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I’ll Do it If…5 habits for financial health. OHCE State Lesson. Icebreaker. Break into small groups of 3-4 Discuss a habit you have tried to develop (or break) to reduce spending and increase savings As a group decide the best tips and report back to the group. Objectives.

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  • Break into small groups of 3-4
  • Discuss a habit you have tried to develop (or break) to reduce spending and increase savings
  • As a group decide the best tips and report back to the group
  • Five strategies to help provide more control over finances
  • Tracking
  • Budgeting
  • Setting Money Aside
  • Checking your Credit Report
  • Knowing what’s in your report
  • A method for keeping up with actual spending
  • Useful when you find there might be some spending “holes”
  • Notepad, check register, phone app
  • Whatever works
tracking continued
Tracking continued
  • Use categories that match those on the budget sheet
  • Always consider periodic payments
  • Usually requires a month or two to get accurate tracking
  • A written plan for how we spend money
  • There is a sample budget sheet in your packet of information
budget components
Budget components
  • Fixed expenses – those that are set
      • Mortgage
      • Car payment
  • Variable expenses – those that can be controlled
      • Groceries, eating out, utilities
  • Periodic expenses – those that come up at various times throughout the year
      • Gifts, vacation, school expenses
periodic expenses
Periodic Expenses
  • Because these are not due every month, they are often ignored or overlooked
  • Can lead to overuse of credit if no money is set aside
  • Can use calendar or worksheet to determine amount that needs to be set aside monthly
  • Set aside into a separate account
  • Use this account to pay those expenses when they come due
setting money aside
Setting money aside
  • We just discussed one reason to set money aside
  • Other reasons include a major purchase, down payment or other goal
  • Decide on exact amount and time frame
  • Begin setting aside amounts
  • Financial Planners recommend an emergency fund of 3 - 6 months of living expenses
  • Nancy is widowed but still working
  • With only one salary, she needs 6 months
  • Living expenses $1,235 per month
  • times 6 months = $7,410
  • Over one year she needs to set aside $617.50 into savings each month
ordering a credit report
Ordering a credit report
  • All consumers have the right to 3 free per year
  • From 3 major Credit Reporting Agencies (CRA)
      • Equifax
      • Experian
      • TransUnion
  • www.annualcreditreport.com
      • Order online, by mail, on the phone
know what s in your report
Know what’s in your report
  • The report is a compilation of information
  • Your creditors send the info to the Credit Reporting Agencies
  • The report is divided into sections
personal information
Personal Information
  • Name
  • Aliases
  • Current address
  • Previous addresses
public records
Public records
  • Civil claims
  • Bankruptcy
  • Collections
  • Liens
      • Some of this information can remain on your report for a long time. Bankruptcy (7 – 10 years), liens can be renewed and stay on indefinitely
credit items history
Credit Items (history)
  • List of credit accounts
  • Account numbers, type of account, payment history, months reviewed, total amount of debts…
  • This information stays on your report for seven years from date of last activity
  • Payment history has the largest affect upon your credit score (a measure of credit risk that affects how much you pay for loans, interest, and even insurance.
  • List of requests for you credit information
  • Creditor that you do business with
  • Someone who wants to offer you credit (promotional)
  • Your personal request for your report
  • A creditor where you have filled out an application
      • This is the only one that affects your score
      • These inquiries stay on your report for two years
  • www.ftc.gov
  • Excellent information on ordering, reviewing and correcting mistakes on your credit history
  • www.myfico.com
  • Information on how your report affects your score