Making Money Work For You Money Management Making Money Work For You

Objectives Review & learn key financial and economic literacy concepts Understand the importance of budgeting in order to control spending and meet expenses Teach students how to effectively utilize cash, debit cards, and credit cards to purchase goods and services

Basics of Banking Services Bank: A financial institution that handles money, including keeping it for saving or commercial purposes, and exchanging and investing, and supplying it for loans. Credit Union: A non-profit financial institution insured by NCUA that is owned and operated entirely by its members. Credit unions provide financial services for their members, including savings and lending. Savings Institution: A financial institution that accepts deposits from individuals, makes homes mortgage loans, and pay dividends.

Basics of Banking Services CHARACTERISTIC BANK, CREDIT UNION OR SAVINGS INSTITUTION? Insured by the National Credit Union Administration (NCUA) Must have majority of their assets in housing –related loans Governed by federal & state laws and regulations Similar to a bank Members only Make loans, pay checks & accepts deposits Created to promote homeownership

Benefits of Using Financial Institutions Safety Convenience Money Saver Security Financial Future

Savings Accounts Why should you save your money? What are the benefits of saving & savings accounts? Should you save for something that you want or need? What are some reasons why you might withdraw money from a savings account?

Paying Yourself First-Savings Account Key Points Allows you to deposit, withdraw, and earn interest on your money. Allows you to put aside for a future goal or emergency fund. Limits how often you can take your money out.

Checking Accounts Why would you open a checking account? What sorts of things can you write a check for? What are some reasons that someone might want to pay by check rather than using cash?

Check It Out – Checking Accounts A checking account is a great tool for managing your money day-to-day A checking account allows you to put money in to make a deposit or take money out to make a withdrawal You can get cash whenever you need it Allow you to have a record of how much you spend and where.

Your Budget – Making Money Matter Three Basic Steps Money Management Scenarios & Worksheet

NEEDS – WANTS = NET INCOME to SAVINGS Monthly Budget NEEDS – WANTS = NET INCOME to SAVINGS

ATM & Debit Cards Automated Teller Machine (ATM) ATMs are safe and convenient ways to manage your money A PIN is your password to using an ATM. Do not tell anyone your PIN number Stay alert and aware while using an ATM. A debit card is not a credit card. Be AWARE of the fees that are associated with your debit card.

Credit Cards Credit CARD Act of 2009 President Obama signed the Credit CARD Act of 2009 into law May 22, 2009, following passage days earlier in the Senate and the House. Limited credit to young adults: Credit card issuers are banned from issuing credit cards to anyone under 21, unless they have adult co-signers on the accounts or can show proof they have enough income to repay the card debt. Credit card companies must stay at least 1,000 feet from college campuses if they are offering free pizza or other gifts to entice students to apply for credit cards. Read more: http://www.creditcards.com/credit-card-news/help/what-the-new-credit-card-rules-mean-6000.php#ixzz1GyxpuKHA Compare credit cards here - CreditCards.com

Credit Cards??? Is given to you on your credit worthiness. Must pay interest on any unpaid balances . May allow you to buy something today rather than having to wait. But remember, you always have to pay the money back!!! The items you purchase are typically insured. If you pay your bills on time and in full, you build a good credit history and increase your ability to borrow in the future. Be aware of the fees and interest rates associated with the credit card. The card can be your best friend or your worst nightmare.

Credit – The Benefits & Risks Option of buying something today and paying the money back over time, rather than having to wait Overdoing it; borrowing more than you can afford to pay Flexibility to act on major purchases and life opportunities that may require more money than you have on h and right now If you don’t make your payments on time, you will damage your credit history Easier to rent an apartment and to get service from local utility companies Having to pay additional interest and fees Easier to buy what you want, when you want Difficulty getting loans in the future

Good Credit vs. Bad Credit Paying at least the minimum required Paying on time Never missing a payment Staying within your credit limit Paying too little Paying too late Missing payments Going over your credit limit Having too much debt Result Easier to borrow money No additional penalty fees More money you’ll keep in your pocket Good deal on major purchases & cell phone Decent apartment Difficult to borrow money You lose money on late fees More money spent on fees and interest Not getting the job you want Higher rates and fees on major purchases & cell phone

Your Credit Credit Report Credit Score

FICO Score A type of credit score that makes up a substantial portion of the credit report that lenders use to assess an applicant's credit risk and whether to extend a loan.  FICO is an acronym for the Fair Isaac Corporation, the creators of the FICO score.

What Determines your FICO Score?

Tips for improving YOUR Score Monitor your credit report Consistently pay your bills on time Keep your balances low (no more than 30%, ideally 10%) Limit your amount of new credit Do not close out old accounts Be cautious about consolidating balances and moving credit around

General Tips for Financial Success Set a monthly budget Always pay on time Never borrow more than 20% of your yearly net income. Keep your credit card debt low enough so that your required payments are no more than 10% of your monthly income or avoid credit cards if possible. Invest your earnings Budget and manage your cash Live within your means