Personal Finance Guide

18 Pages·2017·3.93 MB·English

Educators Credit Union
Personal
Finance
Guide
Earner.
Planner.
Saver.
Member.
Learn the basics
and begin to secure
your future.
For the teacher in you. 262.886.5900 | ecu.com
Table of
contents
What’s personal fnance? | 1
Types of fnancials | 2
Depositing into your accounts | 3
Account management | 4
Planning to save | 5
Goal setting | 5
Types of accounts | 6
Budgeting | 6
Checking accounts | 7
What is a checking account? | 7
Types of checks | 9
Credit | 10
What is a credit score? | 10
Protecting your credit score | 11
Credit cards | 11
Investng | 12
401(k)/403(b) | 12
IRAs | 13
Stocks | 13
Bonds | 13
Mutual funds | 13
What’s
personal fnance?
Personal fnance is about how we use our money. This includes spending it at
the store, putng it away in a savings account, investng in a 401(k) and more.
Understanding where your money goes is the key to successfully managing
your personal fnances. The money we spend today doesn’t just impact what
we have available tomorrow but what’s available next week, next month, next
year and even 60 years down the road. Because of this, it’s important that you
are tracking how and why you are spending your money. Planning to put some
money aside for bills, some aside for saving and some aside for retrement will
help make sure you have the money you need throughout your life.
This guide will discuss how we use money and the diferent ways you can
manage it.
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Types of fnancials
A fnancial insttuton is an organizaton that makes fnancial transactons,
such as loans, deposits or investments. The three most common types of
fnancials are credit unions, banks and check cashing businesses. Each type of
organizaton has key diferences in how they operate.
Credit unions decisions based on what will generate the most
proft for the bank’s stockholders.
A credit union is a not-for-proft fnancial
cooperatve where every member is an equal Banks generally include minimum balance
owner. Credit unions are run by volunteer requirements and a variety of fees.
boards that make decisions based on the
Check cashing
fnancial needs of its members. The board
Check cashing businesses ofer two types of
returns profts to its members as rewards.
services: check cashing and payday loans. The
Credit unions have limited to no minimum
business will charge a fee to cash someone’s
balance requirements or fees.
check. A payday loan is a loan obtained by
Banks a customer when they post-date a check in
exchange for cash. Payday loans ofen come
Banks are for-proft insttutons with
with large interest rates, some well over 100%.
stockholders as owners. A paid board makes
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Depositng into your accounts
In-person deposits
In order to deposit money into your account, most fnancials require you to fll out a deposit form.
A deposit form details your account number with the fnancial, the amount you are depositng,
which share (e.g. savings, checking, etc.) the funds are going into and if you will be receiving any
money.
Please see the example below.
TRANSACTION TICKET Account Number
Name _____________________________________________________________________ Date _____________________________________
Signature _________________________________________________________________ Password ________________________________
(signature required for withdrawals or transfers) (optional)
Checks or Cash from Member Withdrawal From Account # _____________________________
Cash $ ______________ Cash Back $ ______________  Savings   Checking   Other _________________________
Coin $ ______________ 1 Cash Back $ ____________________ 2
Total Checks $ ______________ Money Order (max. $1,000) $ ____________________
Grand Total $ ______________ Cashiers Check (no min.-no max.) $ ____________________
Check Payable to: ________________________________________
Deposit or Payment to:
CSahveicnkgins g # ___________________ Amount $ __________3____ FATrmroamonu sAnftc ectort. tr#a n_s_f_e_r _$_ _____________ _to_ A cct. # ____________4_____
Loan # ___________________ $ ______________ From Acct. # __________________ to Acct. # _________________
Other # ___________________ $ ______________ Amount to transfer $ _______________
Internal Use Only DL - State ID - Known - Other ID#_____________________________________ Exp______________
Deposits may not be available for immediate withdrawal. All items accepted are subject to our rules and regulations applicable to this account. Rev. 06/15
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Source of funds — Cash, coin or checks Transfer — Amount of a transfer is
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for deposit are entered here along entered here along with the share it is
with the grand total and any cash back withdrawn from and the share it will be
amounts. deposited to.
Withdrawal — Amount being withdrawn Checks — Additonal felds where other
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and the share it will be taken from. checks to be deposited can be listed.
Deposit/Payments — Amount being
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deposited and the share it should go to.
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CHECKS DOLLARS CENTS
Must FTBreOo nETtn ASteiLdre d On
Mobile banking Direct deposits
Instead of moving paper checks between A direct deposit is an electronic payment
fnancial insttutons, the government allows transferred from the account of the payer
for checks to be processed electronically. The directly to the recipient’s account. This is most
electronic deposit requires a picture of the commonly used for paychecks. Employers will
front and back of the check. You can do these ask an employee for their account informaton
deposits with smart phones or tablets linked to and make payment directly to their account
the internet. It may need to be done through come payday.
the fnancial insttuton’s website.
Account management
There are many ways to manage the funds in your account. You can use deposit forms to transfer
funds from share to share. You can move money online or through a mobile app. These tools allow
you to constantly monitor and manage the funds in your account.
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Planning
to save
Goal setng
Looking to repay debt, save for a new car or make a down payment on a house? Setng goals is an
important step to help you prepare for that next purchase in your life.
There are generally three types of goals:
Short-term — These goals normally include items such as a new computer,
Œa vacaton or clothes. Since you are normally saving to purchase these items
quickly, a basic or Prime Share Savings account is normally an ideal account to
hold this money.
Mid-term — The goals are large purchases that are in the not-too-distant future.
Items can include paying for a new vehicle or a down payment on a house.
These savings goals normally stretch from two to fve years.
Long-term — These are the goals that take much longer to save for, such as
Žretrement or a child’s higher educaton. Generally these savings will go into
special high interest accounts to help accumulate more money over tme.
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Types of accounts
Savings setng aside money as an “emergency fund”
or mid-term savings goals. However, they likely
A savings account is an account where you can
won’t build interest as quickly as an Individual
store your money for use at a later date. While
Retrement Account (see page 13), or other
your money sits, most savings accounts make
accounts for long-term savings.
money by earning interest.
Share Certfcates
Interest is money paid to your account at a
partcular rate over a certain period of tme. Share Certfcates, or Certfcates of Deposits,
If you have $1,000 in your account and your are great for short-term savings goals. This
account has an interest rate of 1%, your account account ofers high interest or dividend rates in
will earn $10. Interest rates change based on exchange for a commitment to leave the money
the type of account. in the account for a set period of tme.
Money Markets At Educators, we require a minimum balance
of $500 and ofer a variety of term lengths. You
Money Markets earn more interest than basic
could face a penalty for an early withdrawal.
savings accounts. These accounts are great for
Budgetng
Budgetng is an important part of reaching your savings goals. Document where your money goes
so you understand how you spend your money and where you could potentally save.
The graph below shows how fnancial experts recommend you spend your money:
rent, mortgage, utltes,
35% Housing insurance, taxes
10% Savings personal savings account
car payment, auto insurance,
15% Transportaton
gas, parking
student loans, credit cards, personal
15% Debt 6
loans, tax and medical debt
food, clothing, entertainment,
25% Other
child care, vacatons
Of course, these goals can be diferent from person to person and household to household.
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Checking
accounts
What is a checking account?
A checking account allows you access to your money through checks or a debit card. Checking
accounts sometmes come with a minimum required balance, fees and litle-to-no interest.
Personal checking be used to support the needs of the business it
is used for.
A personal checking account is a checking
account used for personal reasons. This could A personal checking account generally ofers
be paying your monthly bills, groceries, etc. two types of payment: checks or debit cards.
This is diferent from a service like a business
checking account, where the funds could only
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Checks
A check is a paper document statng that you agree to transfer funds to another person. In the
diagram below, you can see the anatomy of a check and how to properly fll it out.
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Robert A. Williams
3 Mary J. Williams
101 Park Place
Yourtown, State 12345
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12
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10 11 1
Check Number — Helps you keep Writen Amount — Amount of the
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track of who you paid. You can use this check in numbers.
number in your register to keep track of
any checks you write. Padlock — Indicates a checks security
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features (they are listed on the back).
Date — Month, day and year the check
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is being writen. Memo — Space to write a note on what
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the check is for.
Account Owner — Person, authorized
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signer or business that is writng the Signature — Signature of the authorized
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check and their address. signer of the check.
Pay to the Order of (Payee) — Name of
Routng Number — Nine digits that
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the person(s) or company the payment
identfy the check writer’s fnancial
is going to.
insttuton.
Legal Amount — Amount of the check
Account Number — Account number
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in words and fractons of dollars. Fill in 11
from which the check is being drawn.
any lefover space to the right with a
line to prevent tampering and fraud.
Financial Insttuton — Name and
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address of the fnancial insttuton the
check will be drawn from.
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