Checking Accounts
You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase come from?
It gets deducted directly from your checking account.
This type of account pays you interest on money you have put away for later to help your money grow
Savings Account
True or false: Paying cash to cover the entire expense of an item is better than paying monthly payments that include additional interest and fees.
True
All of the following are downsides of what?
- Lack of access to credit.
- Time spent paying bills.
- Difficulty making online purchases.
Being unbanked (or, not having a checking account).
What is one of the first things you should start doing with your money as soon as you get your first full time job?
Save. Invest. Pay off debt. Create an emergency fund.
How often do customers typically receive a bank statement for their checking account?
Monthly
What is it called when your employer sends your money electronically to your savings account?
Direct deposit.
A rule of budgeting that requires you to allocate a percentage of your money towards needs, wants and savings.
5/30/20 rule.
Being "unbanked" means what?
Not having your money associated with an FDIC approved institution.
How much of your total take home income should be allocated to savings?
20%
Using your debit card to pay for groceries at the supermarket will do what to your checking account?
It will reduce your checking account immediately.
A savings account that typically pays higher interest rate on deposits than a traditional savings account.
Online savings account.
When someone doesn't have any money saved and their paychecks are just barely covering monthly expenses, it is said they are living....what?
"Paycheck to paycheck"
Protection for bank customers’ deposits up to $250,000, guaranteeing their money is still available if the bank goes out of business
FDIC Insurance.
Your monthly "must haves" should not exceed what percentage of your total take home income?
50%
This kind of banking allows you to request transfers, pay bills and automate your savings without visiting the bank branch.
Online banking
Juan saved $1,000 from his summer job cleaning pools. Which of these account types would work best for him if he doesn't need access to the money for a number of years AND wants to earn the highest interest rate?
Certificate of Deposit
When you can't afford to pay cash for an item but you choose to purchase it anyway, how does the cost of that item get paid for.
What kind of card can be used to make online purchases that is not linked to a bank account or any other savings, spending or lending institution?
Pre-paid card.
What is an emergency fund, what is it used for and how much should be in it.
A specific amount of money saved for an emergency situation or immediate financial need that should exceed 3-6 months of living costs.
When you incur a cost for spending more money using your bank card or a check, than you have in our account.
Over-draft fee.
Joel wants to have an emergency fund to cover 6 months of his expenses. Her monthly gross pay is $4,000 and her monthly expenses are $2,000. If he plans to save 10% of his gross pay each month, how long will it take him to build his emergency fund?
30 months or 2.5yrs
Explain what "good debt" means.
Buying something on credit that will increase in value the longer you own it or buying something on credit that can make you more money than it costs you money.
This is an alternative way for employers to pay employees when a person does not have a bank available for direct deposit.
Payroll card or a pre-paid dept card.
What are three questions you should ask your bank before opening any kind of account with them?
- What are your monthly fees?
- What is the minimum account balance needed to maintain my account?
- What is the interest rate I can collect on my money?