Health DMAPlease take out a piece of paper and complete the

following:1.Write down the vocabulary word and definition.2. Choose ONE of these options and complete it.–Draw a picture that illustrates/explains the vocabulary word.–Rewrite the definition in your own words.–Write a sentence that includes the term and the information

from the definition.

Affect

How we express our innermost feelings and how other people observe and interpret our expressions.

Today’s Agenda DMA Banks & finance

Pre-test Types of banks Types of accounts Types of loans

Pre-TestEveryone needs a handoutWrite all your answers on your own paper.

Insured Financial Institutions

Banks/Thrifts: Federal & state laws Make loans, pay checks, accept deposits, & other

services

Credit Unions: Same as banks (services) Non-profit financial institutions Require a membership

Check Your Balances…. Always know how much is in your

account!

FeesMonthly maintenance feesPenalty feesOverdraft fees

FDICDeposit $ into a bank/thrift/credit

union up to $250,000.00

FDIC/NCUA insures it

Bank vs. Check-Cashing ServicesWhich is the better deal?

Check-Cashing Services

Check-cashing fees:4 x $5 = $20 a month

$20 x 12 = $240 a year

Money order fees:5 x $1 = $5 a month$5 x 12 = $60 a year

Total: $300

Bank

Monthly fee:$5 a month

$5 x 12 = $60

Box of checks: $18Total: $78

Savings: $222

Interest% of your balance that the bank pays you for keeping your $ at that bank

Description +/- Balance

Opening Balance +$100 $100Withdrawal -$20 $80Fees -$4 $76Interest +$1 $77

If the FDIC insures accounts… how do people lose so much $ in the stock market?Discuss with a neighbor…

Non-Deposit Accounts Includes stocks, bonds, & mutual funds Not FDIC-insured

You may risk losing your investment.

Name That Service Everyone needs a handout

Put the name of the service next to its description The signs around the room have the names

of the services

Move around quietly to find the answers

Why is credit important?Discuss with a neighbor…

Why Is Credit Important? It’s convenient Emergencies Pay for purchases over time Can affect your ability to obtain employment,

housing, & insurance

What is Collateral? Security/assest you pledge to the lender If you do not repay the loan

the lender is allowed to take/keep the collateral.

Home LoansHome Purchase Loans

Primary loan for purchasing a home

Home Refinance LoansLoan that replaces primary home loan

Home Equity LoansSecond mortgage/loan secured by the

borrower’s home

Home Equity

A lender may allow you to borrow up to a certain percentage of your home’s value (usually 80%)

Value of Home $250,000

Minus debt -200,000 Equity $50,00

0

The Four Cs Capacity: Your ability to meet payments Capital: Value of your assets and net worth Character: How you paid your bills or debts in the

past Collateral: Property/assets used to secure the loan

Predatory Lending Practices Predatory loans:

Are usually more expensive than other loans

Have repayment terms many consumers cannot meet

Exploit borrowers

What are pay-day loans?List some companies that offer them…Discuss with a neighbor….

Pay-Day Loan Services Short-term, costly loans

If you “roll over” or “renew” your loan, the lender will charge an additional fee:

$230 + $30 additional fee = $260!

Loan Amount

Loan Term Fee

You write a check

for:

$200 2 weeks $30 $230 (391%)

When You Need $ Fast

Borrow from yourself first put money into an emergency savings account

Comparison shop for loans Look at ALL fees & risks

Check out emergency cash options with your bank