Savings for All

Don’t you want that brand new iPhone or Xbox Series X when it comes out? Well, how can you buy these expensive items if you do not have enough money saved up? You can ask mom or dad, but what if they happen to say no? The key to being able to make large purchases like these are embedded in saving. Saving money is not only a good financial habit that consists of putting money away somewhere, but also making sound financial decisions when banking. More specifically, opening a savings account can be a useful tool to earn interest and benefits over time. Saving means putting money aside for future use, banks and other financial institutions offer incentives for people to keep their money in a savings account. These incentives are referred to as earning interest. In other words, banks pay interest on money put into savings accounts because the bank can use the money to make loans to other customers. So basically, by putting your money away in a savings account in hopes of buying that new iPhone or Xbox Series X, you will have more than what you started with. However, it is important to know that the amount of interest earned depends on several factors, including the type of savings account, which bank has the account, and how long the money is kept in the account. There are also many different types of savings accounts that can be opened, so it is crucial that you research to see which is the best fit for you. At the end of the day, planning well and putting your money into a savings account can be an extremely beneficial financial decision. 

Now that we’ve talked about how important saving money in your savings account is, let’s talk about how to open a savings account. Now I’m sure you’re thinking, “Saving sounds great and all, but how in the world do I open a savings account at this age?!” Actually, the answer is quite simple. Kids just like you can open a savings account at a bank or another financial institution as long as a parent or adult guardian is present.  All you have to do is know your Social Security number and have some money to deposit! Finally, your parent or guardian will co-sign the account - which means that they will be sharing responsibility for the account. Boom, it is as easy at that! Now, the road to saving for your Xbox Series X, iPhone, or whatever you may desire just got that much easier! 

We have talked about saving money and even how to open a savings account, now let’s jump into using an actual account. There are procedures called deposits- to put money in, and withdrawals- to take money out of a savings account. Although quite simple, these procedures are important and need to be done with caution. To make a deposit, or put money into the account, you need to fill out a deposit slip. Once you fill out this slip, all you have to do is hand it to the bank teller and the rest is all handled. The procedure for withdrawals, or taking money out, is very similar to that of a deposit. All you have to do is fill out a withdrawal slip, sign the slip while at the bank, and show your ID. After that, the money towards your new gadget is all yours and ready to go! Pictures of these slips are also available below for a reference of what you may need to fill out.

Savings deposits can also be made by using an automated teller machine, or ATM. You can even check with your bank to find out the age requirement for using an ATM. ATMs are a convenient and simple tool to use and are found in banks and many other convenient locations all over the place. Many are also open 24 hours a day! When a bank gives you an ATM card, they also give you a personal identification number or PIN. This PIN is like your personal secret code that only you should know! If someone else knows it, they may be able to take money out of your account…so don’t share your PIN with anyone! Before you deposit a check, you’ll need to write your signature on the back. This signature goes above the line on one end of the backside of a check and is also called “endorsing the check”. This alternative method of depositing money into your account can be useful if a bank is closed or you may be short on time. Either way, depositing and even withdrawing money from a savings account is fast and easy. 

Lastly, we will talk about how to keep track of your savings account! While saving up to eventually get that new iPhone you’ve been wanting, it is important to have a record of all your withdrawals and deposits along the way. All banks keep track of their customers’ savings accounts, however, it’s your responsibility to keep track of all transactions. It’s essential to make careful calculations and make sure each deposit or withdrawal is correctly recorded. When you open a savings account, the bank provides you with a savings account register to track your deposits and withdrawals. A sample savings register is to the left and can be used to visualize how to record your transactions.

Now that you have learned how to open a savings account, use it, and also keep track of it, the path to saving for that new iPhone of Xbox Series X just became that much easier. It is crucial to remember that saving is a financial tool used to put money away and earn over an allotted amount of time. So next time you think of that expensive thing which you want, think about saving the right way! See you next week!

Resource Link: https://youth.handsonbanking.org/wp-content/uploads/2019/08/InstructorGuide_MiddleSchool.pdf

*All rights of the content are reserved to the Wells Fargo Hands on Banking Curriculum*

Using Your Personal Budget

Nice job! You’ve now learned about the importance of creating a budget that fits your personal needs. If you need a refresher on the basics of budgeting, feel free to look through last week’s lesson here. You’re now ready to create your budget. You may be saying to yourself, “Wait, didn’t you just say every budget was different and that it could be molded to my personal needs and wants? How am I supposed to know how to make a budget if every budget is different?” To get started in this process, think about your present spending habits. What kinds of things do you spend money on in the present? What sorts of things do you know you need to allocate funds toward in your budget? Is there anything you would like to purchase but never seem to have enough money for? These are the first questions you need to ask yourself when preparing and using your first budget.

Remember the qualities needed to create and use a personal budget. Firstly, your budget should include funds for basic expenses that occur regularly. We’ve covered this topic in last week’s lesson. These expenses include rent and utilities, among other consistent and important expenses. Part of your budget must also be allocated toward unexpected expenses. These include personal injuries and repairs or replacements for items you own, like your car or refrigerator. Lastly, a good personal budget allocates money towards savings. These regular and consistent savings can be used to pay for future planned expenses.

You may be thinking, “This is great, but when will I actually use these budgeting skills?” Great question. Consider the following scenario: you decide that you would like to purchase a brand new ten-speed bike. However, you don’t know how much money you can afford to spend or which store will offer you the best deal on a bike that fits your needs. This is where your budgeting skills will come in handy. By segmenting your budget into different categories, you know how much money you’ll need for your basic expenses and how much you are leaving aside for savings and unexpected expenses. You can then decide how much money you’re willing to take from the savings or unexpected expenses segment to purchase a bike. Another great thing about budgeting is if you don’t currently have enough funds set aside to buy a new bike right now, you can plan to set aside money in the future to save up for this bike. That way, you can still get the bike you want at the price you desire without overpaying or compromising your budget.

It’s important to keep your budget in mind while you shop. You may really want that brand new bike, but do you have enough money to purchase it at its current price? Have you gone to other stores or researched other brands of bikes to see which best fits your needs? By doing research and going to multiple stores to see their options, you may be able to get the item you want for a lower price than you expected. By comparing prices on similar products, you are creating more value for yourself and easing the burden you may be placing on your budget.

Be sure to try out the worksheet attached below for some practice with budgeting. See you next week!

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*All rights of content are reserved to the Wells Fargo Hands on Banking Curriculum*

Worksheet and Answer Key:

https://youth.handsonbanking.org/wp-content/uploads/2019/08/InstructorGuide_MiddleSchool.pdf (pages 32-38)

Sample budget citation:

“What Is a Budget?” Personalfinanceimu, brightstarlearning.wixsite.com/personalfinanceimu/what-is-a-budget.

https://brightstarlearning.wixsite.com/personalfinanceimu/what-is-a-budget

Price comparison image citation:

Flat-icons.com. “'Black Friday - Astute Vol. 1' by Flat-Icons.com.” Iconfinder, www.iconfinder.com/icons/5473383/balance_compare_prices_icon.

https://www.iconfinder.com/icons/5473383/balance_compare_prices_icon

Additional Resources:

Prioritizing and Budgeting for Kids - https://www.youtube.com/watch?v=x0Xez_0BpvE

What is a Budget? - https://brightstarlearning.wixsite.com/personalfinanceimu/what-is-a-budget