Studied by 35 peopleNet spendable income
The amount of left over after taxes, giving, and debt repayment
Reasons for having an emergency fund
1.) Life is uncertain
2.) The less we have, the more things cost
3.) You are required to have a set amount of money to function
What is financial liquidity
Cash, bank accounts, or other resources that can be quickly converted to cash
Overdraft protection
The bank will pay the charge for standard debit and ATM transactions even if you don’t have enough funds in your account. Charges about 75% of total checking account and fees
Nonsufficient funds
Bank charges for checks drawn from accounts with nonsufficient funds (also called a bounced check)
Apostle Paul’s Financial Plan
------ – no collections will have to be made
------ – each individual per individual calling
----- – sum in keeping with the individual’s income
----- – one the first day
----- - every week
planned, personal, proportionate, priority, periodic
Tithing
portion of our income to give back to God, 10%
Giving
anything extra we give beyond that, additional to money (time, actions, words)
Saving
A plan to set aside a certain amount of your net cash flow to be able to accomplish a short-term goal
Investing
The use of money to earn money for the purpose of accomplishing long-term life goals
The size of your investment is dependent on:
1.) Principle
2.) Length of time
3.) Rate of return
Interest
The amount a borrower pays to lender for the use of the money
Dividend
Payments made by a company to its stockholders from excess earnings
Rate of Return
the gain from an investment as a percent of the principle invested
How many credit reports can you get a year?
3
Credit Report agencies
Equifax, TransUnion, Experian
Largest factor in determining credit score
35% payment history
Grace Period
the period between the end of a billing cycle and the date your payment is due.
Skimming
when devices illegally installed on ATMs, point-of-sale (POS) terminals, or fuel pumps capture data or record cardholders' PINs
Bond
Loan made to a corporation or a government agency
When you buy a bond….
you are loaning money to the company whose bond you bought
Bond’s price is inversely related to….
the market interest rates
Mistakes people make with emergency funds
Think that it can be used for things that aren’t emergencies
People tempted to use it to pay off credit card debt
Stock
Documents representing ownership in a company
What is the difference between an overdraft and an NSF?
Overdrafts are sometimes paid by the bank even if you don't have funds; NSFs are declined and returned.
How are online banks able to charge lower fees and have higher interest rates?
They have lower costs thanks to not having buildings and staff.
Even if you don't have much money, it is important to set up a savings account because
it allows you to set aside an amount separately each month and create a savings habit
What is a bank?
A financial institution that accepts deposits and channels those deposits into lending activities
If we are certain that there will always be economic uncertainty, then which one of the following principles should we NOT follow:
Take out a home equity loan for emergencies
The main reason for having an emergency fund is
to avoid building up debt when things go wrong
If you live with a negative net cash flow routinely, what are you doing?
Living paycheck-to-paycheck
How does overdraft protection work?
Overdrafts are protected by a charge to either your savings account, your credit card, or a personal loan. You're charged a smaller fee, and you have to repay the money.
Which is NOT a Biblical reason for giving?
Giving is a short-term view.
A tithe is what?
The biblical starting point of giving
Which of the following would be the lowest risk?
Money market fund
Which of the following is NOT a common investing mistake?
Diversifying
Compounding means to
earn interest on interest already earned as well as the principal
What advantage do money market mutual funds offer over other types?
Safety
The average investor
earns half the return the overall stock market earns because the average investor frequently operates on emotion.
Which characterizes an investment versus a savings?
Has the potential for higher returns
If you DON'T invest your money in some higher risk alternatives as a young adult, what type of risk are you taking?
Risk that high inflation will take away your money's purchasing power
Note
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