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Study Guide: budgeting, savings test- Wednesday 16thBudgeting: 2 main parts:PYF: Monthly take home pay is $2200 How much should go into savings? $________How much of your after-tax income should go towards housing?What types of expenses are easiest to budget? Living within your means:Premature affluence:given assets and liabilities--calculate net worth:$120,000 home value owe $85000 mortgage credit cards $4000 student loan $15000Car $8000 savings account $350 checking account $780 what are assets? liabilities?Calculate Net worth $________________________*why are wants and needs sometimes hard to distinguish?Framework for understanding poverty- hidden rules of class chartHow do the 3 classes view money differently?How does the wealthy class differ from middle class?ch 12 Savings review notes handout.2 purposes of saving:recommended Savings goal?liquidity:When your money is in relatively safe accounts, how much will it make?_________________simple vs. compound interest:which is best? how often would you want compounding?use rule of 72 if you have 30 years for money to double what rate would you need? ____ x ___=ex earns 1.25% how long would it take to double? ____ x ____=____What does the FDIC sticker at the bank tell you?What is done with depositor’s money?Why are interest rates so low now?Annual percentage rate (APR) vs. annual percentage yield APY:review 4 types of savings options- pros/cons of each.+ -Savings acctc.d.Money marketSavings bondsHow are savings bonds different today?Why do they require a S.S.# for these accounts?When will your interest be taxable? Who determines interest rate in America?Why are rates so low right now? ................
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