Stater Financial Literacy Banking & Budgeting Stater Financial Literacy

Banking Options Retail Banks Credit Unions Ex: Chase, Wells Fargo Regional or national – many branches & ATMS May be quicker to roll out new technology Banking Options Credit Unions Ex: VyStar, Community First Local – won’t find branches when travelling Non-profit May have better customer service

Account Options Checking Accounts Savings Accounts Research fees & interest rates! Transfer money with checks or access directly with a debit card Use for daily transactions and bills Unlimited deposits/withdrawals Account Options Savings Accounts Limited transfers and withdrawals Higher interest than checking accounts May have a higher minimum balance

Managing Bank Accounts Overdrafts Occur when more money is withdrawn from an account than that account contains Must repay over-drafted funds as well as fees Check your online bank records regularly! Bank statement Contains monthly account history Lists purchases, withdrawals, deposits, and fees Can request through mail or online Managing Bank Accounts

Phase 1: Assess your personal and financial situation (needs, values, life situation). Phase 2: Set personal and financial goals. Phase 3: Create a budget for fixed and variable expenses based on projected income. Phase 4: Monitor current spending (saving, investing) patterns. Phase 5: Compare your budget to what you have actually spent. Phase 6: Review financial progress and revise budgeted amounts. The Budgeting Process

Income Gross income – amount earned before deductions Net income – amount received after deductions Deductions: Income tax withholdings Payroll tax withholdings Insurance and benefit expenses Savings deductions Income

Balancing Your Budget Needs Wants Mandatory expenses Examples: Rent or mortgage payments Transportation Groceries Balancing Your Budget Wants Discretionary expenses Examples: Going out to dinner Buying movies

Balancing Your Budget Fixed Expenses Variable Expenses Constant each month and should be planned first Rent or mortgage Insurance payments Balancing Your Budget Variable Expenses Can change each month Plan after fixed Clothing Food

Balancing Your Budget Spending Saving Anything you spend money on currently Needs and wants Fixed and variable Balancing Your Budget Saving Can be fixed or variable Investing a portion of income for the future or for short-term goals Savings accounts Retirement accounts Oher investments