Unit 3 Budget: Don’t Go Broke

1. Unit 3Budget: Don’t Go Broke Step 3: Other tools to help you handle your cash TRANSACTION SERVICES RECORD KEEPING

2. Transaction Services • A Checking Account • You can write a check • You can use an ATM • You can use a Debit Card that acts like an electronic check Watch the videos. Take notes on how to write a check and how to balance a check book. How to Write a Check How to Balance a Check Book

3. Transaction Services • Shop around for the right bank or credit union for you • Minimum balance—an account may require a certain balance at all times; if you fall below it you might have to pay 5 dollars a month or have your account closed • Annual monthly fees—some accounts may charge a monthly service fee for a checking account • Overdraft Protection—if you write a check for more money than you have in your account, the bank may cover the check with a loan then charge you an overdraft fee and/or interest • Insufficient funds charge—If you “bounce” a check and don’t have overdraft protection, the bank will charge you an insufficient funds fee, usually 15 – 30 dollars

4. Transaction Services ATM fees—There is often a fee for using an ATM, usually 1-2 dollars Watch the video. Make a list of things you should consider when looking for a bank. How to Choose the Right Bank for You

5. The Envelope System • If a bank account isn’t for you at this point • Label a separate envelope with each category of your budget • Write the budget total on the outside of each envelope • Put the budgeted amount in when you get each paycheck • Take the money out when you need something from that category • When the envelope is empty, you are done for the week • When you take money from the envelope, write the date, amount and reason on the outside of the envelope; this provides an accurate record • Start with a new set of envelopes for each planning period

6. Record Keeping • Files to keep • Checking account statements • Savings and investments statements • Copies of car insurance papers and payments • Tax documents for up to 3-4 years • Pay stubs from your employer • Loan papers, for example for your car • Big ticket item receipts and warranties, for example, computers Record Keeping and the IRS Watch the video. Take notes on what to keep and how long to keep it.

7. What You’ve Learned in Unit 3 The benefits of a budget, what it is, and how it works The difference between income and expenses How taxes and other payroll deductions affect your paycheck The importance of PYF How basic tools like a checking account or the envelope system can help your budget work for you Watch the video. What are money losers and what are money winners? Laugh and Learn about Personal Finance

8. Action Steps: Portfolio Quick Check: How Are You Doing? Directions: Write a sentence answering ‘yes’ or ‘no’ for each statement. Do you have written goals? Do you save regularly? Do you have a budget? Do you pay what you owe promptly? Do you think ahead before you buy? Do you buy only what you need and will use. Do you PYF? From what you learned in the Quick Check, write down two steps you can take this week to improve your financial habits.

9. Bibliography TEXT AND ASSIGNMENTS NEFE High School Financial Planning Program, Student Guide. National Endowment for Financial Education. Greenwood Village, CO. 2001. Page 2: “How to Write a Check—Checking Account Tips.” You Tube. Page 2: “How to Balance a Checkbook.” You Tube. Page 4: “How to Choose the Right Bank for You.” You Tube. Page 6: “Record Keeping.” You Tube. Page 7: “Laugh and Learn about Personal Finance.” Investored.ca You Tube Any images not catalogued are from Microsoft ClipArt Gallery.