Michael Rupured, M.S., AFC Extension Financial Management Specialist College of Family & Consumer Sciences.

Slides:

Advertisements

Similar presentations

Chapter 19 Lesson 2 Budgeting Your money.

Advertisements

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,

The Importance of Credit Brought to you by Work.

The FAB Calculators © Financial Asset Building Personal Planning Calculators Access the FAB Calculators © at Developed by Richard.

Credit and Its Use.

Using Credit TODAY YOU WILL EXAMINE REASONS WHY PEOPLE USE CREDIT. 1 ©2012 National Endowment for Financial Education | Lesson 2-1: Using Credit.

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

Warmup Why does the dollar on the left have value, while the one on the right does not?

Credit Law in Society Objective: To understand the use of and acquisition of credit.

Personal Finance Chapter 16

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.

HOW CREDIT CARDS WORK What you need to know about credit cards- including what credit cards companies can and can’t do, and what information they have.

Good Debt vs. Bad Debt Middle School Financial Literacy #5.

Borrowing Basics 1. 2 Purpose Borrowing Basics: Describes how credit works and the types of credit available. Helps you determine if you are ready to.

Loans and Interest Financial Capability. Loans and Interest Follow up questions for “Borrow Cards” game Follow up questions for “Borrow Cards” game What.

Discussion Question CN (1) Web Investment Tracking Dow Jones Industrial Average Company Research Financial Web Sites Other Averages Online Brokers World.

1.5 Choosing to borrow money. Why borrow? People’s spending needs change over their personal life cycle so it is often necessary to borrow money by means.

1 Get Smart About Credit $$$$$$$$$$$$. 2 Marsha A. Goetting Ph.D., CFP ®, CFCS è Professor & Extension Family Economics Specialist è Department of Agricultural.

Budgeting and Financial Planning. Budgets Budget: A plan for how a person, family, or organization will raise and spend money. Why do you think it is.

Credit Cards Did you know that 183 million Americans are using credit cards? Average credit card debt is ~ $7,100 per household in 1012.

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

Business Math, Eighth Edition Cleaves/Hobbs © 2009 Pearson Education, Inc. Upper Saddle River, NJ All Rights Reserved The Cost of Credit Installment.

Credit Consumer Economics. What is credit? The ability to borrow money now with the promise that you will repay it in the future. Credit can be a useful.

 Why is it important for you to start saving now? SLID E 1.

Credit statistics Average college student has 4.25 credit cards College seniors graduated with an average credit card debt of more than $4,100. Close to.

Good Debt vs. Bad Debt 7 th Grade Income vs. Expenses #3.

 Buying on credit = buy goods and services now and pay for them later (usually with interest)  Having credit depends on the suppliers’ confidence in.

Section 4D Loan Payments, and Credit Cards Pages

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

 dvice/glossary.htm dvice/glossary.htm.

Credit Law in Society Objective: To understand the use of and acquisition of credit.

Financial Management Jonathan Banks. 1. Get Paid What You're Worth and Spend Less Than You Earn 1. Get Paid What You're Worth and Spend Less Than You.

 Credit  Equity  Credit: the ability to borrow money in return for a promise of future repayment. Future repayment usually includes interest.

Credit Pros and Cons Unit 1 Lesson 4. Introduction Credit use carries an important responsibility. Credit use carries an important responsibility. When.

Annual Percentage Rate (APR) The amount it costs you a year to use credit, expressed as percentage rate Interest, transaction fees, and service charges.

SESSION 3: FINANCIAL GOAL SETTING, SPENDING, AND CREDIT TALKING POINTS on SETTING & ACHIEVING FINANCIAL GOALS FINANCIAL GOAL SETTING, SPENDING, AND CREDIT.

Using credit is a way of life. People use credit online and for everyday purposes. Some do it so they don’t have to carry cash. Some use it to buy things.

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?

Personal Financial Planning Steps in Creating the Plan.

Garman/Forgue Personal Finance Ninth Edition Chapter 3 Financial Statements, Tools, and Budgets.

Ch. 7 Financial Literacy. Describe a financially irresponsible person : bills not paid on time inadequate basics to live comfortably spends money on luxury.

Personal Budget Vocabulary. Personal Budget Estimate of costs, income, and resources over a certain period of time. Step 1: Identify how much money you.

Bell Work, Wed. 5/13 O Where is Shell going to start drilling for oil? O Who created the first Presidential Library? O What technology are firefighters.

Using Credit TODAY YOU WILL... EXAMINE REASONS WHY PEOPLE USE CREDIT. 1 (C)2012 National Endowment for Financial Education | Lesson 2-1 Using Credit.

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.

Unit 1 – Personal Finance Credit & Worker Earning How can the use of credit benefit & hurt consumers?

UNIT FIVE. CREDIT: BUY NOW, PAY LATER. Coming soon to a mailbox near you: Credit Card offers.

 Credit  Equity  Credit: the ability to borrow money in return for a promise of future repayment. Future repayment usually includes interest.

Do Now: I just graduated from college and have four credit cards with balances totaling $5,000. I can barely make the minimum payments each month. What.

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.

MoneyWi$e Webinar: Good Credit What is credit?  Ability to borrow money or obtain goods.  Your promise to pay the original cost later or over time plus.

Using Credit Wisely Types of Credit Credit Card Allows user to charge amounts in different places Given a credit limit, or maximum amount you can.

Grade 12 Family Studies.  Do you have a credit card?  What is it used for?  How is it like a loan?

Creating a Budget for Mike and Jennifer. What is a Budget? Weighing how much you earn against how much you spend.

ESSENTIAL QUESTION: HOW CAN SOMEONE INCREASE THEIR HUMAN CAPITAL? HOW CAN CREATING AND MANAGING A BUDGET HELP SOMEONE MAKE BETTER FINANCIAL DECISIONS?

Georgia Studies Unit 9: Personal Finance Lesson 1: Personal Finance

Chapter 7 Buying Decisions. Slide 2 Where Can Consumers Get Credit? Credit is the ability to borrow money and pay it back later. 7-2 Getting Started with.

 Capital Spending: money spent by a business for an item that will be used over a long period.  Capital Projects: spending by businesses for items such.

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

Personal Financial Statements Chapter 12 Personal Financial Statements The Balance Sheet.

Personal Finance Money Management Choices SS6E4 & SS7E4

2.4.1.G1 © Family Economics & Financial Education – December 2005 – Get Ready to Take Charge of Your Finances – Take Charge of Credit Cards Funded by a.

Bell Ringer 1/20/16 Make a list of some items you would like to purchase in the next few years Take out homework. We need to go over it.

ECONOMIC ACTIVITIES OF CONSUMERS EARNING  Gaining money by working, owning a business, or receiving investment returns.  Money gained from.

Using Credit Wisely. Credit  Credit is a sum of money a person can use before having to reimburse the credit lender.  It allows a person to receive.

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

Chapter 7 Buying Decisions. Slide 2 How Can You Be a Responsible Shopper? 7-1 Designing a Buying Plan Use systematic decision making: consider all the.

Consumer Economics Credit Credit Investing Investing.

LESSON TWO: PERSONAL SPENDING

Presentation transcript:

Michael Rupured, M.S., AFC Extension Financial Management Specialist College of Family & Consumer Sciences

Objectives: Help you think about your relationship with money and if necessary, inspire you to change it. Give you a different perspective (perhaps!) on your investment in graduate school. Show you why using credit cards to finance your lifestyle is a bad idea. Take a closer look at your spending habits to identify opportunities for change. Explore strategies for managing and reducing different types of expenses

Spenders vs. Savers

Opportunity Cost of the Spending Lifestyle

Investing in Your Future

Deficit Spending for Grad School is Normal

Maximizing Your Investment Example: Buy a $100,000 Home Mary puts $1000 down and finances the rest. Bill puts $10,000 down and finances the rest. Other than the amount borrowed, the loans are otherwise identical. Ten years later, they sell for $120,000. Who received the better return on their investment?

Mary invested $1000 (plus payments) and ends up with $120,000 less the loan balance ($80,000) for a gain of $40,000. Bill invested $10,000 (plus payments) and ends up with $120,000 less the loan balance ($70,000) for a gain of $50,000. Who received the greater return on their investment?

Mary’s initial investment of $1000 grew to $40,000 (40 times her initial investment) Bill’s initial investment of $10,000 grew to $50,000 (5 times his initial investment).

Credit Card Dangers Using credit cards to live beyond your means. Relying on creditors to set your credit limit. Carrying a balance on credit cards. Buying the wrong items on credit. Making only the minimum payment on credit cards.

Paying Off a Credit Card You owe $1000 Annual Percentage Rate (APR) is 18 percent Required minimum payment: two percent of outstanding balance. If you only make the minimum payment, how long will it take you to pay off the balance?

Three Scenarios Pay only the 2% minimum and it will take 19 years and 4 months—including $1,931 in interest. Pay $20 per month (the current required minimum) and it will take 7 years and 2 months—including $860 in interest Pay $50 per month and it will take 2 years, including less than $200 in interest.

Bottoming Out

Where Does Your Money Go?

Fixed Expenses

Variable or Flexible Expenses

Occasional Expenses

Plan Spending to Meet Needs

Reducing Expenses Involve the entire household. Give it up. Find cheaper alternatives. Economize. Use community resources. Barter and/or Coop

Summary Spending is the default saving—you have to learn to save. Spending more than you earn is normal for grad students. Minimize the cost of grad school will maximize the return on your investment. Credit card debt is more expensive than you might think. A spending plan is a tool to make sure your money goes where you want it to go.