Finding a Place to Live
Finding a Place to Live
After High school, one of the decisions you will have to make is where to live - yes, you will have a choice! You can continue to live at home, (maybe: discussion with parents needed!) or you can find a place of your own or with friends. Even if you choose to move out of your parent's home, you will have some choices. Three of the most common are: Basement suites, Houses and Apartments.
- Basement suites are usually a part of someone's house and come in all shapes and sizes. Most of the time, the person who owns the house will also be living in it and you may or may not share parts (such as laundry) with them. A Studio or Bachelor suite is one without a separate bedroom and are usually the cheapest. A bedroom is defined as a room with a closet and a door, so something advertised with a den would mean a room without a closet which of course means that you could still use it as a bedroom!
- Apartments are in buildings with several units and are generally looked after by a building manager who also lives in the building. There aren't a lot of variations in the layout of most apartments since they have to fit as many into the space as they can, so aside from heritage buildings and more bedrooms, they are fairly standard.
- Houses are stand alone buildings that you rent as a whole. These are great if you have a family or want to share the rent with several roommates. Houses have a wide variation in both layout and price, but are generally the most expensive. However, if you can find people that you can stand to live with, this could be your least expensive option!
Transportation
Transportation
One of the many things you will have to consider when you move out on your own is how you are going to get around. In a city, you have many options: Bus, taxi, walking, biking, car, train, ferry, etc. Most of these methods cost money and will have to be factored into your budget and you will have to decide what is the most cost effective and convenient for you.
Assignment
Complete the following assignment on the cost of transportation.
Savings
Savings
Do you save money by putting it in your piggy bank or another safe place where it may not be accessible? The growth of this amount totally depends on you adding to it. Do you keep your money in a bank account? This amount can grow from the "interest" you make by "lending" your money to the bank. You may not realize this, but if you invest in something other than a bank account, your money can actually grow so you have more money to spend, or save for a 
future purchase or for college or university. Investing can also involve risks that include losing some or all of your money. In this lesson you will learn about basic types of investments and how they work. You will also decide how much money you would like to save for a later date.
The Magic of Compound Interest
Compound interest is when the money that your investment makes earns you still more money. It has been compared to a snowball rolling downhill that grows larger with each revolution.
David Chilton in "The Wealthy Barber" explains the importance of young people taking advantage of the "The Magic of Compound Interest" by starting early. For instance, consider these two scenarios:
- Jenna saves $2,000 each year from ages 19 to 26 and invests it in an account that realizes a return of 10% per year. She then no longer contributes anything, but leaves that money in the account until age 65. The total value of her investment at that time would be $1,035,160.
- Ty does not start saving until age 27. He saves $2,000 each year from ages 27 to 65 and invests it in an account that realizes a return of 10% per year. The total value of his investment at age 65 would be $883,185.
Jenna will have contributed a total of $16,000 (8 years x $2,000.00) and at age 65 increased the value of her deposits by 64 times.
Ty will have contributed significantly more at $78,000 (39 years x $2,000.00), but will have increased the value of his deposits only by 11 times.
These two scenarios show that it really pays to be putting as much money away as early as you can. You are not paying a lot of the bills right now that you will be paying as an adult living out on your own, so setting up some investments now can really pay off!
Assignment
How does compound interest work? To find out, complete the following assignment:
Investing Assignment
Assignments
Click on Types of Investments to see what your options are. Use that information to complete:
1. Sample Investments Assignment
When you are done, click on the arrow to upload:
2. My Investment Portfolio Assignment
When you are done, click on the arrow to upload:
Tax Assignment
Taxes
But in this world nothing can be said to be certain, except death and taxes.
Benjamin Franklin (1706-1790)
At one time or another you have probably heard about income taxes. Just what is this mystery that everyone likes to complain about? Income tax can be a complicated issue but the basic theory behind it is easy to understand. In this lesson you will explore the Canadian taxation system. You will learn why we pay taxes and how the money is spent. You will also learn the importance of filing an income tax return, where to get help if you need it, and how to complete a basic income tax form.
Assignment
The Canada Revenue Agency (CRA), a division of the federal government, is responsible for looking after all taxation matters in Canada. One of their roles is to educate the general public about taxes. To do this, they have developed an online course called Learning About Taxes that explains the income tax system and demonstrates how it works. The entire course takes approximately 20 -30 minutes to complete. You can stop and start at any time, and review what you have done.
The course has four modules:
Module 1: Basics of Taxation
Module 2: Tax Filing Process
Module 3: Roles and Responsibilities
Module 4: Complete a Basic Tax Return
Work through the course and answer all the questions on the Learn About Taxes worksheet.
Keep in mind that you can revisit the course any time to review your tax knowledge. It might come in handy when you file your first return, if you haven’t already done so.
Insurance
What is Insurance?
Insurance is a contract (the policy) under which the insured pays a premium to the insurer in exchange for compensation for certain losses, if they occur during the term of the contract. For example, in car insurance, the owner (the insured) pays an annual premium to the insurer. If an accident occurs causing personal injury or damage (the loss), the insurer pays money (the compensation) to the person who suffers the injury or damage.
Insurance companies offer many types of insurance, and the type you need depends on your circumstances.
• If you own a car, you must have basic auto insurance, but you may also want collision and comprehensive coverage to protect you if your vehicle is stolen, vandalized, or if you are in a crash.
• If you're living on your own and want to protect your property from theft, fire or other risks, you may need home or contents insurance.
• Canadians' basic health insurance is covered by their province or territory, but you may want additional coverage for the costs of items like extended medical services, eyeglasses, dental work and prescription drugs.
• If you travel outside of your home province, travel medical insurance will protect you from the high cost of medical expenses elsewhere.
• When you're older and have people who depend on your income, life or disability insurance can protect them from financial risks.
What's Covered?
The insurance policy defines what the insurance agreement covers. The coverage varies with different policies and insurance companies, so you have to read the policy to know what's included.
Usually, basic property insurance covers things like fire, theft, storms, accidents, water damage and vandalism. It doesn't cover deliberate damage caused by the person who buys the insurance.
When an insurer offers compensation for damaged property, it's based on the value of the property "as is," which means the used state it was in when the damage occurred. For example, if you bought a television three years ago for $500 and it was stolen, the insurance company would compensate you for a three-year-old television, which might be worth only $100. For an extra charge, you can buy coverage for replacement value, that is, the cost of replacing the item at its current price, even if the price is higher than what you originally paid for it.
Your Insurance Needs
• How much property insurance do you need? To find out, you can list the property you own and estimate its value, either its used value or replacement value, including taxes. Then discuss your needs with an insurance agent. Be sure you understand the policy the agent offered to you, and buy only the insurance you need.
• Take time to compare prices and terms from different insurance companies. Ask others to recommend an insurance company with a good reputation and low costs.
• Choose an insurance agent with care. An insurance agent is a sales person representing one or more insurance companies. Insurance agents must be licensed and follow a code of conduct.
• Ask others who have experience with insurance to recommend a good agent. Talk to the agent, and choose an agent who answers your questions and whom you're comfortable with.
• Check agencies like the Insurance Bureau of Canada (www.ibc.ca) and your provincial insurance regulator for more information about insurance policies.
Investing
What are Investments?
• A way to use money with the hope of making more money
Types of Investments
• Deposits in a financial institution (savings accounts, term deposits and guaranteed investment certificates)
• Shares - also called stocks or equities (part ownership of a company)
• Bonds and Debentures (loans to a company or government)
• Mutual Funds (a professionally managed pool of money for investments)
• Real Estate (land and buildings)
• Direct investment in a business
Expected Return, Risk and Liquidity
Expected Return the profit that you think you'll receive from an investment in the form of:
• Income from interest or dividends
• Increased value (capital gains)
Risk amount of uncertainty about the expected return, including the possibility that the investment may lose money or become worthless
Liquidity ability to sell the investment quickly and at a fair price
Investing your $10,000 Inheritance:
Option 1: Guaranteed Investment Certificate
• Low risk, return of $400
Option 2: Mutual Fund
• Some risk, return of $1,000 to $1,500 in the past
Option 3: New Company
• Unknown future
+ may return $5,000 to $10,000 per year
+ could go bankrupt and lose the initial $10,000 and any gains
What is Risk Tolerance?
• The amount of risk that an investor feels comfortable with
• The amount of risk that an investor can afford to take
What Affects Risk Tolerance?
• Personal goals
• Life stage
• Lifestyle 
• Time line
• Knowledge
What is Diversification?
Spreading your money over a variety of investments to reduce risk.
• Choose different types of investments
• Choose various investments within each type
Take the Appetite For Risk quiz to find out what kind of investor you are.
Financial Assignment
Financial Plan
In this unit you have been provided with a basic introduction to personal financial planning, covering the impact of career and work factors on earnings potential, spending and saving money, and using and managing credit effectively. You were taught how to develop your own personal spending and savings plan.
Now it time to consider what your financial plans are when you finish high school.
Regardless of the path you take, it is important to know what the costs will be and how you will pay for those costs. For this final assignment you will begin preparing your financial plan for the next year. A financial plan is your road map to your future. It is detailed and accurate and can help you get to your goals with less trouble and less expense. A road map, or financial plan, that's vague or inaccurate can lead you down rough roads and into dead ends.
Notice that budgets and financial plans are different but related documents.
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|
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| has no goal | states a goal |
| shows current income and current expenses | shows expected future income and expected future expenses |
| shows sources of income and allocation of expenses | shows how income and expenses will be organized over time to achieve objectives |
| doesn't include present or future assets | shows investments, savings and other assets that are available or will be generated or acquired |
| doesn't include debts, such as loans | shows loans that may be required |
| doesn't include steps to be taken | shows steps that will be needed to meet financial goals |
Assignment
