Consumer Skills : Saving And Investing

[Music] oh [Music] my folks are oldfashioned about everything hair music you name it like when I got my first job the first thing my dad said was good now you can save some money save I never had any money before I was in spending I bought some new clothes and some records I took my girl out [Music] you know by the time payday came around again I was flat broke and the thing was I really didn't have much to show for my money I mean sure I had some new clothes I had some records but I was still playing them on this old phonograph I took my girl out a few times but we were still taking the bus so I figured I'm working now right I'll get a loan from A bank and buy a car but it isn't that easy to get a loan at my age I remember I asked my dad to sign for the loan with me but of course he doesn't believe in borrowing money save it he told me and I tried I I really did but there was always something coming up like this great movie so I took the money and went but we still had to take the bus it was just too much I wanted a car more than anything else so I gave up and went to Dad like I said he's old-fashioned but he's been around and he really knows about saving money the first thing he showed me how to make up a budget I had to figure out how much I could spend for clothes records dates bus Fair everything and still have something left over to save so every week after that I put away 10 bucks with Dad I just pretended I never even had it pay yourself first he says he's always saying something like that but I got to admit it worked I saved 10 bucks a week and spent the rest and it started to build $10 a week more than 40 a month that's $520 a year by the time summer came I had enough to get a car my own car all with my own money and I even saved about $30 by not buying it on credit [Music] of course it's a used car but it gets me where I want to [Music] go you know what I [Music] mean it was really hard when I first came up here to the city I didn't know anyone except my uncle and his family the first job I had didn't work out so I had to borrow some money from my uncle and he couldn't really afford it with all his kids and everything and then even when I was working steady I had to pay him back and I had to get groceries and things for my apartment at first it was just four walls in a bare floor I didn't even have have a table and I was scared being on my own for the first [Applause] time what if I got sick or broke my leg or something and I couldn't work I knew I should have some money saved up just in case you know [Applause] then I'd see a big sale where they had really nice clothes like at Half Price or something but I figured out that I couldn't have everything all at once and some things were more important I had to plan ahead so I only bought the necessary Furniture like a bed at first the dresser couch and chairs just had to wait until I saved up the money I mean that stuff cost so much and I didn't want to borrow them money from one of those places where you end up paying more in interest than the price of the furniture so I figured why pay them interest for my money I still have to pay for the things I want so why don't I get the interest for myself [Music] and now I still don't have much Furniture but I have a savings account and that helps my credit rating and I have a feeling of security just in case something happens you know most people just put their money into a bank and never think about any place else I got to know these two guys at work Max was always pushing the credit union our labor union runs a credit union for all the members Max is the vice president Max took me in and introduced me to Jay Norcross he's the guy you talk to if you want want to join Jay explained that if you do join the credit union you get a vote in how it works for one thing your money's safe in the credit union all the deposits are insured by the federal government the credit union pays interest too Max explained that credit unions are the cheapest place around to get a loan that's what they're for to loan money to the members it makes sense but Greg was always telling me about Savings and Loan Companies his big point was that savings and loan companies pay more interest than credit unions or Banks I checked that out there's a Federal Regulation on that Banks just aren't allowed to pay as much interest as Savings and Loans Savings and Loans have two kinds of accounts passbook savings and Time Savings with a passbook account you can put your money in or take it out anytime you want that's conven venient but pass book savings don't pay as much interest As Time Savings you buy a savings certificate in a certain amount and you agree to leave the money in for a certain length of time like 6 months or a year or 3 years the longer you leave it in the higher the rate of interest you can get up to the legal maximum but if you have to take the money out before the time is up you usually lose some of that interest the Savings and Loan counselor also explained about checking accounts you can't can't get one from a savings and loan company or from a credit union I need a checking account so I can pay my bills without having to get money orders all the time so I went to a [Applause] bank the only problem with that was checking account accounts don't pay any interest and there's usually a charge for a checking account either a monthly service charge or a certain amount per check or a minimum balance you have to leave in the account so I thought about it and I learned one thing I learned to look for was government Deposit Insurance most Financial places Bank s Savings and Loan Companies Credit Unions most of them are insured so if the place gets robbed or something you can get your money back from the government but some places don't have that insurance you have to watch out for that another thing you'll hear about is the way a bank or Savings and Loan Association figures the interest there are just about as many ways to compound interest as our There Are Places to put your money I learned that the interest rate is more important than the compounding after all my looking around I finally decided on a bank so I could get both a checking and a savings account you see that way I can do the whole thing by mail the bank takes money out of my checking account and puts it in my savings account this forces me to save every month so just depends on what you need for a loan you can't beat a credit union for interest on savings you can't beat a savings and loan company just shop around and get what you want we're doing pretty well now with both of us working we have a little saved up the cars paid for and insurance no kids things are looking good now so we've been looking around for Investments ways to help us build up our future ways to use our money Carol wants to buy a house I guess a house can be a pretty good investment if you're careful and get a good buy we drove around and did some house hunting the problem is all the houses we liked cost so much and a house is a lot of trouble to to keep up you know no painting and fixing and all that I'm not too excited about that I'd rather keep up the apartment and put our money into something else we thought about US savings bonds I guess that's the safest investment you can make but that just doesn't pay enough interest for me I'd rather put some money in the stock market you can make some real money there so I started watching some stocks and this guy at work gave me a good tip a sure thing he said what I did was just pretend to buy the stock just to see what would happen I wasn't too sure about getting into the market the sure thing lost me $1,000 in about 2 weeks I'm sure glad I was only pretending you can lose it just as fast as you can make it in the market since then I've talked to people who really know about stocks and I've read everything I could get my hands on I don't want to jump into the stock market Without Really knowing what's going on we've talked about other things too like investing in real estate or antiques or golden silver but the ad is one thing and the fact of the matter is something else the whole world's real happy to help you spend your money and it's Carol's money too of course and we figured out one thing for sure only a fool would invest money in something without really and I mean really understanding at first I got to admit it's better to budget and save than to owe a lot of money to a bank now that I have a savings account I really feel more secure it's good the bank takes care of my saving automatically every month I'm glad I looked around I'd like to be the kind of investor who knows exactly what the risks are who looks before he leaps I don't want to lose what we've got so it seems It's the smart thing to do [Music]