1 $how me the money. 2 authors: katelyn andersen, msu ravalli county extension jane wolery, msu...
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$how Me $how Me the Moneythe Money
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Authors:Authors: Katelyn Andersen, MSU
Ravalli County Extension Jane Wolery, MSU Teton County
Extension Marsha Goetting, MSU Extension Family
Economics Specialist
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Money Is a ToolMoney Is a Tool By itself, money has not value• When you use money is assumes a
meaning Each person makes unique decisions
about money Most people have a mixture of different
attitudes, values and believes about money
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Money Is a ToolMoney Is a Tool
How much do you know about how to use money as a tool?
Statistics show that, in your lifetime, you will earn $1,667,700 . . .
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Earning Budgeting Time-value of money• Saving• Spending• Compound interest
So You’re Going to Be a So You’re Going to Be a MillionaireMillionaire
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Questions for PrizeQuestions for Prize Answer as Teams
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Team QuestionsTeam Questions
Divide into teams of 4-6
Decide on Team Name
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Take Turns--Team Take Turns--Team RunnerRunner Sticky Notes
Write team name on sticky note each time your team answers a question
Class of ‘08Class of ‘08
$6$6
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Team Question 1Team Question 1What percent of undergraduate students have at least one credit card?
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Percent of students Percent of students with one credit cardwith one credit card
83%83%
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Team Question 2Team Question 2 What’s the average credit card balance owed by undergraduate students?
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Credit Card Balance Credit Card Balance for College Studentsfor College Students
$2,327
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Team Question 3Team Question 3 What percent of college students have a credit card balance between $3,000 & $7,000?
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Balance between Balance between $3,000 & $7,000$3,000 & $7,000
21%
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Team Question 4Team Question 4What is the average combined education loans & credit card balances for college seniors?
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Average combined Average combined education loans & education loans & credit card debtcredit card debt
$20,402
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Graduating seniors Graduating seniors student loan debtstudent loan debt
$17,140
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Graduating seniors Graduating seniors credit card debtcredit card debt
$3,262
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Team Question 5Team Question 5How many credit cards does
the average American household use?
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Number of Credit Number of Credit Cards the Average Cards the Average household Useshousehold Uses
8
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Team Question 6Team Question 6What’s the average credit card balance owed by American households?
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Credit Card Credit Card Balance…Balance…
$9,900
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Credit Card Interest Credit Card Interest that Americans pay that Americans pay each yeareach year
$64 billion
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Individual QuestionIndividual Question
What is the average annual credit card interest rate?
%%
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Average credit Average credit card interest ratecard interest rate
18.9%
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Team Question 7Team Question 7What percent of credit card holders say they hardly ever pay the balance in full?
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Hardly ever pay Hardly ever pay in fullin full
35%
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Credit Cards: Credit Cards: Avoid The Minimum Avoid The Minimum Payments TrapPayments Trap
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Earning and EducationEarning and Education Get an education Some sort of training Educate yourself about money• Lifelong education• Books• Classes• Newspaper• Learn something everyday about $$$
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Importance of EducationImportance of EducationEducational Level for Americans, 25+ years
Median Income ($2006)
Less than 9th grade $20,901
9th to 12th grade, no HS diploma $25,912
High School Diploma $39,426
Some college, No degree $49,691
College Graduate $81,723
MS Degree $88,422
Professional Degree $100,000
http://www.census.gov/hhes/www/income/histinc/h13.html)
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Learning to EarnLearning to Earn Skills
• Career building
Attitude• Be positive• Be motivated
Talents• Develop your hobbies
Willingness• Try new things
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How Much Do You Spend?How Much Do You Spend?
• Teens have resources• In 2006, teens spent
$153 billion • WOW-True in
Montana?
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Access to Access to Credit CardsCredit Cards• Means extra spending•On impulse buys•On items you would not otherwise
be able to afford•On interest (finance charges)
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So What’s the Big Idea?So What’s the Big Idea?
Paying off credit card balances sooner, means higher payments, but
You pay le$$ intere$t!
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Minimum Payments: Minimum Payments: How You Get TrappedHow You Get Trapped
June Bill Balance = $1,0003% minimum payment $30
Interest 15
Principal 15
Total Balance Left: $985
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Minimum Payments: Minimum Payments: How You Get TrappedHow You Get Trapped
July Bill Balance = $9853% minimum payment $29.55
Interest 14.77
Principal 14.78
Total Balance Left: $970.22
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Minimum Payments: Minimum Payments: How You Get TrappedHow You Get Trapped
August Bill Balance $970.223% minimum payment $29.10
Interest 14.55
Principal 14.55
Total Balance Left: $955.67
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The Costs of Minimum The Costs of Minimum PaymentsPayments Matt (light blue) Julie (aqua) Chris and Bethany
(Lavender) Use Credit Smarts
Calculator to answer
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DiscoveryDiscoveryDiscoveryDiscovery If you make continued
payments of the initial 3% amount, any debt can be paid off in 3.88 years!!!!!!!
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Steady PaymentsSteady Payments Steady PaymentsSteady Payments
$10,000 $300 3.88 $25,000 $750 3.88$30,000 $900 3.88
yrsyrsdebtdebt paymentpayment
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Parting WisdomParting Wisdom
Pay MORE than 3% minimum & save a LOT
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Steady as She GoesSteady as She Goes Steady (even) payments will
reduce debt and interest Just the same, steady (even)
payments to savings will earn interest
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Savings and the Savings and the Time Value of MoneyTime Value of Money
Tiffany and Brian •Who will have the most?
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BrianBrian TiffanyTiffany Deposits $2,000 for
10 years
• Age 25-34• Saves Nothing
for next 30 years
Waits until age 35• Deposits
$2,000 for next 30 years
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BrianBrian TiffanyTiffany
Contributions
$20,000 $60,000
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Time & MoneyTime & Money
Brian $545,344 Tiffany $352,427 Brian saved less, but began earlier –Has $192,917 more than Tiffany
Are you a Brian or Tiffany?
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Compound InterestCompound Interest Is magical when money is
steadily invested & left to grow!
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$aving!$aving!
How do you find money to save?• The “Drink Sink” – find some missing money• Habits – form saving habits versus spending
habits!• $ave part of what you earn• Invest, so your money is earning interest
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$how Me the Money!$how Me the Money!
Happy saving