Introduction Banks vs Credit Unions BanksCredit Unions Customers – Banks are owned by investors. Members – Credit unions are member owned. Each person who deposits money becomes a member. Profits – Investors get share of profits. Not-For-Profit – Profits are given back to members in the form of lower loan rates, higher dividends and free or low cost services. FDIC – Federal Deposit Insurance Corporation NCUA – National Credit Union Association.
Budget Learning to Manage Your Money also known as Setting up a Budget
Budget Benefits of Managing (Budgeting) Your Money Free up time do things you enjoy Less Stress better health Achieve goals satisfaction Greater Control peace of mind
Budget Ask Yourself: Do you…. Spend more than you make? Live beyond your means? Pay yourself first? Charge items instead of saving for them? Think about an emergency fund, but fail to have one? Spend uncontrollably?
Budget Establishing an Emergency Fund Emergency Fund $1,000 3 – 6 months living expenses Retirement 401K IRA Savings Account Money Market CD IRA Remember to PAY YOURSELF FIRST!
Budget Set SMART Financial Goals S pecific M easurable A djustable R ealistic T ime-Oriented
Budget Set Three Types of Goals Short Term Goal within next six months Mid Term Goal Within next one to five years Long Term Goal More than five years away BUDGET SAVE INVEST
Budget Financial Goal Chart Target Date Total Needed Pay Periods Until Target Date Savings Needed Per Pay Period Savings Per Week Savings Per Day Short Goal Intermediate Goal – pay off $1,200 debt One year $1,20012 $100$25$3.57 Long Range Goal
Budget Five Steps to a Successful Spending Plan 1. Identify all income sources 2. Determine monthly expenses fixed and variable expenses 3. Balance income and expenses 4. Review and Revise 5. Manage
Budget Expenses Necessary – shelter, food, utilities, insurance, taxes. Discretionary – vacations, entertainment, lattes. Personal – dont have to account for every penny. Miscellaneous – unplanned expenses.
Budget Where Does Your Money Go?? Track your daily expenses Fast Food Soda Coffee Video Rental Tobacco products
Budget STEP 3: Balance Income and Expenses How does your CA$H flow? If Income > Expenses – save more! If Expenses > Income – make changes
STEP 4: Review and Revise Continue to track expenses Find places to save (eliminating leaks) Does your plan fit with your goal?
Budget STEP 5: Manage Your System Track expenses regularly Pay bills regularly Balance checkbook monthly Review goals annually or after major life change. Does plan still fit with your goals?
Credit Report How long does information stay on your credit report? Positive information can remain forever. Negative information can remain up to seven years – from time you take care of it. Bankruptcies can remain seven to 10 years.
Credit Report If your credit report has errors…. Write a letter to credit bureau explaining why you think information is inaccurate. Credit bureau has 30 days to investigate, notify you of results and delete inaccurate or unverifiable information. If you disagree with investigation results, write a dispute statement to appear in your file.
Credit Score How your credit score can affect your life Employment Landlord Insurance underwriting Extending future credit
Credit Score FICO Credit Score Range from 300-850, higher is better Most lenders base approval on them Higher scores mean lower interest rates Scores are based on your rating in five general categories The median FICO® score in the U.S. is 723
How Credit is Calculated Payment History Timely payments=positive points Late/delinquent=negative points Length of Credit Type of Credit Unsecure vs secure debt High risk vs low risk Amount Owed % of credit used # of accounts Aggregate credit limits New Credit # of new accounts # of inquiries
Vehicle Loan Example Credit Score$25,000 5 year note* Monthly Payment 700 – 8504.50%$466 660 – 6996.25%$486 600 – 6599.25%$522 599 – below17.50%$628 *for illustration purposes only $162.00/month difference = $9,720 over a five year loan.
Credit Score Ways to Improve your credit score Pay down debt Pay on time Cancel cards you dont need - with caution
Financial Traps Check Cashing Services Pay Day Lenders Car Title Loan Companies Rent-to-Own Retailers Zero Interest Deals Rapid Refund Loans
Budget Worksheet emoryacu.com About Emory ACU Resources Home & Family Finance Magazine Search for Budget. Free Copy of Your Credit Report - freecreditreport.com Credit Bureaus - experian.com transunion.com equifax.com Debt Collection FAQs - http://ftc.gov/bcp/edu/pubs/consumer/credit/cre18.shtm CredAbility – Dont forget - t he credit union is here to assist you with all your financial needs. 404.329.6415 emoryacu.com http://ftc.gov/bcp/edu/pubs/consumer/credit/cre18.shtm Resources http://www.credability.org/en/homepage.aspx