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Your Financial Education Guide

Your Financial Education Guide. The Basic . A. B. C’s. of Finance. Money Management. Income Opening Accounts Creating a Budget Financial Goals. Borrowing Money. Credit Cards Loans Debt Management. Money Management. You Must Learn How To Manage Your Money Responsibly.

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Your Financial Education Guide

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  1. YourFinancial EducationGuide

  2. The Basic A B C’s of Finance Money Management • Income • Opening Accounts • Creating a Budget • Financial Goals Borrowing Money • Credit Cards • Loans • Debt Management

  3. Money Management You Must Learn How To Manage Your MoneyResponsibly

  4. Income How Do You Generate Income? Allowance 2. A Job • Paycheck • Gross / Net

  5. 1. Gross: $452.43 1. 2. Minus Deductions 2. • Fed. Income Tax • Social Security • State Income Tax • Medical 3. 3. Net: $273.85 3.

  6. Income Now That You Have Money…. What Are You Going To Do With It? SPEND IT! SAVE IT! MANAGE IT!

  7. Opening An Account Types Of Accounts Checking: Manage Day To Day Activity Under 18? Joint Checking Account Savings: Put Money Away For A “Rainy Day.” Let Your Money Earn Money!

  8. Opening An Account Where Do I Go? • Financial Institutions • Banks • CREDIT UNIONS!

  9. Opening An Account What Do I Need? • 2 Forms Of Identification: • License • Social Security Card • Birth Certificate • State ID Card • Minimum Deposits: • $50 For Checking • $5 For Savings

  10. Opening An Account What Do I Get? • Check Card (ATM, Debit, Point Of Sale) • Check Book (Keep It Balanced) • Online Account Access • Monthly Statements

  11. 1. Date - The Date the Check is Written • 2. Maker - Person / Business Who Writes the Check (The Name will be Printed on the Check) • 3. Payee - Person / Business to Whom the Check is Written • 4. Signature Line • 5. Written Amount - The Amount Written in Numbers • 6. Legal amount - The Amount Written in Words • 7. Check number - Printed on the check and appears in the MICR line on the Bottom of the Check • 8. Banking information - The Name of the Institution and The Association Number. • 9. Account and Routing Numbers - Appear on the Bottom of the Check in MICR Line.

  12. Keep Track of Your Balance • Day to Day • Monthly Statement

  13. Creating A Budget Income Vs. Expenses Monthly Income Expenses Cost $3,000 Rent: $1,000 Car: Payment Insurance Gas $300 $80 $120 Monthly Balance Food: Groceries Dining $300 $70 + $750 Utilities: Gas Electric Phone Cable Internet $20 $20 $60 $60 $40 MISC: Clothing Entertainment $100 $80 Total: $2,250

  14. Financial Goals What Do I Want Or Need? AND How Am I Going To Pay For Them?

  15. Financial Goals Goals to Aim For Short Term Long Term ● Rent ● Engagement Rings ● College / School ● Wedding ● Computer ● Home ● Car● Children ● Entertainment● Own Business ● Travel ● Retirement

  16. Borrowing Money How Do I Borrow Money? • Go To A Financial Institution 2. Apply For The Following Loans: • Credit Cards • Student Loan • Personal Loan (Used for Any Purpose) • Car Loan • Business Loan • Home Loan

  17. Credit Cards Be Careful Of Card Offers (They’re Everywhere!) • Mailers • Department Stores • Financial Institutions

  18. Credit Cards You’re Not Borrowing Money! You’re Getting A Line of Credit! Credit Score: SCORE! 800 700 600 500 • Effects Your Ability to Borrow The Higher the Score the Better: • Can Borrow More • Lower Interest Rate. What Effects My Score? • Establishing Credit (Put Bills In Your Name / Dept. Store Credit) • Paying Bills On Time • Maintaining Accounts • The Ratio Between Money Owed To Credit Limit.

  19. Credit Cards Benefits Of Good Credit 1. Can Get A Higher Credit Limit! 2. Get A Lower Interest Rate! YOU HAVE TO PAY THE CREDITORS BACK WITH YOUR MONEY!

  20. Credit Cards What Is An Interest Rate? The Increased Percentage Rate That You Have To PAY BACK To Creditors.

  21. Credit Cards How It Works • Apply For Card • Get Card • Use Card To Make Purchases • Get Monthly Bill / Statement • With Card Usage, Balance, Limit, Minimum Payment, Due Date • Pay At Least The Minimum Requirement By Due Date (Insert: Credit Card Statement)

  22. 1. 2. 3. 4. • 1. Account Number • 2. New Balance • 3. Due Date • 4. Minimum Payment • 5. Transactions • 6. Account Summary • 7. Finance Charges • 8. Percentage Rate 5. 6. 7. 8.

  23. Credit Cards DO’S: Do Make Your Payment On Time Do Pay More Than Your Minimum DON’TS: Don’tBe Late On Your Payments ● You’ll Be Charged A Fee ● It Will Increase Your Interest Rate ● It Will Lower Your Credit Score Don’t Maximize Your Limit THIS LEADS TO BAD CREDIT!

  24. LOANS Applying For A Loan: You Must Show That You’re A Qualified Borrower. AND Show You Have The Ability To Pay Back Your Loan!

  25. LOANS YOU WANT! 1. A LOW Interest Rate 2. A Monthly Payment You Can Afford. How Do I Get This?

  26. LOANS To Get A Good Loan You’ll Need: • Capital (Down Payment / Collateral) • Proof Of Income • Excellent Credit Score Note: A Co-Signer (Parent / Spouse) Can Help YOU!

  27. LOANS • Look For: • First Time Borrower’s Programs • Pay Attention To: • Terms And Conditions • Default Rates • Watch OUT For: • Teaser Rate Programs Example:No Money Down / 0% Interest.

  28. LOANS WARNING! WARNING!WARNING! Your Loan May Be Affected By Terms And Conditions! Fixed Rate Vs. Adjustable Rate Interest Rate Doesn’t Change Interest Rate Starts Low Adjusts To A Higher Rate Monthly Payment Will Increase

  29. LOANS DO’S: Do Make Your Payment On Time Do Try ToPay More Than Your Minimum DON’TS: Don’tBe Late On Your Payments ● You’ll Be Charged A Fee ● It Will Increase Your Interest Rate ● It Will Lower Your Credit Score Don’t Default On A Loan THIS LEADS TO BAD CREDIT!

  30. DEBT MANAGEMENT With Loans You Will Have DebtTo Pay Back.

  31. DEBT MANAGEMENT Tips To Manage Debt • Create A Repayment Plan (Payoff A Loan Before Taking on Another) • Pay More Then The Minimum Requirement • Refinance Your Loan For A Better Rate • Consolidate Your Loans Into One Payment And Finally…

  32. DEBT MANAGEMENT IF YOU CAN AFFORD IT…. WITH CASH! PAY FOR IT

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