Managing Money Chapter 30

Learning to Manage Good habits start early…by becoming a good money manager you can make your money work for you! Saving Money: The trick to saving is making it a habit.

Attitudes Toward Money Personalities affect the way people manage money. A conservative person tends to save more. A more liberal person tends to save less. People may use money to fulfill emotional needs: Security Status Need for love or respect

Living on a Budget Step 1: Determine Income – how much do you make? Step 2: Record Expenses – keep track of what you actually spend for a period of time Fixed expenses Flexible expenses Step 3: Create a Plan – determine your financial goals and make a plan. Step 4: Stick to your plan – keep track of your income and expenses to ensure that you are following your budget.

Types of Accounts Savings Accounts Checking Accounts An account that holds money you deposit and pays you interest on it. The amount earned depends on: Amount of money in the account Interest rate How long the money is in the account How often the interest is paid An account that holds your money and allows you to pay for things by writing a check or using a debit card instead of cash. To open an account you must: Deposit money in a bank Purchase checks Request a debit card Record expenses in register

What is interest? Interest – Payment the bank makes to you in exchange for the right to use your money. Principal – the original amount of money in an account or taken on a loan. Simple Interest – interest that is paid only on the principal. Compound Interest – money you earn on your deposit plus previous interest.