Checking

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• Checking
• Savings
• Investments

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Checking Account

• 90 of transactions involving money are made with
  checks.

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What is a check?

• When opening a checking account at a financial
  institution the customer enters into a
  contractual agreement that allows the customer to
  deposit money in the bank and to write checks on
  that account.
• The financial institution agrees to maintain the
  account, provide records, and honor checks.
  Checks are safe, convenient, and provide a
  receipt for proof of payment.

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• Why is writing checks important?
• Why would you want to use a check instead of
  cash?
  
• What do people buy or pay with checks?
• If you pay with a check when do you actually pay
  the money?
  

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TYPES OF CHECKING ACCOUNTS

• MINIMUM BALANCE ACCOUNTS
• FAEE CHECKING ACCOUNTS
• COST-PEA-CHECK ACCOUNTS
• "NOW" (NEGOTIABLE ORDER OF WITHDRAWAL ACCOUNTS)
• MONEY MARKET DEPOSIT ACCOUNTS ("MMDAs")
• SHARE DRAFT ACCOUNTS

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Deposit slips

• What is a deposit slip?
• Why do you use a deposit slip?
• When you deposit money, where does your money
  actually go?
  
• To fill out a deposit slip you would fill in the
  date and the amount of the deposit.
  

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Writing a check

• Write todays date
• Pay to the order(name of person, company you are
  paying)
  
• Amount of check in numerical numbers
• Amount of check in written words
• Signature
• Memo / for what is the check for? Or the purpose
  of the check
  

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Cashing a check

• What happens if you dont have a checking
  account? Where can you go to cash your check?
  
• If you cash it at your bank can you always have
  your money immediately?
  
• What would prevent you from cashing your whole
  check instead of depositing it?

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Check Register

• What is a check register?
• Why is it important to keep track of checks you
  write and deposits you make?
  

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How to fill out a check register

• Give students several expenses (place and total),
  or you can just have them right checks out to the
  place they would buy gas, favorite place to buy
  close, and favorite entertainment place (food or
  activity).
• Have students practice writing checks.
• Hand out sample paychecks.
• Have students fill out a deposit slip.
• Record transactions into their check registers
  and balance their register book.
  

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Bank Statement

• What is a bank statement
• Why is it important to reconcile your bank
  statement total with your total in your check
  register?
  

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If you had 10,000 where would you save it until
you needed it?

• A. Bank savings account
• B. Mutual funds
• C. Tin Can in your basement or under
• your bed

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Why should you save money

• 1. We can reach our financial goals
• 2. Cover emergencies
• 3. Make major purchases
• 4. Provide for retirement.

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When saving money

• Pay yourself first (fixed expense)
• A good basic savings plan should include
• 1. A specific amount set aside regularly.
• 2. An emergency fund equal to three to six
  months' income
  
• Be aware of why you are saving
• Security of the principal
• Return
• Liquidity
• Convenience
• Tax status

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INVESTMENTS FOR INCOME AND GROWTH

• Share Account
• Personalized Savings accounts
• CD
• Money-market deposit accounts
• IRA traditional, Educational, Roth
• Stock
• Mutual Funds

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Stocks

• Preferred stocks--Dividends
• 2. Common stocks--Common

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Other options

• BONDS
• MUTUAL FUNDS
• COMMODITIES
• GOLD, SILVER, COLLECTIBLES

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Rule of 72

• Divide 72 by the interest rate to estimate the
  number of years it takes for your money to
  double.
  
• For example
• At 6 your money will double in 12 years

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Retirement Plans

• Taxed CD accounts, Mutual Funds, Stock
• Taxed deferred 401 K, 403 B, IRA, Pension
• Tax free Roth IRA and Variable Life Insurance

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Savings vs. Borrowing

• Should I borrow?
• Amount borrowed 4,000.00
• Finance Rate 9.5
• Term 24 months
• Monthly Payments 183.66 x 24 4,407.84
• Finance charge 407.84
• Or should I save?
• Amount needed 4,000.00
• Rate 4
• Monthly payments to savings account
  183.66
  
• Time to accrue 4,000.00 (4,001.47) 21
  months
  
• or 4,596.26 24 months

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Loans

• Personal
• Auto
• RV
• Mortgage
• Home Equity Credit
• Student

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PERSONAL LOAN

• 1. SecuredYou use your savings account or
  certificate of deposit as collateral. You can
  borrow against the amount you have on deposit.
  Low interest rates.
• 2. UnsecuredAn unsecured loan allows you to
  borrow without collateral. Your loan amount will
  be based on your income and ability to repay.
  Interest rates will be higher

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What determines if a financial institution with
loan you money?

• Debt to Income Ratio
• Credit Report
• FICO Score
• BK Score
• Proof of line of credit

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Debt to Income Ratio

• How to determine your loan
• Monthly Income (after taxes)
• Current Monthly Payment obligations
• rent
• credit card
• other loans
• total obligation
• Income divided by obligations should be
  lower than 40
  
• Maximum loan payment

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