Activity - Balancing Your Bank Account

Foundations in Personal Finance: Middle School Edition for Homeschool Chapter 1 OBJECTIVE Students will practice balancing and reconciling a bank account with the goal of understanding the importance of knowing how much money they have available STANDARDS Spending and Saving Standard 1: Develop a plan for spending and saving. Spending and Saving Standard 2: Develop a system for keeping and using financial records. PROCEDURE 1. Introduce the activity and review the key terms. 2. Distribute the activity handout and stress the importance of being able to balance and reconcile a bank account using an account register and a bank statement. 3. Instruct your student(s) to complete the two activities and answer the questions at the end of the handout. KEY TERMS Account Register: A tool to keep track of bank account transactions Bank Fees: Bank charges that may be attached to your account Bank Statement: The bank's record of all of the transactions in your account Reconcile: To compare the bank statement with the account register to determine account balance Transaction: Any time you spend money from your account or add money to your account; also, any time a bank fee is subtracted from your account or interest is added to your account DIRECTIONS: Read the following information on balancing a bank account and reconciling that account with a bank statement, and then complete each activity. After you complete both activities, answer the questions. ACTIVITY Individual 15 MINUTES MATERIALS Activity handout; calculator Chapter 1: Lesson 3 Activity TEACHER'S MATERIAL Balancing Your Bank Account 1/5
Foundations in Personal Finance: Middle School Edition for Homeschool Chapter 1 Chapter 1: Lesson 3 Activity TEACHER'S MATERIAL Balancing Your Bank Account 2/5 BALANCING YOUR BANK ACCOUNT It is important to keep track of your spending—whether you are using a debit card, making online purchases (with your debit card), or writing checks. At first, keeping track of all of your transactions may seem tedious, boring, and unnecessary. But once you get the hang of it, balancing your bank account is actually easy and gives you peace of mind knowing how much money is in your account. By keeping track, you can avoid things like overdraft fees. Remember, when you take responsibility for your money, you will be in control, and you will likely find that you have more money. Here are some helpful tips for balancing your account: If you are diligent with recording all of your transactions in your register every time you spend money or add money to your account, your register will have your most current account balance. The account balance shown on an ATM receipt, and often on your electronic account information, may not be completely accurate if every transaction has not yet been processed. Contact your bank if you think there is a mistake. It is not uncommon for mistakes to happen. Don't get discouraged. Balancing your account takes practice. The more you do it, the easier it becomes. BALANCE YOUR REGISTER WHAT TO DO: In your account register—the simple tool to help you manage your bank account—you will see a bunch of blanks. Starting from the left, you will likely see the following columns: Date: the date of the transaction Type of Transaction: the type of transaction made, such as a deposit, debit, check, ATM withdrawal, or bank fee. Description of transaction: where you made your purchase, what type of deposit you are making, or other information to help you know the details Payment/Debit: the amount of a transaction or purchase Deposit/Credit: the amount of a deposit or credit to your account Balance: the running total of the various transactions
Foundations in Personal Finance: Middle School Edition for Homeschool Chapter 1 Chapter 1: Lesson 3 Activity TEACHER'S MATERIAL Balancing Your Bank Account 3/5 Every time you make any kind of transaction, write it down in your register. Transactions will include deposits into your account, ATM withdrawals, debit card purchases, online purchases, checks you write, and any bank fees. Each time you make an entry into your register, either add (deposits) or subtract (purchases) from the balance above it. Keep track of the date as well as check number if applicable. You will also write the name of the place from which you purchased items. BALANCE THE ACCOUNT Using the information provided in this account register, balance the account by subtracting each debit from the balance above it and adding the deposits to the balance above it. DATE TYPE DESCRIPTION OF TRANSACTION PAYMENT/DEBIT DEPOSIT/CREDIT BALANCE 4/1/15 OPENING BALANCE $504.67 4/2/15 DEBIT GROCERY STORE $33.89 $470.78 4/2/15 DEBIT GAS STATION $25.00 $445.78 4/4/15 DEPOSIT PAYCHECK $846.39 $1,292.17 4/5/15 CK 1536 APARTMENT RENT $750.00 $542.17 4/6/15 DEBIT MOVIE THEATER $18.50 $523.67 4/8/15 DEPOSIT YARD MOWING INCOME $40.00 $563.67 4/10/15 DEBIT MEXICAN RESTAURANT $18.50 $545.17 4/11/15 DEBIT CELL PHONE BILL $120.00 $425.17 4/11/15 DEBIT GAS STATION $26.50 $398.67 4/12/15 DEBIT GAME STORE RENTAL $8.50 $390.17 4/15/15 CK 1537 ELECTRIC BILL $105.50 $284.67 4/20/15 DEPOSIT PAYCHECK $846.39 $1,131.06 4/21/15 DEBIT GAS STATION $27.50 $1,103.56 4/22/15 DEBIT GROCERY STORE $76.48 $1,027.08 4/25/15 CK 1538 WATER BILL $27.53 $999.55 4/25/15 CK 1539 SUZY V (BIRTHDAY GIFT) $25.00 $974.55 4/28/15 DEBIT BOWLING $12.79 $961.76 4/29/15 DEBIT PIZZA $21.25 $940.51 4/30/15 CK 1540 TV/INTERNET BILL $82.50 $858.01 4/30/15 DEBIT GAS STATION $24.75 $833.26
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