Money Management Presentation

What is your goal?• In high school…

• To graduate• In college…

• To graduate• Post graduation…

• To get a job• Get a job to…

• MAKE MONEY

** If your end goal is to make money, will you ever have enough? – No…

• Your ultimate goal should be FINANCIAL SECURITY

Why is this important?• Because 76% of Americans live pay check to pay

check– Golden Hand Cuffs• You will always adjust your lifestyle according to your salary• AKA you will always spend what you make** Even if you make 1 million dollars today and spend 1 million

dollars +1 tomorrow you are in debt• Let’s learn from the experts not from the media

(entertainment stars, professional athletes, etc)

• Because money is the #1 stressor in America and #1 reason why students drop out of school

• Do you believe you can just put this on the backburner until you graduate and have real income and expenses?– Studies show people create their spending and saving

habits between the ages 18-24 that they will keep for the rest of their lives

• What can you do about it??– Learn: Top 4 Things College Student Need to Know about

Money– It might change your life!

Don’t borrow too muchStudent loans

• What types of loans are there?– Private– Federal Direct Loans

• What are the two types of Federal Direct Loans?1. Subsidized 2. Unsubsidized

• What is the difference between these two loans?– Subsidized- government pays the interest for you

while you are in school– Unsubsidized- you pay the interest while you are in

school

• What is the current interest rate for Unsubsidized loans?– 4.66%

• When do you have to start paying your loans back?– 6 months after you graduate, drop out, or drop below 6

hours

• How much average student loan debt did last years seniors graduate with? (undergraduate federal direct loans)– $30,000

• Do you think this number is likely to go up or down when you graduate?– Likely to increase

• How many years is the standard repayment plan?– 10 years

• What is the monthly break down for that repayment?– Approximately $300 (depending on interest)

• What if you can’t pay that on top of rent, utilities, food, etc?– Stretch out payment plan up to 25 years for smaller monthly

payment but paying more over time

• How old will you be 25 years after your graduate college?– Probably about the same age as your parents are now

• What kind of problems does this create in America?

Creating a budget

• Why do people hate budgets?

• What is the purpose?– It’s your money, have it work FOR you, not

AGAINST you

• Know how much money you have coming in– Parents– Job– Financial Aid

• Know how much money you have going out– Going out to eat/groceries– Entertainment

• How can you track this?– Pencil and paper– Apps like Pocket Expense (Free)

• Does your spending exceed your earnings? You have two options:– Make more– Spend less

• How do you save?– Pay yourself

first

– Save by spending less

– Borrow less

Investing Wisely

• Saving is allocating some of our current cash inflows to the future

• Investing is then what we might do with the money we save (discretionary funds, not money you may need in the event of an emergency)

• Save before Investing

• What is compound interest? – Interest added to the principle so that it also earns interest– What are ways compound interest is working against you?– How can compound interest work for you?

• https://www.youtube.com/watch?v=8eHDZSgNFbs

• Ben saved $2,000 a year– Monthly break down $167– ROTH IRA

• Even if you try to save a $1 a month you will be ahead of the 76% that live pay check to pay check- start a good habit!

• What is the #1 cause of bankruptcy?– Medical bills• Unavoidable

• How can you prepare yourself for these kinds of emergencies?– Build an emergency fund

Credit is a tool

• Just like a hammer, it can both hurt you and help you

• How can credit hurt you?– Maxing out your credit card (20% capacity)– Not making payments on your credit card on time– Co-signing for a friend/family member– Mismanaging credit– Not checking your credit report

• How can you check your credit report for free up to 3 times a year? – www.annualcreditreport.com

Importance

35%

30%

15%

10%

10%

Payment HistoryCapacityLength of HistoryNew CreditTypes of Credit

FICO Score Breakdown

**Remember: Score calculates perceived risk level

• How can credit help you?– Building good credit over time = a high credit

score

• What can a good credit report AKA your Financial Resume get you?– Low interest rates on big ticket items (car, house,

etc)– Lower insurance rates– A job: Employers– A place to live: Landlords

• How do you build good credit over time?– Using your credit card like a debit card (not having a

balance)– Paying on time– Be careful with the amount of cards you have– Length of history

How can we help you?

• Schedule a one-on-one coaching session at http://www.utc.edu/financial-wellness/

• Come to our events!– Live Like A Student– Awareness campaigns/tabling

• Join the Financial Wellness Club!– Leadership opportunities available– Contribute to making campus and the Chattanooga

Community financially secure