1. How Do I “Manage” My Money?
Personal Finance Unit: Banks, Credit, and Credit Unions

2. Why should you have a personal budget?
EOC study guide
Personal Finance #3
It’s really about understanding how much money you have, where it goes, and then planning how to best allocate those funds.

3. Why Shouldn’t I just Keep My Money In My Mattress?

4. Inflation!!—an overall increase in prices
EOC study guide
Macroeconomics #8
What’s inflation?
It’s a general increase in prices and fall in the purchasing value of money.

5. Banks pay interest

6. Remember all of the banks that failed during the great depression?

7. Can I really trust a Bank?
If they are Federal Deposit Insurance Corporation (FDIC) members
Since the start of FDIC insurance on January 1, 1934, no depositor has lost a single cent of insured funds as a result of a failure
Depositors are insured for up to $250,000
How does FDIC work?
EOC study guide
Personal Finance #8
FDIC Shuts Down Syringa Bank in Boise

8. Okay, but what’s the difference between a bank and a credit union?
Commercial Bank
Provides transactional savings, money market accounts
Like all businesses, their goal is to maximize corporate profits.
EOC study guide
Personal Finance #2

9. Okay, but what’s the difference between a bank and a credit union?
Financial institution that is not-for-profit and customers are members
EOC study guide
Personal Finance #2

10. Banks vs. Credit unions: accessibility
Big banks
ATMs are typically plentiful and branches are open on the weekend
Most offer a wealth of mobile and online tools
Credit unions
Meant to serve local communities, often not available outside the area
Branded ATMs are practically nonexistent, most offer to reimburse customers for ATM fees if customers have to go out of network

11. Banks vs. Credit unions: Checking account fees
Big banks
Notorious for levying major fees against customers— from overdrafts to monthly maintenance fees
According to MoneyRates.com the average monthly maintenance fee is $12.26
Typical charge for out-of-network ATMs is $2.60
Credit unions
Fewer fees across the board, for the most part
Overdraft fees are $20-$30, but usually only required to keep $30 in an account
70% offer free checking (39% of banks do)
Many charge a $2-$5 maintenance fee

12. Banks vs. Credit unions: Customer service
Big banks
In 2012 they scored a 77 on the American Customer Satisfaction Index
Credit unions
Scored an 82 on the American Customer Satisfaction Index in 2012

13. Why do banks loan people money?
To make money!

14. Key Debt Terms Principal—
a sum of money lent or invested on which interest is paid.
Interest— money paid regularly at a particular rate for the use of money lent
EOC study guide
Personal Finance #11

15. Why may you need to borrow money?

16. Student loan repayment

17. Should I buy it? The monthly payments aren’t too bad

18. Car loan calculator

20. How much would you pay for this home? Do interest rates really matter?
$150,000

23. Does your Credit score really matter? Why?
Financial institutions care about your character!!!
It matters what kind of "financial citizen" you have been
How do they know? By looking at your credit history
What is a credit score?
Showed video 1A

24. What do they care about most?
EOC study guide
Personal Finance #10
Factors that impact personal credit:
Payment history—have you paid your bills on time
Amounts owed—charge no more than 25% of your limit
Length of credit history—have you been reliable for years?
3 important credit score factors

25. Simple--Pay your bills on time. Good credit is common sense--Right?
Unexpected things that lower your credit score

26. Month Balanced Owed Payment New Balance January $1,000 $20 February
Interest portion of payment
(.17/12 x balance)
Portion applied to principle (payment - interest portion)
New Balance
January
$1,000
$20
February
March
April
May
June
July
August
September
October
November
December