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Financial Literacy Information Session

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Agenda

Plan to Earn

Reality Cheque

Where Does the Money Go?

Pay Yourself First

Saving for Life

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Plan to Earn

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Classroom Question

Over the next 2 minutes discuss as a class

What are some things that might happen in your life that will cost money?

Teachers please put answers in the chat.

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Classroom Question

Over the next 2 minutes discuss as a class

What are some things that might happen in your life that will cost money?

Teachers please put answers in the chat.

<<2:00>>

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Classroom Question

Over the next 1 minute discuss as a class

What do you think is the single best predictor of your future income in life?

Teachers please put answers in the chat.

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Classroom Question

Over the next 1 minute discuss as a class

What do you think is the single best predictor of your future income in life?

Teachers please put answers in the chat.

<<1:00>>

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5 main factors that impact finances

Earning income

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5 main factors that impact finances

Earning income
Becoming a couple

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5 main factors that impact finances

Earning income
Becoming a couple
Starting a family

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5 main factors that impact finances

Earning income
Becoming a couple
Starting a family
Property ownership

Rent vs. Home Ownership - pros and cons. Ask the students if they can list and pros for either buying or renting, and discuss. Point out any of the below that students don’t touch on.

Rent - relatively carefree in terms of additional expenses but you do not build up any equity as property ownership does. Not responsible for maintenance on the property, but not able to make big changes. More flexible for if you might move, because a lease is usually a year max.

Property ownership often requires getting a big loan, or mortgage - this can have a huge impact on our finances. It’s a higher barrier to entry but you then own something that’s very valuable. You can do whatever you want with the house, but any problems that need fixing are your responsibility. It’s also a big commitment, and it’s not as easy to up and move when you own a home.

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5 main factors that impact finances

Earning income
Becoming a couple
Starting a family
Property ownership
Everything else

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Classroom Question

Over the next 2 minutes discuss as a class

What are some things YOU will have to spend money on in the next few years?

Teachers please put your students answers in the chat.

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Classroom Question

Over the next 2 minutes discuss as a class

What are some things YOU will have to spend money on in the next few years?

Teachers please put your students answers in the chat.

<<2:00>>

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Classroom Question

Over the next 2 minutes discuss as a class

How do you think your income level might affect your life and future?

Teachers please put your students answers in the chat.

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Classroom Question

Over the next 2 minutes discuss as a class

How do you think your income level might affect your life and future?

Teachers please put your students answers in the chat.

<<2:00>>

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Reality Cheque

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With each paycheck you receive, you will also get a Statement of Earnings like you see below. This is sometimes called a paystub. It will be attached to your paycheck or to a direct deposit statement if you have this payment option.

Statement of Earnings
Employee		Employee ID		Pay Period
Kim Yee		1234566789		01/06/24 - 15/06/24
Earnings	Hours	Rate	Gross Pay	Deductions
001 Basic Pay	40.00	$15.60/hr	624.00	Income Tax	49.92
				E.I.	3.96
				CPP/QPP	8.23
Gross Pay		Deductions		Net Pay
624.00		62.11		561.89
The hourly wage rate is based on Newfoundland and Labrador, 2024. Minimum wage differs from each province and territory.

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On the left, you will see how many hours you worked, your hourly rate, and the total amount you have earned for the pay period. This amount is called gross pay.

Statement of Earnings
Employee		Employee ID		Pay Period
Kim Yee		1234566789		01/06/24 - 15/06/24
Earnings	Hours	Rate	Gross Pay	Deductions
001 Basic Pay	40.00	$15.60/hr	624.00	Income Tax	49.92
				E.I.	3.96
				CPP/QPP	8.23
Gross Pay		Deductions		Net Pay
624.00		62.11		561.89

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On the right, you will see the amount of money deducted from your pay for taxes, such as:

Income Tax
Employment Insurance
Canada Pension Plan/Quebec Pension Plan (CPP/QPP)

Statement of Earnings
Employee		Employee ID		Pay Period
Kim Yee		1234566789		01/06/24 - 15/06/24
Earnings	Hours	Rate	Gross Pay	Deductions
001 Basic Pay	40.00	$15.60/hr	624.00	Income Tax	49.92
				E.I.	3.96
				CPP/QPP	8.23
Gross Pay		Deductions		Net Pay
624.00		62.11		561.89

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When you subtract the deductions from your gross pay, you are left with your net pay, which is shown along the bottom of your Statement of Earnings. This is the amount you take home.

Statement of Earnings
Employee		Employee ID		Pay Period
Kim Yee		1234566789		01/06/24 - 15/06/24
Earnings	Hours	Rate	Gross Pay	Deductions
001 Basic Pay	40.00	$15.60/hr	624.00	Income Tax	49.92
				E.I.	3.96
				CPP/QPP	8.23
Gross Pay		Deductions		Net Pay
624.00		62.11		561.89

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Classroom Question

Over the next 2.5 minutes discuss as a class

What happens to the money that’s deducted from your paycheque?

Teachers please put your students answers in the chat.

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Classroom Question

Over the next 2.5 minutes discuss as a class

What happens to the income tax that’s deducted from your paycheque?

Teachers please put your students answers in the chat.

<<2:30>>

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Saving for Life

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Pay Yourself First

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Classroom Question

Over the next minute discuss as a class

What are some places you can keep your money?

Teachers please put your students answers in the chat.

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Classroom Question

Over the next minute discuss as a class

What are some places you can keep your money?

Teachers please put your students answers in the chat.

<<1:00>>

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There are lots of places to keep your money, but the best options are:

A bank account
A tax free savings account (TFSA)
A registered retirement savings plan (RRSP)

Besides putting your savings into a savings account, you can also invest them.

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Tax Free Savings Account

A TFSA is a special type of account that lets Canadians invest their money, earn money on those investments, and not pay any taxes when withdrawn

It works by letting your money grow long-term without you having to pay tax on the earnings you make on your deposits

A TFSA can be spread out across several different accounts, including investment accounts and mutual funds

You are limited to how much money can be added to the account each year. Anything over your contribution limit will be taxed. Current limit is $7000/year

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Registered Savings Plan

May be set up for education, retirement, first home purchase, and more

Plans vary in how they work, but gains are typically not taxed until the money is taken out

Contributions to certain registered savings plans are deducted from your taxable income - meaning you pay less taxes while earning the same amount of money

A savings plan may be opened for yourself or on your behalf by someone else. Your parents may have an RESP set up for you

No contribution limit (unlike TFSA)

Gains are taxed (unlike TFSA)

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Make Your Money Work

Interest is money earned on money saved/invested. You’ll earn interest in most cases when it comes to TFSA and RRSP.

However, not all interest is created equal.

You may find that you are earning either simple or compound interest, and there is a big difference between the two

Simple interest in earned on the initial amount, or principal, that you’re saving. That means if you out $100 in your account and earn 5% interest, you’ll earn $5 in interest every year.

On the other hand, compound interest accumulates on both the principal and the earned interest. So what does that mean?

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Simple vs Compound Interest

	Simple interest (5%)	Compound interest (5%)
Initial Savings	$100	$100
Total after 1 year @ 5%	$105	$105
After 2 years	$110	$110.25
After 5 years	$125	$127.62
After 10 years	$150	$162.89
After 20 years	$200	$265.33

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Thank you!

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Financial Literacy Information Session

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Agenda

Pay Yourself First

Budget Basics

Credit Sense

Common Credit Mistakes

Savvy Consumer

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Budget Basics

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Classroom Question

Over the next 2 minutes discuss as a class

What are some examples of variable expenses?

Teachers please put your students answers in the chat.

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Classroom Question

Over the next 2 minutes discuss as a class

What are some examples of variable expenses?

Teachers please put your students answers in the chat.

<<2:00>>

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Credit Sense

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• Credit itself is neither good nor bad. However, you can make good or bad choices about how to use credit in your life. Think of credit as a tool, like a hammer. The hammer is not good or bad, it’s just a tool. But that tool can build things or tear things down.

• If you make good choices, you will have the credit necessary to buy the things you want and need and the opportunity to pay for those items over time.

• If you make bad decisions, you will pay far more money than the original purchase price. That additional cost comes in the form of interest, fees, fines, and higher interest on future credit. You also could suffer consequences in other parts of your life that may seem unrelated, like not being able to get certain jobs or rent the place you would like to live.

• One question to ask about using credit is: If I don’t have the money now, will I have it when I have to pay back the loan plus interest?

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Classroom Question

Over the next minute discuss as a class

What types of loans have you heard of?

Teachers please put your students answers in the chat.

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Classroom Question

Over the next minute discuss as a class

What types of loans have you heard of?

Teachers please put your students answers in the chat.

<<1:00>>

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Payday Loans

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Pawn Shops

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Rent to Own

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Classroom Question

Over the next 2 minutes discuss as a class

What do you think lenders are looking for in a borrower?

Teachers please put your students answers in the chat.

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Classroom Question

Over the next 2 minutes discuss as a class

What do you think lenders are looking for in a borrower?

Teachers please put your students answers in the chat.

<<2:00>>

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Common Credit Mistakes

If you co-sign a loan for another person and they don't pay back the debt it won't affect your credit. False

If you ask someone to co-sign a loan for you and you don't pay the bill you will both pay for bad credit with higher fees and interest rates.

Reading the fine print on credit offers is not too important. Most agreements are the same. False - always read the fine print, it can have a huge impact on the actual amount of money you will need to pay back in addition to the loan amount.

If you ever get into financial trouble and can't pay a bill, contact the company immediately and ask about options. Yes, take this action right away, rather than let the problem get worse with each missed payment, which not only adds to the money you will need to repay, but also have an affect on your credit score.

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Being a Savvy Consumer

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All consumers potentially face the risk of financial loss. It is important to be informed and prepared when it comes to your personal finances.

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Classroom Question

Over the next 2 minutes discuss as a class

What are some things that could have a negative impact on someone’s finances?

Teachers please put your students answers in the chat.

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Classroom Question

Over the next 2 minutes discuss as a class

What are some things that could have a negative impact on someone’s finances?

Teachers please put your students answers in the chat.

<<2:00>>

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Insurance

Life is already expensive without having to pay for extended medical care or replace possessions that are stolen or damaged in an accident, especially when those items are costly and haven’t been fully paid for

Having insurance can protect us against the unexpected. Some things that people commonly insure include:

Car (accidents/injury)
Quad/motorcycle/boat etc
House/apartment (tenant’s insurance)
Life
Health (dental/vision/prescriptions etc)
Valuables (jewelry/electronics/collections/instruments)
Pets

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Review

Pay Yourself First is the best way to guarantee savings
A budget is a plan for your money, including income and fixed/variable expenses
Credit is a tool to be used wisely
There are many types of loans, and it is important to know the difference between your options
Lenders take your full financial history into account when deciding to give you money. Better history means better loans
Paying back money on time and in full is the best thing you can do for your credit
Everyone out there wants your money and information - protect it!

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