Financial Literacy

Callum from GetWi$e ASB came and spoke to us about Financial Literacy. That's when you are being smart (or wise) with your money. 

These are some of the things he talked about:

He compared it to being an All Black - you need to practice. 

Like rugby, what do you need?  In rugby you need a ball. In Financial Literacy you need money! But HOW do we get it? Well, we earn it.

How can we earn it? 

We can do chores (He called these “Da rules” = do your chores = free time). So how do we earn money if we don't get money from doing chores for our parents? We can do someone else's chores for money (extra chores). It means we have less free time but the flip side is we are earning!

These are the thing we can do to earn money:

• neighbourhood jobs - chores for other people. We get less free time in exchange for money.
• business (fundraising e.g. selling lemons) - product or service. Do something for someone or make something for someone to buy. Product - sell lemons. Service - neighbourhood lawn mowing service. We could borrow mum and dad’s lawn mower, pay for the petrol ourself, hand out flyers and mow people’s lawns. Any business will always operate on; earn - cost = profit (e.g. sausage sizzles).
•  sell stuff - sell the things you have outgrown or don’t use.

Setting a goal

All Blacks - what is their goal? To win!

If they had no idea why they were playing in the first place, would they play as hard? Having a goal is about motivation.

Cash Goal - on a piece of paper we wrote: 

C 

A

S

H

C = Clear - Imagine the All Blacks Coach told his players they had to pass the ball through a hoop. The players have to practice their accuracy. If the coach said, “Throw the ball,” players could throw the ball anywhere. The instructions were not specific.

If he said, “Throw the ball into the hoop,” everyone could throw it at the same time.

If he said, “One at a time, throw the ball through the hoop," then he is being specific. We need to be specific with our goals. 

What do you want to buy? Is it realistic?

A = Action  Imagine the All Blacks again. What if the first player waits and does nothing. This achieves nothing. 

We can do chores, neighbourhood jobs, run a business, sell stuff. We wrote what we are willing to do.

S = Save - how much money can you save in a week? $15 per week is the national average for children our age. Don’t get distracted and buy something else. If you see something you really want to buy you need to consider - Save or buy? Shout it! SAVE OR BUY? That’s what your brain does. It argues - 'If I buy the shiny object I will have less money. But I REALLY want it!'

H = How long? - How far away is your goal? (How far away is the hoop?)

If someone wants to buy a Lamborghini, it could cost $200,000. $200,000 divided by $15 is 13,334 weeks - that's 256 years. That’s an unrealistic cash goal. It's a bit like if the All Black coach said, "Throw the ball through the hoop?" Where's the hoop? In Peru?? We could also think, 'I could win the lottery.' Chances are 1 in 36,000,000.  Tickets cost about $15. Try multiplying that by 36,000,000! (And you can’t drive anyway.)

If we wanted to buy a phone for $200, at $15 per week it would take 14 weeks to save. Now that's realistic!

How to run your own business

Is it - Product or Service?

On a piece of paper, we wrote:

S
S
S

Service - e.g. mowing lawns - $20 per lawn earns $60-$80 per weekend.

S - strengths - What product/service would people pay money for? What can I do? What am I good at? What do I enjoy doing? 

We decided one thing we are good at e.g. good with animals, mowing lawns, gardening, baking

S - Solve - Product or service? Which one will I choose? We chose one of the things we are good at.

S - Start - We wrote down the small steps we need to do to start our business. What are the things I need to do to start my business? Where? When? What do I need? I will get supplies from...I will get some starting money from...

Shark Tank  

After we had devised our plan, we presented it to The Shark Tank! A Shark Tank is when a person who has an idea for a business would approach the panel and present their business idea. They received constructive criticism from the panel who picked apart bits of the business and put it together in a workable format.

We stood in front of the class, presented our plan and then people asked us questions. It was really helpful as we hadn't thought of some of the things.

Read how Olivia S wrote her plan.