1. UNIT VII – Personal Financial Literacy
Your Money and the Bank
UNIT VII – Personal Financial Literacy

2. Your Pay SALARIES WAGES Hourly pay
Anything over 40 hours must be paid overtime (time and a half)
Annual pay
Get paid the same regardless of how many hours you work

3. Your Pay NET PAY GROSS PAY
How much you make BEFORE taxes and other deductions are taken out
How much you make AFTER taxes and other deductions are taken out

4. Mandatory Deductions Deduction What do you get? Who pays?
Federal Income Tax
State Income Tax
FICA: Social Security
FICA: Medicare
Employee; Amount taken is based on pay and W-4
Pays for services provided by federal government
Pays for services provided by state government (not all state have, but NC does)
Provides for old-age, survivors, and disability insurance
Employee and Employer
Provides hospital insurance for the elderly

5. Other Deductions Deduction What do you get?
Life Insurance
Short or Long-term Disability
Medical Insurance
Dental and Vision Insurance
Retirement Savings Plan
Pays a beneficiary in the event that an employee dies
Provides benefits in the event that an employee is completely disabled
Provides employee and family with medical care including hospitalization, doctor visits, etc.
Provides employee and family with dental or vision coverage for check-ups and procedures
Savings for retirement, most commonly called a 401k

7. Where should you put your money?
Financial Institution
Description
Commercial Bank
Credit Union
Savings & Loan Association
Brokerage Firm
Typical bank that offers checking, savings, and credit accounts – ex: Wells Fargo
Member owned cooperative, has same type of accounts as commercial but usually with better rates – ex: SECU
Today offer most types of accounts but specialize in saving and mortgage loans
Specialize in buying and selling stocks.

8. Deposit Services Checking Account
Used for daily transactions, money flows in and out often
Savings Account
Used for saving money
Money can be withdrawn anytime
Interest is given to increase money in account
CDs (Certificate of Deposits)
aka – Time Deposit
Money saved for a certain period of time
Receives a higher interest rate

9. Managing Deposits and Spending
Making a Deposit
To make a deposit into your checking or savings account you must fill out a deposit slip
PRACTICE: Deposit check #123 for $300 and receive $75 back in cash.

10. Managing Deposits and Spending
Withdrawing Money
Can be done in person at the bank with a withdrawal form or at an ATM
PRACTICE: Withdrawal $100 from account number

11. Managing Deposits and Spending
Spending Money
Today this can usually be done by using a debit card attached to the account
Checks can also be written, these are mostly used for payments to people or for bills
PRACTICE: Write a check for $ to the U.S. Department of Education

12. Managing Deposits and Spending
Keeping Track of Your Account
It is INCREDIBLY important that you keep up with the transactions (deposits, withdrawals, and spending) of your checking account
Banks today offer online banking to help you with this but this is NOT always reliable because transactions can take a while to process so your account may have more/less than the online banking says
Due to this, it is important to ALWAYS keep a paper record of transactions in your check register
Each month you will receive a statement of the previous month’s activities. ALWAYS balance your checkbook and look for any mistakes you may have made.

13. Managing Deposits and Spending
Starting balance: $649.52
Deposit on 12/2: $54.96
ATM Withdrawal on 12/4: $20.00
Debit Card Purchase on 12/5: Food Lion for $ 13.75
Bill Payment on 12/9: Check #149 to Time Warner Cable for $183.15