PERSONAL FINANCE

EXAM C

Education Level vs. Income

Money Supply in USA

• In economics, the money supply or money stock, is the total amount of money available in an economy at a particular point in time.[1] There are several ways to define "money," but standard measures usually include currency in circulation and demand deposits (depositors' easily-accessed assets on the books of financial institutions).[2][3] COIN, PAPER CURRENCY, CD’S, CHECKING ACCOUNTS,

FEDERAL RESERVE POLICY

• Conducting the nation's monetary policy by influencing monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates.

• Supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system, and protect the credit rights of consumers.

• Maintaining stability of the financial system and containing systemic risk that may arise in financial markets.

• Providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system.

PAWN SHOP

• The pawning process begins when a customer brings an item into a pawnshop or pawn shop. Common items pawned (or, in some instances, sold outright) by customers include jewelry, electronics such as televisions, car stereos, speakers, computers and video games, DVD movies, music CDs, musical instruments (often popular music instruments such as electric guitars and basses and keyboards), and tools (both hand tools and power tools).

PAWN SHOP

• If an item is pawned for a loan, within a certain contractual period of time the pawner may purchase it back for the amount of the loan plus some agreed-upon amount for interest. The amount of time, and rate of interest, is governed by law or by the pawnbroker's policies. If the loan is not paid (or extended, if applicable) within the time period, the pawned item will be offered for sale by the pawnbroker/secondhand dealer. Unlike other lenders, though, the pawnbroker does not report the defaulted loan on the customer's credit report, since the pawnbroker has physical possession of the item and may recoup the loan value through outright sale of the item.

Deposits of $10k or more

• MUST BE REPORTED TO TREASURY DEPARTMENT.

• CONCERN:

• ILLEGAL GAINES

• AVOID PAYING TAX

• HIDE INCOME

BALANCE A CHECK BOOK

• Do you balance your checkbook each month? Here are four reasons why you should:

• Balancing your checkbook verifies that your records match the bank's records.

• Banks CAN make mistakes, but even more likely is that you'll make a math error in your checkbook register.

• If you make a mistake or forget to post a transaction in your register, you may start bouncing checks and incurring fees of $25 or more.

• If there's a problem, you won't need to wade through months of transactions to figure it out.

BALANCE A CHECK BOOK

• Reconcile Your Checks • Reconcile Your Deposits • Reconcile Your ATM Withdrawals and

Debit Card Purchases • Record Interest Earned and Bank Fees • List Outstanding Checks • Record Your Bank's Ending Balance • Calculate Your Balance

PAY YOURSELF FIRST

• First, you need to create a budget. I know what you’re thinking, but before you can even dream about saving money you have to know where your money is going. There’s simply no way around it. How can you decide where to make cuts or find extra cash to save if you have no idea where all of your money is going? You can’t. So, it’s time to create a budget.

PAY YOURSELF FIRST

• After you’ve identified where your money is going you should have a few spare dollars to put aside into your savings or a retirement plan like a 401(k). That’s a great start, but there’s another secret to saving money: paying yourself first.

CASH LIQUIDITY

• Where is the best place to stash your savings? Under your mattress? In a cookie jar? Your checking account? Savings account? Certificate of Deposit? With so many choices, it's easy to throw up your hands and take the path of least resistance, which can end up costing you money.

CASH LIQUIDITY

• Checking Accounts - Savings Accounts • Money Markets –VERY LIQUID• Certificates of Deposit-Savings Bonds –

PENALTY-INTEREST CHARGE

• Checking Accounts -Savings Accounts -• Money Markets MORE LIQUID THAN• Certificates of Deposit & Savings Bonds

EFT

• Electronic funds transfer or EFT refers to the computer-based systems used to perform financial transactions electronically. An EFT is the electronic exchange or transfer of money from one account to another, either within the same financial institution or across multiple institutions[1].

• The term is used for a number of different concepts:

• Cardholder-initiated transactions, where a cardholder makes use of a payment card

EFT

• Direct deposit payroll payments for a business to its employees, possibly via a payroll services company

• Direct debit payments, sometimes called electronic checks, for which a business debits the consumer's bank accounts for payment for goods or services

• Electronic bill payment in online banking, which may be delivered by EFT or paper check

CASH LIQUIDITY

• The lower the interest rate the greater the liquid the $ is.

• GET HANDS ON $$$$$$$$$$$$-GREEN!

• Savings acct—more liquid than CD

• CD MORE LIQUID THAN STOCK BOND

• STOCK BOND MOTR LIQUOD THAN REALESTATE

FHA

• The Federal Housing Administration (FHA) is a United States government agency created as part of the National Housing Act of 1934. The goals of this organization are: to improve housing standards and conditions; to provide an adequate home financing system through insurance of mortgage loans; and to stabilize the mortgage market.

FHA

• Federal Housing Administration was created. Its intent was to regulate the rate of interest and the terms of mortgages that it insured. These new lending practices increased the number of people who could afford a down payment on a house and monthly debt service payments on a mortgage, thereby also increasing the size of the market for single-family homes.[2]

• The FHA calculated appraisal value based on eight criteria

MINIMUN PAYMENT

• Credit Card Account Balance$ 3000.00

• Annual Percentage Rate (APR) 17  %Minimum Payment Percentage 17  %Your Minimum Payment Amount Factor$ 15.00

• 50 YRS TO PAY OFF DEBT

• $12K TOTAL PAYMENT APROX

OPEN END CREDIT

• Car loan—no

• Mortgage loan-no

• Home improvement loan – no

• Credit card

• Sears card

• Interest on outstanding balance

Uncollateralized loan

• A- loan not backed by a cosigner who agrees to cover the amount of the loanb- a personal loan without assets to cover the loan amount -NO ASSET TO SUPPORT LOAN

• Collateral or liquid assets that you own are items/things that can be turned into cash.

Such as a platinum ring or any other item that's worth $$$.

Basically when you apply for a loan and put something you own up as collateral, if you don't pay the loan, the bank legally owns the item you put up as collateral.

Bankruptcy

• Chapter 7 Bankruptcy, which is total bankruptcy, stays on your credit report for10 years. Chapter 13 Bankruptcy, more like a payment plan, stays on your credit report for seven years. Bankruptcy, however, is for life. Loan applications and many job applications ask if you have ever filed for bankruptcy. Ever. If you lie to get a loan because your bankruptcy is very old, technically you have committed criminal fraud.

Bankruptcy

• Myth: I'll just file bankruptcy and start over; it seems so easy.Truth: Bankruptcy is a gut-wrenching, life-changing event that causes lifelong damage.

• 10YEARS ON CREDIT REPORT