(MM) Money Management Module Overview
Money Management Module Overview
Introduction
A common definition of management is to be in charge. Therefore, money management simply means being in charge of your money. A good manager, plans, organizes, directs, and controls. The same is true of a good money manager. It starts with a plan, also known as as a budget. The budget looks at the money coming in and the money going out. Financial institutions such as banks, investment firms, and insurance companies help organize the money. The money manager then can direct where the money should go (toward paying bills, into savings, etc.) Finally the money manager can compare and control the budget by making decisions that promote individual or company goals. Financial institutions, especially banks, offer many services that can aid the money manager in these tasks.
Essential Questions
- How are budgets created?
- What are the types of financial institutions and how do their functions differ?
- What services do banks offer?
- How has online and mobile banking changed banking for the bank and for the consumer?
- What is contained in my credit report and how does it affect me and my business?
Key Terms
- Budget - An estimate of income and expenditure for a set period of time is known as a budget
- Financial institution - A financial institution is an establishment that focuses on dealing with financial transactions, such as investments, loans and deposits
- Depository - Any financial institution in the United States (such as a savings bank, commercial bank, savings and loan, and credit union) that is legally allowed to accept monetary deposits from consumers is considered to be a depository institution
- Non-depository - A financial institution that funds their investment activities from the sale of securities or insurance is considered to be a non-depository institution
- Commercial bank - A commercial bank offers services to the general public and to companies
- Savings and loan association - An institution that accepts savings at interest and lends money to savers chiefly for home mortgage loans and may offer checking accounts and other services is a savings and loan association
- Credit union - A credit union is a nonprofit-making money cooperative whose members can borrow from pooled deposits at low interest rates
- Investment bank - An investment bank is a bank that purchases large holdings of newly issued shares and resells them to investors
- Financial services company - A financial services company is an enterprise engaged in the loan of money against collateral or speculatively to manufacturers
- Insurance company - An insurance company offers insurance policies to the public
- Collateral - Collateral is something of value used to secure a loan against the event of default
- Secured loan - A loan is secured when it is backed by something of value
- Credit report - A credit report lists identifying information, credit accounts past and present you have had and how you have paid them, applications for credit you have made, public record information such as wage garnishments and judgments against you
Module Minute
Even before you graduate high school you will probably start to receive offers for credit cards. When you walk onto your college campus the first week of classes, vendors will have tables set up offering some cool item to get you to apply for a credit card. And all this even before you have gotten a job and opened your first bank account. We know from the media that it is important to keep our financial house in order, but to do that we first must understand the functions of a variety of financial institutions. How are banks, credit unions, and savings and loans different? Are all banks alike? What about careers? Would you like to earn your living handling other people's money? Then this module is for you.
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