Financial Literacy
description
Transcript of Financial Literacy
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Financial LiteracyPresented By MOODYS Upward
Bound
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M O O D Y S
asteringccupationalpportunityevelopment Forouthuccess
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Budgets
Presented By Jocelyn Lula and Sarah Lane
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What is a budget?
List of planned revenues and expenses
Organizes income and expenses
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Fact
Only about 40% of people in America have a budget
0%
20%
40%
60%
80%
100%
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Budget uses
Monitor income/expensesWhere money is spentForecast future
income(s)/expense(s)Spend in categories
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Components of the budget
IncomeExpenseDiscretionary Money
SaveRebudgetSpend
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How to calculate discretionary money
Income-Expenses
Discretionary Money
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Example
Income Salary--$2,000 Birthday Money-- $100
Expense Rent--$600 Utilities--$200 Food--$100
Discretionary Money Left over--$1,200
$ 2,100-$ 900 $ 1,200
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Credit and Credit Cards
Presented by Emily Castro and Sarah Lane
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Credit
Dictionary’s definition: amount of money available to be borrowed by an individual
Trustworthiness to be lent money
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Credit Score
Credit score or FICO score The higher your score, the more you are trusted
Financial behavior impacts your credit score
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Credit Ratings and Scales
Credit scores are between the numbers 300 and 850
Credit Scores300
400
500
600
700
800
Highest Good and Bad Credit Scores Possible
Good ScoreBad Score
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How to Improve Your Credit Score
Things that affect your credit score: Checking Accounts
Opening oneOverdrawing
Paying billsOn timeLate or not at all
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How to Maintain a Credit Score
Maintaining a credit score takes patience and diligencePay off your credit card bills
every monthDon’t impulsively buy
something that you can’t afford
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Credit Cards
Dictionary definition: card issued by a financial company giving the holder option to borrow money
Highly affects your credit score and ratings This is money that is borrowed, NOT given
You must pay this money backAPR Interest
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The Effects of Credit Cards
Bad financial choices can ruin your credit scoreGood usesBad uses
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Our Advice to Avoid Bad Credit
Pay off everything every month Always pay on time Never own more than 3 credit cards Never charge anything on credit that you
can’t afford Never use more than half your credit limit Check your credit report regularly (www.freecreditscore.com)
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Net Worth
Presented By Alex Lynaum and Anastatia Smith-Davis
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How to find your Net Worth
List your largest assets
Subtract all your liabilities
The difference is called your net worth
The total assets minus total liabilities of an
individual.
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Assets
Property ownedExamples
A house – that you own, not rent Money in the bank Car Investments Collectibles
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Liabilities
Money you owe Examples
Debt Loans Credit card balance
If your liabilities are greater than your assets you owe money.
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Sample of a Net Worth Statement
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Net Worth
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Taxes
Presented by Greg Nyikos and Jocelyn Lula
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Picture this . . .
April
15
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Why Taxes?
Collected by the GovernmentAmount to IRS If more money was sent to the
IRS than you owe, you will get a refund. If less was sent than you owe, you have to send more in.
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Taxed on the amount of money you earn
Deductions
How do I fill out a Tax Form?
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Types of Taxes:
Types of taxes: Income Tax Sales Tax
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Income
Taxable Income
Deductions
Federal Tax
Antonia’s Salary: $43,000Interest Earned on CD: $300
Total Income: $43,300
Standard Deduction: $5,650Exemption Deduction: $3,650
Total Deductions: $9,300
Income – Deductions: $34,000
The first $8,375 is taxed at 10% $837From $8,375 to $34,000 is taxed at 15% $3,844Federal Tax: $4,681
Example
Income Tax Rate
$8,375 or less
10%
$8,375-$34,000
15%
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Sample Tax Form
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College Planning
Presented by Robert Barron and Greg Nyikos
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College Planning - Factors
College ConsiderationsDegree Programs and MajorsAdmissionQuality Education Involvement in Federal AidActivities of InterestLocationCost
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College Planning - Cost
Tuition Tuition for Notre Dame is $38,477
Room & BoardMandatory Fees and Expenses LifestyleTransportationBooks and Supplies
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How are you going to pay for college?
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College Planning – How to Pay for College
How to pay for college1. Savings2. Working3. Scholarships4. Grants5. Student Loans
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College Planning – Work & Savings
Money saved up Remember it is NEVER to late to save
for college Work Study Working during the summer Working during school Amount you can save
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College Planning - Grants
Need based 6 different Grants:
Federal Pell Grant Federal Supplemental Educations Opportunity
Grant (FSEOG) Academic Competitiveness Grant (ACG) National Science and Mathematics Access to
Retail Talent (National SMART Grant) TEACH Grant Iraq and Afghanistan Service Grant
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College Planning - Scholarships
Merit Based Require hard work and dedication to be
achieved Do not need to be paid back
Scholarship Factors Ethnicity Grade Point Average (GPA) State Sports
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College Planning – Student Loans
Federal Perkins Loan FFEL Stafford Loans (subsidized &
unsubsidized) Subsidized & Unsubsidized
FFEL PLUS Loans Consolidation Loans William D. Ford Federal Direct Loan
(Direct Loan) Program
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Dos and Don'ts
Presented by Anastasia Smith-Davis and Alex Lynaum
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Do’s for school!
Study for an hour before and after each class
Ask for help when YOU need it, and even if you DON’T need it
Take good notes Eat a full breakfast in the morning Join a study a group Always be early to your classes Do extracurricular activities
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Don’ts for school
Don’t go stay out all night on a school night
Do not sleep during classDo not disrespect your professor
Recommendations
No Matter How Hard School Gets Don’t Drop Out!
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Common Sense
Go For Scholarships! Don’t sign up for credit cards
while in school Unless your able to handle the
expenses If it sounds to good to be true don’t
go for itDon’t forget your priorities!
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Job Considerations and BenefitsPresented by Emily Castro and Jarek
Allin
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Job Considerations and Benefits
Once you’ve graduated college, it is time to see a return on your educational investment and seek a job Resume Job Fairs and Career Days Internships Building relationships (networking) Think about where you would like to work
Location, industries, companies
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Job Considerations and Benefits
Factors when looking for a jobPassionCareer AdvancementsSalary or WageFringe Benefits
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Job Considerations and Benefits
PassionChoose a job that you love and
enjoy.Make sure that your job inspires you.Find meaning and purpose in what
you do.Don’t work just for the pay.
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Job Considerations and Benefits
Career AdvancementsPredict where you see the
company and yourself in 3 or 5 or even 10 years.
What responsibilities will you gain as you advance through your career?
Can the company offer you any training?
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Job Considerations and Benefits
Salary and WagesHourly wage or a salaryHow much are you really being
paid?
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Job Considerations and Benefits
Fringe Benefits Paid time off Insurance Retirement
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Job Considerations and Benefits
401 (K) Retirement Plan retirement plan set up by a “for profit”
company Employees can make contributions to their
account Employer can also make contributions to
the employees account Money is invested and then available for
the employee to use in retirement
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Job Considerations and Benefits
403 (B) Retirement PlanExactly the same as a 401 (K)
except… “not for profit” company
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Simple IRASame thing as a 401 (K) and a
403 (B) but the only difference is ……A retirement plan set up by a small business for its employees
Job Benefits
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Pension A retirement plan set up by a small
business Employer contributes money to an
account Employer then promises to pay the
employee a set amount in retirement
Very rare and will likely be extinct in a few years.
Job Benefits
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Insurance
Presented by Emily Castro and Jarek Allin
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Insurance
An agreement by which a company provides a guarantee of repayment for a specific loss in return for a customer’s payment of premium.
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Insurance
Types of InsuranceAutoHome LifeDisabilityHealth
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Insurance - Auto
If you get in a car accident, your car insurance will help fix your car.
If you drive: you have to have auto insurance.
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Insurance - Home
TheftNatural Disasters
Ex: Fire, flood, tornado. If you own a house:
you have to have home insurance.
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Insurance - Life
If you pass away, the insurance company will pay money to your family.
Money could be used to pay for the cost of the funeral.
Life insurance is optional to have.
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Insurance - Disability
If you become disabled and cannot work, the insurance company will pay money to you every month to help you pay bills.
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Insurance - Health
With health insurance
Without health insurance
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Bank Accounts
Presented By Jarek Allin and Robert Barron
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Types of Bank Accounts
CheckingSavingsMoney MarketCertificates of Deposits (CD)
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Checking
A Checking Account is an account designed for transactions of deposits and withdrawal.Very easy to access.
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Checking
By depositing paychecks, you can put money into your account
To withdraw moneyATMChecksDebit card
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Checking – Debit Cards
A debit card is using a plastic card that allows one to withdraw money from their own account instead of talking out a loan (credit card)
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Checking - Checks
Check - instead of paper money
“Balance your check book
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How to fill out a check
7-14-11
Home Depot 73.52Seventy-Three and 52/100
Plywood John Smith
Bank Routing #
Account # Check #
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Checking - ATM
ATM stands for Automatic Teller Machineused to withdraw money from
different locations when needed
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Bank Interview – 1st Source Bank
To open an account you need your drivers license, a 2nd form of identification, and your social security number
You will receive checks and a debit card if you are 18 or older
You will have online banking when you sign up with a debit card
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Savings Accounts
A savings account is a deposit account held at a bankEasy to access
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Savings
You can put money into your savings account calling your teller visiting the bank using an ATM using online banking
Withdraw money from your savings
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Savings – Dos and Don’ts
DosATMTalk to your teller
SecurityAccessibility
Don’tsAccessibilityTheft
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Savings – To open an account
DocumentationAll you will need is your Driver’s
License
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Money Market
Offers higher interest ratesRequires larger depositsEasy to accessYou may need to have another
account open to open the Money Market account
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Certificates of Deposit (CD)
Offers higher interest rates, but limits the investors access to the money
Hard to accessMoney is put into these account
to save for long periods of time
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Money Market and CD differences
Money Market is a special savings account
A “CD” is a special investment account
Could have a high penalty cost if money is withdrawn early
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Any Questions?
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Financial LiteracyPresented By MOODYS Upward
Bound