By: Mallory Jasper
There are two types of depository institutions:
- Commercial Banks- they offer financial services to both consumers and other businesses.
- Credit Unions- They are owned by consumers and they offer many banking services.
Depository institutions offer a wide variety of financial services to their consumers. The services offered and the terms and conditions will vary for every depository institution. Some services include,
- Financial Advice
- Safe-Deposit Box
- Special Needs Payment Instruments
- Online Banking
- Mobile Banking
- Debit Cards
You should think really hard on what depository institution that you wan to use. When choosing a depository institution you should pick one that helps you meet your financial goals.
A commercial bank can keep track of your money and keep in safe till you need it.
Using a cellphone is an easy and convenient way to keep track of your money
A Safe-Deposit Box
A safe-deposit box holds your emergency money to keep it safe so that you don't spend it until you really need it.
Everyone pays taxes to some extent. You are considered a taxpayer in the United States if you live here and pay taxes to national, state, county or municipal governments.
Taxes are charged in a variety of ways. Types include,
- Income Tax
- Payroll Tax
- Property Tax
- Sales Tax
- Excise Tax
Earned income is money you earn from working for pay.
Unearned income is income received from sources other than employment.
You are better off being a member of a community that by yourself. A community is a group of people with common interests and concern for the common good.
Sales tax is often mostly on purchased goods and services including items like clothing.
Property tax is often mostly on buildings like house. It is also on land, and motor vehicles.
Excise tax is often mostly on things like gasoline because the tax is already "hidden" in the price, instead of being added on later.
The Statement of Financial Position
-You calculate your net worth by using the Statement of Financial Position.
The Statement of Financial Position is a statement describing your financial condition.
It is very important to keep track of where all your money is going. The Statement of Financial Position gives you tangible record to refer to and it helps you set your financial goals.
To find your net worth on your Statement of Financial Position you need to take your assets and subtract them from your liabilities.
The Statement of Financial Position helps you find out how financial wealthy you are or aren't
Statement of Financial Position Template
The Statement of Financial Position Template can be used for you to write down everything that you put your money towards.
To find your net worth, you have to take your assets, which are monetary items, subtracted from your liabilities, which is like your debt towards something.
Statement of Financial Position Template
The Income and Expense Statement
-An Income and Expense Statement is an important financial management tool that summarizes your past transactions to determine how you are earning and spending your money.
-The Income and Expenses Statement helps you objectively evaluate your past financial decisions.
- Income- is money received
- Expenses- is money spent
Expenses include: Savings and investing, insurance, housing, transportation, and food.
There are three types on income
- Earned Income
- Unearned Income
- Income Received from Government Programs
This includes things like, wages or salary, commissions/tips/bonuses, and tax refunds.
This includes things like, investment earnings, money from savings and investments, sales of assets, scholarships/grants, and money from others.
Income Form Government Programs
This includes things like, Workers' Compensation, Social Security, and Unemployment Benefits.
The Spending Plan
-A Spending Plan records both [planned and actual income and expenses over a period of time.
-A spending Plan is very important because it helps you take control of your spendings, this then helps control your financial future.
A Spending Plan forces you to make good choices on your spellings. It makes you consider the opportunity costs of your planned purchases to help your money in a way that maximizes your financial well-being.
There are five steps when creating a Spending Plan...
- Track current income and expense
- Personalize your spending plan
- Allocate money to each category
- Implement and control
- Evaluate and make adjustments
Spending Plan Template
The spending plan template helps you write down where your money is going and it keeps it neat and organized.
Spending Plan Steps
The five simple steps when creating your Spending Plan help you take the right path so you don't make mistakes. The first three steps develop the plan, and the last two steps help maintain the spending plan.
Spending Plan = Budget
The spending plan is referred to as a budget because your money has to be limited so that you don't spend more money then you have in your account.