Personal finance U1

panache

a confident and stylish manner, dash; a strikingly elaborate or colorful display

freemium

Giving away a base-level product for free, but then offering paid upgrades and enhancements once the buyer is hooked

plain folks

Having people just like you speak on behalf of a product, except—unlike you—they're getting paid

false statistics

Using graphs, charts or statistics that sound precise—yet even the four out of five dentists who preferred Trident gum can find these numbers suspect.

bundling

The practice of offering multiple, usually related, goods and services at a lower price than if each item were purchased separately.

bandwagon appeal

The psychological nudge to do—or consume—something because others are doing it. Also known as FOMO

Aspirational Buying

When consumers are encouraged to live like those they admire, even if they can't afford it.

what is the habit cycle

cue -> routine -> reward

in the video what was the guys cue for his habit cycle

at around 3:00-3:30

in the video what was the guys routine for his habit cycle

go upstairs, get a cookie, and talk to his coworkers

in the video what was the guys reward for his habit cycle

socializing with his coworkers

how to deposit money into a checking account

- bring it to your bank

- check

-ATM

-Mobile app

-direct deposit

-transfer from another account

how to withdrawal money into a checking account

-ATM using a debit card

- bank teller

-make a purchase

-check payment

-online bill payment

-money transfer

checking account

money for now, easily accessible

savings account

account to save up, don't touch often, can earn interest

tips on opening a savings account

- has an app/ mobile deposits

-avoid fees

-compare interest rates

-make sure its FDIC insured

common banking fees

-monthly maintenance

- out of network ATM fees

-overdraft fee

-insufficient funds fee

-wire transfer fee

-early account closing fee

- excessive transactions fee (savings only)

1. compound interest formula A=P(1 + r/n) ^nt

final amount

2. compound interest formula A=P(1 + r/n) ^nt

principal (initial)

3. compound interest formula A=P(1 + r/n) ^nt

initial rate (written as a decimal)

4. compound interest formula A=P(1 + r/n) ^nt

# of times compounded per year

5. compound interest formula A=P(1 + r/n) ^nt

# of years

certificate of deposit

-pays a fixed amt of interest on your principal at the time of maturity (3 months - 5 years)

-guaranteed interest rate

- cannot access funds until the CD matures

Money Market Account

- combines features of checking and savings account

- may pay higher interest rates

-easier to pay for transactions with check and debit cards

-best for short term financial planning

traditional savings account

A savings account with a low (no) minimum balance, ease of withdrawal, interest

online savings accounts

An account that offers high-interest savings, low fess, no minimum deposits and 24/7 access to your account through the internet.

high-yield savings account

an account that pays a higher interest rate than a traditional savings account

50/30/20 rule

50% needs, 30% wants, 20% savings

challenges to having a credit card

easy to feel like your not spending real money

challenges to saving because of inflation

inflation should increase around 2-4% your paycheck should reflect this

living paycheck to paycheck

its stressful, hard to cut down to put something in savings, people often think that because they only have a little bit of money they shouldn't put it into a savings account because it wont do anything

advantages of personal internet banking

-easier bill payments

-24/7 access

-sync accounts with apps

- account balance access

direct deposit

-automatic transfers

-common uses

-need to provide (BA #'s, routing #'s, or a void check)

online bill pay

can set up e-bills and automatic pay sometimes for a discount

person to person payment apps

zelle, venmo, never pay instant transfer fees

how to boost banking security

-multifactor authentication

-no public wifi

- ask for text alerts with large transactions go through

pros of a cashless society

-reduced crime rates without tangible money to steal

-digital paper trail and less money laundering

-quicker for depositing/storing

-easier currency exchange while traveling internationally

cons of a cashless society

-personal info exposed to a data breach

-no alternative source of money

-learning curve

-lack of control over spending

a line of best fit can be used to estimate a value between two known data values, a process called...

interpolation

predict a value outside the range of known values, a process called...

extrapolation

r=-1

strong negative correlation

r=0

no correlation

r=1

strong positive correlation

diminishing marginal utility

decrease in satisfaction or usefulness from having one more unit of the same product

paradox of value

The situation where some necessities, such as water, have little monetary value, whereas some non-necessities, such as diamonds, have a much higher value.