Money Wise Your Financial 411

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Money Wise Your Financial 411
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MANAGING YOUR MONEY
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Work to Earn Money

• Earn money now
• Learn what you like and dont
• Get career ideas target your college major
• Acquire transferable skills
• Make contacts, character references

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Establish Financial Goals

• Short term
  Long Term
• Buy a car
  Buy a home
• Buy an IPOD NANO Start a
  business
• Buy the newest Game System Start a
  family
• Vacations (Spring Break) College
  tuition
• 
  Pay off student loans
• 
  Retirement

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Its time to Start Saving

• Start now
• Save consistently
• Cut back
• Sign up for automatic savings what you dont see
  does make a difference

Todays habits will pay off tomorrow!
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Comparison Shopping

• Comparison shopping big pay off
• Dont be an impulse shopper
• Pause before you purchase
• Be smart shop around and save

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Managing Your Money

• Set goals/make a plan
• Create your budget
• Write everything down
• Save

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BANKING
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Finding the Right Bank

• Location
• Types of Accounts Offered
• Interest Rates
• Service Charges
• ATMs
• Hours of Operation
• Online Service

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Checking Accounts

• Have the money in your account to cover every
  check
• Record all checks you write in your check book
  register
• Review your bank statements promptly
• Report suspected errors to your bank immediately
• Dont sign blank checks
• Know where your checkbook and ATM card are at all
  times
• Report missing items to your bank
  immediately

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Cover Every Check

• Bounced checks can be very expensive
• Banks can charge up to 35 for each check bounced
  plus the payee can also charge a fee
• If you bounce a check and do not pay the fee,
  your name and personal information will show up
  on a national database called ChexSystems and you
  wont be able to open another checking account
  for five years

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BANK CARDS
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Debit and Credit Cards

• Debit (pulls money from a bank account for
  withdrawals as well as purchases)
• Credit (purchases are made using credit, debts
  must be repaid or interest accrues)

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Debit vs. Credit Card

• Debit
• Purchase amount is automatically deducted from
  your checking account
• Provides alternative payment method to cash
• No interest charged

• Credit
• Purchases made with credit card are paid for with
  a loan from bank (billed monthly)
• Interest accrues monthly
• Try to pay in full every month. At least, pay
  more than the minimum payment amount required

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UNDERSTANDING CREDIT
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Credit Cards
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Choose the Right Credit Card

• Interest Rate
• Adjustable Rate Credit Cards
• Fixed Rate Credit Cards
• Fees late fees, over the limit fees, annual
  fees, and balance transfer fees
• Reward Programs
• Introductory Rates

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Managing Your Credit Card

• Make monthly payments on time
• Pay more than the minimum amount requested
• Use your credit cards conservatively
• Try to charge only what you can pay off at the
  end of the month

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Credit Card Pros and Cons

• Cons
• Can negatively affect credit
• Debt accumulation
• Years to repay debt
• High interest rates
• Repayment could be 3 to 5 times original purchase
  price
• Immediate cash availability

• Pros
• Build credit
• Available for emergencies
• Immediate cash availability
• Rent a car
• Frequent flyer miles
• Online purchases

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Its Hard to Get Out From Under

• Credit Card Scenario 1
• You charge 2,500
• You pay 50 per month
• Yearly interest rate is 19.9
• How long will it take to pay the balance?

• Credit Card Scenario 2
• You charge 2,500
• You pay 100 per month
• Yearly interest rate is 19.9
• How long will it take to pay the balance?

9 years 1 month
2 years 9 months
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Benefits of Good Credit

• A person with good credit is someone most
  likely to repay a loan
• Makes it more likely that you will receive the
  credit you want when you want it
• Car loans
• Student loans
• Apartment rentals
• Utilities and phone service

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Student Loan

• Subsidized Loans
• Federal government pays the interest until the
  student enters repayment.
• When the borrower has been granted a deferment,
  the government pays the interest during the
  deferment period.
• Unsubsidized loans
• Student is responsible for paying the interest
  that accrues on the loan from the date of
  disbursement until the loan is paid in full,
  regardless of enrollment status.

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Pay Down Student Loans

• Pay Extra and Save
• An extra 50 a month
• Pay off loan 3 years faster
• Save 2,231 in interest
• An extra 250 a month
• Pay off loan 6 years faster
• Save 4,892 in interest
• An extra 500 a month
• Pay off loan 8 years faster
• Save 5,762 in interest

Student Loan 15,000 borrowed 10 year term 8.25
interest rate
Monthly payment 184 Total interest paid 7,077
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Stay on Top of Student Loan Obligations

• What if I lose my job?
• What if I cant afford my monthly payment?
• What if I want to go back to school?

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Consequences of Defaulting on your Student Loans

• Entire loan balance due at time of default
• Notification to the Credit Bureaus
• 15.3 collection cost added
• Possibility of wage garnishment of 25
• Tax refund can be withheld for payment
• Ineligible for additional more Financial Aid
• Transcripts can be withheld

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Feeling Overwhelmed?

• Ask for help
• Call at the first sign of trouble
• Denial of credit
• Credit cards that are maxed out
• Borrowing money to pay bills
• Paying only the minimum
• Contact your student loan provider
• Contact a Consumer Credit Counselor
• Work out a plan to repay

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IDENTITY THEFT
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Identity Theft

• 31 of identity theft victims are young people
• Teens first discover they are victims when
  applying for a drivers license

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Protect Yourself

• Protect your identity -- keep your Social
  Security Number private
• Commit all password and PIN numbers to memory
• Use a shredder
• Be aware of your surroundings
• Always take your credit card receipts
• Never allow anyone to use your credit cards

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Credit Reporting Agencies

• Equifax, 1-800-685-1111
• www.equifax.com
• Trans Union, 1-800-888-4213
• www.transunion.com
• Experian, 1-888-397-3742
• www.experian.com

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Federal Trade Commission (FTC)

• www.consumer.gov/idtheft
• 1-877-438-4338
  
  

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A College Education is a Smart Investment