1. MoneyCounts: A Financial Literacy Series
AAUW – PSU Students
Financial Literacy: What’s in it for Women?
Dr. Daad Adel Rizk
Director, Penn State Financial Literacy Center
128A Outreach Building
University Park PA 16802

2. Financial Literacy: A life $kill
To boldly go where no one has gone before
Topic is personal
Topic is emotional
Mission:
To provide financial knowledge and skills to make informed decisions and take effective actions regarding money management

3. Four Elements of Financial Well Being
In summary, financial well-being can be defined as a state of being wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future, and is able to make choices that allow enjoyment of life.
The four elements of financial well being (cfpb)
Present
Future
Security
Control over day-to-day
Capacity to absorb financial shock
Month to month finances
Freedom of Choice
Financial freedom to make
On track to meet financial goals
Choices to enjoy life
Consumer Financial Protection Bureau (Jan 2015)

4. Why Financial Literacy?
Credit card debt = 1.0 trillion
Student loan debt = 1.42 trillion
Mortgage debt = 14.4 trillion
Bankruptcies = 512,743
Foreclosures = 869,533
Median Income = $30,112
Total Personal Debt = $18 trillion
Debt per Citizen = $56,146
Citizen = man, woman, child

5. Life on the Edge

6. Financial Literacy for Women
Financial literacy is a serious issue facing women in the United States (and globally)
Women earn less over a lifetime
Women spend between 11–13 years out of work
Women save and invest little, if any
Women acquire same or higher debts
Women end up divorced (50%)
Women live longer (5–7 years)

7. Student Loans Total U.S. student loans: $1.4 (T)
Average loan for college graduate = $35,000
Women college graduates are carrying 60% of student debts
Average loan monthly payment is between 8–20% of women’s net income

8. Credit Card Debt Total U.S. credit card debt = $867,784, (B)
Average credit card debt = $5,600
FINRA (Financial Industry Regulatory Authority, Inc.) 2009 study of 28,000 people:
Carrying a credit card balance: 55% of men, 60% of women
Making only minimum payment: 38% of men, 42% of women
Paying a late fee: 23% of men, 29% of women
Over-the-limit fee: 15% of men, 16% of women

9. Financial Literacy: Young Professionals
Map your financial future
Budget your money
Your credit past is your credit future
Manage your debt
Stay insured

10. Map your Financial Future
Set Goals – Plan
Dream of your
20,30,40,50,60,70,80,90
What do you see?
Save & Invest – Act
Realize goals

11. Budget your Money Gross Income/Net Income Tax and other Deductions
Saving & Investing
Expenses
Fixed
Variable/discretionary

12. Budgeting guide Earning 100% Saving 10% Housing 30% Meals 20%
Loans 10%
Car 10%
All other 20%

13. Save before you Spend Saving Pay Yourself First
Make Saving automatic
Establish an emergency fund (curveball account)
Expect the unexpected – EXIT Strategy
3 – 6 months

14. Spend less than you Earn
Spending
Wants Versus Needs
Live within your means
Financial Freedom!
Financial Security!
Living Beautifully!

15. How Time Changes Values

16. Credit Cards Credit past is credit future www.annualcreditreport.com
Copies of your credit reports
Equifax
Experian
TransUnion
Clean & protect credit reputation
Watch out for student loans
Understand the cost of borrowing

17. Manage your Debt Pass the Debt Test? 20/10 Rule
All Debt (outside mortgage) should not exceed 20% of net annual income
Monthly payment should not exceed 10% of monthly take home income
Pay by due date and in full (if possible)
Watch debt to limit ratio - Keep your credit card charges at no more than 30% of your credit limit to protect your FICO Score

18. Strategies to reduce debts
Debt Management Strategies
Pay debt with highest interest rate first
Pay debt with small amounts first and free funds
Save for Big Purchases
Calculate cost of items before you charge on credit cards

19. Size your Mortgage Mortgage
Monthly payment should not exceed 28% -30% of net monthly income
Send ½ a payment every 2 weeks instead of one payment a month
$800 a month = $9,600 a year (800 X 12)
$400 every 2 weeks = $10,400 a year (400 X 26)

20. Stay Insured Manage Risk Review Insurance coverage periodically
Assess current and future need
Health/medical
Life and Term insurance
Disability
Home insurance
Car insurance
Protect Identity from theft

21. Managing Retirement Manage Retirement
Start saving early – compound interest
Do not rely solely on Social Security Funds
Delay SSF to get full benefits
Save money in your assets - Home

22. Things do not change, WE CHANGE
Share the Knowledge
Share a TIP!
Things do not change, WE CHANGE
Henry David Thoreau

23. MoneyCounts: A Financial Literacy Series
Thank You!
Comments and Questions
Dr. Daad Adel Rizk
Director, Penn State Financial Literacy Center
128A Outreach Building
University Park PA 16802