PSCC - Personal Savings & Consumer Credit Overview

Personal Savings & Consumer Credit

Introduction

"A wise man should have money in his head, but not in his heart." -- Jonathan Swift

Can you identify with this quote? What might it mean to have money in your head? What about in your heart? How are they different?

It's important to be smart about money but also not to obsess over it. How do you know whether to spend or save what you earn? If you choose to spend it, what kind of fees or taxes should you be aware of? If you choose to save it, what's the best way to do that? Do we just hide cash in an envelope in our sock drawer (don’t do that…) or deposit our money into an interest-earning bank account?

In this module, you will learn all about the different types of sales taxes and fees when making purchases. You will alson learn about the different types of banking accounts and how they could actually make your money grow just by depositing it into the bank. Just be mindful of the different fees, interest rates, penalties and minimum balance requirements!

Lesson Preview

In this module, we will study the following topics:

Simple Interest, Compound Interest, and Continuously Compounding Interest: Explore the different types of earning power that you and your money can take advantage of!

Finance and APR: Learn about the fees and interest rates that credit card companies use to charge their borrowers. 

Key Terms

The following key terms will help you understand the content in this module.

  • Annual Interest Rate - the percent of principal that you earn as interest based on a year
  • Checking Account (transactional account) - a deposit account, held at a bank for the purpose of securely and quickly providing frequent access to funds on demand
  • Compound Interest - interest not only earned on the original balance but also the interest earned during the previous interest period
  • Demand – the ability or willingness to buy a particular commodity at a given point in time
  • Deposit - money placed in a bank account
  • Markup – the difference between the cost of a good or service and its selling price
  • Overdraft fee - when money is withdrawn from a bank account and the available balance goes below zero
  • Principal - the amount of money earning interest
  • Record keeping - maintaining the history of your banking activities by entering data in ledgers, filing away documents, etc.
  • Retail Price – the list price or recommended retail price of a product
  • Savings Account - accounts maintained by financial institutions that pay interest but cannot be used directly as money (i.e. writing a check); these accounts allow customers to set aside a portion of their liquid assets while earning a monetary return
  • Simple Interest - interest paid on the original principal
  • Supply – the amount of a product that is available to consumers
  • Withdrawal - the removal of money from a bank account

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