You

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You Your MoneyClass 2, Part 1 Your Budget

• International Center
• at Catholic Charities Community Services
• December 2013
• Instructor Virginia Guilford

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Class Schedule

• Class 1 - Thursday December 5, 330 -5 PM
• Your Income
• Your Taxes
• Class 2 Thursday December 12, 330 -5 PM
• Your Budget
• Your Bank Accounts
• Class 3 Thursday December 19, 330 -5 PM
• Your Credit
• Learning More

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Please Be Aware

• This course does not give you professional advice
• I am not a lawyer.
• I am not an accountant.
• I am not a banker.
• This course explains the basic concepts and
  vocabulary that you need for understanding work,
  taxes, budgeting, banking and credit.

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Please Be Aware

• This course does not give you professional advice
• I am not a lawyer.
• I am not an accountant.
• I am not a banker.
• This course explains the basic concepts and
  vocabulary that you need for understanding work,
  taxes, budgeting, banking and credit.

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Your Attitudes Toward Money Influence of Your
Parents

• How your parents dealt with money when you were a
  child can influence how you feel today.
• Frugal Parents?
• Your Parents Spoiled You?
• Charitable Parents?
• Your Parents Never Talked About Money?
• Your Parents Thought Investing Was Not Safe?
• Your Parents Were Extravagant
• Your Mother Was Dependent
• Your Parents Divorced

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Your Attitudes Toward Money Influence of Your
Money Personality

• Take the Money Personality Quiz
• The questions ask what you would do in different
  situations.
• Choose the answer that most closely matches what
  you would do.

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Your Attitudes Toward Money Influence of Your
Money Personality

• Money Personality Quiz Scoring
• Score your answers
• Give yourself 2 points for every A answer
• Give yourself 1 points for every B answer
• Give yourself 0 point for every C answer
• Your Money Personality
• 14 20 points Shopaholic (emotional, entitled)
• 7 13 points Sensible Spender (rational,
  planner)
• 0 6 points Scrooge (stingy, pessimistic)

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Your Attitudes Toward MoneyDealing With Your
Money Personality

• Shopaholic
• You spend as much as you can, and you have
  trouble using your money for savings or to pay
  down debt.
• People from countries that provide more of a
  safety net may not realize the need in the US
  to save for emergencies, like sickness or job
  layoffs.
• Try to make shopping not your only reward
  remember sports and hobbies that you enjoy.
• Arrange for automatic payroll savings plans
  wherever possible if you dont have it, you
  cant spend it.
• Scrooge
• You tend to be pessimistic and fearful about the
  future, and you are reluctant to spend anything
  more than the minimum necessary. Friends and
  family may feel neglected and disrespected.
• Think about setting aside a specific amount of
  money that you plan to use for gifts or
  contributions. That way you wont feel that these
  expenses will overwhelm you.
• Consider investing some of your savings. If you
  can see your savings grow, maybe you can become
  more comfortable spending some of your money.
• Sensible Spender
• You usually make rational, informed decisions
  about your money.
• Continue learning. Regularly read the personal
  finance pages in your newspaper, or look at CNN
  Money or Yahoo Finance.
• You, too, should consider investing a sensible,
  diversified investment plan can help you fund
  your retirement.

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Your Budget

• You will want to make sure that the money you
  earn will take care of your needs
• A budget is a kind of plan that lists your
  expected income (your net income) and your
  estimated expenses

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Estimating Your Income

• Employee with a fixed salary
• Monthly or Twice a Month
• Every Two Weeks
• Scholarships Grants
• Monthly Stipend
• Annual Payment
• Irregular Income
• Paid on Commission your pay rises and falls,
  depending on how much you sell.
• Paid by the job your pay rises and falls,
  depending on how many projects you are hired to
  do.

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Estimating Your Expenses

• Write down a list of what you estimate your
  expenses will be
• Review your checkbook
• Keep a list for a month
• Analyze your Expenses
• Fixed Expenses
• Flexible Expenses
• Required Expenses
• Optional Expenses

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How to Manage an Irregular Income

• Making Your Nut
• Giving Yourself a Salary

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How to Manage an Irregular Income

• Making Your Nut
• Know what your nut is the minimum you need to
  cover basics
• First earn enough to make your nut
• Then think about extras
• Good if you earn lots of small amounts of money

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How to Manage an Irregular Income

• Giving Yourself a Salary
• Know what is a sensible amount for a salary that
  will cover most of your needs
• Put all income into a savings account
• Transfer the salary amount each month to your
  checking account
• Good if you get large amounts of money at
  different times

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Put Savings First

• Saving for Emergencies
• Enough to cover 6 months basic expenses
• Saving for Retirement
• Even if you are young, try to put away something.
• Use tax advantaged accounts
• Saving for a Goal
• Decide how much you will need, and when you will
  need it
• Calculate how much you will need to save each pay
  period to reach your goal

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You Your MoneyClass 2, Part 2 Your Bank
Accounts

• International Center
• at Catholic Charities Community Services
• December 2013
• Instructor Virginia Guilford

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Kinds of Banks

• There are different kinds of banks
• Commercial Banks
• Savings Banks
• Credit Unions
• Internet Banks
• In earlier times, each different type of bank was
  only allowed to provide a specific kind of bank
  service. But now, most types of banks can do all
  the same basic things.

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Choosing Your Bank

• Convenience
• Branches /ATMs located near your home or work
  place
• International branches.
• Open at convenient times for you
• Services
• Offers the kind of bank accounts you need
• Safe online banking that is easy to use
• Fees
• Reasonable fees compared to other banks. Verify
  at Find A Better Bank (www.findabetterbank.com)

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FDIC Protection

• The Federal Deposit Insurance Corp (FDIC)
  protects against the loss of deposited money if
  an FDIC-insured institution fails
• Does cover funds in checking accounts, savings
  accounts, money market accounts, and CDs
• Does not cover stocks, bonds, mutual funds, life
  insurance, annuities or municipal securities
• Most commercial banks, savings banks and credit
  unions will post signs indicating that they are
  FDIC-insured

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Kinds of Accounts Bank Offerings

• Checking Accounts
• Savings Accounts
• CDs
• Money Market Accounts
• Tax-Advantaged Accounts

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Checking Accounts

• Checking Accounts
• Allows you to take money out whenever you want
• Money can be withdrawn by using a check, or an
  ATM/Debit card
• Some checking accounts also pay interest on money
  in the account

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Savings Accounts

• Savings Accounts
• Allows you to take out money whenever you want
• Money can be withdrawn by a visit to the branch,
  or with an ATM/Debit card
• Savings accounts pay a small amount of interest
  on the money left in the account

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CDs

• CD (Certificate of Deposit)
• You agree not to take out the money for specified
  amount of time
• CDs have maturity dates that range from 3 months
  to 5 years or more
• CDs usually pay a higher amount of interest than
  savings accounts
• CDs in higher amounts, with longer maturity dates
  pay more interest

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Money Market Accounts

• Money Market Accounts
• A MMA is an FDIC-insured deposit account
• Pays slightly higher interest rates
• Usually has a minimum balance
• Usually limits the number of withdrawals
• Not the same as a Money Market Fund (MMF)
• An MMF is a kind of mutual fund
• An MMF is not FDIC insured

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Tax-Advantaged Accounts

• Tax-Advantaged Accounts
• Federal State tax laws allow you to shelter
  some income from income tax
• IRA Retirement Account
• ROTH IRA Retirement Account
• HSA Health Savings Account
• ESA Coverdell Education Savings Account
• Most banks and brokerage firms offer
  tax-advantaged accounts

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Access to your Bank Accounts

• Deposits
• Withdrawals at the Bank Branch
• ATM Withdrawals
• Debit Card Withdrawals
• Check Payments
• Certified Checks

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Access to your Bank Accounts

• Deposits of cash or checks
• Deposit Ticket
• ATM deposit
• Smart phone deposit (checks only)
• Direct Deposit
• Employer
• Tax refunds

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Access to your Bank Accounts

• Withdrawals at the Bank Branch
• Most easily done at your own branch (where you
  opened your account)
• Your own branch will have your signature on file
• You may be personally known to someone at the
  branch
• Give the teller a check written on your account
  made out to cash

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Access to your Bank Accounts

• ATM Withdrawals
• Bank-provided ATM card
• Debit card
• Avoid out-of-network ATMs

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Electronic Access Debit Card

• Debit Card Withdrawals
• A bank card that allows the cost of purchases to
  be immediately deducted from your bank account
• Not a credit card you must have the money in
  your account when you use it.
• May be used for withdrawing cash from the ATM

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Access to your Bank Accounts

• Checks
• Blank checks may be free, or there may be a small
  charge
• The Float is the time between when you write
  the check and when the money leaves your account.

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Access to your Bank Accounts

• Certified Checks
• Large purchases (car, down payment) may require
  payment with a certified check
• A check that is guaranteed by the bank
• Must be requested at the branch
• Bank verifies that you have enough money to cover
  the certified check
• Bank freezes that amount of money in your
  account
• No float time between when you write the check
  and when the money comes out of your account

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Electronic Access to your Bank Accounts

• On-Line Banking
• Approved Automated Withdrawals / ACH Debit

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Electronic Access On-line Banking

• On-Line Banking
• Check your balance
• Pay bills
• Transfer money
• Is It Safe?
• Most banks offer secure Internet banking
• https indicates the connection is secured by
  encryption
• Internet security is a complicated issue
• Be cautious
• Be careful

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Electronic Access - ACH Debit

• Approved Automated Withdrawals / ACH Debit
• Only for limited amounts and limited time
• Only from trustworthy companies
• Companies that you know well
• Companies that you would not have trouble with if
  you wanted to change or cancel your payment
• YES for major utilities, public
  colleges/universities, government offices
• NO for private profit-based schools, small
  companies in other countries

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Special Banking Services

• Wire Transfers
• Money is sent electronically from one bank
  account to another
• Often used for international transfers of money
• Wire transfers use networks like CHIPS (Clearing
  House Interbank Payments System) or Fedwire (the
  Federal Reserve Banks network)

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Special Banking Services

• Overdraft Protection
• A check is bounced when you dont have enough
  money in your account to pay it
• Banks may charge high fees if a check bounces
  as much as 20 or 30
• Overdraft protection is offered at some banks.
  The bank gives you an automatic loan if you dont
  have enough money to cover a check you wrote.
• Look carefully at any overdraft protection
• How much will it cost?
• Is there a charge only if you use it or is there
  a monthly charge?

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Special Banking Services

• Stop Payment Orders
• If a check you have written is lost or stolen, or
  if you dont want to pay it for some other
  reason, you can put a stop payment order on
  that check
• Check payee
• Check amount
• Check date
• Check number
• A fee may be charge for a stop payment order
• The stop payment order may only be good for a
  specific amount of time for example 6 months

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Special Banking Services

• Automatic Transfers
• You can set up a regular, automatic transfer that
  will happen on the same day, at regular intervals
• Once a month
• On your payday
• If you have online banking, you can set up a
  regular transfer through your online interface
• You can also ask the bank to do make the transfer
  for you

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You Your Money Glossary

• Contains simple definitions of the most commonly
  used financial terms.
• Log on to www.virginiaguilford.com and download
  the Word document from the Docs and Links page.
  (The PowerPoint presentations used in this class
  are also available there)
• Or send your request to
• vg_at_virginiaguilford.com

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