Saving and Investing

To save or not to save, that is the question.

Terms Saving –Setting aside income for a period of time so that it can be used later. Interest –Payment people receive when they lend money or allow someone else to use their money.

Time deposit –Savings plans that require savers to leave their money on deposit for certain periods of time. Maturity –Period of time at the end of which time deposits will pay a stated rate of interest. Terms

Certificates of deposit (CD) –Time deposits that state the amount of the deposit, maturity, and rate of interest being paid. Terms

Types of Savings Accounts Statement Savings Account –An account in which the saver receives a monthly statement showing the current balance and interest earned on the account.

Types of Savings Accounts Money Market Deposit Account –An account that pays relatively high rates of interest, requires a minimum balance, and allows immediate access to money.

Savings How much should I save? –You should have at least 3 times your monthly expenses in a savings account, but 6 months is recommended. Example: If your monthly expenses are around $900, you should have at least $2700 in a savings account.

How do I get there? –To get to the recommended amount in your savings account, follow the rule. 10% Tithe or Charity 10% to savings 80% to live off of Savings

Just like you would pay your bills, you should always pay yourself FIRST!!!! Put it in savings. Savings

–Savings Bonds Bonds issued by the Federal Government as a way of borrowing money; they are purchased at half the face value and increase every 6 months until full face value is reached.

Savings Treasury Bills (T-Bills) Certificates issued by the U.S. Treasury in exchange for a minimum amount of $1,000 and maturing in 3 months to a year.

Savings –Treasury Notes (T-Notes) Certificates issued by the U.S. Treasury in exchange for a minimum amount of $1,000 and maturing in 1 to 10 years.

Savings –Treasury Bonds (T-Bonds) Certificates issued by the U.S. Treasury in exchange for a minimum amount of $1,000 and maturing in 10 or more years.

Savings Factors that determine what percentage of income to save: –How much do you spend on fixed expenses? –What are your reasons for saving?

Savings Factors that determine what percentage of income to save: –How much interest can you earn on your savings, how fast will it grow? –How much income do you think you will be earning in the future?

Savings Questions to ask before deciding on a plan for savings: –What degree of risk are you willing to take? –How important is it to you to have your savings readily available in case you need immediate cash?

Savings Questions to ask before deciding on a plan for savings: –Will your standard of living at retirement depend largely on your savings?