Presentation Transcript

1. Smart Saving & Spending

   Presented by: Stephanie Sorrells The Peoples Bank VP/Service Culture Manager
2. Staying Fit Why is it important to be physically fit? Why is it important to be financially fit?
3. Needs & Wants Need Want
4. S.A.V.E.Save, Share, Spend S. Set aside at least $1 from every $10 you earn or receive as a gift and save it. Set aside at least $1 from every $10 you earn or receive as a gift and share it. A. Open a savings account and deposit money regularly V. Vow to put needs before wants when spending E. Encourage others to S.A.V.E., too!
5. How to be a smart saver Know what you’re saving for & come up with a plan! Write down your savings goals & keep them in a place where you can see them. Know where your money is going! Stick to a budget
6. Various ways to save Savings Account A deposit account held in a financial institution intended for funds that are expected to stay in for the short term . This account pays a low rate of interest but can not be used directly as money. Money Market Account This is an interest bearing account, similar to a checking account but usually earns a higher interest rate. Minimum deposit levels are higher than checking, and access to the account may be limited. CDs (certificates of deposit)/or Time Deposit A document written by a financial institution that is evidence of a deposit, with the issuer's promise to return the deposit plus earnings at a specified interest rate within a specified time period.There is usually an early withdrawal penalty & these accounts typically earn higher interest rates than savings or money market accounts. Stocks/Bonds/Mutual Funds Accounts that are opened with an Investment Firm. These accounts usually carry the highest interest rates of any savings tool. They are both short term & long term. However, there is a risk that you may lose the money you deposit or earn.
7. Interest Interest Rate: The percentage at which interest is charged on a loan, or paid out on savings. The rate will vary according to the base rate and the type of loan or savings plan. Earned Interest: This is interest that the depositor earns on the money they deposit into the financial institution and the institution is responsible for paying to the depositor. Accrued interest: This is interest that a loan accrues and the borrower is responsible for paying to the institution
8. Interest Simple interest: Interest that is paid only on the original amount borrowed or deposited Compounded interest: Compounded interest is interest that is paid on both the principal balance of the loan and on any accrued (unpaid) interest
9. How to be a smart spender
10. Spending Tips Being a young person doesn’t have to mean being confused when it comes to the how’s, what’s, when’s, and where’s of spending money. Understand some of the tips and tricks that companies, stores, and restaurants use to get us to buy as much as possible. Learn what makes something a good value. Find different ways to get the things you want for less or even no money at all. Put time and thought into big purchases so you won’t regret them later.
11. Ways to pay for your bills & purchases Cash Check Debit Card Credit Card Online
12. Buying with creditsmart ways to use a credit card A credit card is an unsecured revolving line of credit. These types of loans will cost you the most in interest. If you pay your balance in full during the grace period, you will not be charged any interest! If you do not pay off the balance in full each month, then interest is added to the balance. You must pay at least the minimum due.  This will help you to avoid late fees and a rising APR. (annual percentage rate) To pay off your balance quicker, pay more than the minimum due.
13. What is an APR? For credit cards, the Annual Percentage Rate or APR is basically the interest rate. The APR is applied to your balance to calculate the interest you owe. The dollar amount of interest you owe is shown as a finance charge on your billing statement for any month you are charged interest.
14. Can different APRs apply to the same card? Purchase balances Cash advance balances Balance transfer balances
15. How and when can the APR change? Automatic APR changes triggered by your behavior Changes in APRs with advance notice Changes to variable rate cards
16. What other fees might I pay? Annual fees Late fees Returned payment fees Cash advance fees (using ATM or convenience checks) Balance transfer fees Foreign transaction fees Expedited card replacement fees
17. How much will the item really cost me? $100 pair of shoes Interest rate on credit card is 10% You do not pay the balance in full, just the minimum payment of $10 The payment is not received by the due date so you are charged a $30 late fee plus the interest of $10. The next month you receive your statement and the balance is now $140. This process will keep repeating until you pay the balance in full!
18. Dangers of using credit cards You may spend more than you can pay back. If you do not pay as agreed, then the credit card company will report negatively to the credit bureau agencies. A negative credit report can keep you from buying other wants or needs, like a car, house or even keep you from getting a job!
19. Credit Card Do’s & Don'ts DO start small. DO shop around. DO read the fine print on the credit application. DO understand the Annual Percentage Rate or APR. DO open your bill immediately and compare charges with receipts. DO pay at least the minimum due. DO keep your credit card in a secure place.
20. Credit Card Do’s & Don'ts DON'T feel pressure to get a credit card. DON'T open a lot of credit accounts within a short period of time. DON'T pay your bills late. DON'T spend more than you can afford. DON'T ignore the warning signs of credit trouble. DON'T share your credit card number .
21. Now you have the tools to be a smart saver & a smart spender!