How To Save It And How To Spend It Wisely.pdf

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How To Save It And

How To Spend It Wisely

Table Of Contents

You And Your Money

An introduction

Choosing A Bank

Get a good start

Using A Checking Account

How to open and manage an account

Saving Sense

Increase your money by earning interest

Managing Your Money

Develop smart spending habits

Getting Ready For Credit

What you need to know

Balancing Finances

A summary

Answers To Learning Exercises

Information found within this publication is not to be

construed as legal, tax, or investment advice. It consti-

tutes only a general overview of the subject matter dis-

cussed. The USAA Educational Foundation, a nonprofit

organization, does not provide professional services for

financial, accounting or legal matters. You should always

consult with your tax and legal advisers regarding the

legal consequences of your financial planning activities.

The information contained within this publication could

be time sensitive requiring revisions and updates period-

ically. Information in older publications may be outdated.

The Foundation does not promote or endorse the prod-

ucts or services of any commercial supplier.

You And Your Money

What do you want to do with your money? Buy

clothes or CDs? Go to a concert or sporting event?

Maybe you want to start a summer business, save for a

car, or pay for college. The way you manage money

can determine whether, and how soon, you get to do

all or any of those things.

Learning to take care of money requires time

and practice. This publication is a good place to

begin. It contains important information on skills you

will need when you are out on your own, such as:

Choosing A Bank

• Automated Teller Machines

(ATMs) let you use a plastic, coded

card to withdraw cash, deposit

money, and check your account

balances any time of day. Find out

about ATM fees. Many banks charge

extra for using other banks’ ATMs.

• Debit Cards look like ATM cards

or credit cards but work like checks.

Using a debit card is safer than using

cash and easier than writing a check.

Money is subtracted almost immedi-

ately from your account each time

you use your debit card.

• Pre-paid Spending Cards can be

used anywhere credit cards are

accepted and work like gift cards.

With a pre-paid card, you cannot

spend more money than you have

on the card.

• Overdraft Protection is like a

safety net for your checking account

or debit card. If you mistakenly

spend more than you have in your

account, overdraft protection author-

izes the bank to move money from

another account to keep you from

being overdrawn.

• Online Banking Services let you

manage your money from any com-

puter with an Internet connection.

Make sure a bank’s online services

are secure and easy to use, and pro-

vide the services you want.

All banks provide similar services but

each one can be very different. Take time

to shop for one that is right for you.

Shop Around

Start with research. You and

your parents should gather informa-

tion about several banks.

• Choose a bank with a strong

reputation and no fees.

• Compare how services differ from

one bank to the next. A Bank

Comparison Chart on the

following page can help.

• Look for conveniences such as

ATM and debit services and elec-

tronic banking services.

• Think about every benefit a bank

offers. Do not choose one just

because it offers gifts, vouchers,

or cash rewards for opening an

account. Choose it because it

right for you.

Banking Tools

These definitions should help

when comparing bank products and

services:

• Checking and Savings Accounts

help you handle money safely and

track what you spend. Accounts cre-

ated especially for students are usual-

ly the least expensive. Some

accounts earn interest (money the

bank pays you for keeping money

there), but the amount will vary

based on the interest rate. You may

have to keep a minimum balance in

your account to earn interest.

Compare Services

As you shop for a bank, keep track of what you learn.

Bank Comparison Chart

Question

Bank A

Bank B

Bank C

Does this bank offer a student checking account?

Is there a minimum balance requirement? What is it?

Does the bank pay interest on account balances? How much?

Will I be charged if I write more than 10 checks each month?

How much?

Can I choose a check design?

Does the bank have ATMs?

Can I use other banks’ ATMs to withdraw money from my account?

Do I have to pay ATM fees? How much?

Does the bank offer a debit card?

Does it cost to use my debit card? How much?

Can I get overdraft protection? How much does it cost?

Does the bank have online services? Is there a usage fee?

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