• Please pick up a handout on the back table.
• Copy down the Unit Essential Questions for Unit 1: Personal Finance
1. How do banks operate to store, transfer, and loan money?
2. How can the concept of budgeting be applied to economics, and other areas of life?
3. What factors should be considered when determining when to use credit?
Banks create money in the economy by making loans to people or businesses.
The amount of money banks can loan is set by the Federal Reserve’s “reserve requirement– The amount banks must keep in vaults at
all timesThe reserve requirement is about 3-
10% of deposits received.
Credit Union = non-profit cooperative financial institution– Owned & controlled by its members– Bank= for-profit company, makes $$ from
charging fees & lending moneyCredit Unions serve groups sharing
something in common, ex: professionCredit Unions provide checking & savings
accounts and loans- Often at better rates than commercial
banks!!
Your $$ is safe from loss, theft or fire!Each account is insured up to $100,000
by the FDIC (banks), or National Credit Union Share Insurance Fund (credit unions)
Using check-cashing stores (Publix) and money orders is more expensive than paying bank fees
A bank account can help you keep track of how you spend your money!!
Checking AccountThought of more as a “transition
account”When a check is written, it is withdrawn
from a checking acct.Can also get ATM, or debit card – takes
$ directly from bank accountIf funds are sufficient!
Savings AccountTypically accrues interest – place for $
to be “saved” or “put away”
All checks must have a signature to be considered legal tender.
If a check is “post-dated” (dated later than day written), can’t be cashed until listed date (or later)
On amount line, always start writing at the beginning of line – and draw a line after the amount
Written $$ amount & amount in box should match
Written $$ amount is what will be paid to holder of the check!