3. Home account: keep money at home in a piggy bank. This type of
account is risky because you are not guaranteed protection.
Checking Account: money kept in a bank where you can write a
check, use a debit card, or withdraw cash.
Savings Account: money deposited in an account but may charge a
fee if there are withdrawals.
Certificates of Deposit (CDs): similar to a savings account but
consumers agree not to withdraw money for a specific amount of
time (usually months or years)
Individual Retirement Accounts(IRAs): allows consumers to put
money aside to save for retirement
4. Fixed: costs that stay the same from month to
month (i.e.: rent/mortgage, car payment, insurance,
etc.)
Variable: costs that fluctuate (change) every month
depending on use (i.e.: food, travel, gas,
entertainment, etc.)
5. A budget is a plan for how an individual , family, or
organization will raise and spend money.
Steps for creating a budget
1. List fixed costs that you will have for the month.
2. Estimate your variable costs based on past experience.
3. Set aside an amount you want to save each month and put
into a savings account as soon as you get paid
4. List large purchases you plan to make (vacations, home
improvements, etc.) and determine how much money must
be set aside to achieve these goals.
6. When you use a credit card to make a purchase, you
are taking out a small loan that you will have using your
credit and will require you to pay interest (money that is
changed for using credit).
It is best if you shop for a lower interest rate because
the higher the interest rate, the more money you will
have to pay back in the long run.
If you don’t pay off your interest on time, you are
building debt.
Debt: the money you owe to creditors for purchases you
make (homes, cars, education, starting a new business,
etc.)
Building debt is not always bad if the consumer can pay
it off over time. You are more likely to get a lower rate if
you have decent credit score/history.
7. Put money in a savings account or CDs
- It may grow at a very slow rate but you will be
guaranteed a return.
Buy U.S. government bonds and treasury bills
- Give government money now and get back the
principle (amount loaned) and interest
8. Buy a Home
- Houses usually gain in value and you will be able to sell
it for more than you bought it over time.
Invest in Stock
- Very risky and not guaranteed a return on investments
- Ways to make money on stocks
- Dividends: piece of company’s profit for owning shares of the
company
- Capital Gains: selling stocks for more than what you bought
for it
9.
10. Insurance: when a company provides a guarantee
of compensation for a specified loss, damage
illness, or death in return for payment
Insurance Agent: person who sells and manages
insurance policies
Claim: a demand made by the insured or their
beneficiary for payments provided by the policy
issued
Deductible: the amount of money the person must
pay out of pockets before the insurance kicks in
11. Health: provides for medical care, doctor visits, prescriptions, rehab,
etc.
Life: pays money to beneficiaries upon death of the insured to cover
death expenses (funerals, etc.) and for lost income due to death
Automotive: in case of a car accident it will pay for medical expenses
of those injured and property damage
Home Owner/Renters Insurance: provides money for personal
properly and structural damage in case of damage or theft
12. FTC (Federal Trade Commissions): regulates businesses from
limiting competition and for prosecuting businesses that use
unfair or deceptive practices; its Bureau of Consumer Protection
(BCP) deals with identity theft and job discrimination .
Consumer Product Safety Commissions (CPSC): create and
enforce policies for safe products not including food,
pharmaceuticals, alcohol, and guns; may issue recalls on
products that are unsafe for consumer use.
Food and Drug Administration (FDA): does safety regulation and
testing of food, pharmaceuticals and cosmetics to make sure
they are safe consumer use.
Federal Communications Commissions (FCC): controls what
content can be used through different media, and it prevents
businesses from providing false advertising.
Bureau of Alcohol, Tobacco, Firearms, and Explosive (ATF):
regulates the sale and safety of this specific products.
NC Department of Justice: state agency in charge of regulating
businesses and protecting consumers in NC.
