AAEC 2104 Lecture Notes - Lecture 6: Money Order, Certified Check, Stored-Value Card
8 Oct 2016
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Chapter 5 (cash management: liquidity vs savings, liquidity = rapid cash needs b. i. Enough to meet your usual needs: savings = emergency needs c. i. Cash management: build your checking account a. i. Direct deposit of paycheck into checking: then, build your emergency funds b. i. Iv: then, use cash to pay down debts, invest, spend on yourself, donate/charity, etc. Cash flow chart: take home pay goes into checking account and is used for normal expenses or gifts/ donations, savings account should be used to pay debts and invest. Where to keep your cash a: checking account (demand deposit) Interest bearing: savings account (time deposit, money market deposit accounts d. i. May have higher minimum balances & limits on withdrawals. Where to keep your cash: certificates of deposit (cds) a. i. Loan to a bank at stated interest rate and maturity a. ii. Good place to park your money until you decide: laddering your cds b. i. Nice way to manage your emergency funds b. ii.
