Insurance/Saving/Investing/Credit

Andraea Aguilera (1st period)

Insurance:

- Car, life, health, and dental insurance are all examples of the types of coverage there is out there for consumers.

- While some sets of insurance are mandatory, others are important to have just in case something were to go wrong. Insurance companies are there to provide financial help when it comes to certain situations.

- In the short term, insurance is something a person can count on in case of an incident of some sort. It usually makes a person feel more comfortable doing things that they could be at risk for.

- In the long term, insurance can help pay for some of the things that would otherwise be hard to cover without the help of insurance. The situation determines the importance of each type of insurance. Say for example a person has car insurance, in the event that they are found at fault for an accident, they don't have to pay as much for damages.[1]

- A repercussion of not having insurance is that you may be fined by law for not having certain types. Another repercussion includes that if anything were to happen, you'd have to pay so much more money than if you did have insurance.

Saving:

- Saving is the act of not spending your income and investing it in the economy.

- People save for different reasons whether it be for emergencies or for something along the lines of a family vacation.

-  Saving is important in the short term because you know you'll have extra money in case you need it. Since the future cannot be predicted, it's a comfort to know that there is still money available to you in the case that you may need it. In the long term, saving is important because large purchases such as a car or home requires massive amounts of money, usually gathered over time. [2]

- Repercussions of not saving money include not having money for needed repairs, no safety net if you were to lose your job, and nothing to cover costs of retirement funds. Saving money helps reduce the risk of having nothing to fall back on just in case. [3]

Investing:

- Investing is the act of purchasing a security such as a stock or bond.

- Investments are typically broken down into ownership, lending, and cash equivalent investments. [4]

- Investments are made all the time, whether it's for a car or house or other things.

- In the short term, making investments is important because your money earns money. When you loan someone money, you not only get your money back but you also get interest. As for long term importance, what you invest in could increase in value later on over time,leading to more money. [5]

- A repercussion of not investing may be not making as much money as could be made. But while investing can be a great thing, it could also become a bad thing. If you were to invest in say a company & that company was to fail, that would lead to you losing money.

Credit:

- Credit is a loan that allows customers to receive goods/services before payment. The loaners must trust that it will be paid back on time.

- You can get good credit by making sure you pay your bills on time, staying away from your credit limit, and only applying for credit that you need.

- There are two forms of credit: loans and credit cards.

- In the short term, you can spend way too much. In long terms, that gives you bad credit score. Oh the other hand, if you pay everything off on time, your credit score will boost in the long run.

- One repercussions of having bad credit means having high interest rates on credit cards and loans. Over time, a person would end up paying higher interest rates than if they would if they had better credit. That could also lead to creditors & lenders not wanting to give you loans because it's risky. One with bad credit may experience trouble buying goods like cars and houses. [6]

MORE:

Q: What do insurance, saving, investing & credit all have in common?

A: All of these have to do with money and are affected by how people use that money. Some of the aspects go hand in hand with each other(ex. investments can be made then saved).

VIDEO LINKS:

http://www.youtube.com/watch?v=wD6m8BCTdHg

http://www.youtube.com/watch?v=GawH48QNDfc

http://www.youtube.com/watch?v=wfW03c8J9EI

http://www.youtube.com/watch?v=JaiNA54JyNo

CITATIONS:

[1] Kenny, Peter. "Why Is Insurance Important?" Why Is Insurance Important? Streetdirectory, 22 Sept. 2014. Web. 22 Sept. 2014. <http://www.streetdirectory.com/travel_guide/141831/insurance/why_is_insurance_important.html>.

[2] "The Importance of Saving." Www.handsonbanking.org. Wells Fargo Bank NA, 23 Sept. 2014. Web. 23 Sept. 2014. <http://www.handsonbanking.org/financial-education/adults/the-importance-of-saving/>.

[3] "Dangers Of Not Having A Savings Account." Www.frugalrules.com. Frugal Rules Ink Harmony, 23 Sept. 2014. Web. 23 Sept. 2014. <http://www.frugalrules.com/dangers-not-having-savings-account/>.

[4] Beattie, Andrew. "Defining The 3 Types Of Investments." Investopedia. Investopedia, 1 Jan. 2014. Web. 23 Sept. 2014. <http://www.investopedia.com/articles/younginvestors/10/what-is-an-investment.asp>.

[5] "Why Invest?" Investor.gov. Investor.gov. Web. 24 Sept. 2014. <http://investor.gov/introduction-markets/why-invest#.VCIMmvldWSo>.

[6] Irby, LaToya. "10 Ways Bad Credit Ruins Your Life." About. Credit.About.com, 24 Sept. 2014. Web. 24 Sept. 2014. <http://credit.about.com/od/creditrepair/tp/bad-credit-side-effects.htm>.

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