introduction to maroon money management
DESCRIPTION
Introduction to Maroon Money Management. Preparing Future Faculty March 21, 2014. How to Graduate Successfully and Prosper Financially. Contact. Rebecca Smith, Ph.D. Director, Extension Center for Economic Education and Financial Literacy [email protected]. - PowerPoint PPT PresentationTRANSCRIPT
![Page 1: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/1.jpg)
Introduction to Maroon Money Management
How to Graduate Successfully and Prosper Financially
Preparing Future Faculty March 21, 2014
![Page 2: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/2.jpg)
ContactRebecca Smith, Ph.D.
Director, Extension Center for Economic Education and
Financial [email protected]
![Page 3: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/3.jpg)
3
Extension Center for Economic
Education and Financial Literacy
![Page 4: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/4.jpg)
Agenda
• The Case for Financial Literacy• Resources• Introduction to Maroon Money Management• Evaluation
![Page 5: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/5.jpg)
Connect With Us
[email protected] Please follow MMM Twitter account: @MSStateMoney#CreditForCredit– What did you like most about this workshop?– What topic would you like to learn more about?
![Page 6: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/6.jpg)
Why Do We Want to Improve Our Financial Standing?
![Page 7: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/7.jpg)
Getting Good Judgment
Good judgment comes from experience, and experience well, that comes from poor judgment. Confederate Army General Simon Bolivar Buckner
![Page 8: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/8.jpg)
Resources
![Page 9: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/9.jpg)
http://www.cashcourse.org/prep
Cash Course
![Page 11: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/11.jpg)
http://www.360financialliteracy.org/
![Page 13: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/13.jpg)
http://www.youtube.com/watch?v=rK6WLHNYjwM
![Page 14: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/14.jpg)
Is mint.com safe?
Pros The site is protected with the
same level of security as your financial institutions
No personal identifying information connected to your account other than your email address
You may not transfer money to or from your accounts through mint.com
Consᵪ You must give them your bank
account login ID and password
ᵪ Anytime you enter or access personal information on-line there is a risk
“Should You Trust Mint.com?” by Jennifer Saranow Schultz, The New York Times
![Page 17: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/17.jpg)
www.annualcreditreport.com
• Free once per year and after denial of credit– 877-322-8228
![Page 18: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/18.jpg)
Government Credit Educationhttp://www.consumer.ftc.gov/articles/0155-free-credit-reports
http://www.consumerfinance.gov/askcfpb/search?selected_facets=category_exact:credit-reporting
![Page 21: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/21.jpg)
Introduction to Maroon Money Management
How to Graduate Successfully and Prosper Financially
http://www.youtube.com/watch?v=EM_p1Az05Jo
![Page 22: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/22.jpg)
The Power of Higher Education
![Page 23: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/23.jpg)
For Most, College is a Good Investment!
Benefits• Higher job satisfaction• Healthier lifestyles• Contribute more to society • More prosperous children• Higher pay• Lower unemployment
Costs• Public funding is declining• Cost of higher education is
increasing• More students and parents
are taking out loans• Delinquency rates are rising
![Page 24: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/24.jpg)
Financial Return on Higher Education
![Page 25: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/25.jpg)
Rising Student Debt Loads
![Page 26: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/26.jpg)
Student Debt Loan Load is Rising
Source: http://www.newyorkfed.org/studentloandebt/
![Page 27: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/27.jpg)
Introduction to Maroon Money Management
How to Graduate Successfully and Prosper Financially
![Page 28: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/28.jpg)
Objective of MMMWhat?• A campus-wide initiative to increase personal finance literacy
and practices of MSU studentsWhy?• To empower participants to add more value to their lives, so
that they can achieve their dreams and live their lives more fully
How?• Provide new perspectives, knowledge, experiences, and
resources• http://www.moneymanagement.msstate.edu/
![Page 29: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/29.jpg)
MMM Opportunities
• Participate in MMM programming• Programming for your organizations• MMM Peer Mentors
![Page 30: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/30.jpg)
MMM Session Topic F2F Monday 12:30 Student Support Services
Montgomery Hall
Webinar Wed. 3:30 p.m.http://msues.adobeconnect.com/beckys/
Know Thyself & Your Success Feb. 3 Feb. 5
To Buy or Not to Buy? Decision-Making & Cutting Expenses
Feb. 17 Feb. 19
Saving & Budgeting Feb. 24 Feb. 26
Student Loans Mar. 3 Mar. 5
Credit Cards Mar. 17 Mar. 19
Taxes Mar. 31 April 2
Making Your Major Profitable April 14 April 16
Investing and Protecting April 28 April 30
Register at [email protected]
![Page 32: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/32.jpg)
Worth Your TimeTreasurer Lynn Fitch Roundtable• Wed., March 26 at 2:00pm in 310 Lloyd Ricks Watson
April 8 Open House 11:00am-2:00 pm • Dawg House “Life After College”
Mississippi Saves• www.mississippisaves.org
MS Savers Club• Meets every 4th Wednesday at noon in Bost 409• Bring your lunch!
![Page 33: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/33.jpg)
Graduate Healthy and Wealthy
![Page 34: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/34.jpg)
Success, Anxiety, and Failure You be the One to Define Your Success
• Alain de Botton - – Job snobbery – judging the worth of people based on what they do
• Begins from idea that we can be anything• Envy from perceived equality; spirit of equality with existence of deep inequality• “We can be anything” and “anything is possible” leads to low self-esteem
– Meritocracy – position achieved in life is merited and deserved• “Unfortunates” (victim of fate) vs. “Losers” (self-caused outcome)• It is wrong to judge anyone by their position in life
– Fear failure because we fear the judgment and ridicule of others• Tragedy (learning) vs. Failure (ridicule)
– Self-worship – there is nothing greater than us to believe in
– Success and failure• Idea of success = money, renown in field• Can’t be successful (excellent) at everything
– To be successful (excellent) in one facet, means can’t be successful in other facets
– Have your OWN IDEA of SUCCESS – you get to define it because you are the one that must live with it; make it your own
http://www.youtube.com/watch?v=-dMoK48QGL8
![Page 35: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/35.jpg)
Hiring Managers’ Assessment of Recent Grad Candidates Vs. Students’ Self-Assessment
(% Responding Very Prepared or Completely Prepared)
Creating budget or financial goal
Managing a meeting
Making a decision without having all the facts
Public speaking (e.g. giving a presentation)
Managing a project by identifying key steps, resources & timelines
Incorporating information to develop strategic insights
Writing to communicate ideas or explain information clearly
Prioritizing work
Writing to summarize results, convey information, etc.
Organization
Developing slide presentations in concise, compelling way
0% 10% 20% 30% 40% 50% 60% 70% 80%
52%
49%
47%
54%
67%
63%
71%
77%
70%
79%
75%
30%
34%
37%
43%
46%
46%
49%
50%
51%
54%
60%
Hiring Managers Students
Bridge That Gap: Analyzing the Student Skills Index; www.chegg.com/pulse
27% difference
25% difference
22% difference
22% difference
![Page 36: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/36.jpg)
![Page 37: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/37.jpg)
Relieving Stress• Time management
strategies and division (reduction) of responsibilities have been shown to reduce stress
• Relaxation techniques, physical activity, exercise, and other enjoyable (!) activities also serve as effective stress relievers
![Page 38: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/38.jpg)
Remember the Big Picture
• Make healthy choices when they are available and most of the time in general.
• Focus on what to eat, not what NOT TO EAT.• Remember that you don’t have to eat perfectly all
the time.• Allow fun foods.
![Page 39: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/39.jpg)
Making Your Major Profitable
![Page 40: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/40.jpg)
40
Maximize the Return on Investment in Your College Major
http://www.bls.gov/ooh/ http://www.gradsense.org/gradsense
![Page 41: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/41.jpg)
Successful Decisions and Cutting Costs
How to Graduate Successfully and Prosper Financially
![Page 42: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/42.jpg)
42
Improving Decision-Making
![Page 43: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/43.jpg)
43
Are you waiting for a future you?• Is there an important change or task that you are putting off, hoping that a future
you with more willpower will show up?– All the time? Often? Sometimes? Rarely?
• Do you optimistically overcommit yourself to responsibilities, only to find yourself overwhelmed by impossible demands?• All the time? Often? Sometimes? Rarely?
• Do you talk yourself out of something today, telling yourself that you’ll feel more like it tomorrow?• All the time? Often? Sometimes? Rarely?
• How does this affect your choices today?• What are strategies that can help you become the future self you want to
become?
![Page 44: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/44.jpg)
Use A Spending Diary
• Date• Item• Amount
Look back to see what the most common categories were in your spending and how much you spent in each category.
![Page 45: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/45.jpg)
Plugging Spending Leaks• Leave your debit/credit card at home• Attend free campus concerts and plays• Use your bike or public transportation• Carry a refillable water bottle instead of purchasing soft
drinks or coffee drinks• Limit the number of songs, ringtones, etc., you download • Avoid buying sodas and snacks out of vending machines• Kick a costly habit (cigarettes, lattes)• Use the library• Use the Internet for comparison shopping
![Page 46: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/46.jpg)
46
How Much is Your Daily Brew Costing You?
![Page 47: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/47.jpg)
Cutting Expenses—MSU Account
Due FROM Student• Personal Payments• Monthly eBills• Balance due on the 9th
• HOLDs & Fees
Due TO Student• MoneyMate• Refund• Leave on Account – Federal Aid recipient: it
is critical that you clear your account at the END of each aid year (end of SUMMER term)
![Page 48: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/48.jpg)
Successful Saving and Budgeting
![Page 49: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/49.jpg)
Where Did All the Money Go?
• Saving• Budgeting
![Page 50: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/50.jpg)
The Power of Saving While Young
![Page 51: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/51.jpg)
Why is it important to start saving early?
Because TIME is your best friend !!!
http://www.bankrate.com/calculators.aspx
![Page 52: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/52.jpg)
What a Difference a Few Years Make Jorge’s IRA Olivia’s IRA
Interest rate 9% 9%
Years contributions were made
9 years (age 22 to age 31) 34 years (age 31-65)
Amount contributed $1,000 per year For 9 years = $9,000
$1,000 per year For 34 years = $34,000
Value of IRA at age 65 $13,021 at age 31; this lump sum then compounds: At age 65 equals: $243,863
At age 65 equals: $196,982
![Page 53: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/53.jpg)
“Compound Interest is the eighth wonder of the world. He who understands it, earns it…he who doesn’t …pays it.”
-Albert Einstein
25 - 35 35 - 65$0
$50,000
$100,000
$150,000
$200,000
$250,000
EarningsInvest
Compound Interest
![Page 54: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/54.jpg)
Pay Yourself First
• Save at least 10% of your gross income• Use payroll deduction—never miss it!• Never touch retirement funds
![Page 55: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/55.jpg)
Emergency Savings Account
• 3-6 months living expenses– Begin with a goal of $500– Then at least $1,000– Then one month living expenses– One year living expenses for retirees
![Page 56: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/56.jpg)
Creating a BudgetA budget will let you tell your money where to go, instead of wondering where it went!1. Identify your sources of income2. Identify your expenses3. Setting goals4. Monitor 5. Make adjustments
![Page 57: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/57.jpg)
57
Stick to Your Budget!Expenditure Guidelines
30%
18%10%14%
7%10% 11%
Housing 30%Transportation 18%Debt 10%Food 14%Household 7%Savings 10%Everything else 11%
Source: Department of Labor, Bureau of Statistics
![Page 58: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/58.jpg)
Live Beneath Your Means
• Stop spending when you reach your budget limits – Groceries– Gasoline– Eating out– Personal allowance– Gifts or office contributions
![Page 59: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/59.jpg)
59
What type of account should I open?
Easy Accessibility
Access with Penalties
Cash
Savings
Money Market
CD’s
Brokerage Account
Qualified Retirement Plans
IRA Accounts
![Page 60: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/60.jpg)
Successfully Paying Off Student Loans
![Page 61: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/61.jpg)
61
Borrower Consequences• No additional financial aid• Reduced credit score
– Takes years to repair• Pay higher interest rates or inability to get credit in the future• Wages, Social Security benefits garnished• Tax refunds withheld• Lottery winnings withheld• Professional license withheld• Legal action
– borrowers are liable for original balance, accrued interest, court fees, collection fees
• Virtually impossible to discharge student loans through bankruptcy
![Page 62: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/62.jpg)
62
Debt “Rules of Thumb”
Total Debt• 20-10 rule
– Maximum total consumer debt should be no more than 20% of income
– Monthly debt re-payments should not exceed 10% of monthly income.
Student Loan Debt• Total student loan debt
should be less than starting annual salary after graduation
![Page 63: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/63.jpg)
Student Loan Best Practices
• Calculate repayment amounts BEFORE you borrow
• Financial Aid Shopping Sheet– http://collegecost.ed.gov/shopping_sheet.pdf
![Page 64: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/64.jpg)
64
Student Loan Best Practices
Take out the minimum!• The less you borrow, the
less you have to repay– Find scholarships http://www.fastweb.com/
• Use loans only for educational expenses, not food, clothes, gas
• You don’t have to take out the whole student loan refund check out of your student account
• Graduate!
![Page 65: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/65.jpg)
65
Student Loan Best Practices
• Consider paying as you go– Principle – Interest
![Page 68: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/68.jpg)
Loan Forgiveness:
• For a borrower who is not in default and who makes 120 monthly payments on the loan after Oct. 1, 2007, under certain repayment plans, while the borrower is employed full-time in a public service job.
• You may NOT apply for forgiveness after you have made all of the required 120 qualifying monthly payments.
![Page 69: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/69.jpg)
69
Loan Consolidation
• Some loans are eligible– One payment– Potential for lower
interest rates– Fixed interest rates– Potential for loan
forgiveness– Potential for extending
the payment period• https://studentloans.gov
![Page 70: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/70.jpg)
Higher Interest Costs of Consolidation
Undergrad borrow max $31,000– Additional $7,422 for Extended – Additional $3,131 for Graduated
![Page 71: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/71.jpg)
Higher Interest Costs of Consolidation
Grad borrow max $138,500– Additional $102,727 for Extended – Additional $86,298 for Graduated
![Page 72: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/72.jpg)
The Power of Good Credit
![Page 73: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/73.jpg)
![Page 74: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/74.jpg)
Biggest Mistakes Affecting Credit
• Not using a credit card wisely• Being disorganized about paying bills• Paying the minimum amount on your credit
cards
![Page 75: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/75.jpg)
Irresponsible Credit Card Usage Leads to…• Denial of credit• High APR b/c of the higher risk• Universal Default Clause– Allows an issuer to increase an individual’s APR if they fail to
make a payment to another lender• Difficulty renting an apartment• Denied employment• Denied financial aid• Higher automobile insurance premiums• High security deposits, e.g., Cell phone, gas, electronic
![Page 76: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/76.jpg)
How much car can you afford?• 1/3 annual income maximum
• Payment 15% of monthly take-home pay
http://www.edmunds.com/apps/calc/CalculatorController?pmtcalAction=affordability&tid=edmunds..calculators.basic_loan_tab.afford.tab_link..* edmunds.com calculators
![Page 77: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/77.jpg)
Never get upside-down in a car!
20/4/10 rule of thumb for buying a car• Pay at least 20% down• Finance for no more than four years, • Payment should be less than 10% income The first part of this rule prevents you from owing
more than the car is worth, and the last two parts prevent you from buying more car than you can afford
![Page 78: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/78.jpg)
Credit Card Strategies• Limit use to one card• Define “emergency use”• Understand credit terms• Pay more than the minimum
Credit Card Balance
Interest Rate (%) Charged
Monthly Payment
Months to Pay Off Balance
Years to Pay Off Balance
Total Cost (Balance + Interest)
$2,000 18% $40 minimum 90 7.5 $3,608
$2,000 18% $50 60 5.0 $3,004
$2,000 18% $150 15 1.3 $2,211
![Page 79: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/79.jpg)
Credit Reports • Financial report card reflecting the extent of an individual’s
credit and payment history– Negative information can stay on for 7 years while bankruptcies
remain for 10 years– Lenders buy the reports to determine whether they will grant an
individual credit and at what rate• Three U.S. Credit Reporting Agencies
• Annualcreditreport.com – Get one free credit report from each agency each year– Do not use any others
![Page 80: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/80.jpg)
Credit Scores• Numeric value obtained
from a credit report– Defines you by a single
number– Quick Screening
Mechanism for Lenders• Low Credit Score = No
Credit or High Interest Rates
– Many employers check credit reports
• Scores range from 300-850• National Average = 678
![Page 81: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/81.jpg)
ScoringDon’t focus on the credit score number– Focus on the factor that is lowering your score– Scores change over time as you pay off debt, etc.
Most common scoring system is Fair Isaac Corporation (FICO)– Payment history: 35% – Total amount owed: 30%– Length of credit history: 15%– New credit: 10%– Types of credit: 10%
![Page 82: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/82.jpg)
Improving Your Score
• Pay credit card off before due date
• Make multiple payments in a month
• Ask for a “good-will” deletion
• Pay for removal of a late payment
• http://www.bankrate.com/finance/video/credit-debt/steps-improve-credit-score.aspx
• http://www.bankrate.com/finance/video/credit-debt/steps-improve-credit-score.aspx
![Page 84: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/84.jpg)
Example of the Cost of Lower Credit Score
![Page 85: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/85.jpg)
85
Avoid Predatory Loans
![Page 86: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/86.jpg)
Debt Repayment Decisions• Low balance method• High interest method• Most important method• Percentage method• Pro-rate & Negotiate• New plan method• Debt consolidation• Professional credit counseling
![Page 87: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/87.jpg)
Which One Should I Pay Off First?Low balance methodHigh interest methodMost important methodPercentage method
![Page 88: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/88.jpg)
Create a Debt Payment Plan
Credit Source APR Owe MO Payment Overdue
Card #1
Mortgage
Car note
![Page 89: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/89.jpg)
Taxes
How to Graduate Successfully and Prosper Financially
![Page 90: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/90.jpg)
90
Taxes
![Page 91: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/91.jpg)
91
Gross v. Net
• Gross Pay– Amount you make before deductions on your
paycheck• Deductions include– Taxes, insurance, retirement, and optional items
• Net Pay– Amount you make after deductions
• Net Pay is usually 60-70% of Gross Pay
![Page 92: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/92.jpg)
92
A “Kinder, Gentler” IRShttp://apps.irs.gov/app/understandingTaxes/hows/mod01/sim_mod01_04.jsp
http://www.irs.gov/Individuals/IRS-Withholding-Calculator
http://www.cashcourse.org/working-earning/wages-benefits/making-sense-of-the-w-4.aspx
![Page 93: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/93.jpg)
93
Lowering Your Tax Bill
• Defer income to when you retire and are in a lower income tax bracket by using a retirement account like a 401(k)
• Take advantage of any “voluntary deduction” programs your employer allows– Acts as a shelter for income in the form of health
care, child care, or retirement
![Page 94: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/94.jpg)
Investing Insuring
Identity Protection
How to Graduate Successfully and Prosper Financially
![Page 95: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/95.jpg)
Investing, Insurance, & Identity Protection
Younger Strategy
Older Strategy
CDsMoney Market
Savings Account
Mutual FundsUS Treasury Bonds
Corporate BondsReal Estate
Stocks
Lower
Risk
Highe
r Ris
k
![Page 96: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/96.jpg)
Can you retire?
• If you have 20 times your annual income or needs saved, then you should be able to retire
http://www.choosetosave.org/ballpark/
![Page 97: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/97.jpg)
Insurance for College Students
• Health and Renter’s Insurance are a good ideas for college students
• Life Insurance is not
![Page 98: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/98.jpg)
98
Insurance Information
http://www.iii.org/ http://www.insurancejournal.com/
![Page 99: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/99.jpg)
Connect With Us
[email protected] Please follow MMM Twitter account: @MSStateMoney#CreditForCredit– What did you like most about this workshop?– What topic would you like to learn more about?
http://www.youtube.com/watch?v=EM_p1Az05Jo
![Page 100: Introduction to Maroon Money Management](https://reader035.vdocument.in/reader035/viewer/2022062411/5681685f550346895ddea4e6/html5/thumbnails/100.jpg)
Sources• Duke University Financial Aid Office• Bobbie Shaffet, MSU Extension Service• Alex Washington, MSU Office of Student Financial Aid