Money Management: FS 100

Credit Cards

Debit Cards

• Credit cards on the other hand are more difficult to keep track of your spending. Easy to just keep spending and spending because all you have to do is max out and start a new account.

• Debit Cards differ from credit cards because they draw money from your checking account and not from a line of credit.
• College students prefer a debit card rather than a credit card because they can keep track of their spending.

Basics of Money Management

Establish & Maintain Good Credit

The Great War between

Thank you!

Pay yourself first!

• When you earn money, receive cash or receive a check as a gift - pay yourself first by saving it instead of spending it. Always save at least 10%.

• Increase progress toward savings goals.

• Have money for emergencies and unexpected expenses.

• Save money for upcoming events.

• Start building wealth at a young age. The earlier you begin saving the more money you will have when you retire.

How much money are you able to save?

• Makes it easier to obtain loan approval. Types of Loans include:
• Credit Card
• Auto Loan
• Mortgage (home loan)

• Other benefits of maintaining good credit include:
• Lower loan rates (pay less to borrow)
• Helps prove you are financially responsible

• You can start out by building a good credit history:
• Checking account in good standing
• Always pay bills on time (loans, utilities, credit card, etc)
• Apply for a low interest credit card, make two purchases a month & make payments on time.

Consequences of Poor Choices with your Credit card:

• Trouble purchasing a home or a car

• Could lose out on a job

• Could be charged higher interest rates on future credit cards

Money makes the world go round

Facts

Where do you save

your money?

There is no doubt that money is important.

• Cause you to live in a cardboard box or a 3-storey mansion?
• Keep you in college or drop out?
• Successful or unsuccessful?

That is why it is important to learn to manage money.

• 25% of American families have no savings at all.
• 49% of Americans don't even have enough money saved to cover three months of expenses.
• How can you save money?

"Too many people spend

money they haven't earned,

to buy things they don't need,

to impress people they don't like."

-Will Smith

• At a Financial Institution

Eg: Credit Unions & Banks

• In an Account

Eg: Savings Account, Checking Account, Money Market

• Who has lower rates on services-Banks or Credit unions?
• Your money is insured

How can one save???

• Need vs. Want
• Take advantage of student discounts
• Discounted movie/theme park tickets
• Used/Rent books
• Generic over brand
• Debit/Gift card instead of credit card
• Spend only on necessities
• Pay bills on time!

If you have a problem, don't deny it..

Denying that you have a problem only makes it worse

If you have spending problems, talk to someone about it

You don't need hundreds of pairs of shoes...

Be smart with your money!

College- Grants & Student Loans???

10 things one must know about money:

"We lose more students to credit card debt than to academic failure."

Behavioral Challenges & Solutions by Shlomo Benartzi (TedTalk)

Savings Goals

Name an item you would like to buy but can't afford now.

Examples: Bike, Fancy/Extra pair of Shoes, or iPad.

A savings goal to help you start building long term wealth.

Example: Pay off Debt, Save to purchase real estate, start a retirement savings.

Do you have Savings Goals?

Why doesn't everyone save money?

• Instant gratification- Spending more fun than saving today

• Difficulty of saving today- challenges, procrastination

• People in the U.S. spend on an average $1000/year on lottery tickets

• Pay yourself first
• Spend less than you earn
• Understand the difference between want & need
• Stop competing with others & be happy with what you have
• Pay off all your debts before spending money on anything else
• Never pay full price when you do not have to
• If you do not understand an investment product, seek more information
• Know the difference between saving money and investing money
• Always have a 3-month emergency fund
• Don't ever stop saving money...

The Battle Between Your Present & Future Self by Daniel Goldstein (TedTalk)

• The present-self, future-self, self-discipline, & commitment device (decision made with a cool head)

• Decisions made today have good or bad consequences for our future selves

• Tools that make us imagine ourselves over time, so that we make smart choices for Future Us

• Solution may be- Creating a balance