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Financial Success

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Nicole Sidders

on 18 August 2015

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Transcript of Financial Success

Financial Success
Why do I need to know this?
Create independence

Set and reach your goals

Live within your means

Prepare for life after college


What do I need to know?
Your budget:
developing a plan


Look at your resources
-What do I have coming in?
Understand your expenses
-Where and how do I spend my money?
Set goals
-Long term and short term
Review your progress
-Follow the budget!
Make changes if needed
-Adjust as expenses change or bills get paid off.


Pay yourself first!!
GOAL!
Thank you!
Your budget:
examples of worksheets
Banking:
Types of accounts
Checking account
-Used to track daily expenses
-Allows you access to your debit card, ATM's and checks


Savings account
-Can be linked to checking account
-There for emergencies
-Helps you reach your financial goals
-Can make money from interest
Credit scores:
What are they and why do I care?
Did you know?

More students report that they dropped out of school because of money issues than academic problems.
Budgeting

Banking

Checking and savings accounts

Credit cards and debit cards

Loans

Credit reports and scores
Needs vs. Wants
Groceries or eating out?
Buying a car or public transportation?
Netflix or DirecTV?
Trendy, expensive phone or basic phone?
Did you know?

Websites like Mint.com can help you reach your financial goals by tracking your income and expenses for you.


Budgeting:
smart ways to reduce spending
Pay yourself a weekly amount for spending money

Save each day's loose change to make a weekend fund

Don't buy things on impulse-wait a few days and see if you still want it before you spend the money

Don't fall for sales pitches or special offers

Buy gifts year-round or set up a special savings account for holiday shopping

Grocery shop with a list

Go to the library for books and DVDs of movies and TV shows instead of purchasing them

Pack your lunch instead of eating out
Banking:
what should I look for?
Convenient locations and hours

Types of accounts available

Low service charges

Secure online services

Types of services available
Debit and credit cards:
What's the difference?
Debit cards
-Tied to your checking account
-Can be used like a check
-You can't spend more than what you have in the bank
-No interest charged
-Does not build credit

Credit cards
-Has a pre-determined limit
-Like a loan, anything not paid back in full is assessed an interest charge
-Helps build credit
-Can be helpful in emergency situations


Credit cards:
Do I need one?
Advantages:
-Zero fraud liability
-Builds credit
-Available for emergencies
-Can receive rewards
-Immediate purchase power

Disadvantages:
-May incur fees
-Can negatively affect credit
-High interest rates
-Repayment can be 3 to 5 times original purchase price
-Immediate purchase power
Look for:
-Low fees and interest rates
-Fixed rate
-Reward programs
Loans:
What should I know?
Go to www.bankrate.com or creditcards.com to compare cards.
Did you know?

The average credit card interest rate for students is about 17%.
Like credit cards, loans have to be paid back with interest

Shop around for the lowest fees and interest rates

Pay more than the minimum each month

Don't borrow more than you need and know what you owe

Make payments on time

Read the fine print--what happens if you pay late or miss a payment?

Never have more than 10-15% of your monthly income going toward loan repayment

What about student loans?
Federal Direct loans vs. private loans
Direct Loans (4.29% interest)
-Lower interest rates
-6-month grace period during which no payments are due
-More repayment options, including income-based and extended
-Ways to lower or postpone payments
-Loan forgiveness programs
-Deferment options

Subsidized
-The federal government pays the interest while the student is enrolled in at least 6 hours or has the loan in deferment.
Unsubsidized
-Student is responsible for paying the interest from the time of disbursement, regardless of enrollment status.






Private student loans (6.99-15.99%)
-Offered through banks such as Wells Fargo or Sallie Mae
-Historically have higher interest rates
-Repayment period differs
-Not as many repayment options
-No forgiveness programs
-Typically have fewer deferment options or ways to change/postpone payments
-May need a co-signor
-Requires credit check












Credit Cards:
How long does it take to repay debt?
Scenario #1
-You charge $2,500
-You pay $50 per month
-Interest rate is 19.9%

It will take you 9 years, 1 month to pay this off and you will end up paying almost $5,500 total!
Scenario #2
-You charge $2,500
-You pay $100 per month
-Interest rate is 19.9%

It will take you 2 years, 9 months to pay this off and you will end up paying just over $3,000!
Credit scores:
7 common mistakes that lower your score
Paying bills late

Not paying minimums required

Keeping debt levels too high

Owning too many credit cards

Not telling current/potential creditors if you've moved or changed names

Not periodically checking your credit report

Not using your full legal name in financial documents
Did you know?

The average student loan debt is $23,000.
Credit:
What can I do to protect it?
Limit access to personal data

Always take credit/debit card receipts with you

Never allow anyone to use your credit card

Copy the front and back of your cards and keep the copies in a safe place

Call the card issuer immediately if you see anything suspicious

Remove your name from the marketing lists at www.optoutprescreen.com
(888) 5OPTOUT

Order your free credit report once a year at www.annualcreditreport.com
(877) 322-8228


Between 300 and 499- Bad Credit score
Between 500 and 579- Poor Credit score
Between 580 and 619- Low Credit score
Between 620 and 679- Average or OK Credit score
Between 680 and 699- Good credit score
Between 700 and 850- Very Good or Excellent Credit score

Everything you do with your credit accounts affects your credit score, including your car and school loans

Creditors extend credit to credit worthy customers

When you pay your bills on time, you are proving yourself credit worthy

Banks reward good customers with lower interest rates and higher credit lines

Employers may check your score and a bad score may result in fewer job offers

There are 3 national credit bureaus: Equifax, Trans Union, and Experian
Nicole Sidders

PCC Default Prevention Coordinator
(719) 549-3051
nicole.sidders@pueblocc.edu
Questions?
Did you know?

Identity theft is the fastest growing crime in the world and 18-24 year olds are the most at risk.
Full transcript