1. Make A Smart Start Toward Financial Success

3. College Education: A Smart Investment High School Graduate$ 30,400 Associate’s Degree$ 38,200 Bachelor’s Degree$ 52,200 Master’s Degree$ 62,300 Doctorate Degree$ 89,400 Professional Degree$109,600

4. Start Smart By Avoiding Pitfalls Little or No Savings No Short and Long Range Plan Too Much Credit Card Debt

5. The Credit Card Debt Picture Among college students: –84% have credit cards –62% of final year students have four cards or more –21% owe between $3,000 and $7,000 –Final year students carry an average credit card balance is $4,100.00

6. It’s Hard to Get ‘Out from Under’ Scenario #1 –You charge $2,500 –You pay $50 per month –Yearly interest rate is 19.9% –How long will it take to pay the balance? Scenario #2 –You charge $2,500 –You pay $100 per month –Yearly interest rate is 19.9% –How long will it take to pay the balance? 9 years, 1 month2 years, 9 months

7. Six Steps for a Smart Start after College 1. Establish Financial Goals 2. Separate Needs from Wants 3. Create a Monthly Spending Plan 4. Start Saving and Bank Wisely 5. Stay on Top of Your Student Loan Obligations 6. Use Credit Wisely

8. 1. Establish Financial Goals Short Term Buy a car Buy new furniture Be debt free Vacations Long Term Buy a home Pay off student loans Start a business Start a family College tuition for children Retirement

9. 2. Separate Needs from Wants Needs: Fixed Rent or Mortgage Utilities Food Clothing Transportation Taxes Health Care Childcare Repairs Wants: Variable Entertainment Cable Internet Service Magazines Eating Out Hobbies Cell Phones

10. Needs vs. Wants ItemNeedWant FoodGroceriesEating Out ShelterDorm/RoommateApartment or House TransportationPublic Transportation Gas, Car Insurance, etc. ClothesThe BasicsTrendy Styles & Brands TelephoneRegular Home PhoneCell Phone

11. 3. Create a Monthly Spending Plan Start at the beginning of each month Pay yourself first (open a savings account) Keep track of everything you spend: coffee, newspaper, magazines, etc. Record all of your income Pay your bills on time

13. Budget Worksheet Sections Section 1 –Yours (and your spouse’s, if you have one) –Financial Aid Section 2 –Books, tuition, and interest on unsubsidized loans Section 3 –Cable TV, lattes, eating out, newest cell phone

14. Start a savings account Sign up for your employer’s retirement plan Borrow only what you need Sign up for automatic savings: what you don’t see does make a difference 4. Start Saving and Banking Wisely Today’s habits will pay off tomorrow!

15. Banking and Savings Due to the effect of compounding, routine saving adds up quickly … The Effect of Compounding $50/month = about $7,057 in 10 years $250/month = about $35,284 in 10 years $500/month = about $70,568 in 10 years Based on 3% interest

16. Choose the Right Bank When choosing a bank, seek one that offers: –Convenient Location and Hours –Types of Accounts You Need –Competitive Interest Rates –Low Service Charges –Convenient ATMs –Secure Online Services –Incentives

17. Use Your Checking Account Wisely Record all purchases Balance your account monthly Avoid overdraft fees Take advantage of online banking Debit cards are not credit cards

18. 5. Stay on Top of Student Loan Obligations Subsidized Loans –Federal government pays the interest until the student enters repayment –When the borrower has been granted a deferment, the government pays the interest during the deferment period Unsubsidized Loans –Student is responsible for paying the interest that accrues on the loan from the date of disbursement until the loan is paid in full, regardless of enrollment status

19. Pay Down Student Loans Pay Extra and Save  An extra $50 a month  Pay off loan 2.8 years faster  Save $1,766 in interest  An extra $250 a month  Pay off loan 6.7 years faster  Save $3,920 in interest  An extra $500 a month  Pay off loan 8 years faster  Save $4,633 in interest Student Loan $15,000 borrowed 10 year term 6.8% interest rate Monthly payment: $173 Total interest paid: $5,714

20. 6. Use Credit Wisely Advantages Build credit Rent a car Available for emergencies Frequent flyer miles Online purchases Immediate cash availability Disadvantages Negatively affect credit Debt accumulation Years to repay debt High interest rates Repayment could be 3 to 5 times original purchase price Immediate cash availability

21. Consequences of Defaulting on Your Student Loans Entire loan balance due at time of default Notification to the credit bureaus Approximately 15-18% collection cost added Possibility of wage garnishment of 25% Tax refunds can be withheld for payment Ineligible for additional financial aid Transcripts can be withheld

22. Choose the Right Credit Card Strive to pay off your credit card balance every month –Don’t charge more than you can afford Examine the Interest Rate –Introductory Rates –Adjustable Rate Credit Cards –Fixed Rate Credit Cards

23. Choose the Right Credit Card Examine the Fees –Late fees –Over the limit fees –Annual fees –Balance transfer fees

24. Choose the Right Credit Card Reward Programs –Do your homework

25. Manage Your Credit Cards Choose a credit card with no annual fee Use credit cards conservatively Charge only what you can pay off at the end of the month Make monthly payments on time Always pay more than the minimum requested Be wary of cards that offer free merchandise

26. Manage Your Credit Cards Do not purchase on impulse Do not charge more than you can afford Know when your credit card payment is due Do not live a lifestyle you cannot afford Do not use credit cards for cash advances, unless it is an emergency

27. Protect Your Credit Limit access to your personal data Always take credit card receipts with you Never permit your credit card number to be written onto your checks Order your free credit report once a year Remove your name from the marketing lists of the three credit reporting bureaus Never allow anyone to use your credit card

28. Feeling Overwhelmed? Ask for help Call at the first sign of trouble –Denial of credit –Credit cards that are maxed out –Borrowing money to pay bills –Paying only the minimum Contact your student loan provider Contact a Consumer Credit Counselor Work out a plan to repay

29. Protect Your Credit Equifax www.equifax.com (800) 997-2493www.equifax.com Trans Union www.transunion.com (800) 888-4213www.transunion.com Experian www.experian.com (888) 397-3742www.experian.com National Credit Bureaus

30. Protect Your Credit www.annualcreditreport.com www.annualcreditreport.com (877) 322-8228 www.optoutprescreen.com www.optoutprescreen.com (888) 5OPTOUT

31. You’ll be able to take that vacation, pay off bills, and buy your new car or home! Follow these guidelines and you will have a successful future!

32. Questions

33. Thank You!