1. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 M oney t alks FINANCIAL MANAGEMENT 101

2. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 Money, Money, Money, Money… In Your Journal write down info in Red We are covering: Banking Services & Terms Types of Accounts Reconciling a Checking Account

3. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 What about Saving Accounts Saving Account -.95% Save $100 a month for 10 Years = $12,693 Certificate of Deposit$-- 2.12% Save $100 a month for 10 Years = $13,477$ ((penalty if taken out early) Liquidity: How quickly you can get your money out 2,693.23Savings Balance: $12,693.23nal Savings Balance:

4. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 DEBIT Cards t DEBIT Cards typically have a or logo It’s important to keep track of your spending! It’s important to keep track of your spending! Directly tied to your checking account. Debit cards can be used for both PIN and signature transactions (retail/gas purchases, ATMs, etc.). Debit Cards

5. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 Debit Cards Debit cards if used with the credit option may give you some purchase protection: Example: Letterman’s jacket purchase & company went bankrupt: Paid Cash: No recourse Credit Option with Debit Card: Bank reimbursed

6. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 ATM Cards Remember: to record your ATM withdrawals ! ATM cards may require 4 digit PIN #. There may be a fee associated with their use. ATM Cards are tied to a Bank Account Automated Teller Machine Ability to access funds without the need of a teller & have access to funds 24 hours per day, seven days per week.

7. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 “On-line bill paying and eStatements are convenient Be careful & remember “Holds” can be placed on deposits Helps keep track of transactions NSF checks are costly! Outstanding Check: A check that has not cleared the bank Checking Accounts Tips

8. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 You write a check at Safeway for $12, but you only have $6 in your checking account. Your Bank charges you a $35 NSF fee and notifies Safeway. Safeway tries to submit the check again. (A check can be submitted three times by the retailer.) You get another $35 NSF fee from your Bank. Safeway now charges you a “Returned Check” fee of $20. NSF (Non Sufficient Funds) These Checks Are Costly How much did this $6 mistake cost? Do the Math:

9. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 NSF (Non Sufficient Funds) These Checks Are Costly You now owe $32 to Safeway and $70 to your Bank! $12 + $20 (Safeway) $35 + $35 (Your Bank) Now, you could owe $132 for a check you wrote for $12 ! If you don’t take care of it right away, a Collection Agency can get involved. They will also charge a fee ($30 and up.)

10. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 –Pay attention to your checking account. Always know how much you have in your account. 1.When you make a mistake (many people occasionally overdraw their account), immediately contact both the retailer and your bank. 2.Overdraft happens when money is withdrawn from a bank account making balance go below zero. Find out what kind of “Overdraft Protection” is offered. Depending on how much they charge for this service, it could save you a lot of money. Shop around for the best rates. –Use a Debit Card D ebit card transactions, once approved, will always clear your account and cannot be sent back. There can be no NSF fees with an approved debit card transaction. Checking Accounts

11. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 Helpful Hints for Writing Checks 1)Write in permanent blue or black ink 2)Fill in all blank spaces with proper information – Do not sign a check before filling in all the information 3)Cash or deposit checks asap. Checks may not be good after 6 months – sometimes even in 60 days they will “expire” 4)Never give out check information unsolicited

12. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 Keeping Track of Your Account How do you know YOU haven’t made a mistake? OR How do you know the Bank hasn’t made a mistake? It’s called Reconciling your Account Go to the Unit 3 Project in Moodle & follow the directions

13. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 E Credit

14. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 Credit Cards Disadvantages Leading cause of financial difficulties. APR can be very high; hidden fees. “Buy Now, Pay Later” can severely test your self discipline. Note: Anyone under 21 must prove they have the means to pay or have the account co-signed by parent/guardian.

15. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 Introduction The advantages and pitfalls of Checking Accounts, Debit Cards, Credit Cards and Payday Loans. The importance of maintaining good credit and the role of Credit Reports. Protecting against Identity Theft.

16. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 Credit Cards Advantages Convenience -- accepted almost anywhere Shop by phone or Internet Emergencies Purchase Protection Can help establish credit history

17. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 What are they? What information is on them? (Your credit report is similar to your high school transcript.) How are they used? What is a credit score? Importance of maintaining good credit: –Loan APR –Renting an apartment –Buying a car/home –Purchasing a cell phone, etc. –Getting a job Credit reports

18. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 Credit card payoff Visa @ 9.36% Visa @ 21.00% Starting Balance $3,000 $3,000 Payoff Time 11 years, 3 months39 years, 2 months Total Payments$4,459.23 $16,996.56 Both cards require a minimum payment of 2% of the outstanding balance or $25, whichever is greater. Difference in payoff of a $3,000 balance at 9.36% vs. 21.00% (if you only make minimum payments)

19. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 EXAMPLE : $15,000 Loan Installment Loans Interest Rate: 3.24% Payments:60 Total of Payments:$16,269.54 Interest Rate: 18% Payments:60 Total of Payments:$22,864.59

20. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 How they work Pros Cons Pay Day loans are relatively simple and easy to get, especially if you only need the money for a short time. These loans are relatively high risk to the lender, so the lender charges a high APR to offset that risk. Let’s take a look at some examples… Pay Day Loans

21. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 EXAMPLE #1: $500 Loan You give your postdated check to the Pay Day lender. They give you $500. On payday, the lender cashes your check. It costs you $75 to borrow $500 for two weeks! Pay Day Loans Let’s say, you need (or want) $500 …like, NOW! You know you’ll get paid soon (less than 2 weeks). So… You write a personal check for $575 – postdated for your payday.

22. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 Let’s say you need to replace a tire on your car and Mom and Dad won’t pay for it. It will cost you about $100. What would be the “cheapest” way for you to purchase the tire? Pay Day Loan? Credit Card? Personal Loan? Share Secured Loan? Pay Day Loan vs. Other Loan Options 392% 15 – 21% 10 – 15% 4% Pay Day Loans

23. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 Birth Date SS# Driver’s License # Mother’s Maiden Name Address GOLDEN INFORMATION Protect your “GOLDEN INFORMATION” Golden Information Cause of Identity Theft for teens is personal theft of “Golden Information” by a roommate, boy/girlfriend, or family member. Identity Theft Identity Theft #1

24. SCHOOL EMPLOYEES CREDIT UNION OF WASHINGTON FINANCIAL MANAGEMENT 101 Shred personal documents when done with them. Get e-Statements -- instead of paper. Always shred credit card offers. Beware of scams (email, phone, etc.). Check your credit report (annualcreditreport.com) Ramifications of Identity Theft: –Credit report will not be accurate –Long and costly process to rectify –Could adversely affect ability to get loans, apartment, job, etc. Identity Theft Identity Theft