Mastering Personal Finance: Budgeting, Credit, and Financial Wellness
Learn about personal budgeting, credit options, the impact of debt, and bankruptcy. Discover benefits and risks of credit cards while gaining insights on managing finances effectively.
Mastering Personal Finance: Budgeting, Credit, and Financial Wellness
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Presentation Transcript
Vocabulary • Check: a note that gives bank permission to make a payment • Debit Card: Make a payment electronically. Money comes out of an account immediately
What are some benefits of producing a personal budget…? • How do you know how much money you have…? • What are different ways in which you can obtain money…?
Forms of Credit • Credit Card: allows consumers the privilege of buying something now and paying for it later • Lines of Credit: bank extends a specified amount of unsecuredcredit to a specified borrower for a specified time period
Forms of Credit • Mortgages:a legal agreement by which a sum of money is lent for the purpose of buying buildings, land, homes, etc. • Personal Loans:a loan that establishes consumer credit that is granted for personal use • Auto Loan: a personal loan to purchase an automobile
Total Cards in U.S. Circulation • American Express credit: 48.9 million (Source: AmericanExpress.com) • MasterCard credit: 171 million (Source: MasterCard) • MasterCard debit: 123 million (Source: MasterCard) • Visa credit: 269 million, as of Sept. 30, 2010 (Source: Visa) • Visa debit: 397 million, as of Sept. 30, 2010 (Source: Visa) • Discover cards: Unavailable
Question • Is it always a good thing to live “beyond your means” by paying later? • Can this system be abused?
Benefits of Credit • Convenience • Use for Emergencies • Establish good credit history
Question • What happens if you do not pay off your credit card on time?
Costs of Credit • Costs more if unpaid balance is not paid monthly • Tempts one to overspend • Decreases future buying power
Question • Can your fix that “decreased buying power”?
Did you know… • the average credit card holder has more than 9 credit and charge cards • In 2003, 1.6 million people filed Bankrupt • In 2004, the credit card fees were $60 billion dollars
Question • What is bankruptcy? • What is the penalty for it? • Can this be fixed?
Total bankruptcy filings in 2009 reached 1.4 million in 2009, up from 1.09 million in 2008. The vast majority were personal bankruptcies (Source: AACER, the American Bankruptcy Institute, January 2010) • Young Americans now have the second highest rate of bankruptcy, just after those aged 35 to 44. The rate among 25- to 34-year-olds increased between 1991 and 2001, indicating that this generation is more likely to file bankruptcy as young adults than were young boomers at the same age. (Source: "Generation Broke: Growth of Debt Among Young Americans")
