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Chapter 10

Chapter 10. Saving for the Future. Why Save??. Short-term needs:. Why Save?. Long-term needs:. Financing Your Education. How to pay for college? Work - Scholarships Student loans – Grants – Work-study Programs –. How much to save?. How much you can save is based on:

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Chapter 10

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  1. Chapter 10 Saving for the Future

  2. Why Save?? • Short-term needs:

  3. Why Save? • Long-term needs:

  4. Financing Your Education • How to pay for college? • Work - • Scholarships • Student loans – • Grants – • Work-study Programs –

  5. How much to save? • How much you can save is based on: • Discretionary income – • The __________ you attach to saving • Your anticipated ________________ • Your ___________

  6. Keys to Saving

  7. How your money grows • Principal – • Interest – • Compound Interest –

  8. How your money grows • The ______ _____interest in compounded, the ________ your earnings. • Yield – • Annual Percentage Yield -

  9. Where to save • ________________ – chains; usually “full service;” FDIC insured • __________________________ – specialize in savings accounts and real estate loans; FDIC insured • ______________– Not-for-profit, member owned institutions; “share accounts;” NCUA insured • _________________ – offer securities (stocks and bonds); Not FDIC insured

  10. Regular Savings Accounts • Liquidity – • Tradeoff? • You are free to make deposits and withdrawals without penalty.

  11. Certificate of Deposit • Certificate of Deposit (CD) – • Maturity date – • __________ must be paid if money is withdrawn _______ • Rates are ______ than a savings account b/c _____ __________

  12. Money Market Account • Money market account – • Offered by ______ and ________________ • ______ _______ but often limited to a certain number of withdrawals per month • Usually require large_______ ______ and high ___________ ___________

  13. Money Market Accounts MM Deposit Account MM Fund Offered by __________ ______ Type of mutual fund that invests in low-risk securities Risk of loss of principal ___ _____insured • Offered by ______ • Higher rate for higher deposits • Rate can ________ as account balance increases • ________ insured

  14. Factors to consider when saving - First Niagara - Wells Fargo

  15. Saving Regularly • It is important not just to save, but to save regularly. • Direct Deposit - • Automatic Payroll Deductions –

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