Smart Money Skills. Personal Financial Workshop. Brought to you by: Shawn Spruce First Nations Development Institute

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1 Smart Money Skills Personal Financial Workshop Brought to you by: Shawn Spruce First Nations Development Institute

2 Who We Are: 501(c)(3) non-profit founded in 1980 Three pronged strategy of education, advocacy, and capitalization Promoting financial education in communities nationwide 2

3 Financial Education Products and Services: Building Native Communities curriculum Financial education training Program support Online resources Experiential learning 3

4 Does it Work? 2009 Federal Reserve Study Pre car purchase training for soldiers stationed at Fort Bliss, TX Key Findings: Financial education is most effective when presented in a timely, as needed method with topics that are relevant to lives of participants 4

5 Pop Quiz!! 5

6 In the U.S. more people file for bankruptcy than graduate from college: True False 6

7 More students quit college due to credit card debt than bad grades? True False 7

8 How much does the average four-year college student owe in student loans upon graduation? $7,700 $25,200 $39,300 8

9 Making the Minimum Payment $3,000 charged to a credit card will take how many years to pay off? 3 Years 18 Years 10 Years

10 How many advertisements is the average American exposed to each day? 500 1,500 3,000 10

11 In Gallup, NM there are more payday lenders than fast food restaurants: True False 11

12 Men are better than women at managing their money: True False 12

13 Within two years of retirement, what percentage of former NFL players are bankrupt or under financial stress due to joblessness or divorce? 10% 25% 50% 78% 13

14 A person with $1,000,000 is more likely to be happy than a person with $50,000: True False 14

15 What does Money Equal to You? Select the phrase that is closet to how you feel about money. Money = Love Money = Power Money = Greed Money = Happiness Money = Opportunity Money = Loneliness Money = Security Materials Developed by Inger Giuffrida, Financial Educator and Asset Building Consultant. 15

Money = Love Money = Power Money = Greed Money = Happiness Money =

16 Generational Differences Regarding Money Common Generation Name Birth Years GI and Silent Generation Boomer Generation Generation X Generation Y (Millennials)

Generation 1909 1942 Boomer Generation 1943 1964

17 Veterans and Silent Generation Born Formative Events The Great Depression Pearl Harbor WW II Hiroshima The New Deal The Korean War Core Values Tradition Respect for authority Conformity Prefer consistency and uniformity Discipline Strong work ethic

The Korean War Core Values Tradition Respect for authority

18 Baby Boomers Generation Born Formative Events The Civil Rights Movement John F. Kennedy, Robert Kennedy, Martin Luther King assassinations Vietnam War Woodstock The Moon Landing The Cold War Roe vs. Wade First generation raised with television and advertising Core Values Optimistic Want involvement/to be involved High value on education Competitive Status conscious Driven (work long hours & expect the same of others)

19 Generation Xers Born Formative Events Watergate Iran Hostage Crisis Fall of the Berlin Wall Challenger explosion The Gulf War The PC boom The Reagan Presidency Core Values Skepticism Work to live NOT live to work (work/life balance) Self reliance Fun Flexibility Independence

boom The Reagan Presidency Core Values Skepticism Work to live NOT live

20 Generation Y/Millennials Born Formative Events Oklahoma City Bombing 9/11 Terrorist Attack The Internet boom Columbine School Attack Corporate malfeasance The Great Recession First generation raised with personal computers, cell phones, etc. Core Values Realism Confidence Innovation Extreme Fun Social/connected Environmentally conscious

Great Recession First generation raised with personal computers, cell phones, etc.

21 Name that Generation s Core Money Value Buy Now, Pay Later Veterans and the Silent Generation Baby Boomers Generation X Millennials

22 Name that Generation s Core Money Value Savvy spender and saver Veterans and the Silent Generation Baby Boomers Generation X Millennials

23 Name that Generation s Core Money Value Earn to spend, but newly frugal Veterans and the Silent Generation Baby Boomers Generation X Millennials

24 Name that Generation s Core Money Value Buy Now, Pay Now Veterans and the Silent Generation Baby Boomers Generation X Millennials

25 Common Core Money Values Generation Veterans (Silent) Baby Boomers Generation X Generation Y (Millennials) Birth Years Money Values Put it Away Pay Cash Buy Now Pay Later Cautious/Savvy Conservative Earn to Spend Save Money = Security Tool Resource?

26 Where Does My Money Go?

27 3 Types of Expenses Fixed: costs that don t change Flexible: costs you can control Luxury: purchases you don t need

28 How Important To You Is: Owning a fancy vehicle Eating out often Wearing brand name clothing Living in a fancy place Sports activities or working out Entertainment: movies, concerts, parties Helping friends or family Carrying a deluxe phone or electronic device Buying gifts Vacation time/travel

29 Set 3 types of Goals Short term.less than 12 months Intermediate term 1 to 5 years Long term.more than 5 years 29

30 Know the difference Budget for short term goals Save for medium goals Invest for long term goals 30

31 Budgets for Everyone Everyone has a method that works for them. Organized- accordion file folder, spending plan or budget worksheets Paperless- excel worksheet, mint.com, quicken books Visual- cork board, calendar, dry erase board *Budget group exercise- 4 groups

32 Group exercise If all you had was $10 to buy dinner. What would you buy? If all you had was $20 to buy snacks for a month. What would you buy?

33 Understanding Credit

34 Credit Trust given to another person for future payment of a loan, credit card balance, etc. Creditor A person or company to whom a debt is owed.

35 Types of Credit Secured Requires something of value as a guarantee that you will repay your debt. Unsecured No guarantee is required.

36 Types of Credit Revolving Allows you to borrow money at any time up to a set limit. Installment Allows you to borrow a specific amount at one time for a specific purchase.

37 Types of Interest Simple Interest only calculated on principal Compound Interest calculated on BOTH principal and previous interest

38 Credit Cards Fee Will charge lower interest No-Fee Will charge higher interest Bank cards or Store Cards?

39 Pizza Cost Comparison Payment Methods Terms Cost to Consumer Cash Pay now $10 Credit Card with Balance Pay off over 18 months with 18% interest $42.40

40 Credit Reports

41 What is a Credit Report? It is a factual record of an individual s credit payment history as reported by his or her creditors. It s main use is to help a lender quickly and objectively decide whether to grant you credit, (i.e., buy a vehicle). Other uses include: renting an apartment, getting a job, qualifying for low insurance rates, buying a home, obtaining insurance, getting a cell phone. 41

42 Credit Report Information Includes: *Identifying information such as name, current and previous addresses, telephone number, social security number, date of birth and current and previous employers. *Credit information specific information about each account (date opened, late payments, collection accounts, current amount owed, credit limits, debt related lawsuits) *Public record information. *Inquiries names of those who obtained information about your credit history. Remember to check reports for errors regularly. 42

43 Fair Credit Reporting Act *The fair credit reporting act outlines how long information can be retained on your credit report. *Good credit can stay indefinitely. *Derogatory credit can only be reported for 7 years from the date that the account first became delinquent. *Bankruptcy: Chapter 7 is reported for 10 years and credit included in a Chapter 7 will only be reported for 7 years. *Bankruptcy: Chapter 13 is reported for 7 years. 43

44 Free Credit Report AnnualCreditReport.com Or by mail

46 The FICO Score Fair-Isaac Co. Scores range from 350 to 850 Good: Over 700 Not so good: 600 and below

47 3 Credit Bureaus Different FICO score for each bureau 3 scores (auto, mortgage, consumer) One free report a year from each bureau, but no free score

48 FICO Score Breakdown 35% Payment History 30% Current Debt 15% Length of History 10% Types of Credit 10% Applications

50 What is Warren Buffet s credit score?

51 Tips for a Healthy Credit Score Pay credit card bills within one week Contact lenders about problems Don t over borrow Don t bounce checks

52 Tips for a Healthy Credit Score Beware of third party assistance Pay utilities, parking fees, and library fees on time If you re late once ask creditor to delete a 30 day late item or to reage the account Add relevant information to your credit report

53 More Tips... Maintain at least one good account Avoid excessive inquiries Cancel newer cards Caution when co-signing

54 More Tips... Pull your credit report once a year and/or stagger them Don t apply for in-store credit Credit utilization ratio below 30% Pay attention to no limit cards

55 More Tips... Capital 1 is #1 for consumer complaints Start early!! Diversify credit Consider piggybacking

57 Other Credit Scores and Bureaus FICO Expansion Score Vantage Score ( ) Innovis (mailing lists) OPTOUT OptOutPrescreen.com

58 Where Should I Put My Money?

59 First Nations Development Institute Financial Education Consultant 2217 Princess Anne St. 600 Montclaire NE Suite Albuquerque, NM Fredericksburg, VA (505) (540) (505) mobile Contact: Sarah Dewees Contact: Shawn Spruce

CreditAbility: Build a Strong Credit History. Brought to you by Duke University FCU

CreditAbility: Build a Strong Credit History. Brought to you by Duke University FCU : Build a Strong Credit History Brought to you by Duke University FCU Seminar Objectives Learn: Who needs to build good credit, and why Significance of credit report and score How to establish credit if