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Financial Literacy http://www.youtube.com/watch?v=MQyl2ObYKaM

Financial Literacy

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  • Slide 1
  • Financial Literacy http://www.youtube.com/watch?v=MQyl2ObYKaM
  • Slide 2
  • Savings Account Try to save 10% every month. Keep 6 months of expenses in savings Look for best value Free ATM withdrawals Low monthly rate Carry extra money (hidden) for emergency Recommendations: NCSECU, Allegacy Credit Union
  • Slide 3
  • Checking Accounts (Debit Cards) Always know how much $$ you have An overdraft (trying to pay more than what you have ) costs 30$ to bank, 25$ to company and hurts credit score! You can opt out of overdraft on debit cards but not for checks.
  • Slide 4
  • Credit Union vs Banks Credit Unions are NON-PROFIT. Money earned is passed on to the members. (nicer coin machines, more tellers etc..) Banks are FOR PROFIT. Money earned is passed on to share holders. They can offer more services and usually better loans.
  • Slide 5
  • Bonds and CDs Government and Banks raise money by selling bonds or CDs at fixed rates for fixed amount of time. Ex: 5 years at 4% Look at Bond ratings for safe investment Advantages: Safe, known income for a few years later. Disadvantages: Locked in for time
  • Slide 6
  • Stocks Long term investment Look for low trading fees (Scottrade, Etrade etc..) Advantages: Average rate of increase is 7% plus dividends Can be easily changed into money if needed Disadvantage: Not stable growth Recommendation: Kiplingers Magazine Dow Jones Index: Price of about 50 stocks Nasdaq Index: Price of all 3000 stocks (first to use electronic sells)
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  • Mutual Funds Collection of stocks Advantages: Balanced Risk Disadvantages: Cost. Average payment is about 1.1% including some up front costs for some. Recommendations: Vanguard or Fidelity https://investor.vanguard.com/what-we-offer/mutual-funds/costs
  • Slide 9
  • Pensions (very few around) to be paid when you retire 401K (through employer; taxes later) Deductable IRA (pay taxes later) Roth IRA (taxes now, not on earnings) You invest money that you get when you turn 65. Some charge taxes now (Roth IRA) and some will charge taxes later (401 K) There is a penalty if you take the money out early. Advice: If a company matches your donation, then put the maximum amount in!
  • Slide 10
  • Rule of 72 Doubling $$: Divide 72 by interest rate or years to find the other number. Ex: 4% interest rate will take 72/4 or 18 years to double. Ex: 10 years to double will take 72/10 or 7.2% interest rate 2 = 1e rt ln (2) = rt.69 = rt so rt =.69
  • Slide 11
  • Millionaire!! Millionaire: The more you invest now in a positive rate, the more you will have later! http://www.youtube.com/watch?v=XUCYdGAWcbo Savings Per Month at 7% Time to be a Millionaire $40039 years $75031 years $100027 years
  • Slide 12
  • Ways to save at least 10%! Coupons and discounts Buy for value! Buy for NEED not WANT Dont buy a new car! Make and follow a budget! Shop around for best value. http://www.youtube.com/watch?v=Bf50xx-AnoY
  • Slide 13
  • Credit Cards 1-2 for now but 3-5 when you get older. Borrow only what you can pay at the end of the month. Pay attention to annual fees. Look for good benefits. Keep interest rate under 15% Dont withdraw money from ATM machines. Late payment is usually $25, 10% penalty, and lower credit rating. Pay more than the minimum if you cant pay in full. http://www.youtube.com/watch?v=ebjYlbcWEv4
  • Slide 14
  • www.myjourneytomillions.com/articles/horror-of-just-paying-monthly-minimum-payment-credit-cards/&
  • Slide 15
  • Mortgages Make down payment of at least 20% to avoid PMI (Private Mortgage Insurance) PMI is extra $600 a year until you have put at least 20% into your house. Shop for best mortgage rates. (Calculate points carefully) Avoid ARM (Adjustable Rate Mortgages) Pay extra money to reduce the time on the loan. (100$ extra turns 30-yr loan to 23 years) 28% is the maximum of your monthly income that you should put into mortgage (or housing).
  • Slide 16
  • Loans College loans (Federal Government) Family member/friend loans (not the best idea) Dont borrow too much $$$$ (only what you can afford to pay back!) Home Equity Loans (up to 80% of what you have put into the house)
  • Slide 17
  • Major Money Mistakes Payday Loans (15% fee) Borrowing Money to pay another lender Cosigning a loan Gambling with $$$$ you cant avoid to lose. Impulse buying! Spending what you dont have!!!!!! Buying a new car.
  • Slide 18
  • Job Searching and Keeping Its not what you know but who you know. Maintain safe Social Media Sites. Use correct English when communicating with prospective employers. Write a thank-you letter shortly after the interview. Stay away from illegal drugs!
  • Slide 19
  • Identity Fraud Use different passwords. Pay attention to your bank/credit card statements. Never give out your password or Social Security Number. (Phishing!!!) Use https and not http http://www.youtube.com/watch?v=DuhjKasJA04 Keep copy of passport/license/insurance at home and one with you when travelling!
  • Slide 20
  • Credit/Debit/Gift Card Contact institutions if traveling Keep a copy at home Keep track of automatic drafts especially if your card gets cancelled or lost. Treat Gift cards like $$$ and try to use them quickly before they get lost or money is debited from non-use.
  • Slide 21
  • Credit Score Three agencies give credit score based on your history of paying off loans. (200-820) Higher Credit Score means more likely that you will get a loan at a lower rate Having few credit cards, Paying off credit cards, paying rent, paying car loans etc ON TIME increases your credit score! http://www.youtube.com/watch?v=_9fVnE63bz0
  • Slide 22
  • Lower Taxes Charity donations (keep receipts) Deduct $$ interest from loans Put $$ in 401K or IRAs Combine winnings and losses in same year (stocks, gambling etc)
  • Slide 23
  • Invest in Yourself Keep educating yourself Find what you do the best and try to make the best of it. Over of your waking time will be spent on a job. So enjoy it as best as you can!
  • Slide 24
  • Tip #1: Make Financial Goals Tip #2: Follow a Budget Tip #3: Respect and Build Credit Tip #4: Education and Learning Matter Tip #5: Save Money - Use Coupons Responsibly Tip #6: Protect Yourself - Get Insurance Tip #7: Plan for the Future - Save & Invest Tip #8: Own Your Home Ways to be better with $$$$$ 1. Buying a new car. 2. Borrowing to buy things that lose value. 3. Earning squat while paying plenty. 4. Ignoring your credit score. AnnualCreditReport.com. If you dont like what you see take steps to improve it.AnnualCreditReport.com 5. Wasting a windfall. 6. Overpaying your taxes. 7. Buying name brands. 8. Getting scammed. 9. Missing new technologies. 10. Settling for more.
  • Slide 25
  • WAYS TO WASTE MONEY!!! 1. Buying a new car. 2. Borrowing to buy things that lose value. 3. Earning squat while paying plenty. 4. Ignoring your credit score. AnnualCreditReport.com. If you dont like what you see take steps to improve it.AnnualCreditReport.com 5. Wasting a windfall. 6. Overpaying your taxes. 7. Buying name brands. 8. Getting scammed. 9. Missing new technologies. 10. Settling for more.
  • Slide 26
  • Other Videos to show http://www.youtube.com/watch?v=n1XNK7fXlIc http://www.youtube.com/watch?v=UK8Fw8pPT7o http://www.youtube.com/watch?v=J0mOcLil0Mg http://www.youtube.com/watch?v=n1XNK7fXlIc Look at North Carolina CPA course on Financial Literacy for better information