Financial Literacy
Basics of Banking
Deciding on a Bank
Deciding Factors
- Cost
- Convenience
- Service
- Also what fees apply for each bank when you don't have the minimum amount of money in your account according to the banks regulations
Checking & Savings Accounts
- Your Checking Account and Savings are separate because when you take money out of your account it is only through your Checking Account.
- When you have a debit card it takes money immediately out of your Checking Account, but it won't let you spend over the amount you have.
- A Savings Account is where you "save" your money, and in case you need it then you can transfer money from your Savings to your Checking Account.
Terms to Know
Budget
- Managing your money into categories and checking the validity of each transaction
Overdraft
- When you spend over the amount in your account and owe the bank; usually a fee
Withdrawal
- When you take money out of your account like at an ATM
Deposit
- When you put money into your account
Direct Deposit
- Instead of getting a printed check from your employer they can send the money directly into your account
Debit Cards
Pros
- Convenient
- Can be used as credit
- Doesn't allow overspending
Cons
- Can lose track of balance
- Open Checking account for Credit fraud
- Others get your money if you lose the card
Types of Expenses
Fixed Expenses
- Monthly payments that are always a consistent amount, they never change.
- Monthly payments that can vary in cost every month
- Personal expenses that aren't needed, but treat yourself!
Creating a Budget
- Helps manage your money and notice negative spending habits
- Separate your types of expenses
- Organize your transactions
- Find your monthly average spending and start a savings
- Avoid overspending to avoid Overdraft Fees
Bank Statements & Credit Report
Bank Statement
- Allows you to see your transactions within a time period, and see what money you have left to spend
- It is a way for potential leaders, landlords, and future employers to find out how well you manage your expenses
- It can also be used against you in any court judgements
Identity Theft
What to do
- Contact your banks that the account is under so they can flag the account
- File a police report so there is a paper trail
- Contact the fraud departments at all three major major credit reporting agencies