1. Cornerstone: Creating Success through Positive Change 6 th edition

2. 1.What percentage of your income should you spend on must haves, wants, & savings/debt? 2.How much credit card debt does the average household have? 3.What percentage of American families spend more than they have each year? 4.T/F Marrying someone with good credit will improve your credit score.

3. 1.50/30/20% 2.$8,000 3.43% 4.No, but…

4. Practicing Fiscal Fitness Managing money is a challenge for many students Will you have to work to finance your education? Do you need to change your financial habits? Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 2

5. Young Adults and Debt Nearly 50% have defaulted on a debt 30% worry frequently about debt 58% move in with parents after college 22% altered career plans due to debt Average credit card debt is now over $4,000 24 - 40% of income is spent on debt payments Bankruptcy is a major issue for young adults Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 3

6. Preparing for the Future Practice delayed gratification Take a personal finance course Learn financial lingo Save your change daily Write down everything you spend Apply for all types of financial aid Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 4

7. Match the word with the correct definition. 1.Unsubsidized Stafford loan 2.Federal Supplemental Educational Opportunity Grant 3.PLUS Loan 4.Pell Grant 5.Stafford loan a)Low-interest subsidized loan based on need. Must be half time. b)A need based grant awarded to undergraduates with no other degree. c)Low interest loan to qualified parents of students. d)Need based grant awarded to institutions to distribute accordingly. e)Unsubsidized low-interest loan- you don’t have to show need.

8. Types of Financial Aid Loans – must be repaid with interest Grants – do not require repayment and are often need-based Scholarships – do not require repayment and are often merit-based Work study – money earned while working on campus Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 5

9. Are you Eligible for Federal Aid? Demonstrate financial need? Have high school diploma or GED? Enrolled in an eligible degree program? Citizen of U.S. with a SS#? Making satisfactory academic progress? Male registered with Selective Service? Any drug convictions? Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 6

10. Some Tips for Applying Complete your FAFSA in its entirety Read instructions carefully and attend to deadlines Be honest and supply any documentation required Keep tax returns and forms organized Work with Financial Aid Officers on campus Apply for all types of aid Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 7

11. Student Loans Required for many college students Borrow only the minimum you need This debt will follow you for up to 30 years Bankruptcy does not relieve student loan debt Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 8

12. Undergrad Debt Institution Level & ControlPercent BorrowingCumulative Debt Overall Total (4, 2 and < 2 year) 58.8%$18,625 Public49.4%$16,369 Private Non-Profit69.7%$26,683 Private For-Profit93.1%$17,162 4-year Total66.5%$22,656 4-year Public61.1%$19,839 4-year Private Non-Profit70.6%$27,349 4-year Private For-Profit97.0%$24,635 2-year Total44.8%$12,307 2-year Public37.2%$10,444 2-year Private Non-Profit64.0%$14,790 2-year Private For-Profit97.6%$17,310 < 2-year Total74.7%$10,172 < 2-year Public36.1%$10,321 < 2-year Private Non-Profit45.0%$10,990 < 2-year Private For-Profit86.0%$10,123

13. Institution Control and Degree Program Percent Borrowing Average Cumulative Debt Median Cumulative Debt (Just Borrowers) Median Cumulative Debt (All Students) Bachelor's Degree65.2%$23,118$19,999$10,500 Public61.2%$20,040$17,500$6,998 Private Non-Profit70.5%$27,535$22,374$16,115 Private For-Profit96.0%$32,909$32,625$31,186 Associate's Degree47.1%$13,289$10,000$0 Public38.9%$10,574$7,668$0 Private Non-Profit71.1%$19,294$16,130$10,000 Private For-Profit97.8%$19,681$18,783$18,415 Certificate63.2%$11,302$9,000$4,804 Public32.0%$9,754$6,625$0 Private Non-Profit49.5%$15,071$10,000$0 Private For-Profit89.9%$11,573$9,858$8,797

14. Useful Links http://www.finaid.org/loans/-http://www.finaid.org/loans/- Fin Aid Data http://www.hccs.edu/portal/site/hccs/menuite m.5fc1e5d66248062f3227a2ced07401ca/?vgn extoid=678cf8a147b6f110VgnVCM100000054 710acRCRD&vgnextfmt=default-http://www.hccs.edu/portal/site/hccs/menuite m.5fc1e5d66248062f3227a2ced07401ca/?vgn extoid=678cf8a147b6f110VgnVCM100000054 710acRCRD&vgnextfmt=default- Fin Aid

15. Scholarship Searches http://acinet.org/scholarshipsearch/Scholarship Category.asp?searchtype=category&nodeid=2 2 http://apps.collegeboard.com/cbsearch_ss/welc ome.jsp http://www.hccs.edu/portal/site/hccs/menuite m.5fc1e5d66248062f3227a2ced07401ca/?vgn extoid=6f89daf3ba07f110VgnVCM100000054 710acRCRD&appInstanceName=default-http://www.hccs.edu/portal/site/hccs/menuite m.5fc1e5d66248062f3227a2ced07401ca/?vgn extoid=6f89daf3ba07f110VgnVCM100000054 710acRCRD&appInstanceName=default- HCC Scholarships

16. Pay off your debt quickly! Amount Borrowed Your Interest Rate Total Years to Repay Monthly Payment Total Interest Paid $5,0007%10$58.05$1,966.00 $5,0007%20$38.76$4,302.40 $5,0007%30$33.27$6,977.20

17. Protect Your FICO Score Monitor your credit report regularly Keep credit card balances low Ask card companies for lower credit rates Do not open multiple accounts at once Keep accounts in good standing open Use automated payment systems for bills Keep balance transfers to a minimum Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 9

18. Impact of FICO Score on Home Buying FICO ScoreInterest Rate Payment30 Years of Interest 5009.3%$1651$394,362 5608.5%$1542$355,200 6207.3%$1373$294,247 6756.1%$1220$239,250 7005.6%$1151$214,518

19. How Can you Budget in each Area? Household expenditures? Utilities? Phone/email costs? Transportation costs? Food? Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 10

20. Credit Card Debt One of worst kinds of debt Majority of college students have this debt Credit card issuers love college students! Paying with plastic results in more spending High interest and fees add up quickly Can you pay off what you spent each month? Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 11

21. Tips for Managing Credit Cards Only use one card Watch for changes in fees and interest rates Your credit score can affect your rates Avoid cards with annual fees Know grace periods and payment due dates Protect your card with signature and “see ID” Make more than just minimum payments Try debit cards instead Seek reputable counseling if in trouble Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 12

22. Analyze Credit

23. 1. Interest rate (including promotional lower rates for the first X number of months, regular rate, varying rate) 2. If there is a grace period for 100% monthly payoff if paid in full with no interest 3. Minimum monthly payment amount or percentage 4. Late fee amount 5. Annual credit card fee 6. Promotional bonuses (e.g. cash back percentage, airline miles, etc.) 7. 2 Other positive features 8. 2 Other negative features 9. Fees and special interest rates for cash advances 10. Is this a good card, why or why not?

24. Personal Loan Pitfalls Watch out for high-interest: – Payday loans – Car title loans – Rent-to-own contracts Worse than credit cart debt –read carefully! Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 13

25. Watch Small Item Money Drain Gum? Bottled water? Eating out daily? Junk food/vending machines? Unused memberships? Expensive salon visits/treatments? Cigarettes? Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 14

26. Identity Theft Widespread concern for college students Actual or virtual information may be stolen People you know or strangers may commit it Very expensive and time-consuming to fix Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 15

27. Tips to Minimize Your Risk Carry only necessary personal information Buy online from secured sites only Don’t use obvious passwords Memorize PIN numbers and passwords Shred personal documents Monitor your credit report Protect personal information online Use a permanent mailing address Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 16

28. Chapter Reflections Avoid credit card trap Record how you spend your money Monitor and protect your credit rating Learn about all types of financial aid Don’t borrow more money than you have to Learn about investment and retirement plans Get reliable counseling for debt management Copyright © 2011 by Pearson Education, Robert M. Sherfield & Patricia G. Moody, Cornerstone: Creating Success Through Positive Change, 6th Edition, Chapter 11, Slide 18

29. 1. Scholarship Search (choose either option) A- 2 Applied for scholarships proof B- 3 Possible Scholarships & HCCS Foundation Essay Your scholarship essay should be no longer than two double- spaced, typed pages in 12-point font. Essays that are not formatted correctly will not be accepted. Your essay must discuss all of the following: Your background, including any struggles or successes; Educational and career goals; How a scholarship will help you achieve your goals; Why you deserve a scholarship; and Any personal information that you want to be considered.

30. To Do List 1. Scholarship Search (choose either option) A- 2 Applied for scholarships proof B- 3 Possible Scholarships & HCCS Foundation Essay 2. Credit Card Assignment- Check the credit card folder on the learning web tomorrow. 3. Finish up career project 4. Portfolio 5. Quiz 4- Financial info (11), Reading (8), Note Taking (9)- (Available Thursday 7 a.m. to Sunday 11:59 p.m.)

31. Credit Card Analysis Example CardAPRGraceMin. Pay Capital One 24.9 First Premier 23.9 Capital One #2 11.9