2 set goals that take into account long term

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Unformatted text preview: R BUDGET #1) How are you spending money now? #2) Set goals that take into account long-term financial objectives – (just like our activity at the beginning of class) #3) Track spending – stay within guidelines, but don’t drive yourself crazy! CREATING YOUR BUDGET #4) Don’t spend beyond your limits #5) Tithe yourself – set aside funds to reach financial investment goals. Financial Investments 4 2/20/2014 Overview Types of Financial Instruments Example: Financing a College Education Example: Financing Retirement Tradeoff between risk and rate of return: Safe Investments • • • • Checking account Passbook savings account Money market account Certificate of deposit Costs of Safety Checking accounts earn 0.1% interest. ($2,000) Money Market Accounts limit amount of withdrawals a month. Earn interest rate of 0.2% CD (stores your money for certain amount of years that you can't touch that has the highest interest rate, close to inflation) FDIC - insures money up to $250,000 to return if bank fails 2011 - 27% of individuals with checking accounts paid overdraft fees, on average of $225. In total was $12.6 billion. Interest earned on money “saved” is low. Potentially high opportunity costs. There are transaction fees on ATMs and checks. Overdraft fees. 5 2/20/2014 in·vest·ment noun 1. the action or process of investing money for profit or material result 700 584.6 600 Ho...
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This document was uploaded on 03/27/2014.

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