FINANCE$ “Dollars and Sense”
“How Do I Pay For Stuff??” • When buying a product or service you can use… • Cash • Debit Cards • Credit Cards • Loans • Checks
CA$H • The simplest form of payment. • Keeps your spending “in check.” • You may not always have enough for big ticket items.
DEBIT CARD$ • Closest to cash • Amount of purchase is deducted from your bank account right away.
DEBIT CARD$ • If there’s not enough money in your account to cover your purchase: • Your card will be refused. • Or- • You will be charged an overdraft fee.
7 $igns of $mart Debit Card Use • 1. Memorize and protect your pin. • 2. Immediately record transaction • 3. Sign back of card • 4. Keep receipts • 5. Use your bank’s ATM • 6. Be aware of your surroundings • 7. Immediately report lost/stolen card
CREDIT CARD$ • Easy to take a “buy now, pay later” attitude. • You DO pay an interest amount on anything you don’t pay in full right away.
CREDIT CARD$ • With unpaid balances, the “real” cost adds up fast. • If you pay only the minimum balance each month, it could take years to pay off your balance. • Credit card debt is one of the top financial problems teens face.
LOAN$ • Another form of credit. • You agree to pay interest for a set amount of time (months/years) in addition to the amount borrowed.
LOAN$ • If you don’t make your payments on time, you can lose the item you purchased. • You can risk ruining your credit history as well.
CHECK$ • When you write a check, money is deducted from you checking account balance once the merchant deposits it in the bank.
Using a Checking Account “Writing Checks”
6 Things • The date • Person receiving the check • Amount in numerical form • Amount spelled out • Signature • Memo
Deposit Slips • Name • Amount deposited • The date • How the money is being deposited
Recording • Why is it important to record all charges or credits? • Fill in the following:
Recording • Check number • Date • Description of transaction • Payment/debit • Fee if any • Deposit/credit • Balance
How to Save Just a few tips…
Keep Track of Spending • Try this: for 1 month, write down every penny you spend. • Whether it is $2 for a drink at the mall, or $200 dollars for your new video game.
Keep Track of Spending • Don’t be surprised to find that you’re spending a lot on things that you really don’t need. • Impulse purchases add up fast. • Stories?
Do It Yourself • Cooking your own meals. • Using a home dry-cleaning kit. • Changing your own oil in your car. • Be sure to stick to jobs you can handle. • Ideas?
Think Before You Spend • Wait a day or two before making a purchase. • Ask yourself: Do I really need a digital camera to take on my trip? • Could I get a disposable camera? • Could I borrow my sister’s camera?
Think Before You Spend • If you’re replacing an item that’s broken, first see if it makes sense to have the old one repaired. • Stories?
Get it For Less • Save money by choosing store brands. • Use coupons. • Watch for sales. • Shop at discount stores.
Get it For Less • Online shopping saves money too. • www.half.com • Buy in bulk when it makes sense. • Consider buying second hand • Platos closet • Stories?
Be Creative • You can get more use out of old things by seeing them in a new way. • Ripped jeans could be used as new shorts. • You can frame calendar pages or make something yourself for wall decorations.
Be Creative • Before investing in something new, look for a creative way to reuse something you have or create some new works of art! • Stories?
Bank Accounts Know the facts….
Minimum Balances • You may need a certain amount in the account. • If you drop below that level you have to pay a penalty.
Fees • Some accounts have a service charge each month just to maintain your account. • You may also be charged for each check you write.
Fees • You can be charged for each use of your ATM/debit card. • Avoid accounts with these types of charges.
Transaction Limits • Some accounts limit the number of withdrawals or other transactions you can make each month.
Savings Account • Simplest type of account. • When you have money to deposit, you take it to the bank and give it to the teller.
Savings Account • When you want to take money out, you go to the bank and make a withdrawal. • If you prefer you can make deposits and withdrawals at an automatic teller machine (ATM).
Money Market • When you open a money market account, the bank invests the money you deposit. • This means that money market accounts pay higher interest rates than regular savings accounts.
Money Market • The catch is that you usually have to keep a minimum amount, such as $2,500 in the account. • Most money market accounts limit the number of checks you can write on the account.
CDs • With a CD (certificate of deposit) you agree to deposit your money for a certain length of time. • This can be anywhere from three months to five years.
CDs • This is in exchange for a specific interest rate that is usually higher than any other accounts. • If you withdraw your funds early, you pay a penalty. • Don’t commit for a long period if there’s a good chance you will need the money sooner.
Checking • You can use checks to pay for things you buy, and the money comes out of your account. • Using checks lets you make purchases without having to carry large amounts of cash. • Its also better to mail a check than cash.