chapter 23.1 use your money wisely. spending styles how a person spends money says a lot about the...
TRANSCRIPT
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Chapter 23.1 Use your Money
Wisely
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Spending Styles
• How a person spends money says a lot about the person’s values and goals.
• Two basic types of spending:– Present Oriented – Future Oriented
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Present Oriented
• People buy what they want sooner than later.
• They do less finical planning and saving.
• Do not consider how there spending affects the family.
• Can easily get into debt.
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Future Oriented
• People who focus more on their future and savings.
• Make purchases with care.
• Prepared when something pops up.
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Future Oriented
• May focus too much on not spending money, or take advantage of people willing to pay.
• May be nervous to spend money.
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Spending Styles
• Very few people are one style or the other.
• Most people are a mixture of both styles with one dominate.
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Checking Accounts
• Safer than keeping cash on you.
• Deposit money in to an account at the bank or credit union. – Ready for you when you need it.
• Can be taken out in person or by writing a check.
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Checking Accounts cont.
• Checks transfer money from an account to another person.
• Some people write checks for money they do not have. – When this happens the check bounces. – Many places have charges for bounced checks.
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Checking Accounts cont.
• Electronic funds transfer: Moves money from one account to another electronically. – Good for putting money into savings – Common for transferring money to savings.
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Chapter 23.2 Use you Money
Wisely ]
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ATM’s
• Automatic teller machines
• Allows you to check balances, withdraw, and even deposit money. – Some are open 24 hours a day.
• Must have an ATM or Debit card and a pin to use them.
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Debit Cards
• Another way to purchase something using the money you have in your checking account.
• Money is deducted electronically.
• Be sure to keep tack of the money you are spending.
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Online Banking
• Can see your account with a computer and internet access.
• Also can be done on some phones.
• Can pay bills or transfer money.
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Online Banking
• Some banks have no physical bank.
• Very convenient.
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Credit
• Burrowing someone else’s money and paying it back later.
• Good for large purchases. – House – Car
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Credit
• Since credit is rented money, there is a fee with it.
• Interest: What you pay when you use someone else’s money.
• After adding interest the cost of what you buy goes up.
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Credit
• Companies keep tract of whether or not people pay their debit.
• Those who pay it well and use it properly earn a good credit rating.
• Credit ratings go down when people do not pay their bills or pay them late.
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Credit
• Everyone is entitled to one free credit report each year.
• Lending companies can look at anyone's credit.
• Lending companies look at your credit when deciding whether or not to loan to someone.
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Types of Credit
• Lenders make money from giving out loans.
• The larger the amount of money and the longer the loan, the more money they make.
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Credit Cards
• Similar to debit cards, but instead you are using money that belongs to the credit card company.
• Most credit cards have a limit. –Amount available to be spent.
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Credit Cards
• Make sure you are aware of the interest rates and due dates of your bill.
• Some cards charge interest right away others only charge interest if you do not pay the whole balance.
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Loans
• Agreement to borrow money and pay back more than the borrowed amount.
• Banks and credit unions offer lower interest rates.
• Be aware of the loan agreement before you sign it.
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Installment Buying
• Offered through businesses that sell items like furniture and appliances.
• Typically more costly than loans.
• Make a down payment–Then pay monthly payments and interest.
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Use Credit Carefully
• Easy way to get what you want. Also easy to get into debt problems.
• Make sure that you can pay off whatever you buy with credit.
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Savings
• Should always be a goal.
• Easier for Future-oriented people.
• Money in a savings account earns interest.
• Good idea to keep 3-6 months of you salary in savings.