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Financial Applications #1 How to Choose a Bank Account Savings Checking Features Cost Convenience.

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Presentation on theme: "Financial Applications #1 How to Choose a Bank Account Savings Checking Features Cost Convenience."— Presentation transcript:

1 Financial Applications #1 How to Choose a Bank Account Savings Checking Features Cost Convenience

2 Financial Applications #1 Checking Account Types Basic Discount Premium Online

3 Financial Applications #1 Checking Account Types Student Interest Bearing Credit Unions Small/Large Banks Internet Only Banks

4 Financial Applications #1 Convenience and More Location, Location, Location Flexible Hours FDIC or NCUA Tons of ATMs Its Not a Marriage

5 Financial Applications #1 How To Open An Account Bring the minimum funds Bring ID Overdraft? Choose Checks Sign up for Online Banking Choose a Debit or ATM Card Consider opening another account

6 Financial Applications #1 Four Ways to Avoid Bouncing Checks 1. Wait for deposits to clear 2. Balance your checkbook 3. Reconcile your checkbook 4. Remember your ATMs

7 Financial Applications #1 ATM Safety Tips 1. Avoid alone in the dark 2. Choose ATMs inside large places 3. Never leave receipts behind 4. Shield the Keypad 5. If concerned, go somewhere else 6. Put the card and money away

8 Financial Applications #1 Banking and paying Bills Online Quicker Cheaper Can download into software Can set to Auto-Debit Can track history Still get statement in the mail

9 Financial Applications #1 Financial Software Programs Quicken MS Money Can expand as your life gets complicated Quick overall picture Can download into tax programs No boxes only a CD

10 Financial Applications #1 What To Keep and What To Shred? Tax Returns Mortgage Statements Home purchase records Household receipts Utility bills Medical records

11 Financial Applications #1 What To Keep and What To Shred? Insurance Policies Investment Information Student Loan Statements ATM Receipts Credit card receipts/ Statements Bank Statements

12 Financial Applications #1 Credit Cards Two Ways to Go Wrong The cashmere sweater and the iPod No credit card

13 Financial Applications #1 How To Get Your First Card 1. Get a full time job 2. Go to college 3. Try for the easy ones 4. Try a Secured Credit Card 5. Ask your parents to co-sign

14 Financial Applications #1 What To Look For in a Credit Card No annual fee Generous grace period Low regular APR Low fees for late payments No penalty APRs Free electronic bill paying No arbitration clause

15 Financial Applications #1 Credit Card Dictionary Minimum Monthly Payment Cash Advances Variable Interest Rate Fixed Interest Rate

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17 Financial Applications #1 Credit Card Dictionary Credit Line/Limit Balance Transfers Billing Cycle Revolving Account Charge Account

18 Financial Applications #1 Debit Cards Vs. Credit Cards What are Debit Cards? Debit Card Positives Debit Card Negatives What are Credit Cards? Credit Card Positives Credit Card Negatives

19 Financial Applications #1 Easy Tips For Credit Card Success Limit the number Pay close attention to contract changes Steer clear of Cash Advances Steer clear of Credit Card Checks Ask and receive

20 Financial Applications #1 Easy Tips For Credit Card Success Read, read, read, the fine print Know when and how to cancel Just say No to credit insurance Report lost or stolen card ASAP Go Online Keep track of purchases

21 Financial Applications #1 Reasons To Check Your Credit Card Statement 1. 60 day error or fraud limit 2. Stolen 3. Dispute a charge 4. Due time 5. Due date (full or minimum balance)

22 Financial Applications #1 Reward Cards Frequent flyers and hotels Discounted gas Cash back Gold Cards

23 Financial Applications #1 Managing Your Credit Score FICO or scores Below 650 Sub-Prime 675 – 720 Good 720-850 Best Vantage Scores 900 = A 800 = B

24 Financial Applications #1 Score Hurts and Helps Auto/Homeowners Insurance Employer and Landlord checks Checking Accounts Getting a loan Credit Card Companies

25 FICO SCOREAPRMonthly Payment 760-8506.094%$1,817 700-7596.316%$1,860 660-6996.60%$1,916 620-6597.410%$2,079 580-5198.275%$2,259 500-5799.131%$2,442 30 Year $300,000 Mortgage and FICO Score

26 FICO SCOREAPRMonthly Payment 720-8507.193%$774 690-7197.928%$783 660-6899.484$801 620-65911.075%$819 590-61914.495%$860 500-58915.124%$868 36 Month $25,000 Car Loan and FICO Score

27 Financial Applications #1 What Matters Most Your bill paying record Amount of debt Credit mixture Credit time Too much at once

28 Financial Applications #1 Bad Marks on Your Credit Report Default on a loan Foreclosure Charge off Car repossessed Bankrupt

29 Financial Applications #1 What Matters Most 35% Payment History 30% Amounts Owed 15% Length of Credit History 10% Types of Credit in Use 10% New Credit

30 Financial Applications #1 How To Maintain Great Credit 1. Use your credit card 2. Pay your bills on time, every time 3. Dont charge to your max limit 4. If turned down, ask why? 5. Avoid too many credit inquiries 6. Keep your card

31 Financial Applications #1 How To Pay It Off As Quickly As Possible Make a list Try and lower the rates Make payments on time The Beauty of Prepayment (and the Beast of the Minimum Payment)

32 Prepayment of $5,000 @ 17% $71.28 Monthly Extra Monthly Payment Years to Pay off Loan Interest Paid $030$20,702 $1012.5$6,854 $209$4,708 $308$3,653 $71.28 (Double) 5$1,961

33 Financial Applications #1 How to Save Money Put your raise away Brown bag it Turn up the thermostat Make a grocery list before shopping Make your own Gourmet Coffee

34 Financial Applications #1 What To Do Now and In Your 20s Start now Build credit Pay off loans Save for a home Open a retirement account Keep up credit rating

35 Financial Applications #2 Saving and Investing The difference is time frame and goals Save For: Vacation New car Rainy Day Fund Invest For: Down payment on home Childs education Retirement

36 Financial Applications #2 The Rainy Day Fund First thing to save for Job loss Disability 3-6 Months living expenses: Rent Utilities Car payment Groceries

37 Financial Applications #2 Before saving, Insure Homeowners Health and Disability Auto Life

38 Financial Applications #2 How and Where To Save Checking Account Saving Account Money Market CDs U.S. Saving Bonds

39 Financial Applications #2 Growing Your Money Compound Interest Rule of 72s Auto Pilot

40 Financial Applications #2 Stock Market Investing 1. Gamble for thrill seekers or crazies 2. Get rich the fastest way 3. Solid strategy for a reasonable person

41 Financial Applications #2 Why Invest? From 1925-2002 Stock Gain10.2% Bond Gain5.5% T-Bill Gain3.8%

42 Financial Applications #2 Types of Investments Stocks Bonds Mutual Funds Real Estate Precious Metals Collectibles

43 Financial Applications #2 Real Estate Basics 1. Own before investing 2. Learn the legal and tax implications 3. Be realistic 4. Location, Location, Location

44 Financial Applications #2 Investing Priorities 1. Retirement 2. College for kids Asset Allocation Dont put all your eggs in one basket

45 Financial Applications #2 Mutual Fund Terms No Load Load Index Risk versus Return

46 Financial Applications #2 Mutual Fund Types Managed Indexed Stock Bond Aggressive Growth Growth Income

47 Financial Applications #2 Mutual Fund Rating www.morningstar.com Biography of the Fund Manager The top 5 or 10 holdings Description of the fund

48 "Smart Planning: Acquiring the Tools for Financial Success". Mutual Fund Experts Morningstar: 1 year 50% 5 years 30% 20 years 15% 15% experts beat the market 85% do not

49 Financial Applications #2 How To Buy Mutual Funds Direct Purchase Discount Brokerage Workplace 401 (k)s Price timing Exchange Traded Funds

50 Financial Applications #2 Stock Terms Dollar Cost Averaging Bull Market Bear Market The Market Dow S & P 500

51 Financial Applications #2 How To Open a Brokerage Account Discount or Full Service Discount Full Service Minimum Deposit Visit their office or web site Getting in Cheap No load Programs One Share Programs

52 Financial Applications #2 Bonds are loans Corporate Convertible Municipal U.S. Government Securities U.S. Government Agency Foreign Government

53 Financial Applications #2 Bond Funds Not Bonds Risks Benefits Bond Bottom Line Steady income for a short term

54 Investment Basics Hot tip? 1. Is the seller a moron? 2. Is everyone a moron? 3. Everyone has the same information 4. Just pick a line and stay in it (Dollar Cost Averaging or Indexed fund) 5. Experts beat the market only 15% 6. Save Invest Repeat

55 "Smart Planning: Acquiring the Tools for Financial Success". Diversify Flip a Coin 1 flip Heads = $400,000 Tails = $0.5($400,000) +.5(0) = $200,000 =100% return 50% Risk

56 "Smart Planning: Acquiring the Tools for Financial Success". Flip 10 Coins 10 flip Heads = $40,000 Tails = $0 10(.5($40,000) +.5(0)) = $200,000 100% return.001% Risk

57 "Smart Planning: Acquiring the Tools for Financial Success". Hot stock tips Index Fund Ibbotson Associates 1925-2006 Stocks 10.42% Bonds 5.9% Treasury Bills 3.72%

58 Financial Applications #2 Workplace Retirement Plans 401 (k) Tax Free In, Taxable Out 403 (b) 457 SEP-IRA Pension

59 Financial Applications #2 Individual Retirement Plans IRA SEP IRA Roth IRA Taxable In, Tax free out Tax Sheltered Compounding

60 Financial Applications #2 How To Make a Million Bucks Timing Comparison

61 "Smart Planning: Acquiring the Tools for Financial Success". Roth, taxable in tax free out Age 30 $3,000 8% Age 65 $44,356 $3,000 per year $561,306 Age 50 $90,972 Age 25 $1,255,278

62 $1 Million with a cup of Coffee Money Invested per year AgeMoney for Retirement $3,00050$117,380 $3,00040$357,000 $3,00030$978,90 $3,00025$2,600,000 $1,20025$1,000,000

63 "Smart Planning: Acquiring the Tools for Financial Success". The $1 million cup of coffee $5 X 5 days week Roth Index fund 10.42% Age 22 $1,086,271

64 "Smart Planning: Acquiring the Tools for Financial Success". Starting now is important! $200 per month from age 18-28 then not another dime 9% Roth Age 65 $950,580 $200 per month from age 28-65 $714,674

65 Financial Applications #2 Saving For Education Constant increasing costs 529 Savings Plan Coverdell ESA Gifts

66 Financial Applications #3 Living Expense Factors Monthly Expense/Range Rent-$300/$2,000 Gas-$20/$250 Electric-$30/$150 Water-$20/$60 Garbage Collection-$45/$85

67 Financial Applications #3 Living Expense Factors Monthly Expense/Range Phone Bill-$25/$100 Cell Phone-$30/$65 Internet-$10/$50 Cable/Satellite-$35/$75 Groceries-$200/$450

68 Financial Applications #3 Living Expense Factors Monthly Expense/Range Entertainment-$75/$250 Health Insurance-$150/$600 Renters Insurance-$150/$800 Home Maintenance-$10/$125 Clothing-$300/$1,200

69 Financial Applications #3 Living Expense Factors Monthly Expense/Range Dental-$5/$70 Car Payment-$100/$600 Car Insurance-$50/$400 Gasoline-$30/$80 Car Repair-$10/$50

70 Financial Applications #3 Living Expense Factors Monthly Expense/Range Bus Commute-$0/$100 Gym Membership-$35/$75 Credit Card Bills-$15/$150 Vacation-$50/$200

71 Financial Applications #3 Salary Calculator $30,000 in Ft. Lauderdale, need: New York $52,900 Chicago $37,300 Atlanta $24,900 Denver $26,300 Dallas $23,800 Charlotte $24,200 San Francisco $46,300

72 Financial Applications #3 Apartments, What Can You Afford? One Bedroom Monthly Rents Nashville $680 Fort Lauderdale $850 San Francisco $1,943 Atlanta $819 NYC $2,397 Chicago $842 Denver $750

73 Financial Applications #3 Apartment Hunting Steps 1. How much you can afford 2. Check the choices and decide where 3. Read newspaper ads 4. Hit the streets looking 5. Ask questions 6. Apply for the apartment

74 Financial Applications #3 What To Look For In An Apartment 1. Safety 2. Parking 3. Noise 4. Access 5. Closets 6. Floor Space

75 Financial Applications #3 What To Look For In An Apartment 7. Wall Space 8. Appliances and Plumbing 9. Kitchen Storage 10. Electrical Outlets 11. Daylight 12. Laundry Room

76 Financial Applications #3 Deposits 1. Apartment 2. Utilities 3. Phone 4. Cable TV

77 Financial Applications #3 Leases Term of Lease Sublet Clause Lease Cancellation Who Signs? Late Fees Automatic Renewal

78 Financial Applications #3 Leases Security Deposit Utilities Included Painting Policy Roommates and Overnight Guests Landlords Access Pets No Lease

79 Financial Applications #3 How To Get Your Deposit Back 1. Before you sign, inspect 2. Ask for a move-in inspection 3. Photograph before move in 4. Photograph when you leave 5. Clean well when moving out

80 Financial Applications #3 Trouble With Your Landlord Put everything in writing Get everything in writing Know your rights Be polite Eviction

81 Financial Applications #3 Move-In Mistakes 1. No electricity 2. Size matters 3. Avoid comic relief 4. Avoid the 30 th 5. Label the essentials

82 Financial Applications #3 How To Make a Budget 1. Calculate net salary 2. Add average regular expenses 3. Save on essentials 4. Trim fat 5. If money left over, keep it that way

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84 Financial Applications #3 How To Cut Expenses and Still Have Fun Good/Better/Best Movies Dinner with friends Weekend entertainment

85 Financial Applications #3 How To Keep Your Apartment Clean Preventive maintenance Buy doubles Clean from top to bottom

86 Financial Applications #3 How To Keep Your Apartment Clean Daily or Every Other Day: Wash dishes Make bed Tidy papers Empty garbage

87 Financial Applications #3 How To Keep Your Apartment Clean Weekly: Wipe down sinks Change sheets Do laundry Sweep floor Light Dust Clean out trashcans

88 Financial Applications #3 How To Keep Your Apartment Clean Once or Twice Per Month Thorough cleaning of kitchen, bathrooms including toilet Vacuum carpets Dust furniture Clean mirrors and electronics

89 Financial Applications #3 How To Keep Your Apartment Clean Once or Twice Per Year Clean out refrigerator Move heavy furniture and clean behind Polish furniture Clean lights, walls, pictures Wash windows Sort and pitch

90 Tithing Philippians 4:19 And my God will meet all your needs according to his glorious riches in Christ Jesus. Problems created by worry

91 Tithing Philippians 4:6 Do not be anxious about anything, but in everything, by prayer and petition, with thanksgiving, present your requests to God. All life is a school Central Lesson Focus on Finances What experts say

92 PBS Study: 6 hours shopping 40 min with children Age 20, 1 mil TV commercials More Bankruptcy than graduate college 90% divorce because of money problems

93 If you worry, you are worse off because of the problems that worry creates

94 When God gives a promise it comes with a condition: Believe and be saved Acts 16:31 Not all saved Mat 7:14, John 6:44 You can know John 6:47 No worry about dying

95 Finance promise: Malachi 3:10 Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this," says the LORD Almighty, "and see if I will not throw open the floodgates of heaven and pour out so much blessing that you will not have room enough for it.

96 God is a giver: Eternal Life Eph 2:8 Gave only Son John 3:16

97 God made: Sun, Moon, Stars, Air, Clouds, Earth, Sea, Trees, Flowers, Fowls, Beasts, Plants All give God made Man, he holds on

98 What God wants us to become What does God want?

99 What is a Tithe? What belongs to God What He gives to us What He demands of us Negotiable?

100 Malachi 3 Triple problems 1. Return to Me 2. You Robbed Me 3. You are cursed

101 Survey of Born Again: 40% increase in giving nothing 19% decrease in giving 1/8 Tithe

102 The problem is not the tithe but disobedience by withholding it 1. Not believe Gods promise 2. No gratitude to God 3. No love of God

103 Malachi 3 Triple Blessings 1. Prove God 2. From open windows 3. Rebuke the devourer

104 Tithe not a matter of finance Cant afford to tithe? Peter Marshall

105 Does God keep his word? Billy John Henry

106 Tithing Surprises: 1. How much left 2. Developing faith 3. Increased giving 4. Waited so long to start

107 College Survey Bring in the Tithe Trust God God will provide


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