Financial Literacy Linus Engelhardt

The first thing that I learned in financial literacy is about taxes. I learned about the different types of taxes, and how it effects your monthly pay. There are three kinds of tax: Progressive, Regresive, and Flat tax. Progressive tax is a tax that helps out poorer people because as your income goes up, so does your percent of tax you have to pay, so if you are making very little then you pay very little. An example of a progressive tax is Federal Income Tax. Next, a regressive tax is a tax that hurts poorer people because the tax rate effects you less as your income goes up, so it hurts poor people, while helps richer people. An example of a regressive tax is a sales tax. Finally a flat tax is a tax in which everyone pays the same amount of tax, however this may hurt poor people also because it would be a lot of their income, while very little income for rich people. A state tax is an example of a flat tax. A final tax is an excise tax, which is a tax on items the goverment doesn't want you to buy, such as cigarettes, liqour, gas, and large amounts of fountain drinks.
Next I learned about checkings accounts. A check is a sheet of paper that you write an amount of money on to give to someone else or yourself that takes money out of your account. There are different types of endorsements on a check including a blank endorsement, in which you sign your own name, another type is a restricted endorsement, where your sign your name and then write the name of the person you are giving the check to, this way if your check is lost or stolen it is harder to steal the money. If your check is lost or stolen you should try filling out a stop-payment form, however if the check has already been cancelled, or cashed in, then there is not much you can do. If a check is overdrawn, meaning you wrote more money then is in your account, then the check will bounce and both you and the person who cashed it will be charged fees. I also learned part of having a checkings account is having a checkbook, in which you record all the checks you write, deposits you make, etc. If your checkbook does not match your bank statement when you recieve it at the end of the month, then you may have to fill out a bank reconciliation form, which includes adding and subtracting amounts from both sides in order to get the same number.
I also learned abount stocks and investments in financial literacy. A stock is a share in a company that you can buy for a fee, depending on how large the company is the price of stock may be high or low. Investing in stock is risky, however over time can really help you out, especially if you wait a long time, and if you use diversification, which means that you spread your money out among various different stocks, so that if one company goes under, then it won't affect you as much as it would have if you had invested all of your money into that one company. When you buy stocks you also recieve a dividend, which is your percent of profit from the company per year, again depending on how much you own and on the company this could be low or high. A smart way to earn money on the stock market is capital gain, in which you buy a stock for a low price when no one wants it, and keep it until the stock rises back up again, when you can sell the stock for a way higher price then you paid for it. The final thing I learned about investments is that it is best to start investing as soon as you can because over time the stock grows a lot, therefore if you get stock at a young age you have many many years for the stock to mature to it's full potential in order to get way more money then you started with.
Another thing I learned about in financial literacy is about automobiles and insurance. The first thing I learned is about a thing called depreciation, which means that as soon as you buy a car it starts to lose value. However, the bulk of what I learned is about insurance, if you are in a car crash or otherwise. The first type is bodily injury, which is the type of insurance you or your insurance company pays if you are responsible for hitting someone with your car and they get injured, you pay for their hospital bills, etc. Another type of insurance is property damage which is the insurance you pay is you are responsible for crashing into someone else's property, including their car, house, etc. Collision insurance pays for damage to you or another person's car when you are at fault in a crash. Finally comprehensive insurance, is when you are NOT at fault for damage to your car, this can include acts of nature, vandalism, or theft of the car.
The final thing I learned in financial literacy is the difference between needs and wants. A need is an essential item that need to live and thrive, such as food, clothes, shelter, etc. Wants are things you don't really need but make life more pleasurable such as a phone, and tv. Needs should always be put before wants, because they are needed to live, so are a higher priority they wants. Goods and services are the people and services that provide needs and wants. Goods are items like pens, notebooks, phones, etc. While services are things like public transportation, car repair, etc.

Credits:

Created with images by image4you - "euro coins currency" • free pictures of money - "Taxes" • John-Morgan - "Taxes" • Gadini - "checkbook coupon fill" • TBIT - "dollar bank note money" • stevepb - "coins currency investment" • carolinqua - "car" • David Farrell - "Oops" • Pixel-mixer - "crash test collision 60 km h"

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