MANAGING
YOUR MONEY
Information you should
consider BEFORE you borrow money or get a credit card!!!!
12 Money principles everyone should
know!
1. Map your financial future – Develop a written plan
listing your financial goals. You can go
places you want to go without a roadmap - but seldom on the first try.
2. Don't expect something for nothing - Be leery of
advertisements, sales people or other sources of financial offers promising
anything free. If it sounds too good to be true, it probably is.
3. High returns equal high risks - Recognize that no one
will pay you high interest rates on a sure thing. In most cases, the higher the
interest rate offered to you, the investor, the higher the risk of losing some,
or all, of the money you invest. Diversification of assets is the best
protection against risk.
4. Know your take-home pay - Before committing to
significant expenditures, estimate how much income is likely to be available
for you. Net income, after all mandatory deductions, is more important to
estimate than gross income before deductions.
5. Compare interest rates - Obtain rate information from
multiple financial services firms to get the best value for your money.
6. Pay yourself first - Before paying bills and other
financial obligations, set aside an affordable amount each month in accounts
designated for long-range debt-reduction or investment goals as well as
unexpected emergencies.
7. Money doubles by the "Rule of 72" – To
determine how long it will take your money to double, divide the interest rate
into 72. For example, an account earning 6% interest will double in twelve
years (72 divided by 6 equals 12).
8. Your credit past is your credit future - Be aware that
credit bureaus maintain credit reports, which record borrowers' histories of
repaying loans. Negative information in
credit reports can affect your ability to borrow at a later point.
9. Start saving young - Recognize that your total savings
are determined both by the interest you earn on those savings and the time
period over which you save (Compound Interest). The sooner you start saving,
the more funds you'll be able to amass over time.
10. Stay insured - Purchase insurance to avoid being wiped
out by a financial loss, such as an illness or accident. An insurance plan
should be part of every personal financial plan. Research life insurance carefully – Term
insurance is usually the best value.
11. Budget your money - Create an annual budget to
identify expected income and expenses, including savings. This will serve as a
guide to help you live within your income.
12. Don't borrow what you can't repay - Be a responsible
borrower who repays as promised, showing you are worthy of getting credit in
the future. Before you borrow, compare
your total payment obligations with income that you will have available to make
these payments.
THE TRUTH ABOUT CREDIT CARD$
·
Credit
Card interest averages 18%. If you have
$1000 on your credit card and make a minimum monthly payment, it will take 3 ½
yrs to pay it off (assuming you do not make any additional charges).
·
You
may have to drop out of school to pay off credit card debt(s) (with no
additional charging).
·
Your
credit history follows you wherever you go and it is very hard to repair bad
credit.
·
You
could be denied car/home loan due to poor credit.
·
Stress,
depression, even cases of suicide can be associated with debt-related issues.
·
Massive
credit card debt could lead to bankruptcy.
·
Every
time you apply for a credit card, it goes on your credit report and stays there
even if there is no balance on the card(s).
·
One
of the leading reasons for divorce is debt and money-related issues.
If you are relying on credit cards for living
expenses such as groceries, gas, and entertainment you are already in financial
trouble!
GOOD CREDIT CARD TIPS
1.
Do
not own or use a credit card. Use a debit
card instead.
2.
If
you do use a credit card, have only one
card.
3.
Use
a card with low interest and no annual fee.
4.
Watch
carefully what you charge. Pay off the card each month or pay as much as
possible to avoid high interest costs.
5.
Know
all income sources (help from parent(s), or employment).
6.
Be responsible-even small purchases add up.
CONTROL YOUR
SPENDING: It will help if you live like a “poor”
college student.
·
Know the
difference between what you “want” and what you “need”
·
Buy used books
·
NO eating out -
pack a lunch
·
Shop only at
sales
·
Borrow ONLY what
you need
·
If you borrow
Student Loans, borrow only what you need to cover tuition, fees, & books
·
Think before you
spend
·
Do a budget
before you borrow & stick to it
·
Balance your
checking account and avoid “bouncing” checks
·
Use public
transportation or carpool when possible
A brief look at a money management strategy…DEBT-FREE LIVING
Managing money is 80% behavior and 20% knowledge!
Example Monthly Budget
Income Monthly Total
Student
Employment ____________
Other
Job ____________
Grants
(mo. Amt) ___________
Student
Loans (mo. Amt) ___________
Parents
Help ____________
Savings ____________
Other ____________
Total Monthly Income ____________
Expenses Monthly
Total
Tution/Fees ___________
Room/Board
(rent) ____________
Books/supplies ____________
Utilities ____________
Car/truck
Payment ____________
Vehicle
Insurance ____________
Gasoline/maint. ____________
Food ____________
Clothing ____________
Entertainment ____________
Medical/Dental
(Ins) ____________
Savings ____________
Charitable
giving ____________
Miscellaneous ____________
Other ____________
Total Monthly Expenses ____________
Want more information on…
Yearly Income averages? www.iseek.org
Your credit history? http://www.ftc.gov/bcp/conline/edcams/credit/ycr_free_reports.htm
Finding the perfect job? www.48days.com/
Debt-Free
living? www.daveramsey.com
Money management? www.accessgroup.org/ www.bobbrinker.com/
www.daveramsey.com www.edwardjones.com/
www.lssmn.org.debt www.schwab.com/
www.soundmoney.org www.youcandealwithit.com
Average expected yearly wage
Accounting $26,000
Admin Sec $19,500
Business Management AAS $14,000
Child Development $19,000
Lawyer $78,170
Media Communications $24,000
Medical Secretary $20,000
Natural Resources $26,000
Nursing AS $32,000
Physician $124,821
Police Officer $35,000
Practical Nursing $26,000
School Teacher $30,000
This document is available in alternative
formats to individuals with disabilities by calling 218-879-0805 (voice and
TTY.) Information
is intended to be accurate,
but the publisher does not assume liability for loss or damage as a result of
reliance on this data. Material
should
not be considered legal, financial or other professional advice.