Savings
What happens when you cash in your CD before maturity?
You normally have to pay a fee (early withdrawal penalty).
Ensures that banks and other institutions offer detailed information about terms and costs of credit for all products
Truth in lending act
An account for money not intended to be used for daily expenses
Savings account
What rule calculates how fast your savings will double over time.
Rule of 72
Assets that are easily and simply converted to cash.
Define liquid financial products
What is "pay yourself first?"
Pay yourself first involves in building up a retirement account, creating an emergency fund, or saving for other long-term goals, such as buying a house.
Which institutions charge the highest interest rates on loans? (HINT: 4)
Pawnshops, Payday lenders, Tax prepares, finance companies
What are the two most common saving accounts
Checking and savings account
Why should you pay yourself first?
So you won't spend money you don´t have
What is overdraft protection?
Overdraft protection is a service provided by your bank that ensures your transactions are covered if you have insufficient funds in your checking account.
What are 2 ways to "pay yourself first?"
1.Save 10% in a savings account.
2.Create an emergency fund/retirement account
Which Financial institution has the advantage of lower rates than a bank
Credit Union
Provides quick access to funds for transactions
Checking account
A sum of money is worth more now than the same sum of money in the future due to its earning potential.
Time value of money
What is a tax anticipation loan?
short-term loans issued by municipalities and backed up by tax revenues
What is compound interest?
Earning interest on both the money you save plus the interest you've earned
Which Financial institution has the advantage of lower rates than a bank and requires a membership?
Credit Union
For two or more people who are usually in the same household.
Joint checking account
What is liquid money?
Money in your checking account, saving account, or money market account that can be easily withdrawn to settle liabilities.
What is a subsidized loan?
The federal government pays interest on the loan during periods of authorized deferment.
What are 4 saving tools?
Evaluate needs and wants, consider big monthly + daily expenses, purchase in bulk, Save 10-20%, Accounts that help you manage your money
True or false: credit unions may have potential membership fees and restrictions.
True
Process that uses (two sets of records) Used to determine if the money leaving an account is the same amount being spent. (END OF RECORDING PERIOD)
Reconciling a checking account
Why is budgeting and saving important?
Allows a secure financial future.
What is an unsubsidized loan?
In a unsubsidized loan the interest on the loan remains the responsibility of the borrower.