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Please pick up a handout on the back table. Copy down the Unit Essential Questions for Unit 1: Personal Finance

DO NOW ACTIVITY:. Please pick up a handout on the back table. Copy down the Unit Essential Questions for Unit 1: Personal Finance How do banks operate to store, transfer, and loan money? How can the concept of budgeting be applied to economics, and other areas of life?

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Please pick up a handout on the back table. Copy down the Unit Essential Questions for Unit 1: Personal Finance

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  1. DO NOW ACTIVITY: • Please pick up a handout on the back table. • Copy down the Unit Essential Questions for Unit 1: Personal Finance • How do banks operate to store, transfer, and loan money? • How can the concept of budgeting be applied to economics, and other areas of life? • What factors should be considered when determining when to use credit?

  2. Banking Basics:Checking, Saving, Credit Unions, and YOU!

  3. How Banks Work • 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 times • The reserve requirement is about 3-10% of deposits received.

  4. Credit Unions • Credit Union = non-profit cooperative financial institution • Owned & controlled by its members • Bank= for-profit company, makes $$ from charging fees & lending money • Credit Unions serve groups sharing something in common, ex: profession • Credit Unions provide checking & savings accounts and loans • Often at better rates than commercial banks!!

  5. Benefits of Banks/Credit Unions • 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!!

  6. Checking vs. Savings Accounts Checking Account • Thought of more as a “transition account” • When a check is written, it is withdrawn from a checking acct.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 account • If funds are sufficient!

  7. Checking vs. Savings Accounts Savings Account • Typically accrues interest – place for $ to be “saved” or “put away”

  8. How to Write a Check! • How to Write a Check

  9. Important Check Notes • 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!

  10. How to Balance a Checkbook! How to Balance a Checkbook

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