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Financial LiteracyPresented By MOODYS Upward
Bound
M O O D Y S
astering
ccupational
pportunity
evelopment For
outh
uccess
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/expenses Where money is spent Forecast future
income(s)/expense(s) Spend in categories
Components of the budget
Income Expense Discretionary Money
Save Rebudget Spend
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 one Overdrawing
Paying bills On time Late or not at all
How to Maintain a Credit Score
Maintaining a credit score takes patience and diligence Pay off your credit card bills
every month Don’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 back APR Interest
The Effects of Credit Cards
Bad financial choices can ruin your credit score Good uses Bad 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 owned Examples
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 Government Amount 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% $3,844
Federal 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 Considerations Degree Programs and Majors Admission Quality Education Involvement in Federal Aid Activities of Interest Location Cost
College Planning - Cost
Tuition Tuition for Notre Dame is $38,477
Room & Board Mandatory Fees and Expenses Lifestyle Transportation Books 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 class Do 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 it Don’t forget your priorities!
Job Considerations and Benefits
Presented 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 job Passion Career Advancements Salary or Wage Fringe Benefits
Job Considerations and Benefits
Passion Choose 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 Advancements Predict 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 Wages Hourly wage or a salary How 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 Plan Exactly the same as a 401 (K)
except… “not for profit” company
Simple IRA Same 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 Insurance Auto Home Life Disability Health
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
Theft Natural 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
Checking Savings Money Market Certificates 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 money ATM Checks Debit 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 Machine used 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 bank Easy 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
Dos ATM Talk to your teller
Security Accessibility
Don’ts Accessibility Theft
Savings – To open an account
Documentation All you will need is your Driver’s
License
Money Market
Offers higher interest rates Requires larger deposits Easy to access You 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 access Money 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