MONEY MANAGEMENT WORKSHOP

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MONEY MANAGEMENTWORKSHOP

• Learning Enrichment Center

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Self-Assessment

• Are you a good money manager?
• How can you improve your money management?

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Whats 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

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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!!

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Making a Budget

• Consider a certain time frame
• 1 year
• 1 month
• List income
• List fixed and variable expenses

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Making a Budget

• Income
• Salary from work
• Savings
• Money from parents, spouse, grandparents etc.
• Financial aid

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Fixed Expenses

• College room and board or rent
• Heat and water
• Car payment and insurance
• Health Insurance
• Tuition

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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,

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Making a Budget

• Does your income cover your expenses?
• If yes good, but dont raise your spending
• If no how can you make your budget look
  better?

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Increase Income

• Get a job!
• Look into the possibilities for financial aid

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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!

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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

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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

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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

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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

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Credit Cards

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

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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

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Types of Credit Cards

• Secured
• Product serves as collateral
• Unsecured
• Based on promise and signature
• Most credit cards are unsecured

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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

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Interest Rates

• Example 1
• Interest 18.5
• Purchase of furniture 2000
• Years to pay off with minimum payment 11
• Interest charges 1934

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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

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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

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Grace Period

• A period in which you dont 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

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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

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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
• Dont use credit cards for things that will wear
  out before you finish paying for it

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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!

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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

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Additional Information

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