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“Get Your Money Right: . “Becoming Financially Stable in a Troubled Economy” CPCC TRiO Student Support Services Financial Literacy Series Workshop. Five Steps to Financial Stability. Establishing and Maintaining a Savings and Checking Account
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“Get Your Money Right: “Becoming Financially Stable in a Troubled Economy” CPCC TRiO Student Support Services Financial Literacy Series Workshop
Five Steps to Financial Stability • Establishing and Maintaining a Savings and Checking Account • The Advantages/Disadvantages of Using Debit Cards • The Advantages/Disadvantages of Using Credit Cards • Know Your Credit Score • What Factors Impact Your Credit Score
Establishing and Maintaining a Savings and Checking Account • What is the difference between a savings and a checking account? • What is needed to open an account?
Checking Accounts • A checking account is used to manage money in the short term. • Deposits, bill payments and debit card purchases are connected to a checking account.
Checking Accounts (cont.) • Most companies require employees to have a checking account for direct deposit of wages and payment. • Checking accounts are an easy way to manage your personal finances.
Savings Accounts • Savings accounts are for long term use. • It is recommended that 10% of all income be deposited into a savings account. • Savings accounts build interest over time that increases the amount of money you have in the bank.
Savings Accounts (cont.) • Keeping a savings account that puts at least two months pay in the bank for a rainy day can be the difference between financial success and disaster.
The Advantages and Disadvantages of Using Debit Cards • Typically, a debit card is issued with a checking account and can be used like a Visa or Mastercard. • With a debit card, charges are automatically deducted from your checking account.
The Advantages/Disadvantages of Using a Credit Card • Credit cards are based on the principle of “loaning” money to a credit worthy person for repayment at a later time with interest. • Knowing the ins and outs of credit cards, annual fees, late charges and overage fees can be the difference between a good credit score and a low credit score.
Know Your Credit Score • A FICO credit score can range from 300 to 850. • FICO score range • 700 and higher -- Excellent or Very Good credit. • 680 to 699 – Good • 620 to 679 – OK • 580 to 619 – Borderline • 500 to 580– Poor • 499 and below – Bad
Know Your Credit Score • You can order a free copy of your credit report from a number of sources. • Try this site to get a free report from all three credit bureaus: www.annualcreditreport.com
What Factors Impact Your Credit Score • Payment history • Do you make payments on time? • Late payments lower your score • Amounts owed • What is your debt to income ratio? • Length of credit history • New credit • Types of credit used • Credit Inquiries
Summary • Establishing and Maintaining a Savings and Checking Account • The Advantages/Disadvantages of Using Debit Cards • The Advantages/Disadvantages of Using Credit Cards • Know Your Credit Score • What Factors Impact Your Credit Score
Learning Checklist Questions • Name one factor that affects your credit score. • What is the difference between a savings and a checking account? • What is the difference between a debit and a credit card?
Resources for Improving Your Finances • www.Americasaves.org • www.annualcreditreport.com • Suburban Dollar • http://www.suburbandollar.com/2009/06/09/online-resources-improving-financial-health/ • United Family Services, Consumer Credit Counseling • Free credit repair services
Acknowledgements • Developed by Annette Teasdell, Summer 2009 Counselor, Student Support Services, as part of the Financial Literacy Workshop Series. • Information used in this presentation was taken in part from the resources for improving your finances on the previous page.
