MoneyCounts: A Financial Literacy Series Principles of Personal Financial Literacy Brad L Yeckley MBA,PhD(C) Assistant Director of Financial Literacy The Pennsylvania State University 128 Outreach Building University Park PA 16802 bly106@psu.edu 814-863-0647

Description/Learning Objectives A Young person starting out his/her future needs to know the basics of personal Financial Literacy, this workshop is to arm you with principles of personal financial literacy that should guide you throughout your life. Understand the “must-know” personal finance principles Be able to apply these principles to one’s life Assess your relationship with money management Theory Action Behavior Lets watch a video!

Map Your Financial Future

Know Your Take Home NET Pay Why is this important to understand now?

Know Your Take Home NET PAY

Budget Your Money

A Healthy Budget Sample http://www.bankrate.com/calculators/savings/moving-cost-of-living-calculator.aspx

Pay Yourself First

Save and Invest at early AGE

Needs Versus Wants

Needs Versus Wants

Don’t Borrow What you Can’t Pay Back

Don’t Borrow What you Can’t Pay Back Student Loans Make friends with your servicers Do it early…. https://www.nslds.ed.gov Understand Repayment Plans https://studentaid.ed.gov/sa/repay-loans/understand/plans#estimator Use the repayment plan estimator. Pay what you can afford. Avoid negative amortization.

Know the Rules Rule of 20/10 Rule of 72 Total Debts excluding mortgage should not exceed 20% of net yearly income Monthly payment should not exceed 10% of monthly net income Example: Your net yearly income is $60,000 your total debts should not exceed $12,000. Your net monthly income is $5,000, your monthly payment should not exceed $500 Rule of 72 To determine how long it will take for your money to double, divide the interest rate into 72 Example: an account earning 6% interest will double in twelve years (72 divided by 6 equals 12)

Protect your credit history

Stay Insured

Healthy Relationship with Money In summary, financial well-being can be defined as a state of being wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future, and is able to make choices that allow enjoyment of life. The four elements of financial well being (cfpb) Present Future   Security Control over day-to-day Capacity to absorb financial shock Month to month finances Freedom of Choice Financial freedom to make On track to meet financial goals Choices to enjoy life Consumer Financial Protection Bureau (Jan 2015)

MoneyCounts: A Financial Literacy Series Thank You! Comments and Questions Brad L Yeckley MBA,PhD(C) Assistant Director of Financial Literacy The Pennsylvania State University 128 Outreach Building University Park PA 16802 bly106@psu.edu 814-863-0214