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MONEY MANAGEMENT WORKSHOP PowerPoint Presentation
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MONEY MANAGEMENT WORKSHOP

MONEY MANAGEMENT WORKSHOP

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MONEY MANAGEMENT WORKSHOP

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  1. MONEY MANAGEMENTWORKSHOP Learning Assistance Programs

  2. Self-Assessment • Are you a good money manager? • How can you improve your money management?

  3. What’s Important? • Need to be conscious of your spending • Need to be conscious of your income • Manage your debt • Interest rates • Make a budget = Prediction of income and expenses

  4. Making a Budget • Set priorities for your spending • What is most important to me? • What can I do without? • Be aware that your priorities are realistic!!

  5. Making a Budget • Consider a certain time frame • 1 year • 1 month • List income • List fixed and variable expenses

  6. Making a Budget • Income • Salary from work • Savings • Money from parents, spouse, grandparents etc. • Financial aid • …

  7. Fixed Expenses • College room and board or rent • Heat and water • Car payment and insurance • Health Insurance • Tuition • …

  8. Variable Expenses • Books, tutoring • Snacks, drinks, groceries, restaurant meals • Movie tickets, concert tickets, sporting events • Transportation – parking, gas, car maintenance • Personal expenses – haircuts, toiletries, laundry • Healthcare – doctor or dentist fees, prescriptions • Other – gifts, …

  9. Making a Budget • Does your income cover your expenses? • If yes – good, but don’t raise your spending • If no – how can you make your budget look better?

  10. Increase Income • Get a job! • Look into the possibilities for financial aid • …

  11. Decrease Expenses • Look to the big-ticket items • Use telephone to price investigation • Wait for sale • Try to wait one day with the purchase • Shop at second-hand stores • Be aware of quality • Use coupons!

  12. Decrease Expenses • Cook your own meals – Eat on campus • Conserve energy • Keep housing down • Pay in cash – debit cards • Avoid carrying cash • Notice what you spend on fun • Shop on a full stomach

  13. College Students and Debt • The average college student graduates with $10,000 in debt (includes students without debt) • 64% of college students graduated with debt in year 2000 • Of students with debt, the average debt by graduation is $16,000

  14. College Students and Debt • 70% of college students have credit cards • Typically carry a balance of more than $2000 • 20% have balances exceeding $10,000

  15. What is a Credit Card? • A contract based on your promise to pay in the future for goods and services your receive today • Helpful in emergencies • You become a better money manager when learning to use credit cards responsibly

  16. Credit Cards • Access to credit cards as a college student • Useful when used appropriately • Temptation to overspend can ruin your budget • Credit record begins

  17. Credit Rating • Your credit history is maintained by credit bureaus in the form of a credit report • Will be reviewed by employers, insurance companies, apartment managers, and businesses for consumer products • Credit rating will follow you and impact future ability to buy a house or a car

  18. Types of Credit Cards • Secured • Product serves as collateral • Unsecured • Based on promise and signature • Most credit cards are unsecured

  19. Cost of Credit • It is not free to have a credit card! • Pay interest • More interest with minimum payments • Pay other fees • up to $50 per year

  20. Interest Rates • Example 1: • Interest: 18.5% • Purchase of furniture: $2000 • Years to pay off with minimum payment: 11 • Interest charges: 1934

  21. Interest Rates • Example 2: • Interest: 18% • Purchase of clothing: $1000 • Years to pay off with minimum payment: 6.5 • Interest charges: 650 • Interest: 12% • Interest charges: 335

  22. Interest Rates • Example 3: • Interest: 19.8% • Purchase of TV: $500 • Years to pay off with minimum payment: 2.5 • Interest charges: $150 • Interest: 12% • Interest charges: $78

  23. Grace Period • A period in which you don’t pay interest on your purchases • Usually 25 days • Does not occur if you have an outstanding balance on your card • Does not occur if you want a cash advance

  24. Advice about Credit Cards • Compare fees • Choose low interest cards • Know when grace period begins • Watch minimum monthly payments • Pay off debt with your saving

  25. More Advice • Set a credit card limit and stick to it • Use your budget to determine how much you can spend each month • If possible, pay of credit card balances each month • Don’t use credit cards for things that will wear out before you finish paying for it

  26. Do you want a credit card? • You may want to obtain at least one credit card while you are in college • Have a way to cover emergencies • Allow you to establish a credit history • Use credit as an effective tool instead of a financial trap • A positive credit history is useful in the future!

  27. Alternatives to Credit Cards • Get a low interest loan instead • Choose charge cards instead • Debit Cards/ checking accounts on which money is deposited every month

  28. Additional Information • Consumer Credit Counseling Service • 1301 N. Kingshighway • 573 334 7050 • Financial Aid Services • Academic Hall • 573 651 2253