PF- 3 Review- 10/19/17(Thur.)
Tips for spending wisely:
- Avoid impulse purchases by starting with a list and sticking to it. - Look for bargains. - Buy high-quality products. - Use credit cards infrequently. - Think about what's most important. - Track your spending.
Type of insurance:
- health, - car, - life, - homeowner's insurance, - disability insurance. There are also a few less obvious insurance plans, such as malpractice, dental, vision, renter's insurance, jewelry, and travel.
PF- R Q: Choose all that apply. Select all the parts in a financial plan.
- net worth statement - savings account - financial goals - savings and investing plan - insurance plan - checkbook register - budget answer: - net worth statement - financial goals - savings and investing plan - insurance plan - budget
Online Banking Financial institutions have many tools and services available online, including:
- viewing account balances and statements to reconcile a checkbook; - transferring money; - tracking recent account activity; - paying bills; - obtaining a copy of processed checks; - ordering checks; - issuing stop payment requests; - applying for loans; - gaining information; - creating a spending report; - creating a savings plan; - setting alerts; - creating a budget.
Reconciling your checkbook means checking your balance with the balance the bank sends you in the statement. Remember, there are several steps to reconciling your checkbook.
Steps to reconciling your checkbook: 1. Write a checkmark in the appropriate box for each transaction that appears on the statement. 2. Record any transactions that appear on the statement, but do not appear in your register. 3. Write the ending balance from your bank statement. 4. Add the deposits that have not cleared. 5. Subtract any checks that have not cleared. 6. If the amounts do not match, look for mistakes.
deposit account
a bank account that lets you add money to the account
checkbook register
a booklet used to track deposits and withdrawals from a checking account
stop payment
a request by an account holder to the bank not to pay a specific payment
insurance policy
an agreement to cover or reimburse an individual for a loss that occurs
customer service representative
helps you open an account, explains services, answers general questions, provides printed materials, and refers you to other employees when you have specific questions
liability coverage
insurance that covers other people's injury or loss for which you are responsible
direct deposit
money sent from your employer directly to your account
loans
money you borrow from a financial institution with a written promise to repay it later
impulse purchases
purchases that are not planned ahead
phishing
requesting confidential information over the internet under false pretenses in order to fraudulently obtain credit card numbers, passwords, or other personal data
spreadsheet
software that contains rows and columns used to make calculations, organize information, and make comparisons
premium
the amount to be paid by the policyholder for insurance
money exchange
the exchange of U.S. currency for foreign currency
transfers
the moving of money from one account to another
variable expenses
unpredictable costs that change in amount
Benefits of keeping your money in a financial institution include:
- safety - convenience - growth - cost - security - financial failure
PF- R Q: Jim purchases land, hoping its value will increase during the next five years. What risk does Jim face?
- scam - theft - losing money in an investment - paying for expensive repairs answer: - losing money in an investment
budge
a plan for your money. Reasons for having a budget include: - helping you be a good steward of God's resources; - reducing stress; - avoiding financial problems; - making your money grow; - knowing what you can and can't afford; Steps for creating a budget: 1. List your sources of income. 2. Create a list of estimated expenses. 3. Monitor your progress by keeping receipts and tracking your actual expenses. 4. Make adjustments to your spending habits. Keeping a budget from computers: - a spreadsheet or software that allows you to make quick calculations and organize data - budgeting software, such as Moneydance® and Quicken - online money-management tools, such as Mint.com and Mvelopes® - online banking
account verification
a process in which banks check your history to make sure you will be a responsible account holder
claim
a request for payment from an insurance company
overdraft protection
a service which protects you when you spend more money than you have in your account
teller
cashes or deposits your checks, answers general questions, and refers you to other employees when you have specific questions
fixed expenses
costs that remain the same amount
branch manager
supervises employees at the bank, supervises bank operations, and helps fix problems that other employees can't fix
deductible
the amount an individual has to pay when they make a claim, with the remaining cost covered by the insurance company
Three types of financial institutions:
- Banks - banks offer a variety of services. - Credit Unions - credit unions are created by large companies or organizations for its members. - Savings and Loans - savings and loans specialize in home loans, but also offer other savings accounts.
PF- R Q: Choose all that apply. Taylor wants to create a budget to track her expenses and identify ways she can reduce spending. What tools could she use?
- Quicken - bill pay - spreadsheets - Mint - Budget-Tracker answer: - all of the above (guess)
PF- R Q: Carl has a checking account. He'd like to find out as soon as his refund check from the IRS is deposited in his account. What should Carl do?
- Request a stop payment. - Transfer money from his savings account. - Call the bank to ask. - Set up an alert. answer: - Set up an alert.
PF- R Q: Name three advantages to banking online.
Writer: The three advantages to banking online are viewing account balances and statements to reconcile a checkbook, transferring money, and tracking recent account activity.
bank
a business and financial institution; a safe place to keep money
financial risk
a chance of losing money
co-payment
an amount the insured person pays to cover a portion of a doctor bill or cost for prescription
ATMs
automated teller machines or terminals where you can do certain kinds of banking
PF- R Q: Ashley bought an expensive pair of jeans. Her friend got the same pair of jeans for almost $20 less. What tip could have helped Ashley?
- Use credit cards infrequently. - Buy high-quality products. - Think about what is most important. - Look for bargains. answer: - Look for bargains.
PF- R Q: Mitchell doesn't have a checking account, but needs to pay a bill. What can Mitchell pay with?
- a money order - direct deposit - transfer - loan answer: - a money order
Financial risks include:
- becoming a victim of a scam, when people commit crimes and take advantage of others by setting up fraudulent schemes to steal their money; - losing money in an investment, such as stocks, bonds, real estate and other types of investments; - losing cash; - becoming the victim of theft if your home is burglarized, your wallet is stolen, or someone steals your credit card number; - paying for expensive repairs; - becoming disabled with an illness or injury so severe it prohibits you from working; - becoming the victim of identity theft, or the act of stealing personal information in order to steal someone's money; - losing a job; - being involved in an accident; - experiencing product failure; - becoming ill; - experiencing a natural disaster.
Strategies to manage financial risks include:
- keeping your money in a safe place; - financial planning or meeting with a financial adviser; - obtaining health, car, home, and disability insurance; - protecting your personal information and your identity; - becoming educated and informed in order to avoid scams; - having an emergency fund; - buying products with warranties; - knowing consumer rights.
PF- R Q: When selecting the best financial institution for you, you should consider each of these factors except _____.
- minimum balance - services offered - other people who bank there - locations of banks and ATM's - fees answer: - other people who bank there
PF- R Q: When writing a check, you must complete all these steps except _____.
- signing the back of the check - writing the date - writing the amount in numbers - writing the amount in words - signing the front of the check answer: - signing the back of the check
Check out this table to review the advantages and disadvantages associated with online banking.
Advantages: - convenience - accessibility even when you travel - availability all day, every day - quick transaction speed - efficiency, allowing you to manage different accounts at one site Disadvantages: - lengthy start-up time - lengthy learning time for new online services - changes or updates to the web site, requiring relearning how to complete transactions - security, a worrisome matter to some people
PF- R Q: In two or three sentences, describe how you would use some of the budgeting tools to help manage your money.
Writer: Budgeting tools such as a spreadsheet or software that allows you to make quick calculations and organize data. Budgeting software, such as Moneydance and Quicken are also tools to help manage your money. Other tools to help manage your money are online money (management tools) such as Mint and Mvelopes, and online banking.
debit card-
a card that lets you withdraw money at an ATM and allows you to pay for products and services directly from your account
automatic bill payment
a computerized system in which bills are paid automatically on a certain date
online banking
a computerized system that allows you to manage your money through the internet
identity theft
a crime in which people's personal information is stolen in order to gain from their finances
money order
an order for the payment of a certain amount of money, resembling a check, typically used to pay a bill
money order
an order for the payment of a certain amount of money, which order resembles a check and is typically used to pay a bill
traveler's checks
checks that can be used like cash, but can be replaced if stolen
It's important to record all of your transactions in your checkbook register. The register is used to record transactions, balance the checkbook, and reconcile the checkbook.
1. In the far left column, enter the check number or abbreviation for the type of transaction. 2. In the second column, write the date of the transaction. 3. In the description section, write the name of the payee and a few words that explain the transaction. 4. In the transaction amount column, write the amount of the withdrawal. 5. In the deposit amount column, write the amount of a deposit. 6. In the last column, calculate your balance.
Steps for writing a check:
1. Write today's date on the date line. 2. Write the name of the person or the company you are paying on the payee line. 3. Write the amount of the check in numbers on the line following the dollar sign on the right side. 4. Write the amount of the check in words on the line under the payee line. 5. Sign your check on the signature line.
In this lesson, you looked at all the parts of a checking account-from opening and maintaining the account, to learning how to make out a check, to comparing different accounts. To open an account, you need to provide identification and personal information. The bank will verify that you have a stable financial history, and then you're asked to sign an authorization card.
Maintaining an account includes: - making deposits and withdrawals - recording deposits; withdrawals, interest, and fees in the checkbook register; - keeping track of your balance
savings and loan
a financial institution that specializes in home loans
A financial plan include:
a net worth statement, financial goals, budget, saving and investing plan, and an insurance plan. It is also important to keep track of necessary paperwork. Easiest way to do this is by creating file folders for important financial documents, such as bank statements, bills, taxes, receipts, and credit card information.
credit union
a nonprofit financial institution formed by a large corporation or organization for its employees and members
budget
a plan for how you will spend and save money
PF- R Q: Choose all that apply. Select all the strategies you can use to manage risks. - Purchase health insurance. - Provide your personal information to others. - Have an emergency fund. - Obtain a warranty. - Become informed. - Carry lots of cash.
answer: - Have an emergency fund. - Obtain a warranty. - Become informed.
PF- R Q: Spending wisely ____. - takes a lot of time - helps you be a better steward of God's resources - increases stress - means using a credit card for most of your purchases
answer: - helps you be a better steward of God's resources (guess)
loan officer
answers questions about loans, provides printed information about loans, helps you fill out a loan application, and processes your loan application