Page 1 - Table  of Contents

Page 2 - Emergency Fund

Page 3 - Banks vs Credit Unions

Page 4 - How Banks work

Page 5 - Interest

Page 6 - Liquidity

Page 7 - Cash Management tools

Page 8 - Cash Management tools 2

Page 9 - Selecting a Bank

Page 10 - Value of money

ARRRGGHHH Matey all the booty fell in the Ocean!

Somewhere In the Ocean

This is why we need an Emergency Fund provided by a bank or credit union.

Ay Matey. An Emergency Fund will set us up with a bright future by giving us 3-6 months of liquid income so when something like this happens we don't need to worry!

So what is the difference between a bank and a credit union?

Banks are for profit and for everyone. Credit Unions are non-profit and member only.

The Beach

Still on the beach

So how do banks work?

Banks are for profit. They make money off of interest on customers money. Customers must deposit money or take a loan for this to happen. Additionally, they can make money off ATMs, bounced checks, and account maintenance.

Still on the beach

Where does interest factor into all this?

There are two types of Interest simple interest and compound interest. Compound interest is interest upon interest that earns you more money paid at a rate for lending it. Simple interest is the amount of money given back for lending it.

Still on the beach

Ay matey! You said something about liquidity earlier. What's that?

Liquidity is the speed and ease with which an asset can be converted to cash. There are various items you can use to store this.

Still on the Beach

Where can you store your liquid assets?

Most Credit unions and Banks offer a Checking/Savings account. 

A Checking account is the easiest account to use. Money can be used anytime and be deposited and withdrawn. A Savings account is comprised of money you won't spend for emergencies that earns interest.

Still on the beach

Ahh I see!

Some more money management tools are Money-Market Accounts, Certificates of Deposit, and Saving Bonds. Money-Market Accounts are like Saving accounts with more restrictions and higher interest. Certificates of Deposit are deposits that are guaranteed interest but are held for a certain amount of time. And Saving Bonds are discounted bond that is purchased for half the price of its worth.

Still on the beach

Ay I think I will choose a bank because I will most likely not be able to get into a credit union. A credit union most likely wouldn't choose a pirate like myself, because after all, I am a thief.

Solid choice!

Still on the beach

Arghhh! Thank you so much for this vital information. You are truly a great friend!

Of course my friend i'm happy to help! Money can either be a burden or great asset. It determines how successful you will be in life along with many other things. It is important to know ways to set yourself up for financial stability in the future. 

Theme is friendship