Money Matters INTRODUCTION about managing money
YOUR MONEY SAVING or BORROWING
Introducing Money Matters
Money Matters would like to introduce financial
Schools teach students mathematics, physics, languages, etc. On leaving school students are expected to be financially independent and resume financial responsibility. For many people having a job and earning a salary equals financial independence. Yet being able to earn a salary is not the same as being able to make informed and wise judgments about what to do with money.
education and money management at schools in Malta.
Young people know how to use ATM machines. They are constantly targeted with aggressive advertising. Today it is a new PlayStation, tomorrow a new mobile, the day after tomorrow a new car. But… can they afford it? Do they know why and how to save money? Do they know how to think longterm – beyond the weekend – about their finances? What about credit card debt? Or investing for the future?
students and one Booklet for teachers.
Money Matters is a two - level course with an emphasis on money management, need for saving and the importance of budgeting and taking rational financial decisions.
Money Matters consists of two Booklets for Booklet 1 consists of 20 pages and is designed for 11 to 12 year - old students. Booklet 2 has 36 pages and is designed for 13 to 14 year - old students. Features of Student’s Booklet: • Attractive design, in full colour • Balanced approach, including real-life situations with tasks to be worked out by student • Many lessons have an Internet link and include an online search or work.
Money Matters offers a course aimed at increasing and improving personal financial education. Its purpose is to help young people leave school with a basic financial knowledge which will give them the skills and the confidence they need .It tries to improve economic and financial literacy, for the lack of these means that young people will be at risk of personal debt, costly decisions at work and at home. This will, inevitably have a negative effect on their competitive skills in a fast global economy.
Teacher’s Booklet consists of 32 pages and provides teaching material and additional information for teachers covering topics of both Booklet 1 and Booklet 2.
Society cannot only rely on families to teach their children how to manage money, as many families have difficulties to do it themselves. Financial education should be taught at schools as a part of a curriculum. Financial education has been already included in the school curricula in many European Union countries.
Published by the Meducation Foundation as a public service Copyright © 2009 Meducation Foundation ISBN 978-99932-0-722-1
Money Matters Student’s Booklet 1 deals with: • Your Money - planning income and expenditure • What Does It Cost? - being price conscious • Advertising - being aware of importance and influence of advertising • Can We Afford It? - the need to balance the budget • The Bank - basic banking operations • To Borrow or to Save - how to make a purchase • Getting into Trouble - understanding and avoiding problems of borrowing • Dreaming about Later - the future and money
Student’s Booklet 2 deals with: • Taste and Money - getting it right about lifestyle and money • No Free Ticket - planning and budgeting • Everything Costs Money - learning that almost everything in life costs money • Internet and Your Money - shopping on the Internet • Bank Matters - understanding banking matters • Saving or Borrowing - being short of money • Debts - borrowing and repaying • Holidays - understanding the need for planning a holiday • The Insurance - different types of insurance and how they work • Taxes - the reasons for paying taxes and their purpose • How Much Will You Earn? - getting a realistic view about living on your own • Dreaming about Your Own Home - how to get closer to a home ownership • History of Money & Crossword - how money developed
Teacher’s Booklet deals with all above mentioned topics.
YOUR MONEY Money on the Loose… How much money do you get? Do you get pocket money? Do you earn some of your money? Do you - sometimes - get a “clothes allowance”? Ask some friends of your age how much money they get. Write the information in the spaces below.
No money for Mother’s Day!
Where has all the money gone? It is Saturday afternoon; tomorrow is Mother’s Day and Martin (13) wants to buy a present for his Mum. He opens his purse and - it is empty! “Oh no, how is that possible? I want to buy nice flowers for Mum; the shops are closing soon and I am broke! Tomorrow all the family is coming with presents, and I have nothing!! What has happened to my money?” Yesterday Martin got pocket money from his mother; in the afternoon he went to town with his friend, he bought a computer journal, on the way back he stopped for a hamburger and soon all the money was gone! Martin did not put any money aside for the present. He spent it all. “How silly of me! How will I get some money for flowers now?”
Where has the money gone?
Does the story of Martin ring a bell? Have you ever had the same experience as him? You think you do have money but when you need it, it’s not there. And you do not even remember how you spent it. Pocket Money Example:
How much did I spend? Make such a list for yourself, so you know where your money goes.
MUST and MAY Money can be spent on many things: sweets, snacks, drinks, clothes, mobile, a bike or later a motorbike. There are two types of spending: • Things which you MUST have. For example, you must buy the textbook for your English lesson. • Things which you MAY have but you may also do without them. For example, you may buy an ice-cream. You may also do without it. There are a whole lot of things to buy. Below there are some examples. Have a good look at the list. Which items would you spend your pocket money on? MUST you have them or MAY you have them? Write also how much money you would spend on the items per week. There are a few lines at the bottom for any other item you may want to add.
Plan your spending for next week:
Make your choice
If you want to handle your money well, you have to make choices. Making choices means knowing your priorities. Do you spend your money on jeans or do you buy shoes? Do you go with your friends for a burger or to the cinema? You can spend your money only once. Gone = Gone!
Saving or BorrowinG On being short of money A notebook? You would love to buy that shiny notebook but you don‘t have enough money and your parents are not willing to pay for it. Well, you have three options: 1. Not to buy it, or 2. Start saving for it, or 3. Get a loan
Saving Saving is actually very exciting; with every €uro saved you get closer to your objective. In the end you have a sense of achievement.
How to save – some tips The best thing is to open a savings bank account where you can save money for a specific purpose, e.g. to buy a notebook. That way you can see how much you have saved and how close you are to your target. You can put aside some of your pocket money or money earned from a part-time job as well as any other money gifts. Putting the money away in the bank will prevent you from spending it on other less important things. The longer you keep money in your savings account, the more interest the bank will pay you. Most banks offer special favorable interest accounts for students. Do you have some money left over at the end of the month in your current account? Ask your bank to transfer this from your current to your savings account. Or you can do it yourself at an ATM.
Borrowing It is obvious that if you borrow money you can buy whatever you want immediately. That’s one side of the coin; the other side is you have to pay the money back, in the agreed time and with interest!
Borrowing means getting into debt “No, I do not have any debt, “says Tamara when she talks about money with her friends. But when you look closer, it is not true. She is in the red with her bank; it means she owes money to the bank. Also, she has to pay back a “tenner” to her father, which she borrowed a week ago when she was broke. Besides that her new TV set is not yet fully repaid. Tamara realises that she is drowning in debts.
How to borrow – some tips A loan must be repaid every month. And with interest! You have to have enough money in your account so that the payment can be effected. If you fail repayment you are in serious trouble. Check how many months or years it will take you to repay the loan. You might no longer use nor need what you had bought, but still have to continue paying for it. And that will not make you happy. In case of a non-bank loan, e.g. hire purchase, your bank can take over your monthly payments, a so called ‘standing order’. This way if you happen to be sick or away on holiday, you need not worry as the bank will settle the payment for you. Careful: read the small print. See what the actual annual interest rate and costs are!
Borrowing from the bank As you are not yet 18 years old, your parents must always give their consent if you would like to borrow from the bank. They have to accompany you to the bank and sign for you. You have to be very careful not to borrow too much. The bank will make sure that you only take out a reasonable loan. The bank will also check whether you or your parents have any other loans as it doesn’t want you to face any problems if you are not able to cope with the repayments. You will have to pay the interest rate that the bank will stipulate and of course, the bank wants the loan repayment on time.
Luke’s dream Luke (18) bought a scooter which costs €2000.00 with the money he borrowed from the bank. As Luke did not have any money in hand, he agreed to repay monthly installments of €90.00, for 2 years. The bank will charge him 0.5% interest a month.
Task Work out how much he will have paid after two years.
Task Luke is now the proud owner of the scooter. Here is his monthly budget:
Having a scooter means also other expenses / costs. Write down what else Luke would have to pay for.
Can Luke afford to pay the monthly installments of E90.00 and finance the scooter’s running costs? How would you go about tackling or solving Luke’s problems?
money on the loose are you price conscious? ads and commercials money and spending accounts and statements wanting and making a purchase debts and solutions your future and money advertising and your money making ends meet life is expensive buy it online in the plus or in the minus being short of money borrowing and repaying hotels and travel insurance comes in handy gross and net balancing the budget buying or renting?
About the Author Born in Czechoslovakia, Anna Ignacak settled in Malta in 1989 and became a Maltese citizen shortly afterwards. She graduated from the School of Economics, Slovakia, Faculty of Economics of Tourism and Services and she worked for the Institute for Further Education of the Ministry of Justice. Anna has been teaching Economics at Stella Maris College, Gzira since 1990. She has been a member as well as a chair person of the Syllabus Board of Economics advising the University of Malta.