Financial Literacy Project


Savings are the amount of money someone has saved in a bank account. This money can be used to pay for items they want to purchase. It is important to start saving money early because it can make life easier in the future. When saving money, you should have a goal that you will be able to achieve in a reasonable amount of time. For example, it is not reasonable to want to buy $500 in 4 months. If you only get $30 a month. A more rational goal would be to get the phone in 18 months. Even putting aside a few dollars a week can add up by the end of the year. For instance, saving $5 a week can leave you with and extra $260 by the end of a year. If you put your money in an account that gives compound interest, such as a CD, or Certificate of Deposit, account, your money will make more money.

Savings Vehicles:

Savings vehicles are bank accounts that are designed so that customers can set aside money to save that is separate from a checking account. Some types of savings vehicles are: Certificate of Deposit accounts, Savings accounts, and money-market accounts.



Interest is the amount charged for borrowing money. Banks will pay you interest based on the type of account you have. For example, a Certificate of Deposit, or CD, account will accumulate more interest than a checking account. There are two different types of interest: compound interest and simple interest.

Simple Interest:

Checking and savings accounts will earn you simple interest, but it is only based on the amount deposited into the account. Savings and checking accounts will give you simple interest.

Compound Interest:

Compound interest is interest added to the initial balance of the account. When added to the account, it can also earn interest. CD accounts are the only accounts that give compound interest.


Budgets are plans used to manage how you save or spend money. It is important to budget your money so that you can buy items you want and save money. Having a budget can help eliminate unnecessary expenses. Having a budget isn't enough, in order for it to be effective, you need to stick to it.

Budget Plan

I want to buy a Fujifilm X-TI camera, which costs $1,149 and a 16-55 mm lens costing $1,199. Together, they cost $2,348. Currently I have $1,400, therefore I would need to make $948. I get $25 a month, and usually $120 for birthdays and other holidays. This means that in a year, I earn $420, but spend about $40. It would take me about 2 years and 9 months to save the $948 I need to buy the camera and lens.

Deposit and Withdrawal

Deposit: When money is added to a bank account

Withdrawal: When money is taken out of a bank account


There are many different types of banks, such as:

  • Retail Banks: banks that deal with individual customers and small companies. Retail banks do not have large corporations or companies as customers.
  • Credit Union: Credit Unions are owned and run by its members. The primary purpose of a credit union is to provide "credit at low rates to its members"
  • Online: Some banks offer online access to your bank in the form of an app or website. This would let you make online transactions and deposits without going to a bank.

There are many different people that do different jobs at a bank to keep it running:

  • Bank Teller: Their job is to help people with account transactions, such as depositing or withdrawing money. When adding money to your account, you would speak to a bank teller.
  • Branch Manager: manages all the employees working at a specific location.
  • Customer Service Representative: His/Her job is to help answer any questions you may have concerning your account or the bank.
  • Loan Officer: Their job is to evaluate and sign off loans to people and businesses.

Payment Types

  • Credit: When paying for something with a credit card, you are borrowing money, which must be payed back. If you do not pay off your entire balance every month, you will have to pay interest because you are borrowing money. Using credit cards will effect your credit history in both a positive or negative way, depending on how likely you are to pay your bill back. With a credit card, you have the possibility of spending more money than you have, because your credit card is not linked to your checking account.
  • Selecting a credit card: When selecting a credit card, you want to choose a card that has a low APR, or Annual Percentage Rate, which is the interest you will need to pay on your credit card balance. If you will use it frequently, get a credit card that offers rewards such as airline miles or cash back. Another important thing to look for is a card with no annual membership fee.
  • Debit: When you pay for something with a debit card, it comes directly out of your checking account. Because the money comes straight out of your checking account, you don't need to pay interest. Using debit cards does not effect your credit score. Debit cards usually offer less fraud protection than credit cards do. With a debit card, you can only buy items based on the amount you have in your account.

Payment History

Payment history has a large impact on your credit score. Things such as paying your bills on time, always paying the minimum balance, and the amount of time you have had your credit cards can have a positive or negative effect on your overall credit score.

Credit Scores; Good Credit vs. Bad Credit

Credit scores can range from 300 to 850. The higher your credit score, the better it is. It is important to have a good credit score because you will be able to get loans with lower interest rates.

Bad Credit: A credit score below 500 is considered very poor, and it is recommended to get assistance to help fix it. If your credit score is between 500 and 579 is considered poor, and you will have very high interest rates or you may not be able to qualify for loans at all. People with Fair Credit (580-619) may be able to attain loans, but with unfavorable terms. If your credit score is between 620 and 679, you have okay credit, but you would still need to pay higher than normal interest fees. Having a bad credit score can prevent you from getting a loan for a car or a mortgage.

Good Credit: A good credit score is a score between 680 and 700. This would qualify you for most loans and would not have to pay abnormally high interest rates. An excellent credit score is any credit score over 700. People with an excellent credit score are qualified for the lowest interest fees on loans. It is important to have a good credit score because

Top 10 Financial Tips

  1. Bring lunch from home rather than buy lunch
  2. Use free music streaming websites such as Spotify or Pandora to listen to music rather than buying songs.
  3. Don't spend more money than you have, it will leave you in debt, which can be hard to repay
  4. If possible, make your own food at home rather than eating out or ordering takeout.
  5. Reuse school supplies if they are still in good quality
  6. Buy clothes/shoes that can be used for multiple occasions.
  7. Rather than turning on the heat, put on a sweater to stay warm.
  8. Don't go to the movies that often, wait for them to come out on DVD.
  9. Borrow books/DVDs at the library instead of buying them.
  10. Cancel TV channels that you don't watch.