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Financial Literacy youtube/watch?v=MQyl2ObYKaM

Financial Literacy http://www.youtube.com/watch?v=MQyl2ObYKaM. Budgeting. 30% Housing (including home insurance and taxes) 20% Food, beauty, clothes (more shopping then less eating out) 10% Utilities (including phone) 10% Transportation (multiply by 30 cents per mile for wear/tear on car)

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Financial Literacy youtube/watch?v=MQyl2ObYKaM

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

  2. Budgeting • 30% Housing (including home insurance and taxes) • 20% Food, beauty, clothes (more shopping then less eating out) • 10% Utilities (including phone) • 10% Transportation (multiply by 30 cents per mile for wear/tear on car) • 5% Insurance (health and perhaps car) • 15% Savings for future (gifts, retirement, unexpected, vacation, car) • 10% Other (debt, giving, more savings)

  3. Budgeting Tip (especially in College) Pay all expenses first (ideally before the month) before spending “fun money” What to Have in Savings • $1000 For Immediate Use • Emergency Fund for 3-6 months of expenses • Money for future payments (college, car, gifts, vacations, furniture, phone)

  4. 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 2 Accounts (don’t carry card of other)

  5. Checking Accounts (Debit Cards) • Always know how much $$ you have • An overdraft (trying to pay more than what you have <AKA bounced check>) costs 30$ to bank, 25$ to company and hurts credit score! • You can opt out of “overdraft” on debit cards but not for “checks.” 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.

  6. Bonds and CD’s • Government and Banks raise money by selling bonds or CD’s 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

  7. Stocks • Long term investment • Look for low trading fees (Scottrade, Etrade etc..) • Advantages: • Average rate of increase is 7% plus dividends (quarterly payments) • 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)

  8. 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

  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 <also on earnings> (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!

  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 = 1ert ln (2) = rt .69 = rt so rt = .69

  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

  12. Ways to save at least 10%! • Coupons and discounts • Buy for value! • Buy for NEED not WANT • Don’t buy a new car! • Make and follow a budget! • Shop around for best value. • http://www.youtube.com/watch?v=Bf50xx-AnoY

  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% • Don’t withdraw money from ATM machines. • Late payment is usually $25, 10% penalty, and lower credit rating. • Pay more than the minimum if you can’t pay in full. • http://www.youtube.com/watch?v=ebjYlbcWEv4

  14. www.myjourneytomillions.com/articles/horror-of-just-paying-monthly-minimum-payment-credit-cards/&www.myjourneytomillions.com/articles/horror-of-just-paying-monthly-minimum-payment-credit-cards/&

  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) • 30% is the maximum of your monthly income that you should put into mortgage (or housing). • Cost of house is usually 2.5 times the loan if you just pay the minimum

  16. College Loans • College loans (Federal Government is usually the cheapest) • For every $1 you borrow, you usually have to pay $2 back (perhaps more.) • Borrowing $8000 a year ($32000 total) implies monthly payment of $1600 a month for ten years at 5% interest. • Community college for 2 years and then to university can save tuition and rent money • Attend an accredited university (a not-for-profit one) • Fill out a FAFSA form your senior year to help get loans and financial aid.

  17. Car and “Furniture” Loans • Rent to Own Furniture: Cost is usually 60% higher than if you paid up front $1000 couch is now $1600 • Cheaper car usually equals cheaper insurance • Sometimes no Grace Period (reposess immediately if missed payment)

  18. http://www.edmunds.com/car-buying/how-fast-does-my-new-car-lose-value-infographic.htmlhttp://www.edmunds.com/car-buying/how-fast-does-my-new-car-lose-value-infographic.html

  19. Other Loans • Family member/friend loans (not the best idea) • Family usually has to co-sign a loan • Don’t 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)

  20. Other Costs Illegal Drugs DUI

  21. Taxes & Reading a Paystub 15% to 39% after $10,000 ~6.5% on any amount up to $120,000 ~1.15% on any amount ~5.74% after $7.000 This amount is deducted before taxes Not applicable but could be health insurance If you make less than $7,000 and have state tax deductions then you can get a refund. If you make less than $10,000 and have federal tax deduction then you can get a refund.

  22. Major Money Mistakes • Payday Loans (15% fee) • Borrowing Money to pay another lender • Cosigning a loan • Gambling with $$$$ you can’t avoid to lose. • Impulse buying! • Spending what you don’t have!!!!!! • Buying a new car.

  23. Job Searching and Keeping • It’s not what you know but who you know. • Maintain safe Social Media Sites. • Use correct English when communicating with prospective employers. • Have an appropriate email name. • Write a thank-you letter shortly after the interview. • Stay away from illegal drugs!

  24. 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!

  25. 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.

  26. 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 1-2 credit cards and not using maximum, Paying off credit cards, paying rent, paying car loans etc… ON TIME increases your credit score! • http://www.youtube.com/watch?v=_9fVnE63bz0

  27. Lower Taxes • Charity donations (keep receipts) • Deduct “$$ interest” from loans • Put $$ in 401K or IRA’s • Combine winnings and losses in same year (stocks, gambling etc…)

  28. Invest in Yourself • Keep educating yourself • Find what you do the best and try to make the best of it. • Over ½ of your waking time will be spent on a job. So enjoy it as best as you can! • Buy a good job interview suit/dress and shoes

  29. Other Random Advice • Figure out what you are going to do if you get a raise (more 401 K etc…) • Set up automatic deposits to savings (that you can’t touch), brokerage firm. • “Out of site, out of mind” • Find out what you can deduct from taxes (job search costs, moving, some medical) • Small life changes can make a difference (bringing lunch from home, making coffee at home • Have enough money to be able to move (usually 3 months fee for deposits, fees etc…)

  30. Other Random Advice • Pay in Cash so you keep track of weekly expenses etc… • Don’t let extra money sit around. Put it somewhere. • Buy high quality work shoes • Have decent quality bedding so you can sleep well • Have a good umbrella to prevent dry cleaning costs and/or new shoes • Pay up front for furniture, rent (to possibly get a discount) • Dave Ramsey Plan

  31. Other Random Advice • Avoid splurging on “Pay Day” • Don’t live Paycheck to Paycheck • Marry Well • Have Financial counseling and discussions before you marry someone. Make sure you have the same goals. (sometimes a joint and a separate account is best.

  32. Writing a Check

  33. 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 don’t like what you see take steps to improve it. 5. Wasting a windfall. 6. Overpaying your taxes. 7. Buying name brands. 8. Getting scammed.9. Missing new technologies.10. Settling for more. Ways to be better with $$$$$ • 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

  34. 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 don’t like what you see take steps to improve it. 5. Wasting a windfall. 6. Overpaying your taxes. 7. Buying name brands. 8. Getting scammed.9. Missing new technologies.10. Settling for more.

  35. 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

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