Financial Literacy
Banking for Teens
Terms to Know
Budget- Estimate of income and how much one can spend in a set period of time
Checks- Legal document that functions like cash
Choosing a Bank
When choosing a bank choose based on convenience, service, cost, and look at the additional fees the bank may charge based on their requirements.
Budget
- Build Savings
- Prevents overspending
- Identify goals, better incorporate spending
Budget Cont...
Consists of:
- Income
- Fixed Expenses- Expenses that do not change from month to month
- Variable Expenses- Expenses that change depending on use
- Discretionary Expenses- Everything that is not necessary or is extra
Debit Cards
- Electronically connected to bank account
- Money can automatically be withdrawn
- Authorized Signature (Write "See ID" to prevent theft)
- Verification Code - 3 digits
- Pin number - 4 digits may be able to choose
- Have expiration date
Checking Accounts
Easy access to your money for daily transactional needs and helps keep funds secure
Funds can be accesses through:
- Check
- ATM
- Debit Card
- Phone
- Internet
- App
Checking Accounts Cont...
People use checking accounts to...
- Reduce the need to carry large amounts of cash
- Convenience
- Keeps record of where money is spent
- If lost you can keep money safe
- If you lose checkbook, ATM, or Debit Card report it
Information About Checks
- Check account register immediately records all transactions
- Checkbook holds checks and check register
- Endorsing signature on the back of check approves deposit
- Must be endorsed to be deposited
- 2 Types - Blank and Restrictive
- Blank- Receiver signs and anyone can cash
- Restrictive- Receiver writes for deposit only write the account number above signature- can only be deposited
- Bouncing- Happens when written amount is over current balance- fee is charged- can ruin credit
Monthly Bank Statement
- Lists each transaction and current account balance for specific time period
- Includes dates, ID for each transaction, interest earned, and fees charged
Identity Theft
- Fastest growing crime
- Can steal social security number and start credit in your name
- Can ruin credit
What to do if your Identity is stolen
- Call your banks and credit card companies
- File a police report
- Contact Fraud departments (Equifax, Experian, TransUnion)