financial literacy

Psychology of Money

your thoughts, emotions, beliefs, and experiences influence how you handle money.

Feeling stressed when spending money can lead to

avoiding budgeting

Growing up with limited money may lead to

oversaving or fear of spending

growing up wealthy may lead to

overspending and underestimating costs

your money habits are shaped by

family beliefs, culture, childhood experiences, media and social pressure and friends

If your family struggled financially, you may

Feel anxious spending money, Save aggressively, fear debt

what is cognitive biases

mental shortcuts that can lead to poor money decisions

What is overconfidence bias?

spending money with the mindset that you will always earn it back

What is loss aversion?

fear of losing money that leads to bad decisions 

what is scarcity mindset?

Believing there is never enough money

What is anchoring bias?

Relying too heavily on the first number you see

Brick & Mortar Banks

Traditional banks with physical locations

Credit Unions

Non-profit, member-owned financial institutions

Online Banks

Banks that operate only online

what is APY?

APY is Annual Percentage Yield which is how much interest you earn in one year.

High-Yield Savings Account (HYSA)

High interest, Easy access, Great for emergency funds

Money market Account (MMA)

High interest, Limited withdrawals, Can include checks/debit cards

Certificate of Deposit (CD)

Fixed rate, Locked time period, Penalty for early withdrawal

Which bank type offers the highest APY? (HYSA, MMA, CD)

HYSA or MMA

Which account is best for emergency savings? (HYSA, MMA, CD)

HYSA

Which account locks your money in? (HYSA, MMA, CD)

CD

why do we save?

Emergencies, Future goals, Financial independence, Stress reduction

what are the budgeting categories?

Needs: Things required to live

Wants: Extra things or luxury items

what are the budgeting strategies?

50/30/20 Rule, Zero-Based Budget, pay Yourself First, Envelope System

Which budget method is best for impulse spenders?

Pay yourself first

Why is pouring into your future early on powerful?

allows your money to grow more over time through interest, making it easier to build wealth and reach financial goals.

What is the 50/30/20 rule?

50% needs, 30% wants, 20% savings

What is zero-based budgeting?

when every dollar has a purpose and your income and expenses equal to 0

What is the pay yourself first method?

money goes into savings and to priorities before you get spend it