1. This is an official warning, calculators will be needed from this point on. Also this serves as notice that the information that follows this message WILL be needed for successful completion of Barsic’s world. Consider this fair and legal warning that Barsic’ s world can be difficult if you do not master the following skills

2. Managing Debt- Credit and Loans  Why do we shop using credit?  It allows us to increase our Standard of Living

3. Positives 1. You can buy more things 2. You can buy more expensive things 3. Delay of payments 4. Emergencies/ hard times 5. Buy without cash 6. Get the product now 7. Can save you money 8. Makes the economy bigger

4. Negatives 1. Must pay back more than the product is worth 2. Still paying after the product is no longer in use 3. Less money for other things 4. Easy to spend more than you can pay back 5. Deficit spending

5. Types of credit 1. Charge accounts(credit cards) a. Upper limits b. Interest terms- (avg 8-30%) 1. charged monthly- ex. 12% APR is 1% MPR 2. possible grace period 3. no penalty for early payoff 2. Installment plan a. Layaway plans 1. %down, %a month to payoff b. Rent to own 1. % down 2. Monthly payment- interest is taken out

6. Types of credit 3. Personal Loans a. % down, monthly payment b. Lower interest rates than Credit cards c. Collateral- used to back up a loan d. Capacity – to pay the loan back, 80% of income e. Character (counts) 1. personal history- including tickets, arrests 2. credit history 3. work history The last 3 are the 3 C’s if credit

7. Budgets 1. Money manager 2. Estimates of income and expenses 3. Use groupings to organize a. car- payment, maintenance, insurance b. School- tuition, books c. Home, rent, insurance, utilities, maint.