Consumer Services
Chapter 10-3: Managing Your Money
Careers related to this topic:
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Credit counselor
Account manager
Financial planner
Family economics specialist
When selecting a financial institution, you
will want to consider its services.
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Saving Accounts
Checking Accounts
Debit Cards
Automated Teller Machines (ATMs)
Loans
Certified and Cashier’s Checks
Traveler’s Checks
Safe-Deposit Boxes
Other Services-Credit Cards, Drive-up windows,
Online Banking
Savings Accounts
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Savings accounts can protect extra
money and make it earn money for
you by collecting interest.
Savings accounts can be used to
save for a major goal, such as
college education or a car, or to
save for emergencies.
Interest
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Interest is the money a financial
institution pays at regular intervals
for the use of your money.
Checking Accounts
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A check is a written order to a financial
institution to pay a specific amount of
money.
Checking accounts are sometimes called
demand deposits. That is, money in
them is available on demand.
Debit Cards
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A debit card shows that you have an
established checking account with the
financial institution identified on the
card.
Swiping the card immediately transfers
payment from your checking account.
ATMs
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An automated teller machine (ATM) is a
machine for withdrawing and depositing
money.
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An ATM offers people the flexibility of
banking at any time.
Electronic banking lets you use a phone
or computer to check on your account,
pay bills, and transfer funds to other
accounts.
Loans and Charge Accounts
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There are two types of credit: loans and
charge accounts.
Loans are when you borrow money from
financial institutions and then pay it
back.
Charge accounts are when you receive
your purchase now and pay a store or
credit card company later for what you
owe.
Other Services
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Certified and Cashier’s Checks
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A certified check is simply a personal check for
which the financial institution guarantees
payment.
A cashier’s check is a check drawn on the financial
institution’s own funds. You present the money
and the institution issues the check.
Traveler’s Checks
Safe-Deposit Boxes
Depositing Money
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You open a checking account by
making a deposit, or putting
money into an account.
Depositing Money
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Deposit slip:A slip of paper you fill
out in order to deposit a check or
cash into a bank account.
Endorse: To sign over your rights
to a check by writing your name on
the back.
Reconciling
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When you receive your statement you
need to reconcile your account.
Reconcile means that you need to
make sure that your own records
and your bank statement are the
same. This may also be called
balancing your checkbook.
Credit
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Credit is an arrangement that lets
you buy things now and pay for
them later.
Credit Rating
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Credit rating: A record that shows your
ability and willingness to pay your
debts.
Companies called credit bureaus keep track of
your record of paying debts. A poor credit
rating can stop you from getting more credit
in the future and may cause you to pay
higher interest rates.
Creditors
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Creditors are people or companies to
whom you owe money.
Who is a Consumer?
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A consumer is someone
who buys and uses goods
and services produced by
others.
Being a wise consumer
means being able to
determine the right products
and services and being able
to find a good price.
Comparison Shopping
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Comparison shopping
involves taking time to compare
products, prices, and services.
Impulse Buying
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You want to avoid impulse buying
which is making unplanned
purchases on the spur of the
moment.
Stores promote impulse buying with eyecatching displays. Impulse items are often
placed close to the front of the store so you
notice them as you enter. They’re also
placed near checkout counters, tempting
customers as they wait in line.
Look Before You Buy
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Name brand or store brand?
Sometimes name brands only cost
more because they spend more on
advertising, not because they are
better products.
Read product labels.
Ask about warranty and return policy.
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A warranty is a written guarantee that a
product will work properly for a specified
length of time unless misused or
mishandled by the consumer.
Creating a Budget
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A budget is a plan to help
manage your money wisely.
When you make a budget, you
set up guidelines for spending
money on things that are worth
the time and effort you put into
earning the money.
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Budgets are designed to reflect income
and expenses for a given period of
time.
A few basic steps for setting up a
budget are:
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Set goals for your spending
Determine sources of income
Estimate your expenses
Compare Income and Expenses
Write the Budget and Keep Records
Evaluate the Budget
Income & Expenses
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Income is the amount of money
you have coming in.
Expenses are the goods and
services that you spend money
on.
Types of Expenses
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Fixed expenses – expenses that cost a set
amount that you are committed pay.
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Mortgages
Rent
Insurance
Savings
Flexible expenses – costs that occur
repeatedly, but vary in amount from one time to
the next.
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Food
Clothing
Recreation
Transportation
Have a plan
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Financial planning – the process of
defining goals, developing a plan to
achieve them, and putting the plan
into action.
Financial Planning Steps
5. Monitor and
Modify the Plan
4. Implement the Plan
1. Set Goals
2. Analyze Information
3. Create a Plan
What is cash flow?
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A measure of the money
you receive and the
money you spend.