Let’s Talk Money!Presented by
Did you know?
College students make up 10% to 15% of those seeking money-management help.
Source: U.S. Department of Treasury
Your money know-how
Current climate
Basics of money management
Why a spending plan
Debit Card
Credit & you
Student loans
Protecting your $$ & information
Today’s climate….
Challenging economic conditions
Competition for jobs
Costs of housing
Tight credit market
Here are some facts…
Student financials
Average cost of your education is $20,000+ per year
Approximately 60% of you will graduate with more than $22,000 in student loan debt
Average student credit card debt is $2,169
Sources: College Board Trends in College Pricing and Trends in Student Aid, 2008;Nellie May, 2006
Basics – right starting point
Manage your accounts Checking, saving, credit card and debit card
Keep track of all your “spending” If you don’t have it – don’t spend it!!
Use account options to save you $$ and time
Mobile and online banking
Account alerts
Direct deposit
Your responsibility to avoid overdrafts Overdrafts occur when
you spend more money than you have available in your account
You need to know your available balance*
All transactions are your responsibility
Know before you buy**
Stay alert to your account activity
*Please note that some transaction activities (such as outstanding checks and some Check Card purchases) may not be reflected in your available balance.**Compare what the bank shows as your available balance to your own records, and account for transactions you have initiated that may not be included in the bank's available balance (outstanding checks and some check card purchases).
Question?
How many of you would go online to “shop around” for the best price for an item like concert tickets, computer equipment, etc.?
Spending Plan
Your plan – your money
Planning saves you $$
Minimizes “out of control” spending
Easy tips for saving Automatic monthly transfer
New money: ½ for you – ½ for savings
Shop for thrift – save for excitement
Your basic budget
Monthly income – Monthly expenses
•Housing
•Food
•Clothes
•Books & supplies
•Savings
•Fun
•Misc. (emergencies)
Debit Card (aka Check Card)
Allows you to:
Enjoy a faster, safer, easier way to pay for everyday purchases
Make bill payments with your service providers
Perform ATM transactions
Avoid interest rates Money comes out of the primary checking
account linked to the card
Track Debit Card purchases anytime Through online banking or on your checking
statement
Debit Card (aka Check Card)
Why is it important to know your Daily Dollar Limits (DDL)?
Where can you find your DDL?
What is Zero Liability?
Let’s talk credit
How many of you have more than one credit card?
Got a free t-shirt with your credit card?
Actually know what your APR is?
How did you use that card?
Coffee & Pizza – 1 year
200 lattes @ $3 $600
100 pizzas @ $15 $1,500
Total credit card debt: $2,100
So at @12% interest w/min. payment
Yikes…7 years to pay off + $700 in interest --- total cost to you is $2,800!!
Your credit basics
Exactly what is credit?
Why should I care?
How do I get it?
Credit card realities
It’s a loan
Limits are real
So many offers?!*
Rewards
Cash back
Personalize
But……
Select your card by costs!
Love the t-shirt, but….
Annual Percentage Rate (APR)
Fees & Penalties
Cost of cash advances
Rate increases
Payment cycle
These are the REAL need to knows…
The cost of APR
Card Balance
Interest Rate (APR)
MinimumPayment
InterestPaid
$1,000 14% $25 $669.96
123 Months of payments Total paid $1,669.96
$1,000 8% $25 $289.93
97 Months of payments Total paid $1,289.93
You’ve just charged $1,000…
Illustration only
The costs of minimum payment
You have got to have this $1,500 computer!
Card balance $1,500
APR 14.7%
Lowest payment: $40
51 months & $521 interest >$2,021
Double lowest payment: $80
22 months & $215 interest >$1,715
Illustration only
The cost of credit card cash advance
Card limit $1,000
Cash advance $1,000
APR 24%
Minimum payment $25
82 months - $1,035 in interest payments Total cost to you is $2,035 (+ fees?)
Illustration only
Your credit profile
Credit report
Credit score
Why should I care?
Your job or housing
Check yearly
Annualcreditreport.com
Question?
What was the average student loan amount I mentioned earlier?
Paying for college
Be smart about where you get money for college First, use money you won’t have to repay like
scholarships and grants Next, consider money you work for through a work-study
program at your school Then, use student loans
Federal student loans – apply for these by completing a Free Application for Federal Student Aid (FAFSA)
Private student loans – available from private lenders to cover additional costs
If you need to borrow Borrow only what you need Keep track of your loans and estimate your eventual
monthly payments Be realistic about your starting salary
Salary realities
How much money do you think you’ll be making 2 years after graduation?
What about the average salary of … An Accountant
A Corrections Officer
A Public School Teacher
A Registered Nurse
Responsible borrowing
Do you understand your student loan? Who is your lender?
What are your loan terms?
What are your rights and responsibilities as a borrower?
What are your repayment options?
How are you going to repay your loan?
What is your financial plan?
Did you answer “I don’t know” to any of these questions? Then run—don’t walk—to your financial aid office or your lender!
You can start to manage now
While you are in school Know your student loan total – build it into
your spending plan (future expense)
Consider making interest payments while in school
After graduation Stay connected with your lender
Discuss payment options
Key – is your effort
Factoid
In 2008, there were 9.9 million reported identity theft victims in the United States!
1 in every 30 people…
Source: 2009 Identity Fraud Survey Report, Javelin Strategy & Research, February, 2009
How pervasive is identity theft?
Identity theft occurs every 2 seconds in the U.S.
1 out of 10 victims knew the identity of the thieves.
Business loss per victim: $4.8K
Total loss to business: $48 billion
Source: 2009 Identity Fraud Survey Report, Javelin Strategy & Research, February, 2009
What personal info do you need to protect?
Credit cards and reports
Social Security card and driver’s license
Account numbers
ATM and telephone calling cards
Mortgage statements
Date of birth
Passwords and PINs
Home addresses and phone numbers
Internet ID theft schemes
Phishing:A criminal attempt to obtain
personal info using email spam
Pharming:A scam in which a malicious code
is installed on a personal computer or server, misdirecting users to fraudulent websites without their knowledge or consent
Defend yourself!
Shield your PC and wireless router with firewalls and software to catch viruses, spy ware and crime ware
Avoid unknown sites offering free music and game downloads
Ignore and delete emails urging you to click on a link to verify or provide account information
Online resources for YOU
Hands on Banking®
Stagecoach Island®
The Student LoanDownSM blog
Thank You!
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