Family Economics & Financial Education Revised November
2004 Saving Unit Managing Your Cash Funded by a grant from Take
Charge America, Inc. to the Norton School of Family and Consumer
Sciences at the University of Arizona Managing Your Cash Family
Economics & Financial Education
Slide 2
1.14.2.G1 Family Economics & Financial Education Revised
November 2004 Saving Unit Managing Your Cash Funded by a grant from
Take Charge America, Inc. to the Norton School of Family and
Consumer Sciences at the University of Arizona $ Small amounts
saved and invested can easily grow into larger sums. If a person
saved a dollar each day by not having a candy bar or soda, they
would save $365.00 per year! If the $365.00 dollars was deposited
into a certificate of deposit (CD) with 5.0% interest, the money
could grow to nearly $400.00 in one year! Did You Know?
Slide 3
1.14.2.G1 Family Economics & Financial Education Revised
November 2004 Saving Unit Managing Your Cash Funded by a grant from
Take Charge America, Inc. to the Norton School of Family and
Consumer Sciences at the University of Arizona Cash Management $
The daily routine of handling money to take care of individual or
family needs. Cash Management
Slide 4
1.14.2.G1 Family Economics & Financial Education Revised
November 2004 Saving Unit Managing Your Cash Funded by a grant from
Take Charge America, Inc. to the Norton School of Family and
Consumer Sciences at the University of Arizona Cash Management
Effective cash management includes having available money for: $
Living expenses; $ Emergencies; $ Savings; $ Investing.
Slide 5
1.14.2.G1 Family Economics & Financial Education Revised
November 2004 Saving Unit Managing Your Cash Funded by a grant from
Take Charge America, Inc. to the Norton School of Family and
Consumer Sciences at the University of Arizona Cash Management Tool
$ A financial account used to assist with daily cash management. $
Five types of cash management tools: Checking Account; Savings
Account; Money Market Deposit Account; Certificate of Deposit;
Savings Bond.
Slide 6
1.14.2.G1 Family Economics & Financial Education Revised
November 2004 Saving Unit Managing Your Cash Funded by a grant from
Take Charge America, Inc. to the Norton School of Family and
Consumer Sciences at the University of Arizona Checking Account $
Tool used to transfer funds deposited into an account to make a
cash purchase. Funds are easily accessed by: $ Checks; $ Automated
teller machines (ATMs); $ Debit cards; $ Telephone; $ Internet.
Checking Account
Slide 7
1.14.2.G1 Family Economics & Financial Education Revised
November 2004 Saving Unit Managing Your Cash Funded by a grant from
Take Charge America, Inc. to the Norton School of Family and
Consumer Sciences at the University of Arizona $ Reduces the need
to carry large amounts of cash. $ Features may include:
Non-interest or interest earning; Minimum balance requirements;
Charge transaction fees; Limited number of checks can be written
monthly. Checking Account continued
Slide 8
1.14.2.G1 Family Economics & Financial Education Revised
November 2004 Saving Unit Managing Your Cash Funded by a grant from
Take Charge America, Inc. to the Norton School of Family and
Consumer Sciences at the University of Arizona Savings Account $
Account to hold money not spent on consumption. Money may be
accessed or transferred between accounts through: $ Automated
teller machines; $ Telephones; $ Internet.
Slide 9
1.14.2.G1 Family Economics & Financial Education Revised
November 2004 Saving Unit Managing Your Cash Funded by a grant from
Take Charge America, Inc. to the Norton School of Family and
Consumer Sciences at the University of Arizona Savings Account
continued $ Features may include: Allows for frequent deposits or
withdrawals; Easily accessible; Money storage for emergencies or
daily living; Available at depository institutions; May require a
minimum balance or have a limited number of withdrawals.
Slide 10
1.14.2.G1 Family Economics & Financial Education Revised
November 2004 Saving Unit Managing Your Cash Funded by a grant from
Take Charge America, Inc. to the Norton School of Family and
Consumer Sciences at the University of Arizona Money Market Deposit
Account $ A government insured account offered at most depository
institutions. Have a minimum balance requirement with tiered
interest rates. $ The amount of interest earned depends on the
account balance. $ For example: a balance of $10,000 will earn a
higher interest rate than a balance of $2,500.
Slide 11
1.14.2.G1 Family Economics & Financial Education Revised
November 2004 Saving Unit Managing Your Cash Funded by a grant from
Take Charge America, Inc. to the Norton School of Family and
Consumer Sciences at the University of Arizona Money Market Deposit
Account continued $ Features of may include: Minimum amount
required to open the account, often $1,000; Usually limited to
three to six transactions each month; If the average monthly
balance falls below a specified amount, the entire account will
earn a lower interest rate.
Slide 12
1.14.2.G1 Family Economics & Financial Education Revised
November 2004 Saving Unit Managing Your Cash Funded by a grant from
Take Charge America, Inc. to the Norton School of Family and
Consumer Sciences at the University of Arizona Certificate of
Deposit (CD) $ Certificate of Deposit (CD) An insured, interest
earning savings instrument with restricted access to the funds.
Found in depository institutions accepting deposits for a certain
length of time.
Slide 13
1.14.2.G1 Family Economics & Financial Education Revised
November 2004 Saving Unit Managing Your Cash Funded by a grant from
Take Charge America, Inc. to the Norton School of Family and
Consumer Sciences at the University of Arizona Certificate of
Deposit continued $ Features of may include: Range from seven days
to eight years in length; Minimum deposits range from
$100-$100,000; If funds are withdrawn before the expiration date,
penalties are assessed; Low risk and no fees; Interest rates vary
depending upon specified time length. $ The longer the length, the
higher the interest rate.
Slide 14
1.14.2.G1 Family Economics & Financial Education Revised
November 2004 Saving Unit Managing Your Cash Funded by a grant from
Take Charge America, Inc. to the Norton School of Family and
Consumer Sciences at the University of Arizona Savings Bond $
Discount bond purchased for 50% of the face value from the U.S.
Government.
Slide 15
1.14.2.G1 Family Economics & Financial Education Revised
November 2004 Saving Unit Managing Your Cash Funded by a grant from
Take Charge America, Inc. to the Norton School of Family and
Consumer Sciences at the University of Arizona Savings Bond
continued $ Features of may include: Many different types
available; Can be purchased for $25.00 - $10,000.00; $ A $100.00
bond would be purchased for $50.00. When the bond matures to
$100.00, it can be redeemed. Interest earned on a bond is tax
exempt until redeemed. $ No taxes are due on interest earned. $ It
will be tax exempt when redeemed if used for college expenses.
Slide 16
1.14.2.G1 Family Economics & Financial Education Revised
November 2004 Saving Unit Managing Your Cash Funded by a grant from
Take Charge America, Inc. to the Norton School of Family and
Consumer Sciences at the University of Arizona Cash Management
Tools Tool Average Interest Earned Purchase PlaceSpecial Features
Checking Account 1.5% Commercial Banks, Savings & Loan
Associations, Credit Union Can be used in place of cash, funds can
be easily accessed Savings Account 2.3% Commercial Banks, Savings
& Loan Associations, Credit Union Easily accessed, temporary
holding place for funds Money Market Account 2.6% Commercial Banks,
Savings & Loan Associations, Credit Union Minimum balance,
limited transactions, tiered interest rates Certificate of Deposit
4.0% - 5.4%, depending on the length of deposit Commercial Banks,
other institutions which accept deposits for a fixed period
Penalties for early withdrawals, no deposits or withdrawals are
made after initial investment Savings Bonds 4.0% - 5.4%, depending
on the length of bond Commercial Banks, Credit Unions, employer
payroll deduction plans Tax advantages, a loan to the federal
government
Slide 17
1.14.2.G1 Family Economics & Financial Education Revised
November 2004 Saving Unit Managing Your Cash Funded by a grant from
Take Charge America, Inc. to the Norton School of Family and
Consumer Sciences at the University of Arizona Liquidity How
quickly and easily an asset can be converted into cash. $ Investors
should: Invest in both liquid and non-liquid tools. Liquid assets
are important for emergencies when cash must be quickly accessed.
Liquidity
Slide 18
1.14.2.G1 Family Economics & Financial Education Revised
November 2004 Saving Unit Managing Your Cash Funded by a grant from
Take Charge America, Inc. to the Norton School of Family and
Consumer Sciences at the University of Arizona Liquidity Checking
AccountMost Liquid Savings Account Money Market Deposit Account
Certificate of Deposit Savings BondLeast Liquid
Slide 19
1.14.2.G1 Family Economics & Financial Education Revised
November 2004 Saving Unit Managing Your Cash Funded by a grant from
Take Charge America, Inc. to the Norton School of Family and
Consumer Sciences at the University of Arizona Low Risk These five
cash management tools are low risk: Protected by the U.S.
Government against loss. $ Insures the funds so the consumer does
not lose money on the investment. However, they have lower interest
rates. $ Causes low returns.
Slide 20
1.14.2.G1 Family Economics & Financial Education Revised
November 2004 Saving Unit Managing Your Cash Funded by a grant from
Take Charge America, Inc. to the Norton School of Family and
Consumer Sciences at the University of Arizona Investment Risk
Pyramid Increasing potential for higher returns Growing risk to
investors capital Increasing safety of principal Growing risk of
loss of purchase power Financial Security (Cash Management Tools)
Safety and Income Growth Speculation
Slide 21
1.14.2.G1 Family Economics & Financial Education Revised
November 2004 Saving Unit Managing Your Cash Funded by a grant from
Take Charge America, Inc. to the Norton School of Family and
Consumer Sciences at the University of Arizona Summary $ Cash
management is a daily routine of handling money to have enough
funds for: Living expenses; Emergencies; Savings; Investing.
Slide 22
1.14.2.G1 Family Economics & Financial Education Revised
November 2004 Saving Unit Managing Your Cash Funded by a grant from
Take Charge America, Inc. to the Norton School of Family and
Consumer Sciences at the University of Arizona Summary $ Five types
of cash management tools: Checking account; Savings account; Money
market deposit account; Certificate of deposit; Savings bond.
Slide 23
Family Economics & Financial Education Revised November
2004 Saving Unit Managing Your Cash Funded by a grant from Take
Charge America, Inc. to the Norton School of Family and Consumer
Sciences at the University of Arizona The End