Presentation on theme: "Making Money Work For You"— Presentation transcript:
1 Making Money Work For You Money ManagementMaking Money Work For You
2 Objectives Review & learn key financial and economic literacy concepts Understand the importance of budgeting in order to control spending and meet expensesTeach students how to effectively utilize cash, debit cards, and credit cards to purchase goods and services
3 Basics of Banking Services Bank: A financial institution that handles money, including keeping it for saving or commercial purposes, and exchanging and investing, and supplying it for loans.Credit Union: A non-profit financial institution insured by NCUA that is owned and operated entirely by its members. Credit unions provide financial services for their members, including savings and lending.Savings Institution: A financial institution that accepts deposits from individuals, makes homes mortgage loans, and pay dividends.
4 Basics of Banking Services CHARACTERISTICBANK, CREDIT UNION OR SAVINGS INSTITUTION?Insured by the National Credit Union Administration (NCUA)Must have majority of their assets in housing –related loansGoverned by federal & state laws and regulationsSimilar to a bankMembers onlyMake loans, pay checks & accepts depositsCreated to promote homeownership
5 Benefits of Using Financial Institutions SafetyConvenienceMoney SaverSecurityFinancial Future
6 Savings Accounts Why should you save your money? What are the benefits of saving & savings accounts?Should you save for something that you want or need?What are some reasons why you might withdraw money from a savings account?
7 Paying Yourself First-Savings Account Key PointsAllows you to deposit, withdraw, and earn interest on your money.Allows you to put aside for a future goal or emergency fund.Limits how often you can take your money out.
8 Checking Accounts Why would you open a checking account? What sorts of things can you write a check for?What are some reasons that someone might want to pay by check rather than using cash?
9 Check It Out – Checking Accounts A checking account is a great tool for managing your money day-to-dayA checking account allows you to put money in to make a deposit or take money out to make a withdrawalYou can get cash whenever you need itAllow you to have a record of how much you spend and where.
10 Your Budget – Making Money Matter Three Basic StepsMoney Management Scenarios & Worksheet
11 NEEDS – WANTS = NET INCOME to SAVINGS Monthly BudgetNEEDS – WANTS = NET INCOME to SAVINGS
12 ATM & Debit Cards Automated Teller Machine (ATM) ATMs are safe and convenient ways to manage your moneyA PIN is your password to using an ATM.Do not tell anyone your PIN numberStay alert and aware while using an ATM.A debit card is not a credit card.Be AWARE of the fees that are associated with your debit card.
13 Credit Cards Credit CARD Act of 2009 President Obama signed the Credit CARD Act of 2009 into law May 22, 2009, following passage days earlier in the Senate and the House.Limited credit to young adults: Credit card issuers are banned from issuing credit cards to anyone under 21, unless they have adult co-signers on the accounts or can show proof they have enough income to repay the card debt. Credit card companies must stay at least 1,000 feet from college campuses if they are offering free pizza or other gifts to entice students to apply for credit cards.Read more: Compare credit cards here - CreditCards.com
14 Credit Cards??? Is given to you on your credit worthiness. Must pay interest on any unpaid balances .May allow you to buy something today rather than having to wait. But remember, you always have to pay the money back!!!The items you purchase are typically insured.If you pay your bills on time and in full, you build a good credit history and increase your ability to borrow in the future.Be aware of the fees and interest rates associated with the credit card.The card can be your best friend or your worst nightmare.
15 Credit – The Benefits & Risks Option of buying something today and paying the money back over time, rather than having to waitOverdoing it; borrowing more than you can afford to payFlexibility to act on major purchases and life opportunities that may require more money than you have on h and right nowIf you don’t make your payments on time, you will damage your credit historyEasier to rent an apartment and to get service from local utility companiesHaving to pay additional interest and feesEasier to buy what you want, when you wantDifficulty getting loans in the future
16 Good Credit vs. Bad Credit Paying at least the minimum requiredPaying on timeNever missing a paymentStaying within your credit limitPaying too littlePaying too lateMissing paymentsGoing over your credit limitHaving too much debtResultEasier to borrow moneyNo additional penalty feesMore money you’ll keep in your pocketGood deal on major purchases & cell phoneDecent apartmentDifficult to borrow moneyYou lose money on late feesMore money spent on fees and interestNot getting the job you wantHigher rates and fees on major purchases & cell phone
18 FICO ScoreA type of credit score that makes up a substantial portion of the credit report that lenders use to assess an applicant's credit risk and whether to extend a loan. FICO is an acronym for the Fair Isaac Corporation, the creators of the FICO score.
20 Tips for improving YOUR Score Monitor your credit reportConsistently pay your bills on timeKeep your balances low (no more than 30%, ideally 10%)Limit your amount of new creditDo not close out old accountsBe cautious about consolidating balances and moving credit around
21 General Tips for Financial Success Set a monthly budgetAlways pay on timeNever borrow more than 20% of your yearly net income.Keep your credit card debt low enough so that your required payments are no more than 10% of your monthly income or avoid credit cards if possible.Invest your earningsBudget and manage your cashLive within your means