1. Team D Leonard A Wilson III Javier Vargas Sunny Shiau DishonMcEwan
2. The purpose of this presentation is to empower students with insights to how credit reports and score works. They will also learn how to make a budget plan and they will also learn about credit cards rates. It is the goal of this presentation to be a tool students can use to help them make sound financial decisions that will promoted them to a more responsible and disciplined adult when it comes to finances.
3. Students who move out of their parents home out on their own do not understand how to budget their money effectively. This can cause students to work too many hours and have a negative impact on their school work. Before moving out of their parent's home, State University want to provides students and their parents with a model budget plan to manage their finances. As a result of this plan, students can work a reasonable number of hours and achieve academic success
7. Organization - use a file cabinet for the bills for the month and year so you know where you're money is going
8. Use a shredder to protect yourself from identity theft if you decide to get rid of the bills.
9. Use a Fireproof safe for money you can use for emergency. You can also use it for important documents also such as Insurance policy documents, Copies of deeds and titles for your home, car, and other real property, Copies of previous year's income tax returns, and Originals of wills and powers of attorney.
10. Cut Spending Waste. This means stop wasting money on the wants you want in life and save the money for something more important. You can do this by numerous ways. Some ways are write down all the things you brought as a want, keep receipts, and monitor ATM use.
11. Build a Budget. Write down your income for the month and year. Write down your monthly expenses on your bills. Identify where you want to make budgetary.
12. Save Money. Establish an emergency fund.There are also numerous ways for money management depending on that person situation. The situations can include living on your own as a single person, married to a spouse, married to a spouse with kids or divorced. Living as a single person. You will have monthly bills that you just have to take care of. These bills include rent, utilities bill, phone bill, food and hygiene accessory. These are just bills that are needs. Now you have to see about wants bill. These can be leisure time, cable, and etc. Living with a spouse can be different now. Now it would depend if the spouse is working or not. If the spouse is working nowthere is more money that you can save up for emergency funds. You can also have more money for leisure time. The bills can also be divided into two. If the spouse now doesn't work, you now have to see what the spouses needs are. Living with a spouse and having a kid. Now you have three people to worry about with the expenses. The children needs can be diapers, milk, clothing, and maybe day care depending if the spouse is working or not. Now it's more difficult to live. The bills are going to be more then living on your own. Now you have more needs in the family then living by yourself. Divorce is the worse now. You have to give the spouse child support on top of every other bill you would have to pay monthly. Now you can't even save for leisure time since it's going to child support. You still have to take care of children also. Bottom line is depending on your living style there is always going to be a need and a want. You just have to decide what they are in your eyes.
14. Food is a basic but very important biological necessity. Without the proper nutrient it could make academic projects stressful and also lead to absents due to sickness. FOOD $200
15. Personal hygiene is important for student self esteem as well as inter-dependency. Taking care of ones hygienically needs help make one comfortable and self confident. PERSONAL HYGIENE $10
16. LAUNDRY Laundry another hygienically need, a person appearance plays an important part of how they feel about themselves and around others. It also a great help as to adhere to dressing protocol according to work and school. $20
17. TRANSPORTATION It is without saying transportation is critical for students to get to and from destination to destination, whether it be by private or public transportation. This is a daily need, if one is using public trans-portation it’s best to get a weekly or monthly unlimited pass. $90
18. College student will need school supplies just like any other student. Placing this in your budget will ensure you will have the necessary tools to succeed in your studies. BASIC SCHOOL SUPPLIES $10
19. CELL PHONE A cell phone is a great communication device, one can always keep in contact with family, work, school and other students or study group members. Student can be keep in the loop for days they missed or inform important parties of emergency that may occur. $40
20. Savings is one thing that most people want to do, but without a game plan it become just idle talk. Savings is important so one came some monetary support to fall on. SAVINGS $70
21. Internet service, is both a need and want that serve as one of the greatest resource for academic purpose and entertainment. You have a world of information at your finger tip and can pay bills over the internet as well a shop or downloads thing your need. INTERNET service $30
22. Leisure time is an important want because it help keep stress and frustration down. In addition, leisure time can help recharge students focus, in-spiration and creativity toward achieving goals. LEISURE $50
23. CABLE Cable is another important want because it can be use for a very fast internet services as well as for entertainment. It can be use for relaxing at home or for watching the news on current events, sports, and favorite shows. $30
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25. Credit Card Usage Recommendation 1 You should use a debit card for most of your purchases instead of credit cards because debit card don’t have interest rates and make it easier to not over extend yourself. Credit card should be a last resort or maybe for emergency emergencies not emergency “I got to have it” emergency for something you like. Don’t practice restraint, use restraint. One of the most important thing to remember is you don’t just pay back what you owe there is the INTEREST RATES you must pay. The first credit card usage recommendation is; to use your credit card wisely not frivolous. “Credit cards are the power tools of the financial world. Before you pick up the plastic, however, be sure that you understand all the potential harm they can cause. If you avoid the temptation of overspending, and pay off those balances every month, your credit card will be a powerful financial ally.” Greg Mischio - MortgageLoan.com
30. Remaining Balance: $1,973.33 ($2,000 - $26.67) These calculations are done every month until the credit card debt is paid off. In the end, John pays $4,240 in total over 15 years to absolve the $2,000 in credit card debt. The interest that John pays over the 15 years totals $2,240, higher than the original credit card debt. Because Jane paid an extra $10 a month, she pays a total $3,276 over seven years to absolve the $2,000 in credit card debt. Jane pays a total $1,276 in interest. The extra $10 a month saves Jane almost $1,000 and cuts her repayment period by more than seven years! The lesson here is that every little bit counts. Paying twice your minimum or more can drastically cut down the time it takes to pay off the balance, which leads to lower interest charges. However, as we will see below, it's wise not to pay only your minimum or even just a little more than your minimum. It's best simply not to carry a balance at all. Do remember, $1 is $1, regardless of whether it is invested or lost. Not thinking this way can be very costly. (http://www.investopedia.com/articles/01/061301.asp?viewed=1)
31. Credit Card Usage Recommendation 3 In my first recommendation I mention using credit cards for emergencies, but there are other times when using credit is good. One of them times is traveling or vacation it serve as a protection tools against losing cash and being without money. Yet, another surprisingly good thing to use credit card for is purchasing fragile or electronic items (I mention these two because they are more likely to be damaged when purchased if boxed up). Your card protects you from pay for damaged goods. That is if you have the protection insurance some company offer it for free. For credit card users who are aware of the coverage and want to use it, it covers you in the event that you purchase an item using your credit card that becomes damaged on the way home or soon thereafter, becomes lost, or someone steals it. These are the typical eligibility requirements for purchase protection coverage, although once again, be sure to read your specific credit card company’s policy for the exact details of your coverage. In most cases, the credit card company will refund the amount of the purchase (as shown on your store receipt or credit card statement) back onto your credit card account, although there is almost always a maximum limit to how much money can be refunded under the insurance. Most policies will also have strict exclusions for certain types of damages to items purchased, so a purchase protection insurance policy is not a perfect solution as not all instances of damaged items will be covered, but at least it is better than no coverage! (http://www.creditorweb.com/articles/purchase-protection.html)
32. In Summary In summary of the first part of this presentation, the presentation give students a example of a items that should be included in a budget plan in addition to bills and how budget plan may vary depending on status. We also offered three recommended usage of a credit card. The second part of this presentation gives information of credit report and interest rates. The overall conclusion and goal of this presentation is to empower student to not waste money due to lack of knowledge. In addition it is our intention to prepare students with independent living skills to be not only a successful student, but also a successful person.
47. It have been said that math formula of calculating credit score is like the secret ingredient to Coke Coca Cola or Kentucky Fried Chicken, it’s their secret. However I did find out what are calculated into the scores. Additional credit inquiry will take less than 5 points off your FICO Score It is not strange forthere to be a 50 point difference between the three reports
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49. Presence of adverse public records such as bankruptcy, judgements, suits, liens, wage attachments, etc.), collection items, and/or delinquency (past due items)
67. What Are Interest Rates? By: Javier Vargas Like anything else in economics, there's a few competing definitions of the term interest rate. The Economics Glossary defines interest rate as: "The interest rate is the yearly price charged by a lender to a borrower in order for the borrower to obtain a loan. This is usually expressed as a percentage of the total amount loaned." In day to day conversation we tend to hear references to "the interest rate". This is somewhat misleading, as in an economy there are dozens if not hundreds of rates interest between borrowers and lenders. The differences in rates can be due to the duration of the loan or the perceived riskiness of the borrower. To learn more about the different types of interest rates, see what’s the Difference Between all the Interest Rates in the Newspaper? Nominal Interest Rates vs. Real Interest Rates Note that when people discuss interest rates, they're generally talking about nominal interest rates. A nominal variable, such as a nominal interest rate, is one where the effects of inflation have not been accounted for. Changes in the nominal interest rate often move with changes in the inflation rate, as lenders not only have to be compensated for delaying their consumption, they also must be compensated for the fact that a dollar will not buy as much a year from now as it does today. Real interest rates are interest rates where inflation has been accounted for. This is explained in more detail in Calculating and Understanding Real Interest Rates. How Low Can Interest Rates Go? Theoretically nominal interest rates could be negative, which would imply that lenders would pay borrowers for the privilege of lending money to them. In practice this is unlikely to happen, but on occasion we do see real interest rates (that is, interest rates adjusted for inflation) go below zero. To learn more, see: What happens if Interest Rates Go To Zero?
68. Calculating and Understanding Real Interest Rates. Ihave a couple of questions about the real interest rate I was hoping you could answer: I have the following consumer price index (CPI) and nominal interest rate data: CPI Data Year 1: 100 Year 2: 110 Year 3: 120 Year 4: 115 Nominal Interest Rate Data Year 1: -- Year 2: 15% Year 3: 13% Year 4: 8% How can I figure out what the real interest rate is for years 2, 3, and 4? I’m offered the following deal: I lend $200 to a friend at the beginning of year 2 and charge him the 15% nominal interest rate and he pays me back the $230 at the end of year 2. If I agree to this deal will I be made better or worse off? [A:] Thanks for your great questions! First we’ll look at what the real interest rate is and then we’ll see how to calculate real interest rates. What is the Real Interest Rate? In the article “What’s the Difference Between Nominal and Real?” we learned that “a real variable, such as the real interest rate, is one where the effects of inflation have been factored in. A nominal variable is one where the effects of inflation have not been accounted for.” An example shows how real interest rates work: Suppose we buy a 1 year bond for face value that pays 6% at the end of the year. We pay $100 at the beginning of the year and get $106 at the end of the year. Thus the bond pays an interest rate of 6%. This 6% is the nominal interest rate, as we have not accounted for inflation. Whenever people speak of the interest rate they're talking about the nominal interest rate, unless they state otherwise. Now suppose the inflation rate is 3% for that year. We can buy a basket of goods today and it will cost $100, or we can buy that basket next year and it will cost $103. If we buy the bond with a 6% nominal interest rate for $100, sell it after a year and get $106, buy a basket of goods for $103, we will have $3 left over.
71. r: is the Real Interest Rate To calculate the real interest rate, we need to know the inflation rate (or expected inflation rate, if we’re making a prediction about the future). From the data given we don’t have the inflation rate, but we can calculate it from the CPI data: Calculating the Inflation Rate We need to use the following formula: i = [CPI(this year) – CPI(last year)] / CPI(last year). So the inflation rate in year 2 is [110 – 100]/100 = .1 = 10%. We do this for all three years and get the following: Inflation Rate Data Year 1: -- Year 2: 10.0% Year 3: 9.1% Year 4: -4.2% Now we can calculate the real interest rate. The relationship between the inflation rate and the nominal and real interest rates is given by the expression: (1+r)=(1+n)/(1+i). However for low levels of inflation we can use the much simpler Fisher Equation to calculate the real interest rate: FISHER EQUATION: r = n –i Using this simple formula, we can calculate the real interest rate for years 2 through 4: Real Interest Rate (r = n –i) Year 1: -- Year 2: 15% - 10.0% = 5.0% Year 3: 13% - 9.1% = 3.9% Year 4: 8% - (-4.2%) = 12.2% So the real interest rate is 5% in year 2, 3.9% in year 3, and a whopping 12.2% in year 4.
73. Credit Cards and Interest Rates The article “Strategies Used by Credit Cards Companies” provides information on some of the strategies used by credit card companies to lure in customers. The article explains that credit card companies use lower fixed rates to attract new customers. Some even offer zero percent interest rates on purchases the first years as long as the customer makes payments ever month. Another strategy they use is reward programs. Every time a customer uses the card they get reward points towards other purchases. I chose this article because it provides the exact information I was looking for. The article hit my main two points. Credit card strategies and interest rates that come with them. To article provides a person who is looking for a new card on what type of offers that are out there.
74. Credit Reports The article “Why is a Good Credit Score Important for Students?” provides information on why college students should work on the credit score as soon as possible. The biggest factor to me is the fact that a lot of employer look at credit scores to determine your level of responsibility. You go to college so you can get a good job and you wouldn’t want your credit history in the way of that. Also a good credit score will help you get the things you want and need once you a graduate. When buying a house, a car or any other luxury item your credit score will be checked. I chose this article because it provides the exact information I was looking for. The article provides information for students how to maintain a good credit score. From paying the minimum payments to checking your credit report just to know how your credit is. The article also provides benefits of having and maintaining a good credit score. The article stresses its importance and reaches out to the reader.
75. Money Management The article “A Few Tips on Money Management” provides things to look out for when trying to manage your money. First, determining your needs to necessities is a good step in money management. Next, use your monthly income as a way to limit what your necessities and luxury items are. The articles suggest you save 10% of your monthly income. The article also suggests you avoid using credit cards as much as possible. I chose this article because it provided exactly the information I was looking for. The article provides steps on how to manage your money. The article tells you how much you should save. The article also tells you should plan ahead your expenses based upon your monthly income. The most important thing is to determine your needs and not go over your limit.
76. Works Cited Napa, C. (n.d.). Strategies used by credit card companies. Ehow.com , 1. Ehow.com/way_5718896_strategies-used-credit-card-companies.html Day, N. (n.d.). Why is a good credit score important for students? Ehow.com , 1. Ehow.com/about_4617531_good-credit-core-important-student.html. Michelle, N. (n.d.). A few tips on money management. Ehow.com , 1. Ehow.com/way_5143124_tips-oney-management.html Mischo, Greg..Four Positive Reason To Use Credit Card..Mortgageloan.com Internet..Understanding Credit Card Interest..Investopedia.com/articles/01/061301.asp?viewed=1 Internet..Purchase Protection..Creditorweb.com/articles/purchase-protection.html Internet..Credit Report Basic..Consumerinfo.com Privacy Rights Clearing House/UCan..Factsheet 6c: Your credit Score How It Adds Up(subsection 2)New Rights To Credit Score(subtitle)What Is A Credit Score..Posted November,2005 Revised June,2008..Privacyrights.org/fs/fs6c-creditscores.html#2 Internet..Payment History Analysis..Businessdictionary.com/definition/Payment-history-analysis.html Internet..What’s In Your FICO Score..MyFICO.com/Crediteducation/Whatsinyourscore.aspx
Editor's Notes
Speech Notes - Slide 1
Speech Notes - Slide 2
Speech Notes - Slide 31. [Rectangle] Rectangle ClipStudents who move out of their parents home out on their own do not understand how to budget their money effectively. This can cause students to work too many hours and have a negative impact on their school work. Before moving out of their parent's home, State University want to provides students and their parents with a model budget plan to manage their finances. As a result of this plan, students can work a reasonable number of hours and achieve academic success
