Posted on January 4, 2018
People with disabilities can receive income from employment and social security. You may receive checks, money orders, direct deposits into your bank account, or cash. You might have a debit card, a credit card, or a loan. Certainly you have bills to pay, and like many adults, you might have some debt. This glossary should help you understand the basic terms used when we talk about money.
Cash comes in the form of bills and coins. It’s simple to use, but carrying a lot of cash puts you at risk of losing it or having it stolen.
You can buy a money order using cash. This is a more secure way to pay rent than handing over an envelope full of cash.
A savings account is a type of bank account where you deposit money to take out later, like when you want to buy a car. There are basic savings accounts, and there are options like CDs (Certificates of Deposit), MMAs (Money Market Accounts), and IRAs (Individual Retirement Accounts). The accounts won’t allow you to take out money until a certain time has passed. A basic savings account is good because you can access the money in case of emergencies.
A checking account is what people usually use to pay bills, buy groceries, and go shopping. When you have a checking account, your routing number and account number can be used to pay bills online.
A credit card might seem to work the same way as a debit card, because you can use it to pay bills and check out when you’re shopping. However, it’s really important to understand that debit cards use money you already have. Credit cards lend you money that you have to pay back. Money you owe a credit card company is called your balance. The longer you take to pay off your balance, the more interest you will owe.
Interest is a percentage used both by lenders and banks. You might owe interest on credit cards or loans, and if you do, you’ll end up paying more than the amount you borrowed. On the other hand, you could earn interest on cash placed in a checking or savings account. There are many calculators you can use to figure out how long it might take to pay off debt with interest, and how much you can save by putting money into an account with interest.
Are you living with a disability and in need of a fiscal agent to help you manage your money? Contact Acumen today.