1. Using Credit Wisely, Avoiding Debt What to look for, and what to consider!

2. Credit Statistics Z 40% of credit card holders carry balances less than 1,000…15% carry balances more than 10,000!

3. Credit Statistics Z 48% of consumers individually carry less than 5,000 dollars in debt, NOT including mortgage loans.

4. Credit Statistics Z The average consumer has nearly 17,000 available to them at anytime on credit cards

5. Credit CAN help with your financial goals if… ZYou identify your goal clearly, “what do I want to buy with my credit?” ZGather information, “what are the credit terms, interest rate, length of time to pay off, minimum payment?”

6. Credit CAN help with your financial goals if… ZExamine alternatives, how long would it take to save money and purchase, how much would you have to save each month, could you invest the money and reach your goal sooner?”

7. Credit CAN help with your financial goals if… ZAnalyze outcomes, “do you need the item right now, or can it wait, how will either option affect your budget and saving?”

8. Credit CAN help with your financial goals if… ZMake a decision, is credit the BEST option for you in this place and time?”

9. Credit CAN help with your financial goals if… ZEvaluate you results; in hindsight, did using credit or not using credit helped or hurt your situation; would you make the same decision again?

10. 70-20-10 Rule: ZIt is generally agreed that you can keep your debt in check by dividing up your financial plan this way: Z70% for living expenses Z20% for saving and investing Z10% for paying off your debt

11. Things to remember… ZThe higher the interest on your debt, the LONGER it will take to pay off ZMaking the minimum payment raises the cost of your purchases ZCharging small “everyday” items will come back to haunt you! ZHaving too much available credit makes you look risky

12. Avoiding Pitfalls: ZRead the fine print on ALL your credit applications, KNOW what you are getting involved in financially ZPay your bills early if you can; this way you will not have late payments ZSAVE, SAVE, SAVE!!!

13. Record Keeping… Z Holding onto receipts and financial papers will allow you to be aware of your current situation and if need be produce proof of purchases in case there is an issue.

14. I am in debt; what should I do? ZPut away the plastic, only use cash ZMake a commitment to pay all your debts ZDon’t hide from your debt, know how “bad” it is… ZCreate a repayment plan

15. The Total Affects of Debt Z Financial ZEmotional ZPhysical ZSocial

16. Last Resort ZBankruptcy: a legal option for getting out of debt ZChapter 7-erasing most of your debt, easiest if you are unemployed or have little income. ZChapter 13- consolidates and takes the interest off your debt, still repay over time ZBoth of these options will cause you to have a 7-10 year period of financial hardship

17. Maxim: order of paying off debt Z Pay off the debt with the highest interest first ZOnce you have paid off your first debt use that money to pay off your next obligation ZThis will snowball and pay your debt off faster!

18. Page 56 Exercise 4G ZComplete now