www.ENGLISH.345.czHOME | private-list | private-modify | © |The Four Bank System Do you have to purchase four banks? Well you can, but you can start out this adventure with containers as simple as plastic zipper bags. Banks that are transparent are more fun for children. They can watch their money grow. You can use — Glass or clear-plastic jam, peanut butter, or pickle jars Plastic water or wide-mouth beverage bottles Cylindrical potato chip containers Take four containers and label them Save, Spend, Give, and Grow. Decorate them with pictures and drawings. By turning the project into a fun activity, you make the message memorable. Decorations: visual incentives Decorate each bank using stickers, images cut from newspapers or magazines, or drawings to illustrate your child’s money goals. What do you want to buy? Save for? Back to basics This four-bank idea will get you talking to your kids in a very practical and comfortable way. You may find that this system can actually remind you of the basics we often forget when we’re dealing with larger amounts ourselves. But be forewarned: As your children learn the principles of the four-bank system, these smarter kids will begin watching more closely how you model good money management at home. Your actions always speak louder than words! Dividing money among banks You should decide what part of your child’s allowance or gift money should go into each of the four banks. Once you’ve decided, stick to your plan unless there are really good reasons to change. You are trying to teach your children a routine and a discipline that will protect them financially. If you are constantly adjusting or making exceptions, the child loses the idea that there is a system at work. The Four-Bank System teaches children to divide their money so they can use it different ways. Want to know more about talking to your child about each of these topics? Click on the highlighted word in each bullet below. The Savings Bank The Spending Bank The Investing/Growing Bank The Giving/Donating Bank How Saving Works Watch it grow together When you save money, it grows. That’s the first message you can help your child understand. You can easily drop coins into the bank, illustrating how at the end of 4 weeks and 4 “deposits,” the amount within the bank grows. (This is the value of a bank with transparent walls. Children can watch their money accumulate.) Coins grow into dollars When you save, coins turn into dollars. Now empty the bank and cash in 4 weeks of coins for paper money. Put the paper dollars back in the bank, along with the extra change. Keep saving — money grows When you save over time, money really grows. Now show how the amount of money builds over several months. Drop in the coins. Then count them and trade them for bills. About interest Savings plus interest equals even more money. Talk to your child about interest — begin by explaining that interest is the money a bank pays savers for holding their money in the bank. You can illustrate the idea by adding a nickel to each dollar your child saves. Count out $10 singles, and then place 10 nickels on the table. Help your child count the interest. Your child will discover that he or she made 50¢ just for keeping money in “savings.” Matching money saved Begin a matching program. Create a further incentive. A parent, or maybe the child’s grandparents, can pledge to “match” any money the child saves. Every two weeks, the matchers and the child can sit down and count the total so your child can see matching in action. Help your child plan Work together. You and your child should decide what portion of savings should go to short-term and long-term savings goals. Have your child draw or find a picture that illustrates a short-term goal, like a book or a toy. Another picture could show goals that are very far away, like a video game system or computer. Decorate the bank Stay focused. Cut out or draw pictures of what your child is saving for. Pictures help children see their goals. More ideas To get more info about saving, go to Saving. Why You Need to Save Some kids don't save. They spend every cent they have. That may be okay if you're very young, and your parents pay for almost everything for you. But when you get older, you're supposed to save. For what? Emergencies. You forget to lock your bike and someone steals it. Your parents say that your carelessness is your problem. You have to replace the bike. If you don't have money, you're walking. Common Expenses. Clothes, CDs, movies, pizza, etc. And what about a present for Mom's birthday? Her birthday falls in the same month as Mother's Day and a concert you've been waiting for. Where's all the money going to come from? If you're smart, you've been saving for a couple of months just to get you through this very expensive time. Future Purchases. You can dream about owning that CD burner or start saving for it now. Ever want to own a car? Where are you going to get spending money for college? How much are you going to contribute toward college tuition? While cars and college may seem far off, they're only a few years away. Investing. To invest, you need more savings — money you don't need for 1, 2, and 3 above Be a Smart Spender A Wish list List the things you want to buy. Kids want so many things. Help your child think through what is reasonable and what he or she can afford. Making a wish list helps kids stay focused. Next, approximate the price of the things on the list. Can’t have it all Understand that some items are more important than others. Explain to your child why he or she probably cannot buy all the things on the wish list at once. Here’s a chance to talk about basic concepts in money management: Making choices Evaluating cost —what’s affordable or reasonable Weighing tradeoffs in a purchase decision Delaying purchases Dealing with opportunity cost — whenever you buy one thing, you’ve eliminated the possibility of buying something else Work with your child to rank the items on the wish list — what to buy first, second, third, etc. Help your child go over the list every few weeks to see if new things should be added, or old ones dropped, or items moved up or down on the list. Wise shoppers Look for good deals. Before a purchase, help your child “price shop.” Compare prices from store to store. Or scout out prices in newspaper ads or on the Internet. Teach your child the value of doing pricing homework before spending. Stretching your dollars Count up the savings. If your child is able to buy an item on sale or find a better price at one store than another, count up the money saved. Drop the saved money in the Spend bank and talk about how that money is already giving your child a head start toward saving for the next item on the wish list. Decorate the bank Stay focused. Cut out or draw pictures of the #1 item on your child’s wish list. More ideas For more ideas about being a smart shopper, explore the Spending section. It’s full of great tips for saving while spending. Spending Money Hey, you say, I don't need to learn about spending. I already know how! That's just the problem. Spending is so easy. And it seems that everywhere you look there's another great thing to buy or do that costs money. Want to know what kind of spender you are? You can find out here! Why do you buy? What's the connection between earning and spending? How important is money to you? Learn about your spending personality. Do you know where your money goes? What questions should you be asking yourself before you make a purchase? Smart shoppers save while they spend. You'll discover ways to do just that. How Investing is Different than Saving The time factor Investing is for a long time. Point out the difference between money that you save to spend pretty soon — or in a month or two — and money you save for a long time. The money that children save to buy a car or go to college will be saved for a very long time. People like to make that money grow over the years by earning interest, not sitting in a bank at home. The Growing bank helps kids keep the money until there is enough to invest. Growing money Making your money earn money. First save a sum of money that’s pretty big, say $20 or more, (whatever is appropriate to the age of your child). Then it’s time to move money out of the Growing bank and into an investment where it will earn interest. Help your child remember what interest is by returning to the dollar and nickel activity in the Savings bank page. Take a trip to the bank Start with a bank deposit. If you put your money into a bank, the money will be very safe, but it will earn only a little interest. More risk Other investments. Explain to your child that there are other places to put money. Go to the Investing section. Within the Investing section, you’ll find simple definitions of different types of investments: US bonds, CDs, Money Market Funds, Stocks, etc. Tell your child that investing in a place other than a savings account typically earns more interest than a savings account at the bank. Which one’s for you? Pick an investment that fits your comfort level. Explain to your child which investment you are going to choose to help his or her money grow. Plus, explain how the investment works. You’ll find simple explanations in the Investing section. Older children The concept of risk. This is really a concept for older children. It might make younger children nervous about the safety of their money. Many families start with US bonds because they are backed by the federal government. If you put your child’s money in a non-guaranteed investment, like mutual funds or stocks, make an activity of tracking the money’s progress: you and your child should watch the newspaper or the Internet to see how the investment is doing. If the investment dips, don’t react in a way that will make the child anxious. Keep sending the message to your child, We leave money in an investment a very long time. The money will have its ups and downs. Just like we all have good days and bad ones. Decorate the bank Stay focused. Decorate the bank with pictures of your child’s long-term goal, a car, college, or a trip abroad. More info To learn more about types of investment and the risks they pose, go to Investing. Places to Invest Money You've got choices You've got $1,000 saved. Where should you put it? You can put it in a bank savings account, but you have more choices, as the list below shows. Certificates of Deposit Bank Money Market Account US Savings Bond Mutual Funds Stock Market Collectibles As you learn more about each kind of investment, you'll decide which ones might fit you best. Some are riskier than others. Some let you take your money out more quickly than others. Their rates of return are different. If you decide to put your money in one of these investments, you must weigh all of these factors. Invest money you don't need Whenever you invest money, you should use money you won't need for emergencies or everyday expenses. Money you invest is money you can "put away" and not miss on a day-to-day basis. Protect yourself: diversify It's smart to divide your money among different kinds of investments. (It's called diversifying.) When you put your money in different places, you lessen your risk. While one investment may lose value, others may not. Use this section of The Mint to learn more about investments and what they could do for you. Giving to Help Others Explain sharing I feel good sharing what I have with others. For many families, giving is as important as saving. If that’s your philosophy, begin early explaining that a certain amount of your child’s money should be set aside to help people. Investigate your options Who decides? The whole family can pool its money and give to a single or a few agreed-upon causes. If so, the family should meet and decide together, weighing the pros and cons of the various organizations. A child might want to give toys to other children through programs like “Toys for Tots.” Or giving can be a very individual thing. A child who has lost a grandparent to a disease may decide to support the search for a cure. If so, help your child find a reputable organization that supports such research. One place to start is at the Better Business Bureau’s website, www.bbb.org. Celebrate generosity Recognize the donation as an accomplishment. When the child has enough money saved to make a donation, turn that donation into an event. Carefully count out the money, and then write a check to the organization. You and your child should mail the check together and talk about it at the dinner table and with friends. Send the message Talk about helping others. Whenever you can, make the point that we all help each other. Show it in small ways. For example, ask your child to move an elderly neighbor’s newspaper off the lawn onto her porch as your child passes the house on the way home from school. Work from very local events to more national/international ways that families help others. Help you child plan Set your giving goal. How much to give? Kids with generous allowances and not many expenses can afford to give more. If the allowance is used to pay many or most of the child’s expenses, then the child might give less money but give his/her time instead. Illustrate the point Add it up. Help your child understand how a little donation grows. If your child gives 50¢ a week, at the end of 6 months, he or she will have $13 to donate. Count out the coins to make your point. Decorate the bank Stay focused. Decorate the bank with pictures of a cause that your child wants to give to. How Investing is Different than Saving The time factor Investing is for a long time. Point out the difference between money that you save to spend pretty soon — or in a month or two — and money you save for a long time. The money that children save to buy a car or go to college will be saved for a very long time. People like to make that money grow over the years by earning interest, not sitting in a bank at home. The Growing bank helps kids keep the money until there is enough to invest. Growing money Making your money earn money. First save a sum of money that’s pretty big, say $20 or more, (whatever is appropriate to the age of your child). Then it’s time to move money out of the Growing bank and into an investment where it will earn interest. Help your child remember what interest is by returning to the dollar and nickel activity in the Savings bank page. Take a trip to the bank Start with a bank deposit. If you put your money into a bank, the money will be very safe, but it will earn only a little interest. More risk Other investments. Explain to your child that there are other places to put money. Go to the Investing section. Within the Investing section, you’ll find simple definitions of different types of investments: US bonds, CDs, Money Market Funds, Stocks, etc. Tell your child that investing in a place other than a savings account typically earns more interest than a savings account at the bank. Which one’s for you? Pick an investment that fits your comfort level. Explain to your child which investment you are going to choose to help his or her money grow. Plus, explain how the investment works. You’ll find simple explanations in the Investing section. Older children The concept of risk. This is really a concept for older children. It might make younger children nervous about the safety of their money. Many families start with US bonds because they are backed by the federal government. If you put your child’s money in a non-guaranteed investment, like mutual funds or stocks, make an activity of tracking the money’s progress: you and your child should watch the newspaper or the Internet to see how the investment is doing. If the investment dips, don’t react in a way that will make the child anxious. Keep sending the message to your child, We leave money in an investment a very long time. The money will have its ups and downs. Just like we all have good days and bad ones. Decorate the bank Stay focused. Decorate the bank with pictures of your child’s long-term goal, a car, college, or a trip abroad. More info To learn more about types of investment and the risks they pose, go to Investing. Choose the right preposition to form phrasal verbs related to business. 1. After the scandal, he was relieved _____ his post as finance minister. back down of off out 2. Dad put Ł1000 _____ to help her buy a new car. up out off in down 3. Mr and Mrs Johnson must be pulling _____ over $1 000 000 a year. back down forward off up 4. Shares in telecommunication companies were marked _____ on the news that one of them had gone bankrupt. back down in off up Your exercise is sponsored by Ason Travel 5. Low consumer demand has forced them to mark _____ a wide range of goods by as much as 40%. up off in down back 6. We could use the new revolutionary material to make _____ better tyres. back into off up up for 7. Just before his death, he had made _____ $100 000 to me. about into over up to upto 8. I have some material from which I could knock _____ an article if you want me to. down off out together up 9. The brass plate was knocked _____ to Ł130 for Mr Brown. (At an auction) back down for off up 10. The plan is to hive _____ our daughter companies as soon as they are profitable. off into in down back 11. She's getting _____ a small group to go carol-singing for charity. down in off over up 12. Attempts have been made to ease the chairwoman _____ office. back of for off on out of 13. The director was drummed _____ of office life when it was discovered that she had been taking bribes. - back in off out 14. This is the latest scheeme dreamt _____ by advertising companies to sell new products. in off on up upto 15. Every Christmas thousands of people are drafted _____ to help with the post. on into in for back 16. The marketing director has come in _____ a lot of criticism over his unsuccessful marketing campaign. to on for down back 17. The factory churns _____ thousands of pairs low cost shoes every day. down in into off out 18. The meeting was called _____ due to the director's illness. off of in for down 19. The distributors will probably bump _____ the price of the software when the next version is released. down for in to up 20. The clothes manufacturer recently branched _____ into sport's wear. out off in for down http://www.nonstopenglish.com/exercise.asp?id=1&t=756 Put in these words to build compounds related to investment and stock markets. bear bond bull cat chip edged exchange holding income intangible listed plan rogue selling smart stripping time trading trust working 1. Panic is when many people suddenly start to sell company shares that they own. 2. A pension is a financial plan that allows you to receive money after you or your employer have paid money into it for a number of years. 3. A British unit (US mutual fund) is an organisation which sells shares to the public and invests the money obtained in a range of different businesses. 4. The capital of a company is immediately available for business use. Your exercise is sponsored by Ason Travel 5. Unearned is obtained as a result of investments and property owned instead of working. 6. A US Treasury is a document showing that you have lent money to the US government. 7. A stock is a place where shares in the ownership of companies are bought and sold. 8. money is invested by experienced investors who know a lot about what they are doing. 9. A trader loses a large amount of their employer's money after a bad or illegal investment. 10. A company is one whose shares can be traded on a country's main stock market. 11. An asset is what a company owns which is not material, such as a good reputation. 12. Insider is the illegal buying and selling of shares by people who have special secret knowledge. 13. A company's main purpose is to control another company through owning shares in it. 14. Gilt- securities are low risk investments paying a regular interest. 15. A first- buyer is someone who is buying his first house or flat. 16. A dead bounce is a temporary increase in the value of the shares of a company after a large decrease. 17. A market is a time when prices of shares are generally rising. 18. A blue- company or investment is one that can be trusted and is not likely to fail. 19. A market is a time when the price of shares is falling and a lot of people are selling them. 20. Asset- involves buying a company cheaply, selling its assets separately at a profit. http://www.nonstopenglish.com/allexercises/Business_English/Business_English-stocks_shares_and_takeovers.asp |
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