True False
1. What is an item that you would like to have, but cannot currently afford? 2. Assuming you are starting with no money and you cannot count on anyone else to simply give it to you, how will you go about saving enough for the item? 3. How long do you think it will it take you to save enough money to buy the item? 4. What are some other expenses you need to consider while saving up? Will you make any sacrifices?
Short-term goals (less than 3 months to reach) Intermediate goals (between 3 months and a year) Long-term goals (more than 1 year)
SET GOALS ANALYZE INFORMATION CREATE & MAKE IMPLEMENT A DECISIONS PLAN MONITOR & MODIFY THE PLAN ANALYZE INFORMATION CREATE & IMPLEMENT A PLAN MAKE DECISIONS
Instant v. Delayed Gratification
FINANCIAL PLANNING 1. What types of financial decisions might your family have to make? 2. Identify at least 2 potential unexpected events that might impact your family's financial planning.
Newly married couple in 20s; rent home; two full time jobs; no car (live in city)
Single parent with 2 children, ages 3 and 7; own home; full time job; monthly car payment
self-employed, one working Couple in 60s; one spouse self-employed, one working part-time; own home
Couple in 40s with 2 teenagers, one of which is going to college next year; 2 monthly car payments
Single in 30s; rent apartment; anticipate layoff
Couple, both 18; just graduated; both have part-time jobs at the mall; rent apartment; one car payment
The Three C’s of Credit Character includes name, address, phone number, social security number, and date of birth. Capital includes yearly salary and bank account information. If you have a parent or spouse co-sign for the credit with you, their information will also be included. Capacity to pay includes other forms of credit you already have. You will be asked to determine how much you currently owe. (i.e., other credit cards, home, car, and student loans that you still owe money on).
Jamul, Amir and Sue each want to purchase a television that costs $500 and finance it with credit. Using the information below, how much would the television cost including finance charges? Directions: Using the total amount spent, subtract the amount of the loan and that is the cost of credit. Total Spent / Cost of Credit A. Jamul paid $45.00 a month for 12 months. _________ / _________ B. Amir paid $12.00 a week for one year. _________ / _________ C. Sue paid $25.00 a month for two years. _________ / _________ Of the three loans, which one paid the most to borrow the $500 and which paid the least?
Imagine you are a loan officer at a financial institution, and you must decide whether to approve or deny loans for each of 4 applicants. Each applicant has applied for a $12,000.00 loan to purchase a more fuel-efficient automobile. You have been given 5 pieces of information about each applicant. Using this information, evaluate each applicant's ability and willingness to repay and make the best decision you can.
Applicant 1 Has 10 charge accounts Address has not changed for 5 years Has six children 62 years old Owns stock Approved? Denied?
Applicant 2 Receives public assistance payments Divorced Pays bills on time Works part-time Female Approved? Denied?
Applicant 3 Annual income of $50,000 Married Visa credit card payments are 1 month delinquent Owner or is buying a home Has an overdrawn checking account Approved? Denied?
Applicant 4 21 years old Has no credit history Has been on present job for 10 months Has a savings account Unmarried Approved? Denied?
(P = $1000) X (R = 10% or .10) X (T = 3 years) = I
Compound Interest Formula
10% Interest
Most Common Types of Insurance
https://www.statefarm.com/insurance/auto/coverage-options
Consumer Protection Laws: Warranties - Expressed or Implied Fair Credit Reporting Act - free copy of credit report every 12 months Fair Debt Collection Practices Act - bars debt collectors from using unfair and deceptive practices to collect overdue bill Truth in Lending Act - credit card companies can't bill you more than $50 per card for unauthorized charges made to those cards