Finance SMARTS! Intro to consumer economic topics.

Slides:

Advertisements

Similar presentations

Budget. A financial plan drawn up for an individual, a family, a business or a government. It is usually for a period of a month or a year. Done right.

Advertisements

Banking, Borrowing & Credit More On Managing Your Income.

Credit Buy Now, Pay Later. Credit Someone is willing to loan you money (principal) in exchange for your promise to pay it back, usually with interest.

Types of Credit Consumer Loan One time loan that the borrower pays back in a specified period of time with a pre-determined payment schedule Home mortgages,

Checking Savings Investments. Checking Account 90% of transactions involving money are made with checks.

Earning Money  What is income and what are 3 possible sources?  Income is money that you have available to you to spend  3 sources: babysitting,

PERSONAL FINANCE/BANKING CREDIT, BUDGET, AND CHECKING ACCOUNTS Chapters 25, 26, 28, 29.

 Take a few minutes to look over your notes if you need to take/retake yesterday’s Quiz › Use the resources on Moodle to help you study › We will do a.

Teens 2 lesson seven understanding credit presentation slides 04/09.

Unit 4 - Good Debt, Bad Debt: Using Credit Wisely PG 73.

Consumer Banking Dollars and Sense. Interest Rates – Rules of Commercial Banks – Interest rates charged for loans higher than Savings Banks and interest.

TEST PREP 1. A. The amount you can afford to pay B. The minimum payment stated on your bill C. The minimum amount due on your debit card D. 20 percent.

Credit You're in Charge What is Credit ??? Credit is an arrangement to Receive cash, goods, or services now and pay for them in the future!

CREDIT NOTES Credit is buy now pay later. The opportunity Cost is future income! Credit can be a great tool and can be necessary but can lead to financial.

Consumer Math p Definitions  Down payment – part of the price paid at the time of purchase  Financed – borrowed  Mortgage – a property loan.

The “Need-to-knows” for your financial future. * Do you ever want to buy a car? * Do you ever want to own your own home? * Do you know how debt can impact.

Credit Fundamentals 18-1.

Chapter 4 “going into debt”

All I can do is remind them of the truth of Albert Einstein’s alleged response when he was asked, “What do you, Mr. Einstein, consider to be man’s greatest.

Dealing the Cards of Credit Credit cards No set time to be paid back May pay in full, part, or minimum payment No finance charge if bill paid in full.

Credit: Helpful or Hurtful. Fact or Fiction Q. Using credit can lead to serious problems. A. True.

Personal Finance Spring  Allows the user to buy goods based on the promise that they will later pay for the goods  Issuers give users access to.

Understand credit management 1. 2  What is credit? Credit is the privilege of using someone else’s money for a period of time.  Who uses credit? ◦

Credit Cards Adult Living. Advantages of using credit It’s convenient. You don’t have to carry large amounts of cash and you don’t have to go through.

Going Into Debt Americans and Credit. What is Credit? Credit: is the receiving of funds either directly or indirectly to buy goods and services now with.

Copyright © 2015, 2011, and 2007 Pearson Education, Inc. 1 Chapter 12 Business and Consumer Loans Section 1 Open-End Credit and Charge Cards.

Credit Receiving something now and promising payment at a later time. Principle: Actual cost of the good or service. Interest: Amount paid for the use.

Section 4C Loan Payments, and Credit Cards Pages C.

Money Merge Account (MMA) How can I pay my home off early? Conventional Banking Refinance to a lower interest rate Apply additional money to each payment.

Section 4D Loan Payments, and Credit Cards Pages

CREDIT: Day 2. Types of Credit Credit Cards Loans.

Chapter 16 Credit in America

CREDIT – Part 2 Business Issues. Credit Cards Paid over a variable amount of time Finance charge (interest) is called annual percentage rate (APR) expressed.

Advantages & Disadvantages of Credit Cards

Advantages of using credit cards Ability to use item while paying for it No need to carry cash Use of card builds credit history Quick source of funds.

Banking and Credit Cards. Fees ATM Fee- charge for using ATM services from a different bank ATM Fee- charge for using ATM services from a different bank.

Chapter 6 Consumer Credit

Please… Log into Moodle and complete today’s Bell Ringer.

Buy Now Pay Later….  How to analyze the advantages & disadvantages of consumer credit  How to distinguish among various types of consumer credit  How.

Chapter 21 10/11/ Banking & Credit. Saving Money 10/11/ Ways to save Credit union non-profit financial institution similar to a bank Passbook.

Credit Intro Review  Define Credit  What is interest?  How to stay out of credit debt?!  T or F : A payment is counted as a charge in the transaction.

Credit. What is it? – the ability of a customer to buy goods or services before paying for them, based on an agreement to pay later. Always investigate.

 What are advantages of credit  What are disadvantages of credit.

Chapter 4.  What is Credit? ◦ Principal + Interest  Installment Debt ◦ Equal Payments ◦ Durable Goods ◦ Longer Term = Lower Payment BUT ◦ More Interest.

11111 Youth Money Management Learning Good Spending Habits.

Budgeting and Financial Planning Why should people make a plan for how to get and spend money? What strategies can be used to do this most effectively?

What does this mean to you?. FCS 7 TH GRADE Money Management.

Calculating Cost Of Credit. Types of Credit Closed-End Credit ◦ One-time loan that you pay back over a specified period of time in payments of equal amounts.

Credit/Financial Literacy Unit Study Guide. Credit Vocabulary list Credit Installment Credit Revolving Credit Affinity Credit Cards Annual Fee Co-Branded.

Credit In your opinion, do consumers spend more per month on average when they use a credit card or cash?

Checking Savings BANKING. Checking Account 90% of transactions involving money are made through some form of debit.

Financial Literacy Buying a Car.... Finance Options: Savings – Put a regular amount into a Bank Account each month. Expect to receive around 2.75% interest.

Managing Your Money Chapter 23.

CHAPTER 4 Going Into Debt. Debt = Principal + Interest Credit  Receiving money either directly or indirectly to buy goods and services TODAY with the.

Credit and Credit Cards Good Credit Bad Credit No Credit Good Credit Bad Credit No Credit.

Success System Cutting Edge Software Technology Huge Demand for the Product Pre-set Appointments from Referrals No Licensing required Proven Sales Presentations.

MKT-MP-6 Employ financial knowledge and skill to facilitate marketing decisions.

Lesson 7-2 Getting Started with Credit Learning Objectives: - Compare the sources of credit - List and explain the benefits of credit.

Credit Questions to Consider  What is credit?  Does credit cost?  What are the advantages of using credit?  What happens if I misuse credit?

Ms. Young Slide 4-1 Unit 4C Loan Payments, Credit Cards, and Mortgages.

Checking and credit. Saving account Saving accounts: are accounts maintained by retail financial institutions that pay interest but cannot be used directly.

Credit Cards are a part of most American’s lives, but if you don’t know how to use them, they can really make your life more difficult Credit cards don’t.

Fri. 4/15. Ch. 10 Money and Banking 10.3 Notes “Banking Today”

Unit Four Good Debt, Bad Debt: Using Credit Wisely.

Consumer Credit Selena Lanter-Mason/ Kerrie Kocs.

Consumer Economics Credit Credit Investing Investing.

MAKING GOOD FINANCIAL DECISIONS Credit Cards vs. Saving and Investing.

1 Getting a strong start Money Management A project of Consumer Action | Funded by Consumer Action’s Money Management Project.

Borrowing Econ 10/13.

Financial Concepts &Terminology

Presentation transcript:

Finance SMARTS! Intro to consumer economic topics

What’s the first step toward being financially SMART?  Goal Setting: creating a plan to achieve success in a timely manner  Edwin Lock’s widely accepted theory: Specific, Measurable, Achievable, Realistic and Time- targeted

What else can I do to be financially smart? 1:30

What is a budget?  a financial plan and a list of all planned expenses and revenues (income)  Monthly Income minus expesnses

Banking, Credit and Debit

Banking  Allows customer to build person to person relationship w/ bankers  Don’t charge for cashing checks  Average currency exchange charges per check  If you cash all pay checks there for a year, that’s 60-96/yr

Checking vs. Savings CheckingSaving -allows multiple withdrawals -accepts direct deposit -can be overdrawn -allows few withdrawals implementing fees for “too much activity” -accepts direct deposit -can be overdrawn

Debit cards  Offered with bank accounts  Funds are immediately withdrawn from CHECKING account  When using a debit card a check register should be up-to-date

Debit card troubles… DateStoreAmount Friday 5/25/12Jewel20.00 Friday 5/25/12Sprint80.00 Friday 5/25/12McDonalds8.00 Saturday 5/26/12BP Gas1.00 pending Sunday 5/27/12Walgreens10.00 Kevin has $125 in his account on Friday before he goes to Jewel. He then makes some more purchases such as $30 in gas. Did he overdraw? Why did the gas station only charge him 1$?

So what’s the difference between credit and debit?  Credit cards are loans; debit cards are your cash  Help build credit score which is necessary for a home loan, car loan (leasing/ financing)  Credit cards come with various reward programs; not traditional of debit cards  Credit cards have COMPOUNDING INTEREST; debit cards are likely to have “fees”

What’s compounding interest?  An amount added to the principal balance  A=P(1+ r/n) ^(nt)  A = amount (what you’re solving for  P = principal amount  r = annual rate of interest (as a decimal)  t = number of years the amount is collecting interest  n = number of times the interest is compounded per year ALWAYS 12

Sample problem  John buys a stereo on a credit card that has 17% APR. The stereo cost $1,500 with interest compounding monthly. If he chose not to make a payment for 6 months, what would the amount owed be?  How much would be in interest?

What types of credit are out there?  Revolving credit. With revolving credit, you are given a maximum credit limit, and you can make charges up to that limit. Each month, you carry a balance (or revolve the debt) and make a payment.  Charge cards. While they often look like revolving credit cards and are used in the same way, charge accounts differ in that you must pay the total balance every month or the credit line closes.

 Service credit. Your agreements with service providers are all credit arrangements. You receive electricity, cellular phone service, gym membership, etc., with the agreement that you will pay for them each month. Not all service accounts are reported in your credit history.  Installment credit. With installment credit, a creditor loans you a specific amount of money, and you agree to repay the money and interest in regular installments of a fixed amount over a set period of time. Car loans and mortgages are two examples of installment credit.