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Financial Literacy

Financial Literacy Shannon Stump PNC Bank Financial Literacy Introduction Financial Health Budgeting for Students What is Credit? Students and Credit Cards Getting out of Debt Avoiding ID Theft Introduction Why Financial Literacy? Why now? The Demanding College Experience

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Financial Literacy

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  1. Financial Literacy Shannon Stump PNC Bank

  2. Financial Literacy Introduction Financial Health Budgeting for Students What is Credit? Students and Credit Cards Getting out of Debt Avoiding ID Theft

  3. Introduction • Why Financial Literacy? Why now? • The Demanding College Experience • 1st Time in Control of Spending • Main Dangers • GOAL • Teach students how to reduce their overall college debt by making smart financial choices while in college.

  4. Financial Health • #1 question to ask • Will you make the decisions to support your financial goal? • No magic formula • Getting in shape! • Mastering your own behavior

  5. Financial Health • What does it mean to be financially healthy? • Free of crushing debt • Free of high interest debt • Planning for the future

  6. Financial Health • So how do you become financially healthy? • Create a realistic budget • Minimize debt • Don’t buy on credit cards • Spending more than you have • College books vs. Plasma TV • Don’t give into peer pressure • Keeping up with your friends • Latte

  7. Budgeting for Students • What is one of the biggest reasons we spend to much money? • Lack of planning • Pizza and MP3’s • So how do we plan? • Budget • What is a budget? • Spending/Savings

  8. Budgeting for Students • Budget • Goals of a budget? • Calculators? • Income • Expenses • Cash Flow

  9. What is Credit? • What is Credit? • Promise that money borrowed will be repaid usually with interest. • Why would we use it? • Allows us to get things without having to carry cash • Allows us to buy things we might not be able to afford • Ex. Home, College education

  10. What is Credit • Credit Reports and Scores • Friends? • Rate the likelihood that people will repay their debt • Financial history • Better credit/Better rates • Who looks at my credit? • Car dealer, private education loans, home loans, insurace companies, landlords, and even employees

  11. What is Credit • What is on my credit? 7 years • SSN • DOB • Address • Employers • Bankruptcies, tax problems, etc. • How much you borrow on loans/CC • Your payment history • Collection Accounts

  12. What is Credit • The Score • 300 to 850 • Average score is 700

  13. What is Credit • How do I obtain good credit? • Pay your bills on time • Manage your Credit Cards • Review your credit report periodically • AnnualCreditReport.com

  14. Students and Credit Cards • Second major debt students have next to student loans • Average student’s CC debt • 3 out of 5 first year college students with credit cards max them out within the first year • Why does this happen? • Target

  15. Students and Credit Cards • Should I use cash for everything? • Emergency purchases • Cars, airline tickets, hotel rooms NOT dinner and a movie • General rule • If you can eat, drink or wear and item, it’s usually not a good use of credit.

  16. Getting out of Debt • Credit Cards are simple, right? • You charge it, you pay it off- what’s so complicated about that? • Charge more than you can repay • Interest • Minimum payment trap • Example

  17. Getting out of Debt • Warning signs • Consolidating debt • May lower your rate at first • Risks • Can get into more debt if you don’t cancel your old cards • Request a lower rate • 50%

  18. Avoiding Identity Theft • Cost victims over 5 BILLION DOLLARS a YEAR • When does it occur and how does it work? • How many people does if affect yearly? • How long does it take to repair my credit? • How can I prevent it? • Protect SSN, report lost or stolen cards • Be aware of Key loggers • Phishing scams • Pretexting

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