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A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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1 A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP
Welcome to Manage Your Money WISELY Tracking your money © 2011 MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Money Management Seminar MoneyWI$E A joint financial education project of Consumer Action and Capital One. The MoneyWI$E program was created by the national non-profit organization Consumer Action with a grant from Capital One. The MoneyWI$E program includes educational materials on credit and personal finances in Chinese, English, Korean, Spanish and Vietnamese. Tips for leading the class: - Speak to your audience, not at them. - Make eye contact. - Pause when you ask questions. - Call on people to answer general questions, but don’t single people out when asking personal questions. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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The Money Management course will give you... An understanding of what good money management is and why it is important Skills and ideas to help you better manage your money Hand out folders to participants. Emphasize that the seminar is not graded and is not a competition. Encourage participants to ask questions. Make sure that your students know that you are there for general information purposes only and that you are not a financial advisor. If personal questions persist, let your students know that you or agency staff can provide them with a list of resources at the end of class that will help them answer those questions MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Money Management Session One (Two hours) This slide introduces Session One. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Course objectives This seminar will help you understand: How to prepare a budget How to balance your accounts How to cut back on expenses Ideas for increasing your income How to save more How to set financial goals These are the goals for the seminar. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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In participants’ folders Manage Your Money Wisely (brochure) Checkbook Balancing Activity (worksheet) Three Sample Profiles (class exercise) Financial Goals Worksheets Take-home Budget Worksheet Money Management Seminar Evaluation Form Ask participants to take a look at their folders and make sure they have all the materials needed. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Money Management What is money management: Knowing how to save, spend and invest your money so that you and your family can successfully work toward your financial goals Ask participants what kinds of activities they think are part of money management. Write down key concepts and ideas on the easel pad or white board. As the leader, your role is to listen attentively and pull out the general information that can be used by the entire class. Be supportive and encouraging, as well as tolerant of non-specific answers. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Money Management activities What activities go with money management? Tracking your spending. Making a budget. Balancing your checkbook. Using credit wisely. Setting long- and short-term goals. Earmarking money for savings. Review the activities that are part of money management, pointing out activities on the list that participants had identified during the discussion of the last slide. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Be a wise money manager Wise money management can help you: Pay your bills on time. Make it through times when you are not working. Save money. Plan for short- and long-term goals. Emphasize that these are some of the results of learning the money management techniques you will be teaching in the seminar. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Budgeting What is a budget? A spending plan to help you forecast and control your expenses. Some questions to generate discussion: • How do you make a budget? • Have you ever tried tracking how much you spend each day? MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Making a budget How do you make a budget? You need to figure out how much you spend each month and compare that amount to your take-home pay. Track your spending for a set period of time, like a month, in order to figure out how much money you spend. No notes for this slide. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Tracking your spending What are some ways to track how much money you are spending each day, each week, or each month? Ask participants this question to generate discussion of how to track spending. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Ways to track spending Keep a notebook handy and write down everything you buy and every bill you pay. Keep all your receipts in an envelope or shoe box. Create a computer file for entering your income and expenses. No notes for this slide. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Your budget What are some of the things that should be included in your budget? Ask participants to answer this question to get them thinking about what to include in their own budgets. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Your budget may include: Housing Food (groceries, restaurants, snacks) Automobile (payments, gas, repairs, insurance, commuting expenses) Clothing & personal grooming Utilities (electric, gas, water, cable) Credit card payments Review this list (which continues on the next slide) with the group. Some points to mention: • everyone’s budget will be different • in general, it’s a good idea to overestimate a little instead of underestimating; that way your budget won’t fall short • it’s important to include enough money in your budget for entertainment. If your budget is too strict or rigid it will be hard to follow MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Your budget may include: Student loan payments Child care Insurance payments Entertainment (movies, concerts, books) Medical bills Vacations Income taxes No notes for this slide. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Making your budget work Does your income cover your expenses? If not, you need to figure out how to spend less or earn more. Describe how to figure out if your income covers your expenses. Explain that this is a step participants will do at home once they have tracked their spending and created their own budgets. Let participants know that you will be discussing ways to spend less and earn more later in the session. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Bank accounts A bank account is an important money management tool. How can a bank account help you manage your money wisely? Ask the group how using a bank account could help them with money management. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Bank accounts A bank account helps you keep track of your spending and how much money you have available. Use your checkbook register to write down and deduct: Every check you write Every ATM or debit card transaction or purchase Any bank fees you pay No notes for this slide. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Benefits of a bank account: Money is safe. Each account is insured. Canceled checks prove you paid a bill. Having a bank account can save you money. Money is safe from fire, loss, or theft Each account is insured by the federal government for up to $250,000 Canceled checks are proof that you paid a bill Using check cashing stores and money orders is more expensive than paying bank fees MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

21 Please come back in 15 minutes.
Let’s take a break Please come back in 15 minutes. Make yourself available to give directions to the restroom or snacks, if applicable, before you take a break. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Let’s balance a sample checkbook Take out the checkbook balancing activity from your folders: Review the sample bank statement. Balance the sample checkbook register. Balance the sample account using the checkbook balancing worksheet. See Teacher’s Key to this Exercise in the Lesson Plan package. In this exercise participants will go through the process of balancing a sample checking account. Go through the worksheet directions aloud, explaining what participants will be doing. Ask participants if there are any terms or directions they don’t understand. If people have trouble, encourage them to go over their work. Advise them to make sure that they didn’t record the same ATM withdrawal or bank fee twice or miscalculate the Outstanding Items total. Let the group know that balancing your checkbook takes practice and not to worry if they don’t get it the first time. Recommend that they practice the exercise at home, too. Reference the trainer’s “Checkbook Balancing Key” in order to see what the completed worksheet will look like. After about 15 minutes, review the steps with the group, making sure to explain what you are doing as you go. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Cutting back on expenses What are some ways to cut back on expenses? Tie this section into budgeting: if your income does not cover what you spend, cutting back on expenses is an important way to balance your budget. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Ideas to help you cut back Shop around and compare prices. Make a shopping list and stick to it. Prepare meals and bag lunches at home. Don’t shop recreationally—you could be tempted to buy things you don’t need Review this list (which continues on the next slide) with the group, encouraging participants to add other suggestions. Tips: Shop around to find the best deal. By comparing prices at different stores and providers, you will easily be able to tell which one offers the best deal Make a shopping list and stick to it. Buy sale items, generic products and bulk items whenever possible. Prepare meals at home. Bring bag lunches. Avoid expensive take-out coffee drinks Don’t shop at stores that offer lots of products -- you could be tempted to waste money on things you don’t need MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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More ways to cut back Use the public library for books, magazines, videos. Join a buying co-op. Lower your thermostat when away or sleeping. Walk instead of drive. Look for a free bank account. Ideas for cutting back on expenses (continued) Use the public library for family entertainment (books, magazines, videos). Buy secondhand items where possible. Check out cooperative buying programs. Lower your thermostat during the day and turn it off when you go to bed. When possible, walk to take care of errands. Call local banks to see if they offer free accounts. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Increase your income Ways to earn extra money: Part-time or weekend job. Take advantage of income tax programs, such as the Earned Income Tax Credit. Start a home-based business. Rent out a room. Tie this segment in to budgeting: if your income does not cover your expenses, another way to balance your budget is to earn more money. Encourage participants to think creatively about things they could do to earn money. Describe what the Earned Income Tax Credit is and give students this information: RESOURCE: To find out if you qualify for the credit, answer the five questions on the back of IRS Form W-5, available by contacting the IRS at (800) , or online at MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Setting financial goals Short-term goal (1-2 years) — buying a new car, getting a degree or planning a wedding. Long-term goal (5-10 years or more) — owning a home, starting a family, paying for college or retiring. Encourage participants to mention other examples of short- and long-term goals. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Working toward your goals A savings plan allows you to work steadily toward your financial goals. The take-home ‘Financial Goals Worksheet’ will help you figure out a savings plan that works with your particular goals. No notes for this slide. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Take-home activity The Financial Goals Worksheet and Chart can be found in each of your folders. Complete the worksheets at home. Bring the completed worksheet back for the second session. See you next time! Point out the Financial Goals Worksheet to students (in their folders). Thank the group for their attention. Remind everyone of the next session and write the date and time on the easel pad or white board. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Money Management Session Two (Two hours) This slide introduces Session Two. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Money Management Welcome back! In this session we will focus on saving, investing, insurance, credit and debt Greet participants and welcome them back. Briefly review what was discussed in the previous seminar--making a budget, balancing your checkbook, finding ways to earn extra income--and what is to come in today’s seminar. --Saving and investing --Ideas on how to save more --The importance of insurance --How to save on insurance --Seeking help for overwhelming debts MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Saving & investing Let’s review your Financial Goals Worksheet. Saving and investing can help you to reach your short-term and long- term goals. Invite participants to mention some of the goals that they listed in their Financial Goals Worksheet. Emphasize that saving and investing are two important ways to achieve financial goals. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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How to save more “Pay yourself first” by scheduling automatic deposits on pay day that go into your savings account or IRA (individual retirement account) Review the saving ideas on this slide (continued on the next two slides). MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Retirement accounts Does your employer offer a retirement savings plan? Employer-sponsored plans can help your retirement savings grow faster because you do not have to pay taxes on the earnings until you are eligible to withdraw from the account, at age /2. No notes for this slide. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Saving - CDs A CD (certificate of deposit) is a safe way to save. Like savings accounts, CDs are insured by the government. CDs often earn a higher interest rate than savings accounts do. However, CDs require that you leave your money for a set period of time, such as six months or a year. No notes for this slide. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Investing An investment is the use of money to create more money Stocks, bonds and mutual funds are all types of investments Consider an investment advisor. Be cautious—investments are not government-insured and you could lose your money. Briefly review the differences between stocks, bonds and mutual funds. Mention that a good way to find a good investment advisor is to ask friends and relatives for a recommendation, or ask if your bank offers this service. Always compare at least two advisors (or more) before signing on with one. Check that the professional is properly licensed by asking the advisor for the proper state or federal agency to call. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Insurance What are the benefits of having insurance? Insurance protects you against financial ruin as a result of an unforeseen catastrophe like fire, theft or medical emergency. Tie insurance in to good money management: insurance protects your property so that you don’t lose your savings or fall deeply into debt. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Kinds of insurance What are the most important types of insurance for you and your family? Automobile insurance Health insurance Homeowner’s or renter’s insurance Life insurance Review the benefits of having these types of insurance. Be sure to discuss the possible advantages of having more than the required minimum amount of auto insurance. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Saving money on insurance Always ask if you are eligible for any insurance discounts. Internet sites can help you compare premiums: Insure.com (www.insure.com) InsWeb (www.insweb.com) Quick Quote (www.quickquote.com) Lower Rate Quotes (www.lowerratequotes.com) Mention some examples of auto insurance discounts, such as discounts for having air bags in your car, having a good driving record or being a senior citizen. You can also mention the advantages to opting for a higher deductible. Be sure to explain what a deductible is: A deductible is a certain amount that you (the policyholder) must pay for out of your own pocket before insurance coverage kicks in. For example, with a $500 deductible, you would be responsible for the first $500 (car or home repairs, or medical bills) before insurance would pay for covered services. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Credit Good credit can help you: Rent an apartment Purchase a home Get a job Set up phone and power service. Buy ‘big-ticket’ items without cash Borrow money Obtain a credit card Rent a car Alert participants to the MoneyWI$E “Building and Keeping Good Credit” brochure. (Make sure you have copies of the other MoneyWI$E brochures on hand to pass out.) MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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To build good credit... Pay your bills on time. If you carry a balance, pay as much as you can each month. No notes for this slide. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Rebuilding credit If you have damaged your credit, try applying for credit with local businesses or for a secured credit card (a bank credit card backed by money you deposit in a bank account.) No notes for this slide. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Home equity loans Home equity loans can be used to consolidate debt. Be very careful before taking out a loan secured by your home (a home equity loan or line of credit). If you fail to make a payment, you risk losing your home. Discuss the risks of a home equity loan. Alert the group that there are fraudulent home equity loan salespeople out there who often prey on minority or language groups and senior citizens. Advise participants to read every contract thoroughly before signing, particularly if their home is at stake. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Good credit Try to avoid these expensive credit options: Pawn shops, pay day loans, and car title pawn shops Offers to buy things on credit with deferred interest Credit cards with rates higher than the national average (check for average) Discuss the ways in which the costs of these credit options can add up. Here’s an example you could use: On a $1,000 credit card balance at 18% interest, it will take you 10 years to pay your debt if you paid $30 per month. In that time, you will pay $ in interest. Paying the same $30 monthly payment on a13% credit card will take you a little over 8 years to be rid of your debt. In that time, you will pay $ in interest. That’s almost two years less and a savings of $339. (FYI: This example uses a 3% minimum monthly payment.) MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Overwhelmed by debt? The National Foundation for Consumer Credit - (800) or can refer you to a credit counselor in your area. Low- or no-cost services help you establish a repayment plan. Debtors Anonymous (781) ; No notes for this slide. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

46 Please come back in 15 minutes.
Let’s take a break Please come back in 15 minutes. Make yourself available to give directions to the restroom or snacks, if applicable, before you take a break. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Money management activity Break into small groups. Review sample profiles. Discuss how the people in the sample profile can get back on track. Select a spokesperson from each group to present your ideas. Ask participants to break into small groups and take out the Money Management Evaluation Worksheets from their folders. After about 15 minutes, call the group back together and ask the spokespeople to go over their group’s suggestions. The trainer’s curriculum includes ideas for how each sample individual or couple could save on expenses. In the discussion that results, emphasize that their is no “perfect” way to manage your money. Each person’s salary and expenses are different and people have different financial goals in life. Go back to financial goals—ask participants if they think these people are likely to live up to their goals. Are these achievable goals? Can Joey, Juan and Carmen, and Cheryl make the necessary lifestyle changes to improve their financial situation and plan for the future? MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Take-home budget worksheet In your folder you’ll find a budget worksheet. Track your spending for a while and then complete this worksheet at home. Keep yourself focused on creative ways to save money. Emphasize to the group that budgeting is a crucial first step to wise money management, and that now is their chance to put what they’ve learned into action in their own lives. Answer any questions that participants have about any aspect of the seminar. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Questions? Let’s try to answer some of your questions about money management. The Money Management Leader’s Guide is written in a Q&A format to help you anticipate participants’ questions. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Now you can grade us! Please fill out the seminar evaluation form and leave it with me on your way out. Hand out evaluation forms. Make sure students know that it is important to you to get their feedback in order to become a better teacher. Encourage them to fill out the evaluation form completely. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Congratulations! Congratulations on completing the MoneyWI$E “Money Management” seminar! You’ve taken a big step toward wise money management. Put what you’ve learned into practice—you can do it! Thank them for taking time to talk with and listen to you; make sure you reinforce that you hope they found this experience as valuable as you did. Encourage participants to read the materials about money management and to call the sponsoring agency with any questions they may have. MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP

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Visit money-wise.org for additional information and to access free financial education materials MoneyWI$E A CONSUMER ACTION AND CAPITAL ONE PARTNERSHIP


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