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Agribusiness Library

Agribusiness Library. Lesson L060018 : Personal Finances and Goals. Objectives. 1. Conduct budgeting of personal finances, and develop financial goals. 2. Determine the function of a checking account, and compare the features of various types of checking accounts.

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Agribusiness Library

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  1. Agribusiness Library Lesson L060018: Personal Finances and Goals

  2. Objectives 1. Conduct budgeting of personal finances, and develop financial goals. 2. Determine the function of a checking account, and compare the features of various types of checking accounts. 3. Explain how to open and balance a checking or savings account.

  3. Objectives 4. Identify the components of a check, demonstrate the ability to properly write a check, explain the functions of a debit card, and demonstrate the ability to properly complete a deposit slip.

  4. Terms Automated teller machine Budget Check maker Checking account Financial-planning process Goal Overdrafts

  5. What is budgeting? How is it important in the development ofpersonal financial goals? • Budgeting and developing personal financial goals • A. A budget is a formal written or unwritten plan that projects the use of assets for a future time. • 1. Budgeting allows a person to identify and track income and expenses. • 2. Budgets can categorize the use of cash in regards to necessities or luxuries. • 3. When income and expenses are recorded and tracked, estimates can be made as to how much is needed for the following week, month, or year. • 4. After establishing a well-organized budget, setting financial goals is easy.

  6. What is budgeting? How is it important in the development ofpersonal financial goals? • B. The financial-planning process is a series of steps that can be followed to meet specific goals and objectives. • A goal is a broad, general statement specifying what an individual wants to accomplish. • An individual should consider short-term, medium-term, and long-term goals. • There are six steps in the financial-planning process.

  7. What is budgeting? How is it important in the development ofpersonal financial goals? • 1. It is necessary to gather personal and financial data. • 2. It is necessary to establish financial goals and objectives. • 3. It is necessary to analyze financial information to identify alternatives to achieve goals and objectives. • 4. It is necessary to develop a financial plan. • 5. It is necessary to implement the plan. • 6. It is necessary to review the plan on a regular basis.

  8. What is budgeting? How is it important in the development ofpersonal financial goals? • C. Financial management is important in organizing and managing personal resources. • Financial management provides information like daily financial standing for setting priorities and needs. • It provides information for planning credit needs and assists in tax planning and reporting.

  9. What is budgeting? How is it important in the development ofpersonal financial goals? • 1. Managing finances provides numerous advantages. • a. Accurate financial standing is available, versus an estimate. • b. Personal net worth is easier to calculate. • 2. There are some disadvantages to personal financial management. • a. The initial set-up takes time. • b. Regular updating is required.

  10. What is the function of a checking account? What are the varioustypes of checking accounts? • A checking account is an account in which a user makes deposits and writes checks to be paid from the account. • A. A checking account provides numerous advantages. • 1. It reduces the need to carry large quantities of cash. • 2. The account may accumulate interest on the balance. • 3. It is a safe way to pay by mail. • 4. Most businesses accept checks.

  11. What is the function of a checking account? What are the varioustypes of checking accounts? • B. A checking account has several disadvantages. • 1. A checking account may charge monthly fees. • 2. Time is required to balance the checkbook monthly. • 3. There may be minimum balance requirements. • 4. Stolen or lost checks can result in the loss of money from the account. • 5. Hefty charges are levied against overdrafts —checks written in an amount greater than the account balance.

  12. What is the function of a checking account? What are the varioustypes of checking accounts? • C. There are several different types of checking accounts. • The more popular checking accounts available at many financial institutions are basic, free, interest-bearing, joint, express, lifeline, senior/student, and money market.

  13. What is the function of a checking account? What are the varioustypes of checking accounts? • 1. Basic—This account is designed for people who use a checking account to pay some bills and use a debit card to pay for some daily expenses. • At some financial institutions, basic checking accounts require a direct deposit or a minimum balance. • These accounts may limit the number of checks written per month. • A basic checking account will not accumulate interest. • 2. Free—This account is the most common account used. • In most financial institutions, a free checking account will not have a monthly service charge or fees regarding the balance or activity of the account.

  14. What is the function of a checking account? What are the varioustypes of checking accounts? • 3. Interest-bearing—This account is an account that usually requires a minimum balance. • The account may have to maintain a high balance to gain interest and to avoid fees. • This type of account is not popular due to the high balance needed every month. • 4. Joint—This account is an account owned by two or more people. • The people on the account have equal access to the money. • It is important to maintain good records with a joint account because overdrawn activity can result in fees.

  15. What is the function of a checking account? What are the varioustypes of checking accounts? • 5. Express—This account is a checking account designed for people who prefer to bank by automated teller machine (ATM), telephone, or computer. • An automated teller machine is a device an account holder can use to withdraw or deposit funds and to check account balances. • At many institutions, an express account usually has unlimited check writing, low minimum balance requirements, and low or no monthly fees. • The catch to this type of account is that you generally pay a fee for using a teller.

  16. What is the function of a checking account? What are the varioustypes of checking accounts? • 6. Lifeline—This account is designed for people with low income. • These accounts may or may not have monthly fees, require a low or no minimum deposit and balance, and require the user to write a certain number of checks per month. • 7. Senior/student—This account is a special account designed for students or people 55 or older. • Some financial institutions include free checks, cashier’s and traveler’s checks, free ATM use, and better rates on loans and credit cards.

  17. What is the function of a checking account? What are the varioustypes of checking accounts? • 8. Money market—These accounts combine checking with savings and/or investment opportunities to help a person track higher earnings. • There is a high minimum deposit requirement to open and to maintain the account. • This type of checking account will pay more interest than basic checking or savings accounts.

  18. What is needed to open and to balance a checking or savings account? • A person can apply, open, and balance a checking or savings account online or in person at the financial institution. • Accounts can be balanced at an ATM, on the phone, or by reviewing the monthly statement mailed by the financial institution. • A. There are a few simple items an individual must have to fill out the new account application.

  19. What is needed to open and to balance a checking or savings account? • These may vary depending on the type of account and the financial institution. • 1. Social Security number • 2. Date of birth • 3. Current street and mailing addresses • 4. Years at current residence • 5. Previous address (if less than three years at current address) • 6. Current employment information • 7. Previous employment information (if less than three years at current employer) • 8. Email address

  20. What is needed to open and to balance a checking or savings account? • B. A checking account holder should balance the account on a monthly basis. • However, it is important and highly advised from many financial institutions that accounts should be reviewed daily because of the chance of identity theft. • This can be done easily through online applications. • It helps to reconcile the account holder’s records with the monthly statement provided by the financial institution.

  21. What is needed to open and to balance a checking or savings account? • Important steps in balancing a checkbook include: • 1. Marking deposits and checks that have cleared the bank • 2. Adding to the current balance those checks that are written but have not cleared • 3. Subtracting any deposits made that have not cleared. • 4. Subtracting any service charges and adding any interest • 5. Comparing the ending balances in the checkbook against the monthly statement

  22. What are the components of the check? How is a check written?What are the functions of a debit card? How is a deposit slip used properly? • There are key practices a checking account holder should be aware of and use properly. • Writing a check to pay bills or loans or transferring money to another person may seem easy. • However, the check writer must follow several steps. • Another option of a checking account holder is to have a debit card. • The debit card functions should be used properly.

  23. What are the components of the check? How is a check written?What are the functions of a debit card? How is a deposit slip used properly? • A. There are several components to a check. • An account holder should be aware of each component and the proper use of checks. • Checks that are written should be done correctly, or errors can occur during processing.

  24. What are the components of the check? How is a check written?What are the functions of a debit card? How is a deposit slip used properly? • 1. Depositor—This part of the check can be called the maker of the check. • This identifies the person to whom the bank account belongs—the check maker. • The name and address of the check writer is found in this area. • Some makers include their driver’s license number or a telephone number. • 2. Check number—This is the sequential number of the check. • These numbers help with personal bookkeeping as well as with tracking debits.

  25. What are the components of the check? How is a check written?What are the functions of a debit card? How is a deposit slip used properly? • 3. Date—This line is used for the date the check was written. • 4. Pay-to field—This is where the check writer indicates the payee (the person who will receive the money).

  26. What are the components of the check? How is a check written?What are the functions of a debit card? How is a deposit slip used properly? • 5. Check amount fields—There are two areas on a check that will indicate the amount of money the check represents. • Numerical form is found in the box. • The written form is found on the line provided in the style of “ten dollars and no/100 cents.”

  27. What are the components of the check? How is a check written?What are the functions of a debit card? How is a deposit slip used properly? • 6. Name of financial institution—This area of the check informs the payee which financial institution guarantees the funds represented by the check. • 7. Memo—This line is used by the check maker to indicate the intended use of the check. • For example, “loan” or “happy anniversary.”

  28. What are the components of the check? How is a check written?What are the functions of a debit card? How is a deposit slip used properly? • 8. Bank routing information, bank account number, and check number—These numbers are presented across the bottom of the check. • The bank routing number is located on the far left bottom. • It represents the bank or financial institution that holds the account. • The center number is the bank account number. • The check number is located on the far right bottom of the check.

  29. What are the components of the check? How is a check written?What are the functions of a debit card? How is a deposit slip used properly? • 9. Signature line—This area is used by the “check maker” to validate the transfer of funds from the maker to the payee. • 10. Endorsement lines (on the back of the check)—These lines are used by the payee to endorse (sign his or her name on) the check. • 11. Bank information (on the back of the check)—This area is reserved for bank use. • The payee and check writer should not mark in this area. • The bank will often use this area to print information concerning the payment.

  30. What are the components of the check? How is a check written?What are the functions of a debit card? How is a deposit slip used properly? • B. There are certain guidelines that should be followed when writing checks. • 1. Checks should be written in permanent ink. • 2. The purpose of the check should always be included on the memo line. • 3. No space should be left next to the dollar sign. • 4. All written words should be spelled correctly. • 5. Any check with a mistake should be voided.

  31. What are the components of the check? How is a check written?What are the functions of a debit card? How is a deposit slip used properly? • C. When an individual opens a checking account, he or she should expect a debit card or check card to be included. • Traditionally, ATM cards were used for transactions at automated teller machines. • However, the debit card can offer flexibility for purchases. • The following are a few functions of a debit card. • 1. Cards with pin numbers allow for protection against identity theft. • 2. The money that is used for purchases is deducted directly from the checking account. • 3. Some banks will charge fees for the use of debit cards.

  32. What are the components of the check? How is a check written?What are the functions of a debit card? How is a deposit slip used properly? • D. The proper use of a debit card is important. • The account holder should be aware of the following when using a debit card: • 1. It is important to know the type of debit card. • 2. The debit card should be kept in a safe place. • 3. The debit card should not be kept lying around the house, car, or a desk at work. • Valuable information is found on the front of the card.

  33. What are the components of the check? How is a check written?What are the functions of a debit card? How is a deposit slip used properly? • 4. If the card is lost or stolen, it should be reported immediately to the bank. • Then the account should be closed, and a new account number and pin should be received. • 5. Receipts from debit transactions should be kept and recorded. • 6. The PIN number should be memorized. • 7. It is important to know how much money is in the account before making a purchase. • 8. A debit card number should never be given out, unless the recipient is legitimate.

  34. What are the components of the check? How is a check written?What are the functions of a debit card? How is a deposit slip used properly? • E. Deposit slips are used to summarize the total funds for a complete transaction to occur as money is being added to the checking or savings account. • The following are important steps to follow when filling out a deposit slip. • 1. Most checks come with a deposit ticket located toward the back of the check book. • Many financial institutions will provide deposit slips without a fee. • 2. Account holder information (name, address, etc.) should be located on the top left corner.

  35. What are the components of the check? How is a check written?What are the functions of a debit card? How is a deposit slip used properly? • 3. The date line is used for the date the deposit was written. • 4. Acknowledge receipt of cash received is a line provided for the account holder to sign to receive cash from the deposit. • 5. Items for deposit is a series of boxes to indicate the items, dollars, and cents for deposit. • There is a space for cash (sometimes a box must be checked) and blank lines to indicate checks (use check numbers). • It is important to write out the full amount. • The amount on the deposit slip should match the check amount. • Additional lines are located on the back of the deposit slip for extra listing of items.

  36. What are the components of the check? How is a check written?What are the functions of a debit card? How is a deposit slip used properly? • 6. The subtotal line indicates the subtotal for deposit (all cash and checks added together). • 7. Less cash received is the line to indicate any cash that is to be received by the account holder at the time of the deposit. • 8. Total deposit is the line to indicate the total deposit into the account (after any cash is to be received).

  37. What are the components of the check? How is a check written?What are the functions of a debit card? How is a deposit slip used properly? • 9. In the name of financial institution area of the check, it informs the payee which financial institution guarantees the funds represented by the check. • 10. The bank routing information, bank account number, and check number are presented across the bottom of the check. • The bank routing number is located on the far left bottom. • This represents the bank or financial institution that holds the account. • The center number is the bank account number. • The check number is located on the far right bottom of the check.

  38. REVIEW What is budgeting? How is it important in the development of personal financial goals? What is the function of a checking account? What are the various types of checking accounts? What is needed to open and to balance a checking or savings account?

  39. REVIEW What are the components of the check? How is a check written? What are the functions of a debit card? How is a deposit slip used properly?

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