Warm UP1. What is the difference between gross pay and net pay?

2. What is the difference between a deduction and a bill?

3. What is the difference between revenue and expenditures in your budget?

4. What is the difference between a premium and a co-pay on your insurance policy?

1= That’s me 2= Sometimes 3= That’s not me

1. I count the change I’m given by cashiers in stores and restaurants. 1 2 3

2. I always pick up all the change I receive from a transaction in a store; even it’s only a few cents.

3. I don’t buy something right away if I’m pretty sure it will go on sale soon.

4. I feel a real sense of accomplishment if I buy something.5. I always remember how much I paid for something.6. If something goes on sale soon after I’ve bought it, I feel cheated.7. I have money in at least one interest-bearing bank account.8. I rarely lend people money.9. If I lend money to someone repeatedly without getting it back, I stop lending it to

that person.

10. I share resources (e.g. CDs, books, magazines) with other people to save money.

11. I’m good at putting money away for big items that I really want.12. I believe most generic or off-brand items are just as good as name brands

My Savings Style Survey

Add up your ratings and answer these questions.

• 12-15 Very aggressive saving style• 16-20: Careful saving style• 21-27 Fairly loose saving style• 28-32 Loose saving style• 33-36 Nonexistent saving style

1. What are the advantages and disadvantages of your saving style? 2. How do you think your saving style would affect your ability to keep to a

budget? 3. If you are dissatisfied with your saving style, how might you be able to change it?

5.3 manage a checking and savings account

$371.00

$1029.00

$1200.00Credit Card

Savings Account

Debit Card

5.3

Credits and Debits

What is the purpose of a financial institution?

• An institution that collects deposits and provides a financial reason to do so.

• Types: financial reason

• Bank: give out loans, provides low interest rate• Credit Union: give out loans, provides higher interest

rate• Insurance Company: pays money if someone is in

trouble• Investment Institution: helps individual to invest money

in a place where they can make more (ex. Stock Market)

Debit vs. Credit•Debit: Taking money out of your account (*NOTE* this is different than DEBT)

•Credit: Putting money in your account

•Checking v. Savings •Checking Account: A bank account where you can easily transfer and use the money

Checking Account cont…•Debit Card: Money that can be easily transferred in any transaction from checking account (online, store, atm machine)

•Check: written statement asking for money to be taken out of checking account

Balancing your checking account

• Your first paycheck is $4000.00

• Fill out the deposit slip

• Write in CHECK in the box under CASH

• Add this deposit (credit) to your account.

$516.27

$2576.21

$40.00

$46.23

$237.19 $15.72

Using Card

Using Check #1000

ATM for cash

Using Card

Using Check #1001

Using Card

5.4 Compare and contrast the purposes of credit and debit

Fill out the last blank check to Shinn Enterprises for Rent for this month. Your rent costs $425.85. RecordThis transaction in your check register.

•Savings: A bank account where you store money and can earn money (interest)• Interest: earning extra money for lending it out

•Credit•Credit: money is “credited/deposited” to your account as a loan (borrowing money)

• Interest: Paying extra money for borrowing

•Types of Credit:•Credit Card: can borrow a certain amount of money to spend

•Student loan•Car loan•Mortgage (home loan)

•Credit line: how much money is available for borrowing

•“Financing”: borrowing money to pay for an item that you will pay off over time

•Debt: money that you owe

•Collateral: the borrower agreeing to give up property in the event he/she can’t pay off the loan•Ex. Foreclosure: giving up home as collateral when the borrower can’t pay it off.