Title: Financial Fitness for Life Training Conference Becoming a Smart Money Manager
1Financial Fitness for LifeTraining
ConferenceBecoming a Smart Money Manager
University of Illinois at Urbana-Champaign
College of Agricultural, Consumer and
Environmental Sciences United States Department
of Agriculture Local Extension Councils
Cooperating University of Illinois Extension
provides equal opportunities in programs and
employment.
2Funding for this workshop is provided by
National Council on Economic Education US Dept
of Education University of Illinois Extension
3Instructors
- Dr. Angela Lyons, Assistant Professor, University
of Illinois Urbana-Champaign (217) 244-2612
anglyons_at_uiuc.edu - Debra Bartman, Extension Educator, Quad
Cities Center
(309) 792-2500 (x217) dbartman_at_uiuc.edu - Patricia Hildebrand, Extension Educator,
Effingham Extension Center
(217) 347-5126 phildebr_at_uiuc.edu
4Anecdotal Storiesfrom Real Students
5Objectives
- Introduce
- (1) Financial Fitness for Life
- (2) Saving and Investing
- (3) Budgeting
- (4) Credit Reports and Credit Scores
- (5) NEFE HSFPP
- Experience activities to use in the classroom
- Answer questions about curriculum and other
resources
6You will receive
- Curricula with lessons and activities to use in
the classroom - 6 CPDUs
- Network of colleagues to share experiences
- Resources available at U of I Extension
7Financial Fitness for Life
- Overview
- Teacher Guide
- Student Workouts
- Parents Guide
- CD-Rom and web links
8 http//fffl.ncee.net
9- 5 Themes and 22 Lessons
- The Economic Way of Thinking
- Earning Income
- Saving
- Spending and Using Credit
- Money Management
10- Each lesson includes
- Fitness Focus (lesson description and objectives)
- Workout (warm-up, exercise, cool down)
- Visuals
- Student Exercises
- Family Activities
11- Meets national and most state content standards
in 4 critical areas - Economics
- Language Arts
- Mathematics
- Personal Finance
12FFFL Part 1(Lessons 1, 3, 8, 10, and 14)
How to Really Be a Millionaire
13The Millionaire Game
- The Rules
- For each statement, answer TRUE or FALSE.
- For each correct answer, give yourself 5 points.
- For each incorrect answer, take away 5 points.
- For any 5 statements, you may use your
Millionaire card. If you answer correctly, you
receive 10 points. If not, you lose 10 points.
14Lets Get Started.
- Question 1
- Most millionaires are college graduates.
-
15 16- Question 2
- Most millionaires work fewer than 40 hours a
week. -
17 18- Question 3
- More than half of all millionaires never
received money from a trust fund or estate. -
19 20- Question 4
- More millionaires have American Express Gold
Cards than Sears cards. -
21 22- Question 5
- More millionaires drive Fords than Cadillacs.
-
23 24- Question 6
- Most millionaires work in glamorous jobs, such
as sports, entertainment, or high tech. -
25 26- Question 7
- Most millionaires work for big Fortune 500
companies. -
27 28- Question 8
- Many poor people become millionaires by winning
the lottery. -
29 30- Question 9
- College graduates earn about 65 more than high
school graduates earn. -
31 32- Question 10
- If an average 18-year-old high school graduate
spends as much as an average high school dropout
until both are 67 years old, but the high school
graduate invests the difference in his or her
earnings at 8 annual interest, the high school
graduate would have 5,500,000.
33 34- Question 11
- Day traders usually beat the stock market and
many of them become millionaires. -
35 36- Question 12
- If you want to be a millionaire, avoid the risky
stock market. -
37 38- Question 13
- At age 18, you decide not to smoke and save
1.50 a day. You invest this 1.50 a day at 8
annual interest until you are 67. At age 67,
your savings from not smoking are almost
300,000. -
39 40- Question 14
- If you save 2,000 a year from age 22 to age 65
at 8 annual interest, your savings will be over
700,000 at age 65. -
41 42- Question 15
- Single people are more often millionaires than
married people. -
43 44Lesson 8 Spending vs. Saving
The road to wealth.
begins with saving,then investing.
45 Managing money well means taking things one
step at a time.
46The factors that affect how much savings grow
are
- Time
- The earlier or longer you save,
the more savings you will have. - Investment Size
- The more you save each year from your
- income, the more savings you will have.
- Rate of Return
- The higher the interest rate or rate of
- return, the more savings you will have.
47Exercise 8.2A Tale of Two Savers
Time Value of Money
The earlier you save, the more s you will have.
48 Cool Million calculator www.myfico.com/CreditEd
ucation/Calculators/Millionaire.aspx
49 Other Calculators Mortgage Auto Loan Debit and
Credit Cards Saving Personal Finance Investment Re
tirement
50Exercise 8.3Why It Pays to Save Early and Often
Rule of 72
Or, how long it takes for savings to grow to
double your money
Divide 72 by the interest rate. Example72 ? 6
? 12 years
51Activity (Exercise 10.1)
Free Lunch
52FFFL Lessons
- Grades 9-12
- Lesson 1, How to Really Be a Millionaire
- Lesson 3, Decision Making
- Lesson 8, Whats the Cost of Spending and Saving?
- Lesson 10, Investment Bingo
- Lesson 14, All About Interest
- Grades 6-8
- Lesson 7, p. 61-64, Types of Savings
- Lesson 8, p. 65-81, Simple and Compound Interest
53FFFL Part 2(Lesson 20)
Budgets are Beautiful!
54Creating a Spending Plan (Your Financial Plan)
- Identify your financial goals.
- Determine the time frame for your budget annual,
by academic term, monthly. - Take stock of where youre currently at.
- Estimate your available financial resources.
- Calculate your expenses.
- Do the math.
55- Subtract expenses from resources.
- Decide how much to borrow.
- Borrow only what you can afford to pay back.
- Note that your loans will be repaid with your
FUTURE income.
56 57Set Your Financial Goals
- Types of goals
- Short-term (1 year or less)
- Medium term (1-5 years)
- Long-term (5 years or more)
- Identify goals and write them down.
- Prioritize your goals.
- Develop strategies to achieve your goals.
- Reassess your goals periodically.
- ACTIVITY Financial Goal
Worksheets
58Identify and Prioritize Your Goals
- What do you want to buy after you graduate?
- How soon do you hope to pay off any student loan
or other education-related debt you have
incurred? - What kind of lifestyle do you want?
- Where do you want to live?
- What are your hopes for a family?
- Where do you want to work?
- Where do you want to retire?
- What kind of lifestyle do you want in retirement?
59When creating a spending plan.
- Set limits and prioritize.
- Know your limits.
- Learn by doing!
- Get some practical experience.
60When estimating your resources.
- REMEMBER
- Borrowed funds are NOT your resources!!!
61When calculating expenses.
- Be honest and realistic.
- Distinguish between needs and wants.
- Consider fixed and variable (flexible) expenses.
- Pay yourself first (PYF)
62Can you cut expenses?
- Find one or more roommates to share living
expenses. - Eat at cheaper places when dining out cook at
home. - Have only one phone.
- Dress for less.
- Clip and use coupons.
- Dont buy a new car.
- Beware of buying for convenience.
- Avoid credit card debt.
63Saving Dollars When You Dont Have a Dime to
Spare
Item How Often Price of Each Savings/Year
Eating Out 5 days/week 6.50 1690.00
Magazine 1/week 4.00 208.00
Soft drink/candy bar/chips 1/day 1.00 365.00
Tank of gas 1/week 24.00 1248.00
Lottery ticket 2/week 2.00 208.00
Cigarettes 1 pack/day 4.00 1460.00
Alcoholic Beverage 1/day 2.00 730.00
Cable 1/month 45.00 540.00
Phone extras (call waiting, caller ID, voice mail, etc.) 1/month 11.00 132.00
Gifts (charity/family/friends) 2/month 20.00 480.00
Total 7061.00
Break a habit! Do without! Dont buy!
64Budgeting Really Does Work
- A successful budget should
- Help increase savings
- Inhibit impulsive spending
- Determine what you can afford
- Identify expenses that can be reduced
- Repay debt
- EVIDENCE BYU Financial Path to Graduation
65Its not all about finances.
- Emotions and decision making
- Family communication
- Purpose and value of money
- Financial habits and financial socialization
66Methods for Tracking Spending
- Personal financial software programs
(Quicken or Microsoft Money have built-in
budget-making tools that can create your budget
for you.) - PowerPay (Utah State University)
- Worksheets / spreadsheets
- Online budget planning calculators
- Envelope method
67 www.powerpay.org
68 PowerPay Spending Plan PowerSave Calculators Educ
ation Center
69 Basic Spending Plan Extended Spending Plan
70 PowerSave
71 Calculators
72 Education Center
73Access Group, Inc. http//www.accessgroup.org/Stud
ent-Loans/learn-about-loans/wise-borrower-tutorial
.htm
74(No Transcript)
75Calculators Interest Rate Comparison
Calculator In-School Budget Calculator Loan
Repayment Calculator Out-of-School Budget
Calculator
76 Money 101 Making a Budget http//cgi.money.cnn.c
om/tools/instantbudget/instantbudget_101.jsp
77www.finaid.org/calculators College Cost
Projector Savings Plan Designer Expected Family
Contribution and Financial Aid Calculator Loan
Calculators Budgeting Calculators
78FFFL Lessons
-
- Grades 9-12
- Lesson 20, p. 98-101, Managing Your Money
- Grades 6-8
- Lesson 15, p. 128-134, Managing Cash
79An Activity
- The Bean Game!
- A simulation game where
- you learn how to prioritize
- and make spending choices
- based on whats important
- to you.
80Iowa State University Extension http//www.extensi
on.iastate.edu/finances/personal/childrenmoney/You
th.htm Spending Game Allowance Game
81 http//www.extension.iastate.edu/Publications/PM1
103.pdf
82(No Transcript)
83 http//www.extension.iastate.edu/Publications/PM1
776.pdf
84(No Transcript)
85Credit Reports and Credit Scores
FFFL Part 3(Lessons 11, 12, 13)
86How credit can affect your everyday life
- Getting a job
- Renting an apartment
- Getting a loan
- Buying a car
- Paying insurance
- Getting married!!!
87Take the Credit Challenge!Myths and Realities of
Credit
- The Rules
- For each statement, answer TRUE or FALSE.
- For each correct answer, give yourself 5 points.
- For each incorrect answer, take away 5 points.
- For any 5 statements, you may use your CREDIT
card. If you answer correctly, you receive 10
points. If not, you lose 10 points.
88Lets Get Started.
- Question 1
- Credit card companies only approve credit limits
that an individual is able to afford. -
89 90- Question 2
- After you take out a loan, a lender is not
required to provide information to credit
reporting agencies about the loan and your
history of paying it back.
91 92- Question 3
- Approximately 10 of an individuals credit
score is determined by their payment history.
93 94- Question 4
- Individuals are eligible to receive a free
credit report once a year from each of the three
credit reporting agencies.
95 96- Question 5
- Credit reports contain information on where an
individual has lived, past employers, and annual
income.
97 98- Question 6
- A potential employer is permitted to see an
individuals credit report without his/her
consent.
99 100- Question 7
- Requesting a copy of your own credit report can
negatively affect your credit score.
101 102- Question 8
- Negative information, such as filing for
bankruptcy, can remain on a credit report for up
to 10 years.
103 104- Question 9
- By law, if an individual is unable to resolve a
disputed item with a credit reporting agency,
they have the right to delete the information
from their credit report.
105 106- Question 10
- If an individual resolves an error on their
credit report with one credit reporting agency,
the same error will automatically be corrected by
the other credit reporting agencies.
107 108What is a credit report?
- An evaluation of your credit experience.
- Similar to a report card.
- Your credit record includes
- Personal information
- Open lines of credit
- Payment history
- Inquiries
- Public record and collection items (bankruptcies,
foreclosures, financial judgements) -
109What info is not in your credit report?
- Race
- Religion
- Medical history
- Political affiliation
- Criminal records
- Annual income
- Checking or savings accounts
110Who has access to your credit report?
- Creditors
- Employers
- Insurance companies
- Certain professional organizations
- Courts
- IRS
- Collection agencies (i.e., CCCS)
111What is a credit score?
- A number that summarizes your level of
creditworthiness. - Your score depends on the credit scoring model
used. - FICO scores are the most common.
- Scores range from 300-850.
- Averages are between 690 and 740.
- Visit www.myfico.com for more information.
112FICO Score Ranges
- 20 are above 780
- 20 are between 740-780
- 20 are between 690-740
- 20 are between 620-690
- 20 are below 619
113 FICO Credit Score Estimator www.myfico.com/fico
creditscoreestimator
114- Your credit score is used to set the price of
your loan. - Based on
115 FICO Score Simulator Pay Bills on Time Pay
Down Balances on Credit Cards Pay Down Delinquent
Balances First Seek New Credit Transfer Credit
Card Balances Miss Payments Max Out Credit Cards
116 Other Calculators Mortgage Auto Loan Debit and
Credit Cards Saving Personal Finance Investment Re
tirement
117- Understanding Your Credit Score
- www.myfico.com
118(No Transcript)
119Checking Your Credit Report
- 3 major credit bureaus
- Equifax (Beacon score)
- (www.equifax.com, 1-800-685-1111)
- Experian (PLUS score)
- (www.experian.com, 1-888-397-3742)
- TransUnion (Empirica score)
- (www.transunion.com, 1-800-888-4213)
120 Obtaining a FREE Credit Report www.annualcredi
treport.com
121 Annual Credit Report Frequently Asked
Questions Contact Us About Us Fraud Alert
122An Activity
123 Sample Credit Report http//experian.com/credit
_report_basics/pdf/samplecreditreport1.pdf
124FFFL Evaluating Credit Reports
-
- Grades 9-12
- Ex. 13.1, p. 76
- Ex. 13.2, p. 79
- Illustration 13.1, p. 80-83
- Grades 6-8
- Lesson 13, p. 115-118
- Ex. 13.1A - 13.1E, p. 123-131
125FFFL Evaluating Credit Applications
- Grades 9-12
- Ex. 13.3, p. 84-85
- Ex. 12.1, p. 74-75
- Grades 6-8
- Lesson 13, p. 115-118
- Ex. 13.1A - 13.1E, p. 123-131
126Helpful Resources
- University of Illinois Extension
- Consumer and Family Economics
- www.ace.uiuc.edu/cfe
- National Council on Economic Education
- www.ncee.net
- Illinois Council on Economic Education
- www.econed-il.org
127University of Illinois Extension Consumer and
Family Economics www.ace.uiuc.edu/cfe
128NCEE www.ncee.net
129Contact Information
- Dr. Angela Lyons, Assistant Professor, University
of Illinois Urbana-Champaign (217) 244-2612
anglyons_at_uiuc.edu - Debra Bartman, Extension Educator, Quad
Cities Center
(309) 792-2500 (x217) dbartman_at_uiuc.edu - Patricia Hildebrand, Extension Educator,
Effingham Extension Center
(217) 347-5126 phildebr_at_uiuc.edu
130Questions