w w w. s h a s t a c o l l e g e. e d u Financial Aid Office: Financial Literacy 101

w w w. s h a s t a c o l l e g e. e d u Financial Literacy 101 Americans owe more debt on their student loans than they do on their credit cards. Americans spend more than they earn, the time to save is now. Students who default on their student loans, damage their credit scores which negatively affects employment opportunities and lower loan rates. To sustain financial well being of individuals and their families. Enable individuals to make informed financial decisions and plan for unexpected financial hardships. Learn how to build a budget that works for you, to ensure your goals and dreams are attainable. Take control of your debt before it takes control of you!!! Why is Financial Literacy Important?

w w w. s h a s t a c o l l e g e. e d u Financial Literacy 101 What do you want vs. what do you really need? Start with your mandatory expenses on a monthly basis. Add them up. Example: My Monthly expenses are/will be: 1.Rent $_________ 2.Utilities $_________ 3.Food $_________ 4.Transportation $_________ (include: bus pass, fuel, insurance, payment) 5.Other Bills $__________ (include: credit cards, loans, cell phone, internet, etc…) 6.Other expenses $_________ (include: eating out, clothes, movie tickets, etc…) Step 1: Create a Budget-Expenses

w w w. s h a s t a c o l l e g e. e d u Financial Literacy 101 Next you want to determine your monthly income. Example: My Monthly Income will be: 1.Wages/Salary $_________ 2.Business Income $_________ 3.CalWorks/TANF $_________ 4.Food Stamps $_________ 5.HUD (Housing Assistance) $_________ 6.Social Security $_________ 7.Disability $_________ 8.Financial Aid $_________ 9.Other $_________ TOTAL MONTHLY INCOME $__________ Step 1: Create a Budget-Income

w w w. s h a s t a c o l l e g e. e d u Financial Literacy 101 Next you want to subtract your total monthly expenses from your total income. Example: Total Monthly Income $________ Total Monthly Expenses $________ TOTAL SAVINGS $________ *If your expenses exceeds your income, prioritize your expenses and look for ways to cut back on spending*  The rule of thumb is that your expenses should not exceed your income and there should be at least 3 months living expenses in your savings.  Assess your income and expenses, make a plan and stick to it!! Step 2: Assess, Adjust and Make a Plan

w w w. s h a s t a c o l l e g e. e d u Financial Literacy 101 Example: My Weekly expenses are/will be: 1.Fuel $_________ 2.Groceries $_________ 3.Dining Out/Take-Out $_________ 4.Clothing/Shopping $_________ 5.Entertainment $_________ 6.Other $_________ Total- $_________  These are items that should be monitored and assessed to determine if over-spending is occurring. Step 3: Start a Weekly Log of Flexible Expenses

w w w. s h a s t a c o l l e g e. e d u Financial Literacy 101  This will ensure payments are made on their due date to protect your housing, food supply, transportation and line of credit. Step 4: Create a Calendar of Fixed Expense Due Dates and Income Received Monthly Fixed Expenses and Income The 1 st of Every Month –Rent ($350) The 1 st of Every Month Wages +Pay Day $600 The 1 st of Every Month +Cal-Fresh $200 The 15 th of Every Month -Car Payment ($250) The 15 th of Every Month +Pay Day $600 The 19 th of Every Month -Credit Card Payment ($100) The 29 th of Every Month -Student Loan Payment ($150)

w w w. s h a s t a c o l l e g e. e d u Don’t over-borrow! Balance your check book every time you write a check or use your debit card. Avoid credit cards unless you plan on using them only in emergencies-they can pose as an invitation to over-spend. Pay off smaller credit card debts first, then apply bigger payments to larger debts. Never have more than 2 credit cards open at a time, make sure the amount owed is less than 30% of your credit line, and never miss a payment!! Tips for Staying in the Clear: Financial Literacy 101

w w w. s h a s t a c o l l e g e. e d u Tips for SMART spending: Buy discounted items Shop with coupons Enjoy low-cost entertainment Buy used Carpool Avoid spending out of impulse SMART Spending Saves $$$ Financial Literacy 101

w w w. s h a s t a c o l l e g e. e d u Fun, Affordable Places to Visit and Things To Do Living on a Budget: Visit the Sundial Bridge Go for a walk, hike, or bike ride along the river trail See an affordable movie at: Cinemark Movies 8 Picnic at Caldwell Park Visit a waterfall: Ash Creek Falls, Battle Creek Falls or Burney Falls Take a tour of Shasta Dam For more ideas visit: SMART Spending Saves $$$ Financial Literacy 101

w w w. s h a s t a c o l l e g e. e d u Financial Literacy 101 Why is Building GOOD Credit Important? Better job opportunities More apartment/house choices Open eligibility for lower interest rates on home, car, and other loans (cheaper in the long run!) and little to no money down at time of signing Access to banking services and fast loan decisions

w w w. s h a s t a c o l l e g e. e d u Store Credit Cards Quick Facts: During the first half of 2013, more than $46 BILLION in new credit was issued to store branded cards. PROS: Upfront discount on purchase Flexibility with major credit card companies (earn more rewards) Help boost your credit CONS: High Interest Rate! Limited Use Credit Damage Temptation to Spend!! Better deals elsewhere…do you research and compare rates.

w w w. s h a s t a c o l l e g e. e d u Financial Literacy 101 Credit Score Breakdowns : (Source: Percentage of U.S. Population scoring in each range using FICO model) Superb (11%) Excellent (29%) (20%) (16%) (11%) (7%) (5%) up to 499 (1%)

w w w. s h a s t a c o l l e g e. e d u Financial Literacy 101 FICO Credit Score Influences in order: 1.Payment history 2.Amount owed 3.Length of credit history 4.New credit and type of credit used Vantage Credit Score Influences in order: 1. Payment history (never miss a payment!) 2. Age and type of credit (diversify credit-auto, mortgage, cards) 3. Percent of credit limit used (stay under 30% of credit line) 4. Total balances/debt (reduce debt owed) 5. Recent credit behavior and inquiries (limit accounts opened) 6. Available credit (only open the amount of credit needed)

w w w. s h a s t a c o l l e g e. e d u Financial Literacy 101 Tips for Building Good Credit: Never miss a payment!! Stay under 30% of your maximum credit line The rule of thumb is to not have more than 2 credit cards open at a time Responsible student loan management Know your credit score and monitor it at least once a year

w w w. s h a s t a c o l l e g e. e d u Financial Literacy 101 Check Your Credit Report for Free: One free report from: Equifax TransUnion Experian You can request all three at once every year, or one from each every four months which is advised. More consistent monitoring of your credit will enable you to become aware of any identity theft activity and any errors that need disputing (79% of credit reports have errors!).

w w w. s h a s t a c o l l e g e. e d u Taking control of your finances instills empowerment and prepares you for a fiscally sound future. Final Thoughts: Financial Literacy 101

w w w. s h a s t a c o l l e g e. e d u Final Thought: Financial Literacy 101