More About Personal Finance

  This week in Personal Finance we learned about credit. First, we learned there are many methods of financing a purchase. One method is an installment plan, where the buyer get possession of the merchandise by a payment of deposit and complete the purchase by paying a series of regular installments. Another method is layaway. This is a system of paying a deposit to secure an item for later purchase. Also there is secured and unsecured loans. The banks gives you money so you can offered to buy what you want or need. Unsecured loans are only supported by your credit score. Some sources of financing are retail stores, banks and credit unions, finance companies, pawn shops, payday loans, title loans, and private lenders. But remember payday loans and title loans are bad! You also need to know the types of credit: open-end credit, closed-end credit, service credit, revolving credit, secured loans, and unsecured loans. When buying a credit card look out for things like APR, annual fees, compound interest, ect. Learning this will be very helpful to us in the future. We now know how to finance a purchase that we may not be able to afford. Also it is important to know the types of credit and what to look out for when getting a credit card.

Economic Trends that the Fed Can't Fix

   In the article published by CNN, "2 Trends Janet Yellen Calls 'Disturbing'" by Annalyn Kurtz she talks about economic trends that the Fed can't control. Kurtz writes that one "very disturbing trend" is about 3.5 million Americans have been out of a job for at least six months. This amount of people is 35% of all unemployed. The other disturbing trend is income inequality. Not only is there inequality in income but also in wealth. But the Fed can't fix either of these problems. This is because they can not single out specific regions or industries that need the most assistance. Kurtz says The Fed can try and trigger economy by making it cheaper for businesses and consumers to take out loans by lowering interest rates and buying bonds. Yellen and the rest of the Fed hope that this will lead to job creation in many industries. In my opinion, the actions that the Fed is taking will be helpful. They can not do anything to completely solve the problem but they are taking the right step and aren't ignoring the problem. Unemployment and income inequality is affecting society everyday but hopefully the action taken will improve the financial state for many Americans.

http://money.cnn.com/2014/05/08/investing/yellen-inequality-unemployment/index.html?iid=Lead

Money and Banking

    This week in class we did a lot of exciting, new things! We received our first paychecks, opened our banks account, and deposited our checks! We also had to pay our first electric bill and learn to right a check, which was very informative. Before we did all this we learned about all aspects of money and banking. Money is any good that is widely accepted for the exchange and in the repayment of debts. There are three aspects of money. First, it's a medium of exchange. Second, it is a standard of value. Third, it's a store of value. There are many characteristics of money as well and its has to be: stable in value, scarce,  accepted, divisible, portable, durable, and difficult to counterfeit. What we have to hold all this money are banks. Banks make money by charging interest. Banks consist of the Fed: 12 district banks that regulate activities of member banks. There are 6 functions of the Fed: clearing checks, distributes money to banks, supervises banks, regulating money supply, setting the reserve, and supplying the paper currency. Something important to remember is that Janet Yellen is the Chairman of the Fed. Learning about money and banking is really important to learn about. I finally felt like I was learning something in school that I will actually use in the future!