© Family Economics & Financial Education – Revised April 2008– Saving Unit – Managing Your Cash Funded by a grant from Take Charge America, Inc. to the.

© Family Economics & Financial Education – Revised April 2008– Saving Unit – Managing Your CashFunded 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

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© Family Economics & Financial Education – April 2008 – Saving Unit – Managing Your CashFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at

the University of Arizona

$ How do small amounts of money saved and invested easily grow into larger sums?? INTEREST!! Money invested earns

interest The profit made on money

invested.

Did You Know?

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© Family Economics & Financial Education – April 2008 – Saving Unit – Managing Your CashFunded 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

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© Family Economics & Financial Education – April 2008 – Saving Unit – Managing Your CashFunded 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

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© Family Economics & Financial Education – April 2008 – Saving Unit – Managing Your CashFunded 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

Cash Management Tool$ A financial account used to assist

with daily cash management

• 1) Checking Account• 2) Savings Account• 3) Certificate of Deposit

Three types of cash management tools

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© Family Economics & Financial Education – April 2008 – Saving Unit – Managing Your CashFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at

the University of Arizona

$Use: Tool used to transfer funds deposited into an account to make a cash purchases, write checks, and make ATM withdrawals

$Interest: Most checking accounts do not pay interest

$Accessibility: Money can be withdrawn at any time

Checking Account

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© Family Economics & Financial Education – April 2008 – Saving Unit – Managing Your CashFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at

the University of Arizona

Savings Account

$Use: Tool used to hold or store money for emergencies or large purchases

$Interest: Does earn interest

$Accessibility: Money can withdrawn at any time

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© Family Economics & Financial Education – April 2008 – Saving Unit – Managing Your CashFunded 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)

$Use: Tool used to invest money on a short-term basis. A CD has a set term (1-5 years)

$Interest: Does earn interest! But rates vary. The longer the length of the term, the higher the interest rate

$Accessibility: Restricted access to the funds, must keep money in CD for the full term or pay penalties ):

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© Family Economics & Financial Education – April 2008 – Saving Unit – Managing Your CashFunded 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

Checking Account Zero!

Savings Account .06%-1%

Certificate of Deposit1.5%-3%, depending on the length of deposit

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© Family Economics & Financial Education – April 2008 – Saving Unit – Managing Your CashFunded 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 Liquid assets are important for

emergencies when cash must be quickly accessed

Liquidity

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© Family Economics & Financial Education – April 2008 – Saving Unit – Managing Your CashFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at

the University of Arizona

Liquidity

Checking Account

Savings Account

Certificate of Deposit

Most Liquid

Least Liquid

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© Family Economics & Financial Education – April 2008 – Saving Unit – Managing Your CashFunded 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 three cash management tools are LOW RISK: Funds in these type of accounts are

insured by the Federal Deposit Insurance Corporation (up to $250,000)

However, they have lower interest rates which causes low earnings

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© Family Economics & Financial Education – April 2008 – Saving Unit – Managing Your CashFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at

the University of Arizona

Checking Account Tools

$ Debit Card Withdraw money from an Automated

Teller Machine (ATM) Plastic card that looks like a credit card Electronically connected to a bank

account Money is automatically taken from the

bank account when purchases are made Requires a PIN (personal identification

number)$Confirms the user is authorized to access

the account

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© Family Economics & Financial Education – April 2008 – Saving Unit – Managing Your CashFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at

the University of Arizona

Checking Account Tools

$ Checks Write checks to transfer large sums of

money Deposit checks when receiving large

sums of money

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© Family Economics & Financial Education – April 2008 – Saving Unit – Managing Your CashFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at

the University of Arizona

Parts of a Check $ Personal Information

Account holder’s name and address$ Check Number

Numbers used to identify checks$ Date

The date the check is written$ Pay to the Order of

The name of the person or business to whom the check is being written

$ Amount of the Check in Numerals The amount of the check written numerically in the box

$ Amount of the Check in Words Start at the far left of the line, write the amount in words, followed

by ‘and’, and the amount of cents over 100; draw a line from the end of the words to the word ‘dollars’

$ Memo Space used to identify the reason for writing a check; optional

$ Signature The account holder’s signature agreeing to the transaction

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© Family Economics & Financial Education – April 2008 – Saving Unit – Managing Your CashFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at

the University of Arizona

Checking Account Tools

$ Checks are a DYING BREED Direct deposit Apps- ex. Venmo, Paypal, Square

$https://www.youtube.com/watch?v=mbHQx3-pRI0

$http://www.slate.com/articles/technology/future_tense/2013/08/venmo_review_the_wallet_app_is_light_years_ahead_of_paypal.html

Google Wallet

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© Family Economics & Financial Education – April 2008 – Saving Unit – Managing Your CashFunded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at

the University of Arizona

THINK

$ What are the apparent pros and cons of checking, savings, and CD accounts?