Uploaded by Richard Wang

Account Management & Your Trusted Team

Management &
Your Trusted
Choosing Where To Bank
Selecting A Financial Institution
Cashing Your Paycheck
• Non-financial institution check cashing services:
• 1% – 5% fee
• Payday Lender:
• 10% fee
• Financial Institution:
• 0% fee
Benefits Of Checking And Savings Accounts
Interest earnings
Direct deposit
Organizing your finances
Future relationships
Information You Need To Open An Account
Social Security Number
Valid governmental ID
Date of birth
Current address (possibly past
• Phone number
• Email address
Trouble Opening An Account?
• Obtain ChexSystems report
• If you owe balances on
previous accounts, pay them
• Dispute negative account
claims with ChexSystems
• Find a second-chance financial
Activity: Selecting a Financial
This activity guides you to review the options and features available through a given
financial institution, to help you define what’s important to you in selecting the
institution with which you want to bank. Even if you already have accounts at a
financial institution, you can use this activity to learn the ins and outs of your current
accounts. For example, do you know all the potential fees associated with your
account(s)? What about the available savings account options your institution offers?
Banking Essentials &
Purposes Of Your Banking Accounts
Checking Account
Where most transactions take place
Handles most of your financial “ins and outs”
Where your paycheck is cashed
From which you pay your bills
From which you transfer money to savings and investment accounts
Savings Account
• Where you deposit your
emergency fund
• Short-term savings fund
• Long-term savings fund
• Withdraw money from savings
only for the purpose for which
that fund was intended
• Typically pay interest daily
based on your balance
Automating Your
Personal Finances
Six Steps In Account Automation
• Open Accounts
• Comparison shop for financial
• Open checking and savings
accounts (minimum)
• Set Up Direct Deposit
• Complete form from your
employer or the financial
• Saves time and money
Six Steps In Account Automation
• Bill Pay
• Financial institution → business
• Online bill pay center → business
• Business → your account
• Savings
Automatic transfers
Six-month emergency fund
Short-term savings
Long-term savings
Six Steps In Account Automation
• Investments
• Educate yourself
• Automatic transfers to
investment accounts
• Business → your account
• Filing and Records System
• File system for hard documents
• Computer storage folder for
electronic documents
Lets Take a Break
Debit Cards Vs. Credit Cards
Flow Of Transactions Using Debit Cards Vs. Credit
Debit Cards
Work like a check
Money withdrawn from your account at the time of purchase
You cannot spend more than you have in your account
Can be used to get cash back with purchase
Can be used to withdraw money from ATMs
You may be subject to unlimited liability if stolen
Credit Cards
• Basically the same as a loan
• You pay back the lender plus
interest for each purchase
• Avoid interest by paying balance
in full each month
• Can be used for cash advances,
but for a large fee
• May offer rewards like cash back,
discounts, travel miles
• Offer greater protection if stolen
Secured Credit Card
Convenience of a credit card
Good for those who need to build credit history
You deposit cash as collateral
Credit limit equals the amount of your cash deposit
You cannot touch the cash unless you close the card
Use the card like any credit card, up to the limit
Advantages Of Debit Cards Vs. Credit Cards
Advantages Of Debit Cards Vs. Credit Cards
Building A Trusted
Financial Advisement Team Members
Financial Foundation Team Members
Contact at Financial Institution
Financial Mentor
Help you navigate your accounts
Keep you informed of updates
Someone who successfully manages
his/her money
Do your own research as backup
Tax Planner
• Prepare your tax returns
• Advise you to maximize your
Insurance Agent
• Help you select appropriate
• Knows the business inside and out
Specialized & Advanced Team Members
• College Planner
• Help calculate ROI of education
• Guide student through all phases
of application
• Negotiate funding
• Attorney
• Review contracts and legal
• Prepaid legal companies are
inexpensive option
Specialized & Advanced Team Members
• Realtor & Mortgage Broker
• Help calculate mortgage you
can afford
• Aid to obtain financing
• Locate the perfect property
• Financial Advisor
• Furthers your education
• Consults about investments
• Select advisors who are professional, qualified,
• Choose advisors who will act in your best interests
• Consequences of choosing the wrong advisor:
• Not fully understanding contract terms
• Goldman Sachs shorting the market
• Forbes and CBS on “biggest frauds”