Basic Savings Account
Other Ways to Save
Rules, tips & tricks
Pot Luck
Interest
100
At which bank should you open your first savings account?
Bank A - interest rate of 5%, minimum deposit of $10
Bank B - interest rate of .05%, minimum deposit of $500
Bank A
100
What is the best place to invest money that you don't need for several years AND want the highest interest rate?
a) regular savings account
b) money market account
c) CD
d) checking account
CD (Certificate of Deposit)
100
The recommended % of money to save out of each pay check is _________.
20%
100
Which number in the 50-30-20 rule covers your NEEDS?
50%
100
If you deposit $300 into a CD with an interest rate of 2% for 3 years. How much simple interest will you earn after 3 years?
$18
($300x.02) x 3 years
200
True/False - it is easy to open a savings account as long as you have the required initial deposit amount.
True
200
What example will be the MOST long-term goal?
A) Saving for retirement
B) Saving for a vacation
C) Saving to buy a pool
D) Saving to buy a car
A - Retirement
200
True/False - the best time to use your "Emergency Fund" to buy concert tickets to your favorite artist.
False
200
True/False - Experts recommend that you put money in savings before you buy discretionary items.
True
200
When a bank says you'll earn 3% interest, that means you'll earn 3% for ______
a) a month
b) a year
c) a quarter
b) a year
300
What does it means for a bank account to be FDIC insured?
Insurance for deposits up for $250,000
300
Provide 2 strategies to start saving
Answers will vary
300
Using the rule of 72, how many years will it take Sally to double her money at 8%?
9 Years
300
How does "delayed gratification" impact your savings plan?
You postpone spending money regularly on non-essential items (like Starbucks coffee)
300
What does it mean to have a "variable" interest rate?
Interest rate changes over time
400
What is the advantage of setting up an automatic transfer of money to a savings account every pay period?
Ensures you save some money
400
What's the message?
Saving money is difficult.
400
What does the "30" stand for in the 50-30-20 rule?
Wants
400
Who is the wealthiest?
A) Martha who owns a $250,000 home with $100,000 mortgage
B) John who owns a $15,000 car and has $50,000 in student loans
C) Monique who has a $50,000 car and no loans
A) Martha ($250,000-$100,000) = $150,000
400
If you deposit $500 into a savings account in year 1, and earn SIMPLE interest at 5% each year, what will your account balance be in year 4?
$600
($500x5%) = $25
$25 x 4 years = $100
$500 + $100 = $600
500
Provide 3 ways to get started savings.
"4 banks" for different needs
Save first, not last
Cut your expenses
Be a smart shopper
500
What is the difference between saving and investing?
Saving is putting money away gradually, investing is putting away money for long term gain
500
How many months of bills should an Emergency Fund typically cover?
6 months
500
Give 2 reasons it is important to start saving or investing for retirement?
Answers vary
500
If you invest $1000 for 3 years at 10%. How much COMPOUND Interest will you have at year 2?
$210
($1000 x 10%) + (1100 x 10%) = $210