Financial Education
Presented by
Pop Culture
• Who
is Chris Hemsworth’s brother? (He
is staring in a big movie, out Nov 20th)
• Liam Hemsworth (Mockingjay Part 2)
• Who are the current judges on The
Voice?
• Adam Levine, Blake Shelton, Gwen Stefani and
Pharrell Williams
• Who is Russell Wilson’s girlfriend? (She
attends Russell when he visits the
children’s hospital)
• Ciara
Banking vs. Pop Culture
• What is a CD?
• What is the difference between a
bank and a credit union?
• What is APY/APR?
• What is a credit score? Do you
check your credit score?
• What is direct deposit?
Goal for Today’s Presentation
Give You Financial Tips about Saving
and Spending That You Can Use
What is a Financial
Institution?
Financial institutions –
businesses that provide
financial services
What is the name of one financial
institution in your community?
What Do Banks Do?
Shape of the financial industry
Prosperity
Deposits
Jobs
Loans
Why keep your money in a
bank?
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Safety - Insured
Convenience
Security
Build your
financial future
Types of Financial Institutions
Three types of financial institutions are:
Commercial Banks
Community Banks
Credit Unions
For-profit
For-profit (may be owned by their
members, or they may be publicly
held.)
Not-for-profit – owned by
members (chartered at the federal
or state level)
Open to anyone who
wants to utilize a
financial institution
Open to individuals or
small local businesses
who want a local
financial institution
Offer numerous
financial services
Offer numerous
financial services
Usually the largest
financial institutions
nationwide
Local or regional Range in size but
usually found in
local communities
Have membership
qualifications –
members must share a
“common bond”
Offer many services
but usually not as
many as a bank
Are often able to pay
higher interest rates
and charge lower fees
Each type is unique – choose what is best for you
Types of Financial Institutions
Which one should you choose?
BANKS
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Investment
Commercial
Community
Savings & Loan
CREDIT UNIONS (MEMBERS ONLY)
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Employer
Community
Military
Financial institutions keep your
Federal Deposit
National Credit
money safe
Insurance
Union
•
Offer a safe and
secure place to
store your money
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•
Security (safes,
secure networks,
etc.)
Insurance
How can insurance play a
role in choosing a financial
institution?
Corporation
(FDIC)
Administration
(NCUA)
Insures banks and
other types of
institutions other
than credit unions
Insures
credit
unions
$250,000 per
depositor, per
insured institution,
for each account
ownership type
Same as FDIC
Businesses offer services to the
public
Grocery store
Gas station
What services do these
businesses offer?
Restaurant
Clothing store
Transaction
and Savings
Tools
What are three
services a
financial
institution might
offer to entice you
to choose them
over another?
(free checking, high interest
rate, etc.)
Electronic
Payments
Services
offered by
financial
institutions
Safe-Deposit
Box
Credit
Financial
Advice
How to Open an Account?
Account Verification
Proving your identity and showing your
readiness to open an account with identification
such as:
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–
–
–
Photo ID, state-issued ID card
Passport
Driver’s license
Social Security Number
Next, you’ll receive an account number and tools for your
new account.
Account Purposes
Checking Account
Savings Account
Provides quick access to funds An account for money not intended
to be used for daily expenses
for transactions
Use deposited money
anytime by:
• Writing checks
• Using a debit card
• Withdrawing cash
• Electronically transferring
money
Access to money is more
limited than a checking
account
Some earn interest but
most do not
Earn interest
Should you look for a low
or high interest rate on a
savings account?
Long Term Savings Option
What is a CD?
•
•
Certificate of Deposit: Higher interest earning
savings account in which you promise to
leave your money in for a specific length of
time (term), i.e. 90 Days, 6 months, 1 years, 4
years, etc.
There are penalties if you withdraw your
money prior to the end of the term.
What long term savings goal might
you use a CD for?
Financial institutions offer the
ability to earn interest
Interest - the price paid for
using someone else’s money
You can earn interest or be
charged interest
The amount of interest earned or charged is
determined by the interest rate (percentage rate
used to calculate interest, usually an annual rate)
Interest Explained
What is Interest?
• An amount of money banks or other financial
institution pay you for keeping money on deposit
with them or to use their money. Expressed as a
percentage.
What is Annual Percentage Yield? (APY)
• The amount of interest you will earn on a yearly
basis, expressed as a percentage.
• The more often your money compounds, the
higher the APY, and the more interest you will
receive.
• Compare the APYs of different accounts, not the
interest rate.
Interest Rate View
Simple Interest
$100 deposited in
an account
earning 2% interest
$100
.02
Look for high
interest rates when
earning interest
Look for low
interest rates when
paying interest
$2
per year
No Interest
2% Rate of
Return
Year 1
$1,825
$1,844
Year 5
$9,125
$9,595
Year 10
$18,250
$20,188
Credit
What is it?
• Borrowing
money
What can
you do?
• Loans
•
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Auto
Home
Student
• Credit cards
Other
Information
• You will pay
back the
money
borrowed
plus interest
Read the fine print. It may include more details that can cost you more than
expected in the long run. (Annual fees, early termination fees, etc.)
Loan Services:
When should I get a loan?
•
Car Loan (Installment Loan)
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Home Loan (Mortgage Loan)
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Repaid over time with a set number of scheduled
payments for a certain term (i.e. 48 months)
Home ownership - a long-term living commitment to be
over the next 15 to 30 years.
Credit Card
•
Variable interest rate. May include additional fees and
finance charges.
What is Annual Percentage Rate? (APR)
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•
•
The amount of interest you will be charged for borrowing, expressed as a
percentage number that represents the actual yearly cost of funds over the term
of the loan.
This may include any fees or additional costs associated with the transaction.
By law, financial institutions/loan issuers must show the APR to give borrowers a
clear understanding of the actual rates applicable to their agreements.
How long would it take to pay
off my credit card balance?
Balance
$250
Interest Rate
1.58
$39.85 int.
18%
1.67
$48.18 int.
21%
1.67
$57.18 int.
24%
$1,000
Years to pay off at 2%
Minimum Payment*
$32.09 int.
15%
$500
1.75
$150.87 int.
$851.03 int.
3.67
$198.34 int.
3.92
$257.01 int.
4.25
9.83
$1,396.77 int.
12.58
$2,797.55 int.
19.58
$332.22 int.
4.67
?
Do I really need to buy those shoes?
*2% is the typical minimum payment requirement or $10, whichever is higher
Which option is better?
Saving?
OR
Credit Card?
$19 earned
$470 earned
$1,938 earned
Saving is well worth the money. Remember to
create a budget and stick to it.
Today’s good saving habits will pay off tomorrow!
What is a credit score?
A credit score is a three digit number used by lenders to
determine your creditworthiness for a mortgage, loan or
credit card. Your score can affect whether or not you are
approved as well as what interest rate you are charged.
How is my credit score calculated?
Use Credit Wisely
Obtaining a loan or credit card…
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Advantages
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Build credit
Rent a car
Available for emergencies
Bonuses/Frequent flyer miles
Online purchases
Convenience
Insurance (WA)
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Disadvantages
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Negatively affect credit
Debt accumulation
Years to repay debt
High interest rates
Repayment could be 3 to 5
times the original purchase
price
Personal Budgeting
Keep track of your expenses and balance
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Make Savings a priority:
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•
Place a small amount of every
paycheck into a savings account.
Remember to record:
Deposits
• Withdrawals
• Interest
• Fees
•
Helpful Tip: If you use another bank’s ATM to withdrawal money,
you may be charged an additional fee. Don’t forget to record
that too!
Don’t overdraw your account! You’ll end up paying for it!
Things to Remember About a Budget
 Make

a Savings Plan and Stick to it
Set a savings goal: emergency fund, new car, college etc.
 Pay
Yourself First: When payday arrives, put some of
that money in a savings account before you pay your
bills.
WHAT ARE THE BENEFITS?
 Learn to manage money better.
 Save money toward your goals.
 Manage money independently
(college)
 Have money available for emergencies
NEED THE “EASY BUTTON” OPTION? Try Direct Deposit
Direct deposit, also known as direct credit, is a term that
describes a deposit of money by a payer directly into a
payee's account – savings & checking – electronically!
Ask your employer if they offer this service
Separate Needs from Wants
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Needs
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Rent or mortgage
Utilities
Food
Clothing
Transportation
Taxes
Health care
Childcare
Repairs
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Wants
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Entertainment
Cable
Internet service
Magazines
Eating out
Hobbies
Cell phones
Access ID
Password
• View account balances
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View current & available
balances
See pending transfers
• View recent transactions
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Search for transactions
View pending transactions
• Access online bill pay
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Pay bills online
Set up billers
Schedule future payments
• Make transfers between accounts • Reorder Checks
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Express transfers (immediate)
Schedule future transfers
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• Put a stop payment on a check
Convenient ordering
Select style and type
Send to home or bank
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Lost or stolen
Small fee for this service
Mobile Banking
Easy access to your bank accounts
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Access from an App on your smartphone
View accounts and balances
View recent transactions
Access bill pay
Deposit a check
Make transfers between available accounts
Find branch locations
It’s fast, simple, and safe!
Olympia Federal protects your personal information using a multilevel security system including encryption, authentication and
much more. If your phone is ever lost or stolen, you can instantly
deactivate your mobile banking access by logging onto your
online banking at olyfed.com
Before you enter sensitive data on a Web page, ensure that:
The site uses encryption, a security measure that helps protect your
data as it traverses the Internet. Signs of encryption include a Web
address with https ("s" stands for secure) and a closed padlock beside
it. (The lock might also be in the lower right corner of the window.)
Save financial transactions for your home computer
Never pay bills online, bank, shop, or do other financial business on a
public or shared computer or on devices such as laptops or mobile
phones that are on public wireless networks. The security is unreliable.
Is My Personal Information Safe?
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Financial institutions
must keep personal
information private,
by law
•
Others do not have
access to your
personal financial
information
Protect Yourself from Identity Theft
• Safe Keeping (Debit card, ATM card,
checkbook, Social Security Card, etc.)
• Don’t give out personal information
• Check your credit report each year
(www.annualcreditreport.com) – FREE and NO subscriptions to
purchase
• Shred financial papers before throwing
them away (6% of Identity Theft is from
stolen paper documents)
• Do not respond to suspicious emails or
text messages
• Maintain good financial records
• Never carry your Social Security card
with you and give out this number
sparingly
• Secure your personal computers or
devices by installing a firewall and virus
protection software - create strong
passwords
Debit Card Fraud
• Protect your debit card number
and your Personal Identification
Number (PIN)
• Be aware of your surroundings
when at an ATM
• Use caution at night or in the dark
• Check the ATM for tampering or
additions that do not seem part of
the machine – these are warning
signs that something might be
wrong
• Don’t leave your receipt behind
• Check your debit card account
regularly and contact your bank if
you see any discrepancies
Banking vs. Pop Culture
• What’s important to you?
• Are you prepared for the future?
• Ask for help when you need it
• Ask questions until you completely
understand the information
• Ask for written information to take home for
review
• Never sign anything until you understand it