we have many choices when it comes to saving and investing our money. Understanding our options will help us make better decisions with our money.
        1. Go over the different savings and investing strategies below. The goal is to realize that there are many different ways we can save and invest our money and that what way we choose depends on our future goals.

        1. It can be overwhelming to understand all the different savings and investing strategies available. The goal is to help you realize that there are many different ways we can save and that what way we choose depends on our future goals.

        Use the strategies above to work through the following scenario:

        Ian’s car is 15 years old and he’s worried it might break down soon, so he’s trying to save three months of expenses for unexpected repairs, while also saving for a new car in the near future.         What are the best savings strategies for Ian so he can keep his money accessible for repairs, but also save for a new car?

          A possible solution: Ian could choose a simple savings account to hold his emergency fund and save for a new car. However, if he wanted to get a better interest rate, he could also consider opening a Certificate of Deposit (CD) or money market account to use specifically for new car savings.

          Maximize-Savings-WorksheetDownload

          Reflect on your future goals.

          Which strategies would you consider using to save for emergencies?
          Would they put their money in a CD, a 529 account or a savings account? Why?

              What’s Next?

              New concepts covered and activities completed:
              TODAY: Lesson #3: Maximize Savings

              • “How can I save my money and keep it safe?”
              • “Rainy Day”
                Emergency Fund
                Certificate of Deposit (CD)
                Savings Account
                Money Market Account
                Retirement Account
                529 College Savings Account
                Mutual Funds
                Stocks
                Bonds


              NEXT WEEK:  Lesson #4: Invest and Build Wealth