Saving/ Banking
How often do you get your bank statement?
Monthly
What happens if I use my debit card to buy a shirt?
My checking account will decrease
True or False
Most Americans have an adequate amount saved for an Emergency Fund and retirement.
False
50/30/20 rule?
50% Needs
30% Wants
20% Savings
What are prepaid cards?
* This is a card that you put money on it prior to using it.
* Not hooked up to a bank account
* Good idea for people who are unbanked
* Does not build credit
What is Direct Deposit?
Direct deposit typically refers to your employer sending your paycheck electronically to your bank account.
What is true about a checking account?
* ATM Access
* Debit Card attached to it
* Checks can be written
* Unlimited amount of transactions
How do you use a P2P app?
You sign up an account
Link it to a bank account, debit card, or credit card
Send money to a person
How much should you save in an emergency fund?
3-6 months of your expenses
What does it mean to live paycheck to paycheck?
You don't have any money saved and your paychecks are just barely covering monthly expenses
Put these in order of least amount of interest to the highest amount of interest.
- 12-year CD
- Traditional Savings Account
- 2-year CD
- Online Savings Account
Traditional Saving Account, Online Saving Account, 2-year CD, 12-year CD
What do you do if you see fraudulent charges on your account?
You want to contact the bank immediately and dispute those charges
When should you start saving for retirement?
As soon as you can
Most likely when you get your first full time job
What are short term, medium term, and long term goals?
Give me an example for each
* New computer, go on a vacation, new car
* Pay for college, graduate high school
* Get a house, retirement
What do you want to look at when choosing a bank?
* FDIC insured
* interest rates
* ATM access
* Debit Card attached to my account
* Mobile App
What's a good strategy for saving?
Save a certain percentage of your paycheck and put it directly into your savings.
(20% preferably)
Do you want overdraft protection? Why?
No because it allows you to be charged overdraft fees
What is inflation?
What is the relationship with its purchasing power?
The rate at which the price of goods increases and consumer purchasing power decreases over time
What are downsides to being unbanked?
* Lack of access to credit
* Lost time paying bills
* Difficulty making cashless purchases
Why pick online banking?
* You can do everything online
* Pay bills online
* You never have to visit a bank
Why do you want to put money away for retirement early?
* Builds compound interest
* More time for the interest to build
What fees can you be charges on a checking account
* ATM Fees
* Overdraft Fees
* Maintenance Fees
Why would you want to use a Certificate of Deposit instead of a regular savings account?
* You don't need access to your money for a few years
* You want to build up more interest (highest interest rate)
Jenny wants to have an emergency fund to cover 6 months of her expenses. Her monthly gross pay is $5,000 and her monthly expenses are $3,500. If she plans to save 10% of her gross pay each month, how long will it take her to build her emergency fund?
42 months
3,500 x 6 = 21,000 (6 months of expenses)
5,000 x .10 = 500
21,000 / 500 = 42
Why do you want to be FDIC insured?
Up to what amount?
It means your money is protected if something happens to the bank
You are insured up to $250,000