Health DMA Please take out a piece of paper and complete the following: 1.Write down the vocabulary word and definition. 2. Choose ONE of these options and complete it. –Draw a picture that illustrates/explains the vocabulary word. –Rewrite the definition in your own words. –Write a sentence that includes the term and the information from the definition. Affect How we express our innermost feelings and how other people observe and interpret our expressions.

Today’s Agenda  DMA  Banks & finance  Pre-test  Types of banks  Types of accounts  Types of loans

Pre-Test Everyone needs a handout Write all your answers on your own paper.

Insured Financial Institutions  Banks/Thrifts:  Federal & state laws  Make loans, pay checks, accept deposits, & other services  Credit Unions:  Same as banks (services)  Non-profit financial institutions  Require a membership

Check Your Balances….  Always know how much is in your account!

Fees  Monthly maintenance fees  Penalty fees  Overdraft fees

FDIC  Deposit $ into a bank/thrift/credit union  up to $250,  FDIC/NCUA insures it

Bank vs. Check-Cashing Services Which is the better deal? Check-Cashing Services Check-cashing fees: 4 x $5 = $20 a month $20 x 12 = $240 a year Money order fees: 5 x $1 = $5 a month $5 x 12 = $60 a year Total: $300 Bank Monthly fee: $5 a month $5 x 12 = $60 Box of checks: $18 Total: $78 Savings: $222

Interest % of your balance that the bank pays you for keeping your $ at that bank Description+/-Balance Opening Balance+$100$100 Withdrawal-$20$80 Fees-$4$76 Interest+$1 $77

If the FDIC insures accounts… how do people lose so much $ in the stock market? Discuss with a neighbor…

Non-Deposit Accounts  Includes stocks, bonds, & mutual funds  Not FDIC-insured  You may risk losing your investment.

Name That Service  Everyone needs a handout  Put the name of the service next to its description  The signs around the room have the names of the services  Move around quietly to find the answers

Why is credit important? Discuss with a neighbor…

Why Is Credit Important?  It’s convenient  Emergencies  Pay for purchases over time  Can affect your ability to obtain employment, housing, & insurance

What is Collateral?  Security/assest you pledge to the lender  If you do not repay the loan  the lender is allowed to take/keep the collateral.

Home Loans  Home Purchase Loans  Primary loan for purchasing a home  Home Refinance Loans  Loan that replaces primary home loan  Home Equity Loans  Second mortgage/loan secured by the borrower’s home

Home Equity A lender may allow you to borrow up to a certain percentage of your home’s value (usually 80%) Value of Home$250,000 Minus debt-200,000 Equity$50,000

The Four Cs  Capacity: Your ability to meet payments  Capital: Value of your assets and net worth  Character: How you paid your bills or debts in the past  Collateral: Property/assets used to secure the loan

Predatory Lending Practices  Predatory loans:  Are usually more expensive than other loans  Have repayment terms many consumers cannot meet  Exploit borrowers

What are pay-day loans? List some companies that offer them… Discuss with a neighbor….

Pay-Day Loan Services  Short-term, costly loans If you “roll over” or “renew” your loan, the lender will charge an additional fee: $230 + $30 additional fee = $260! Loan Amount Loan TermFee You write a check for: $2002 weeks$30 $230 (391%)

When You Need $ Fast  Borrow from yourself first  put money into an emergency savings account  Comparison shop for loans  Look at ALL fees & risks  Check out emergency cash options with your bank