Cornerstones for Career College Success 3rd edition Topic: Financial Literacy ©Pearson Education, Inc. (2013) Sherfield/Moody, Cornerstones for Career College Success, 3e

Practicing Fiscal Fitness Managing money is a challenge for many students Will you have to work to finance your education? Do you need to change your financial habits? ©Pearson Education, Inc. (2013) Sherfield/Moody, Cornerstones for Career College Success, 3e

Young Adults and Debt Nearly 50% have defaulted on a debt 30% worry frequently about debt 58% move in with parents after college 22% altered career plans due to debt Average credit card debt is now over $4,000 24 - 40% of income is spent on debt payments Bankruptcy is a major issue for young adults ©Pearson Education, Inc. (2013) Sherfield/Moody, Cornerstones for Career College Success, 3e

Preparing for the Future Practice delayed gratification Take a personal finance course Learn financial lingo Save your change daily Write down everything you spend Apply for all types of financial aid ©Pearson Education, Inc. (2013) Sherfield/Moody, Cornerstones for Career College Success, 3e

Types of Financial Aid Loans – must be repaid with interest Grants – do not require repayment and are often need-based Scholarships – do not require repayment and are often merit-based Work study – money earned while working on campus ©Pearson Education, Inc. (2013) Sherfield/Moody, Cornerstones for Career College Success, 3e

Are you Eligible for Federal Aid? Demonstrate financial need? Have high school diploma or GED? Enrolled in an eligible degree program? Citizen of U.S. with a SS#? Making satisfactory academic progress? Male registered with Selective Service? Any drug convictions? ©Pearson Education, Inc. (2013) Sherfield/Moody, Cornerstones for Career College Success, 3e

Some Tips for Applying Complete your FAFSA in its entirety Read instructions carefully and attend to deadlines Be honest and supply any documentation required Keep tax returns and forms organized Work with Financial Aid Officers on campus Apply for all types of aid ©Pearson Education, Inc. (2013) Sherfield/Moody, Cornerstones for Career College Success, 3e

Student Loans Required for many college students Borrow only the minimum you need This debt will follow you for up to 30 years Bankruptcy does not relieve student loan debt ©Pearson Education, Inc. (2013) Sherfield/Moody, Cornerstones for Career College Success, 3e

Protect Your FICO Score Monitor your credit report regularly Keep credit card balances low Ask card companies for lower credit rates Do not open multiple accounts at once Keep accounts in good standing open Use automated payment systems for bills Keep balance transfers to a minimum ©Pearson Education, Inc. (2013) Sherfield/Moody, Cornerstones for Career College Success, 3e

How Can You Budget in each Area? Household expenditures and utilities? Phone/email costs? Transportation costs? Food? ©Pearson Education, Inc. (2013) Sherfield/Moody, Cornerstones for Career College Success, 3e

Credit Card Debt One of worst kinds of debt Majority of college students have this debt Credit card issuers love college students! Paying with plastic results in more spending High interest and fees add up quickly Can you pay off what you spend each month? ©Pearson Education, Inc. (2013) Sherfield/Moody, Cornerstones for Career College Success, 3e

Tips for Managing Credit Cards Watch for changes in fees and interest rates Your credit score can affect your rates Avoid cards with annual fees Know grace periods and payment due dates Protect your card with signature and “see ID” Make more than just minimum payments Try debit cards instead Seek reputable counseling if in trouble ©Pearson Education, Inc. (2013) Sherfield/Moody, Cornerstones for Career College Success, 3e

Personal Loan Pitfalls Watch out for high-interest: Payday loans Car title loans Rent-to-own contracts Worse than credit cart debt –read carefully! ©Pearson Education, Inc. (2013) Sherfield/Moody, Cornerstones for Career College Success, 3e

Watch Small Item Money Drain Gum? Bottled water? Eating out daily? Junk food/vending machines? Unused memberships? Expensive salon visits/treatments? Cigarettes? ©Pearson Education, Inc. (2013) Sherfield/Moody, Cornerstones for Career College Success, 3e

Identity Theft Widespread concern for college students Actual or virtual information may be stolen People you know or strangers may commit it Very expensive and time-consuming to fix ©Pearson Education, Inc. (2013) Sherfield/Moody, Cornerstones for Career College Success, 3e

Tips to Minimize Your Risk Carry only necessary personal information Buy online from secured sites only Don’t use obvious passwords Memorize PIN numbers and passwords Shred personal documents Monitor your credit report Protect personal information online Use a permanent mailing address ©Pearson Education, Inc. (2013) Sherfield/Moody, Cornerstones for Career College Success, 3e

What Should You Do If… You need to purchase a car? If you need to save on fuel? If you feel the need to “impulse buy”? If your grocery bill is out of control? If you child wants what other kids have? Your credit cards are lost and stolen? ©Pearson Education, Inc. (2013) Sherfield/Moody, Cornerstones for Career College Success, 3e

Topic Reflections Avoid credit card trap Record how you spend your money Monitor and protect your credit rating Learn about all types of financial aid Don’t borrow more money than you have to Learn about investment and retirement plans Get reliable counseling for debt management ©Pearson Education, Inc. (2013) Sherfield/Moody, Cornerstones for Career College Success, 3e