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Mastering Budget and Debt: Financial Strategies for Success

Learn how to manage credit, debt, and create a practical budget to achieve financial stability. Understand types of credit, credit card advantages and disadvantages, credit reports, and debt payoff strategies. Take control of your finances today!

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Mastering Budget and Debt: Financial Strategies for Success

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  1. Budget and Debt 101 Presented by Michele Jersak Counselor and GPS LifePlan Program Adapted from presentation by Kim Woodbury, Underrepresented Student Program - Century College

  2. Managing Credit and Debt

  3. Basic Types of Credit Service credit Loans Installment credit Credit cards

  4. Credit Card Advantages Emergencies/Back-up Flexibility and Convenience Protection against theft Helps with money management Helps build credit

  5. Credit Card Disadvantages Costs involved May encourage you to overspend Rewards impulse buying Ties up your future income

  6. Understanding Your Credit Report • Personal Information • Public Records • Credit Account Information • Inquiries

  7. Understanding Your Credit Score • FICO = Fair Isaac Co. • 300 (low) • 800 (high) • Determines: • Interest you pay • Amount you can borrow • Spending limits • Cost of insurance Get your credit report at:http://www.annualcreditreport.com

  8. Assessing Your Debt Do I pay my bills late? Do I only make minimum payments on my credit card(s)? Am I close to maxing out my credit card limit? Do I worry about money all the time? Have I ever needed to borrow money to pay my bills? Are creditors calling me? http://www.bankrate.com/calculators/credit-cards/credit-card-payoff-calculator.aspx

  9. Paying Off Your Debt Order your debts from highest interest rate to lowest Pay the minimum to all debts every month (except one on top) Send all extra available money to highest interest rate card Repeat ever month From: http://www.consumerismcommentary.com/2008/07/07/the-correct-way-to-pay-off-personal-debt-the-debt-avalanche/

  10. Creating a Budget

  11. Budgets have a bad name Having a budget doesn't mean cutting out all the fun A sensible budget leaves room for “fun” spending but allows you to control your money better Interactive Budget Tools

  12. Where does your money go? For at least one month track all expenses Get a small spiral notebook or worksheet Keep all receipts Allows you to see where your money goes Little things add up Pick a money day Balance checkbook Look at your budget and see if you are on track

  13. Priorities After you have kept track of your expenses for a month, organize! Organize everything in an excel spread sheet Determine what you really need Espresso everyday? Do you spend 5 extra dollars every time you go in to pay for gas?

  14. Determine your goals Studies have proven goals that are written down have a better chance of success than those just talked or thought about Pay off credit card, save for vacation pay off car loan, start an investment fund… Have a one year financial goal Have a five year financial goal

  15. Pay yourself first No matter how small, always have an amount set aside for savings Experts recommend 2-3 months of salary It’s ok if you don’t have it now- make it one of your goals!

  16. Write down your goals!

  17. Income Pay check from regular job Take home Student Loans Child support Etc.

  18. Expenses List your expenses All your bills Incidentals Gas Food Entertainment

  19. Balance Income minus expenses Don’t be discouraged Many people are spending more than they make, with a budget you can better control where your money goes

  20. references http://add.about.com/od/adultadd/a/budget.htm http://www.lifescript.com/channels/healthy_living/Life_Tips/a_sensible_budget_for_people_who_hardly_have_any_money.asp?page=5&trans=1 http://www.ag.state.mn.us/Brochures/pubCreditHandbook.pdf http://www.thebeehive.org/money/spend-it/understand-your-credit/what-your-credit-score http://urbanext.illinois.edu/ww1/04-01.html

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