1. Managing Your Money
Ch 12

2. Save for your future Create a savings plan
Clear idea of why and how much your saving
Create a savings strategy
Save automatically if you can
Reward yourself for hitting goals
Store your savings
Return- income earned from funds that are not spent

3. Types of bank accounts Savings Accounts
Allows you to deposit and withdraw at any time
Earn low fixed rate of interest
Compound interest
APY (annual percentage yield)- percent earned in interest
Min $100
Time Deposit
Certificate of Deposit (CD) 1, 2, 5 yrs
More interest earned for the longer periods
Early withdraw penalty
Min $500 to $1000

4. Types of bank accounts Checking Accounts
Advantages of checks or debit cards- don’t have to carry large sums of cash
Checking account fees- monthly balance, overdraft, service charge
Minimum usually $100
Money Market Accounts
Deposit or withdraw at any time
Rate of interest varies- due to the economy- usually slightly higher
Min $500

5. Invest to earn a return
Investing- using your savings in a way that earns a return
Invest in corporate stock
Dividends paid out or capital gains
Risk vs Reward
Blue Chip stock
NYSE, NASDAQ
Stock Portfolio
Diversification- invest in a wide variety or corporations

6. Invest to earn a return
Mutual fund- a financial organization that accepts funds from many people and invests them in a variety of stocks
Invest in Corporate Bonds- less risk, must be repaid
Used bonds- can have higher or lower interest
Junk bonds- for companies in financial trouble- high risk high reward

7. Money Management Assistance
Investment information
Wall street journal
Financial adviser- investment advise for a fee

8. Protect yourself with insurance
Insurance- used to protect yourself from a variety of losses
Premiums and Past events- pay more if riskier to cover
Deductible- amount insured person must pay before insurance company does anything
Types of Insurance
Property insurance- house, cars, stolen goods
Liability Insurance- losses of injury cause to other person or property
Personal insurance- protect from financial loss (medical, life)

9. Your Insurance Needs Impossible to eliminate risk Rank your needs
Always purchase liability insurance protection
Umbrella policy- increase liability to $1-2 mil
Should have medical
If you have a family life insurances a must
Decision to purchase insurance- always a trade off