SAVING Mrs. Wilson Dayton High School What is Income? • Income is any money you receive. This can include money from a paycheck, allowance, selling items, etc. Income & my Paycheck • What do I do with my paycheck? Where does all the money go? – Mortgage… what’s that? – Electricity/ Utility Bills – Car Payment – Baby Wren =) – Student Loan – Travel • What do I do with the $$$$ that’s left over???? I SAVE IT!! What are the benefits of saving? • Unexpected accidents – Steve-O breaks his arm – Wren gets really sick – I wreck my car – Our air conditioning goes out in August (this actually happened) • Save for Major Purchases – House – Car – Expensive Trip More Benefits of Saving • Save for Opportunities – Your friend asked you to go to Florida with her family for Spring Break. • Save for Flexibility – Don’t always have to say “no,” you can buy that expensive pair of shoes or go on a nice vacation. • Save to Achieve your Goals – College!!!!! It’s very expensive, lots of $$$$. \ – Buy a car when you turn 16! Saving Strategies • Pay Yourself First – Automatically put money in your account when you get paid. • Save 10% of what you make. If you make $100 each week this summer, save $10. • Have a goal! Save towards your shoes that you want, or a vacation you want to take. Saving Accounts What Are Your Options? • Commercial Banks- financial institution that serves people and businesses. • Savings Banks- financial institutions owned by their depositors. – As owners, depositors earn dividends instead of interest. • Dividend- a share of the company’s profits. More Saving Account Options • Savings and Loan Associations – Specialize in lending money to consumers to buy homes. – Provide checking and savings accounts and provide loans to businesses. • Credit Unions – Offer memberships to people who share a common bond example- UK Credit Union, you had to be a student or be employed there to be a member. – Not for Profit- these banks do not operate to make money like other banks do. Deposit Insurance • Major reason for depositing money in a financial institution (bank) is safety. You don’t want to put $10,000 or even $1,000 under your mattress!!! • What happens if your bank goes out of business? Does your money go away? – NO!!! Most banks are insured by the government. FDIC • Federal Deposit Insurance Corporation insures money deposited in most banks up to a certain amount. (usually $100,000) Saving and Interest Rates • One of the biggest benefits of depositing your money into a savings account is the money or interest you can earn. – Example- $750 deposit @ 3% interest will earn me $22.50 extra over one year’s time.