Financial Literacy

Financial LiteracyPresented By MOODYS Upward

Bound

M O O D Y S

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Budgets

Presented By Jocelyn Lula and Sarah Lane

What is a budget?

List of planned revenues and expenses

Organizes income and expenses

Fact

Only about 40% of people in America have a budget

0%

20%

40%

60%

80%

100%

Budget uses

Monitor income/expensesWhere money is spentForecast future

income(s)/expense(s)Spend in categories

Components of the budget

IncomeExpenseDiscretionary Money

SaveRebudgetSpend

How to calculate discretionary money

Income-Expenses

Discretionary Money

Example

Income Salary--$2,000 Birthday Money-- $100

Expense Rent--$600 Utilities--$200 Food--$100

Discretionary Money Left over--$1,200

$ 2,100-$ 900 $ 1,200

Credit and Credit Cards

Presented by Emily Castro and Sarah Lane

Credit

Dictionary’s definition: amount of money available to be borrowed by an individual

Trustworthiness to be lent money

Credit Score

Credit score or FICO score The higher your score, the more you are trusted

Financial behavior impacts your credit score

Credit Ratings and Scales

Credit scores are between the numbers 300 and 850

Credit Scores300

400

500

600

700

800

Highest Good and Bad Credit Scores Possible

Good ScoreBad Score

How to Improve Your Credit Score

Things that affect your credit score: Checking Accounts

Opening oneOverdrawing

Paying billsOn timeLate or not at all

How to Maintain a Credit Score

Maintaining a credit score takes patience and diligencePay off your credit card bills

every monthDon’t impulsively buy

something that you can’t afford

Credit Cards

Dictionary definition: card issued by a financial company giving the holder option to borrow money

Highly affects your credit score and ratings This is money that is borrowed, NOT given

You must pay this money backAPR Interest

The Effects of Credit Cards

Bad financial choices can ruin your credit scoreGood usesBad uses

Our Advice to Avoid Bad Credit

Pay off everything every month Always pay on time Never own more than 3 credit cards Never charge anything on credit that you

can’t afford Never use more than half your credit limit Check your credit report regularly (www.freecreditscore.com)

Net Worth

Presented By Alex Lynaum and Anastatia Smith-Davis

How to find your Net Worth

List your largest assets

Subtract all your liabilities

The difference is called your net worth

The total assets minus total liabilities of an

individual.

Assets

Property ownedExamples

A house – that you own, not rent Money in the bank Car Investments Collectibles

Liabilities

Money you owe Examples

Debt Loans Credit card balance

If your liabilities are greater than your assets you owe money.

Sample of a Net Worth Statement

Net Worth

Taxes

Presented by Greg Nyikos and Jocelyn Lula

Picture this . . .

April

15

Why Taxes?

Collected by the GovernmentAmount to IRS If more money was sent to the

IRS than you owe, you will get a refund. If less was sent than you owe, you have to send more in.

Taxed on the amount of money you earn

Deductions

How do I fill out a Tax Form?

Types of Taxes:

Types of taxes: Income Tax Sales Tax

Income

Taxable Income

Deductions

Federal Tax

Antonia’s Salary: $43,000Interest Earned on CD: $300

Total Income: $43,300

Standard Deduction: $5,650Exemption Deduction: $3,650

Total Deductions: $9,300

Income – Deductions: $34,000

The first $8,375 is taxed at 10% $837From $8,375 to $34,000 is taxed at 15% $3,844Federal Tax: $4,681

Example

Income Tax Rate

$8,375 or less

10%

$8,375-$34,000

15%

Sample Tax Form

College Planning

Presented by Robert Barron and Greg Nyikos

College Planning - Factors

College ConsiderationsDegree Programs and MajorsAdmissionQuality Education Involvement in Federal AidActivities of InterestLocationCost

College Planning - Cost

Tuition Tuition for Notre Dame is $38,477

Room & BoardMandatory Fees and Expenses LifestyleTransportationBooks and Supplies

How are you going to pay for college?

College Planning – How to Pay for College

How to pay for college1. Savings2. Working3. Scholarships4. Grants5. Student Loans

College Planning – Work & Savings

Money saved up Remember it is NEVER to late to save

for college Work Study Working during the summer Working during school Amount you can save

College Planning - Grants

Need based 6 different Grants:

Federal Pell Grant Federal Supplemental Educations Opportunity

Grant (FSEOG) Academic Competitiveness Grant (ACG) National Science and Mathematics Access to

Retail Talent (National SMART Grant) TEACH Grant Iraq and Afghanistan Service Grant

College Planning - Scholarships

Merit Based Require hard work and dedication to be

achieved Do not need to be paid back

Scholarship Factors Ethnicity Grade Point Average (GPA) State Sports

College Planning – Student Loans

Federal Perkins Loan FFEL Stafford Loans (subsidized &

unsubsidized) Subsidized & Unsubsidized

FFEL PLUS Loans Consolidation Loans William D. Ford Federal Direct Loan

(Direct Loan) Program

Dos and Don'ts

Presented by Anastasia Smith-Davis and Alex Lynaum

Do’s for school!

Study for an hour before and after each class

Ask for help when YOU need it, and even if you DON’T need it

Take good notes Eat a full breakfast in the morning Join a study a group Always be early to your classes Do extracurricular activities

Don’ts for school

Don’t go stay out all night on a school night

Do not sleep during classDo not disrespect your professor

Recommendations

No Matter How Hard School Gets Don’t Drop Out!

Common Sense

Go For Scholarships! Don’t sign up for credit cards

while in school Unless your able to handle the

expenses If it sounds to good to be true don’t

go for itDon’t forget your priorities!

Job Considerations and BenefitsPresented by Emily Castro and Jarek

Allin

Job Considerations and Benefits

Once you’ve graduated college, it is time to see a return on your educational investment and seek a job Resume Job Fairs and Career Days Internships Building relationships (networking) Think about where you would like to work

Location, industries, companies

Job Considerations and Benefits

Factors when looking for a jobPassionCareer AdvancementsSalary or WageFringe Benefits

Job Considerations and Benefits

PassionChoose a job that you love and

enjoy.Make sure that your job inspires you.Find meaning and purpose in what

you do.Don’t work just for the pay.

Job Considerations and Benefits

Career AdvancementsPredict where you see the

company and yourself in 3 or 5 or even 10 years.

What responsibilities will you gain as you advance through your career?

Can the company offer you any training?

Job Considerations and Benefits

Salary and WagesHourly wage or a salaryHow much are you really being

paid?

Job Considerations and Benefits

Fringe Benefits Paid time off Insurance Retirement

Job Considerations and Benefits

401 (K) Retirement Plan retirement plan set up by a “for profit”

company Employees can make contributions to their

account Employer can also make contributions to

the employees account Money is invested and then available for

the employee to use in retirement

Job Considerations and Benefits

403 (B) Retirement PlanExactly the same as a 401 (K)

except… “not for profit” company

Simple IRASame thing as a 401 (K) and a

403 (B) but the only difference is ……A retirement plan set up by a small business for its employees

Job Benefits

Pension A retirement plan set up by a small

business Employer contributes money to an

account Employer then promises to pay the

employee a set amount in retirement

Very rare and will likely be extinct in a few years.

Job Benefits

Insurance

Presented by Emily Castro and Jarek Allin

Insurance

An agreement by which a company provides a guarantee of repayment for a specific loss in return for a customer’s payment of premium.

Insurance

Types of InsuranceAutoHome LifeDisabilityHealth

Insurance - Auto

If you get in a car accident, your car insurance will help fix your car.

If you drive: you have to have auto insurance.

Insurance - Home

TheftNatural Disasters

Ex: Fire, flood, tornado. If you own a house:

you have to have home insurance.

Insurance - Life

If you pass away, the insurance company will pay money to your family.

Money could be used to pay for the cost of the funeral.

Life insurance is optional to have.

Insurance - Disability

If you become disabled and cannot work, the insurance company will pay money to you every month to help you pay bills.

Insurance - Health

With health insurance

Without health insurance

Bank Accounts

Presented By Jarek Allin and Robert Barron

Types of Bank Accounts

CheckingSavingsMoney MarketCertificates of Deposits (CD)

Checking

A Checking Account is an account designed for transactions of deposits and withdrawal.Very easy to access.

Checking

By depositing paychecks, you can put money into your account

To withdraw moneyATMChecksDebit card

Checking – Debit Cards

A debit card is using a plastic card that allows one to withdraw money from their own account instead of talking out a loan (credit card)

Checking - Checks

Check - instead of paper money

“Balance your check book

How to fill out a check

7-14-11

Home Depot 73.52Seventy-Three and 52/100

Plywood John Smith

Bank Routing #

Account # Check #

Checking - ATM

ATM stands for Automatic Teller Machineused to withdraw money from

different locations when needed

Bank Interview – 1st Source Bank

To open an account you need your drivers license, a 2nd form of identification, and your social security number

You will receive checks and a debit card if you are 18 or older

You will have online banking when you sign up with a debit card

Savings Accounts

A savings account is a deposit account held at a bankEasy to access

Savings

You can put money into your savings account calling your teller visiting the bank using an ATM using online banking

Withdraw money from your savings

Savings – Dos and Don’ts

DosATMTalk to your teller

SecurityAccessibility

Don’tsAccessibilityTheft

Savings – To open an account

DocumentationAll you will need is your Driver’s

License

Money Market

Offers higher interest ratesRequires larger depositsEasy to accessYou may need to have another

account open to open the Money Market account

Certificates of Deposit (CD)

Offers higher interest rates, but limits the investors access to the money

Hard to accessMoney is put into these account

to save for long periods of time

Money Market and CD differences

Money Market is a special savings account

A “CD” is a special investment account

Could have a high penalty cost if money is withdrawn early

Any Questions?

Financial LiteracyPresented By MOODYS Upward

Bound