MoneyWise

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MoneyWiseYour Financial 411
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Whats Covered

1. Todays Teens
2. Managing Your Money
3. Banking
4. Bank Cards
5. Understanding Credit
6. Identity Theft

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Section 1 Todays Teens
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Todays Teens

• Characteristics
• Born 1979 -1997
• 60 million
• Next dominant generation
• Events
• Famous Gen Y-ers

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Todays Teens

• Totally plugged in very tech savvy
• Spend 1/3 of their time on the Internet
• Upbeat and confident
• Family centric
• Big spenders
• Lofty financial goals

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Section 2 Managing Your Money
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Work

• Benefits
• Experience
• Work habits
• Responsibility
• Skills
• Contacts and references
• Money
• Do what interests you
• Learn what you like and dont like
• Get career ideas target your college major

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Your Paycheck

• John Smith Taxable Marital Status Single
• 123 Main Street Exemptions/Allowances
• Anytown, NY 99999 Federal 0 State 0
• Social Security Number xxx-xx-xxxxEarnings Ra
  te Hours Earnings this Period Year-to-Date
  Earnings
• Regular 7.75 9.5 73.63Gross
  Pay 73.63 1,819.37
• Deductions Social Security
  Tax -4.56 112.80 Medicare
  Tax -1.07 26.38 NY SUI/SDI Tax -0.37
  8.79 Federal Income Tax 8.06
• Net Pay 67.63

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Managing Your Money

• Needs versus wants
• Do I need it?
• Do I want it?
• What are your goals?
• Short Term
• Car?
• iPad?
• Long Term
• College?

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Budget Needs vs. Wants
Item Need Want
Food Groceries/Cooking Eating Out/Ordering In
Shelter Dorm/Roommate Apartment or House
Transportation Public Transportation Gas, Car Insurance, Car Payments, etc.
Clothes The Basics Trendy Styles and Brand Name Labels
Telephone Land Line/ Basic Cell Phone iPhone w/unlimited data plan
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Spend Wisely Shop Smart

• Comparison shopping big pay off
• Dont be an impulse shopper
• Pause before you purchase
• Check out sales, coupons and rebates

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Managing Your Money

• Make a plan
• Take stock of what you earn
• Create your budget
• Write down expense
• Eliminate some wants
• Budgeting is work but its worth it
• Keeping track will help you save

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Saving

• Start now!
• Save consistently
• Review your goals
• Cut back
• Invest in your future

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Cost of Driving a Car

• The monthly responsibilities of maintaining a car
  without a loan payment

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Cost of Owning a Car

• More than just the purchase price financing
  costs

Estimates the monthly cost of purchasing,
financing and operating a 10,000 vehicle driven
and insured by a 20 year old male with the
balance financed at 7 interest for 5 years ( 60
months).
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Cell Phones

• Teens an important, fast-growing segment of the
  cell phone market
• Carriers offer family plans and pre-paid accounts
• Beware of additional charges
• Texting, toll free numbers, directory assistance
• Prepaid cell phones charge rates of up to 45
  cents per minute

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Section 3 Banking
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Finding the Right Bank

• Interest Rates
• Service Rates and Fees
• Online Service
• Special Accounts

• FDIC
• Locations
• Hours of Operation
• Types of Accounts Offered

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Checking Accounts

• Keep enough money in your account
• Record all activities in your checkbook register
• Review your bank statements promptly
• Report suspected errors to your bank immediately
• Dont sign blank checks
• Know where your checkbook, ATM and debit cards
  are at all times
• Report missing items to your bank
  immediately

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Cover Every Check

• Bounced checks overdrafts are very expensive
• Up to 35 bank charge or more! for each
  bounced check
• The payee can also charge a fee
• Warning If you dont pay the fees, youll be
  entered into the ChexSystems national database
  and you wont be able to open another checking
  account for five years!

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Writing a Check

1. Date the check
2. Write the name of the person or firm to whom the
   check will be payable
3. Enter the amount (in figures) next to the

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Writing a Check

1. Write the amount (in words) on the next line
2. Sign your name on the bottom line EXACTLY as it
   appears on the bank signature card
3. Use the Memo line to record the purpose

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Balancing Your Checkbook

• Balance your checkbook every month
• Time to point out mistakes is limited
• Use the instructions provided by your bank
• Back of statement (for paper statements)
• Online (for electronic statements)
• You'll need to reference every transaction
  recorded in your checkbook register so be
  diligent

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Section 4 Bank Cards
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ATM, Debit and Credit Cards

• ATM used to manage money in a bank account by
  using an automated teller machine
• Debit used to pull money from a bank account
  for withdrawals as well as purchases
• Credit used to purchase debts must be repaid
  or interest accrues

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ATM Card vs. Debit Card

• ATM
• 24-hour access to your money
• Daily limits on withdrawal amounts
• Fees charged when used at ATMs not owned by your
  bank

• Debit
• Purchase amount is automatically deducted from
  your checking account
• Card may be used for Credit purchases, too
• Some banks charge a fee when the card is used as
  Debit

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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 the very
  least, pay more than the minimum amount required

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Section 5 Understanding Credit
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Credit Cards
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Managing Your Credit Card

• Always pay on time
• Pay more than the billed amount
• Try to only use your card for emergencies
• Dont charge more than you can afford

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Credit Card Pros 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

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

• Scenario 2
• You charge 2,500
• You pay 100 per month
• Yearly interest rate 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
• You will be more likely to receive the credit you
  want when you want it
• Car loans
• Student loans
• Apartment rentals
• Utilities phone service

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Checking Your Credit

• Your Credit Score the higher the better
• Get Your Free Report (once per year)Annual
  Credit Report - www.annualcreditreport.com
• 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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Section 6 Identity Theft
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Identity Theft

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

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Protect Yourself

• Protect your identity keep your SSN private
• Protect your ATM, debit, credit cards
• Memorize all passwords and PINs
• Use a shredder
• Be aware of your surroundings at an ATM
• Use only secure online Web sites
• Report important losses immediately

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Federal Trade Commission (FTC)

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

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Thank You