1. Spending and Saving Money Chapter 27-1

2. Attitudes toward money Some people put more value on money than others Often spring from emotional needs rather than practical needs Examples: save every penny to feel financially secure vs. buying a new iPod to make you feel better Manipulate people by paying for favors and loyalty – desire for power Some feel the need to “buy” friendships

3. Spending Styles Two basic spending styles: Present-oriented – buy what they want sooner rather than later. Typically do less financial planning and saving less likely to consider how their spending habits affect the family. May enjoy life a bit more because they worry less Future-oriented – people who focus on the future think more about saving. Rarely lose sight of goals. Make purchases carefully to reach those goals. Prepared when something unforeseen happens. Extremists may be reluctant to spend money at all

4. Handling Everyday Expenses Most teens only responsible for part of expenses (housing, food, medical care, some clothing and entertainment are parent covered) When you become more independent, you take on more financial responsibility and need other ways to handle your money Checking account ATM Debit cards Credit cards Installment buying loans

5. Checking account – you put money in an account, the bank holds it until you need it. Withdraw in person, electronically, or by writing checks ATMS – Automatic teller machines, convenient access to your accounts. Open 24/7 Debit cards – like credit cards but come from your checking account without writing a check. (easier to overdraw on your account) Credit – borrowing or using someone else’s money and paying it back later Credit cards – using plastic cards to buy goods and services without cash

6. Other Types of Credit Installment buying – buying a large item in multiple payments Down payment – make a partial cash payment Sign a contact to pay the balance Balance – remaining amount low monthly payments = high interest rates APR – Annual Percentage Rates Loans – borrow money and agree to pay more than the borrowed amount back

7. Applying and Using Credit Businesses want to know that you’ll be willing and able to pay Credit application ask about employment, other sources of credit, etc. Companies do credit check through a credit bureau Credit is an easy way to get what you want BUT Debt problems are very common How do people get themselves into debt?

8. Saving Money Saving for the future isn’t easy Money in savings accounts earns interest Savings and sometimes Checking accounts earn lower interest, but you can access whenever needed CDs – Certificates of Deposit – higher interest, but can’t touch without a penalty Government Savings Bond – higher interest, but can’t touch until due Keep at least 3x your monthly salary in an emergency fund