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FINANCIAL LITERACY Professional Development Office Indiana State Library

Financial literacy

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Page 1: Financial literacy

FINANCIAL LITERACYProfessional Development Office

Indiana State Library

Page 2: Financial literacy

Financial Literacy National Financial Educators Council (NFEC)

It is “possessing the skills and knowledge on financial matters to confidently take effective action that best fulfills an individual's personal, family and global community goals.”

Page 3: Financial literacy

Financial literacy has become a vital issue to our country. America is currently in dire straits because of the bad financial habits of our government and our citizens. We need to return to the values of financial responsibility that were practiced by our forefathers. These values -- thrift, accountability, work ethic -- are what made our country wealthy in the first place and if we don't return to them we will only continue to decline and go deeper in debt. 

Page 4: Financial literacy

◦Money management◦Credit◦Loans and debt◦Identity theft

Topics

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Who needs this info?

◦It’s never too early or too late to start understanding money!

◦Librarians/library staff need this info!◦Customize your materials to the group. Children/Young Adults Adults/Retirees

◦Know your community needs and find resources/organizations to whom you can refer patrons.

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BudgetDetermine monthly billsRentUtilitiesInsurance – auto, medical, vet

Resources available: mint.com, Microsoft Excel, themint.org, Quicken

http://money.cnn.com/magazines/moneymag/money101/lesson2/index.htm

Managing Your Money

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List down other expensesFoodFuelEntertainment ClothesCredit cardsLoansUnexpected and upcoming expenses

Create your own saving plan for short term expenses, retirement, and rainy day fund.

Budget

Page 8: Financial literacy

How much do you make? Total all your expenses.

-Spreadsheet-Check register

Simple Rule

Page 9: Financial literacy

Live within your means!

Page 10: Financial literacy

Safe places to keep your money. Checking Savings Loans – home, auto

http://www.allbanks.org/top_banks.html

Banks

Page 11: Financial literacy

Open checking account at the bank Convenient -ATM Treat it like cash Track your expenses

Debit Cards

Page 12: Financial literacy

Protect your debit card◦Keep PIN safe/private◦Report loss immediately◦Unauthorized purchases◦Avoid using it to purchase online

Know the policies of your bank – fees http://www.consumer.ftc.gov/articles/0213-lost-or-stolen-credit-atm-and-debit-cards

Remember…

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Debit vs. Credit pre-paid Terms & Fees Keep track of your

expenses Good for improving

credit. . .if payments are made on time!

http://www.prepaidcards.org/

Prepaid Cards

Page 14: Financial literacy

Compare prices Favorite stores

◦ Good: Frequent shopper key fobs◦ Avoid: Retail credit cards

Coupons◦ Example: coupons.com

Sale (seasonal)◦ Buy winter clothes during the summer!

Bulk vs. retail

*Ask yourself: Is it a want or a need?

Shop and Save

Page 15: Financial literacy

A credit report contains information on where you work and live, how you pay your bills, and whether you’ve been sued or arrested or have filed for bankruptcy. Credit reporting agencies (CRAs) gather this information and sell it to creditors, employers, insurers, and others.

Credit History

Page 16: Financial literacy

Equifax: 1-800-685-1111 or www.equifax.com

Experian: 1-888-397-3742 or www.experian.com

TransUnion: 1-877-322-8228 or www.transunion.co

http://www.consumer.ftc.gov/articles/0155-free-credit-reports

Credit Reporting Agency

Page 17: Financial literacy

Pay your bills on time. Keep balances low on credit cards and other

“revolving credit.” Apply for and open new credit accounts only

as needed. Pay off debt instead of moving it around.

Owing the same amount, but having fewer open accounts, may lower your score.

Better Credit Score

Page 18: Financial literacy

Compare several credit cards Annual fees Low APR (Annual Percentage Rate)

Fine fine lines!

http://banktruth.org/rates-2012/

Credit Cards

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Use it wisely Few times in a month Do not over-spend Pay whole bill every month. Pay on time. Cash advances!

Using Credit

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Car loans◦ Lease◦ APR◦ Terms◦ Used car vs. brand new

Associated fees: Registration, Insurance

Loans and Debt

Page 21: Financial literacy

Home loans

RESEARCH, RESEARCH, RESEARCH

•Terms•Fixed Rate vs. Variable Rate•Adjustable Rate Mortgage (ARMs)

Page 22: Financial literacy

U.S. Department of Education’s website, www.studentaid.ed.gov, provides information on preparing for and funding education beyond high school with details on the federal aid programs.

Another source of information on financial assistance is www.finaid.org

529 plans and the plans available in each state, visit www.collegesavings.org

Student Loans

Page 23: Financial literacy

Identity Theft

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◦Keep financial records safe◦Purchase a shredder◦Get your mail as soon as possible

Choose email option if possible◦Guard your SSN◦Phishing – spam mail◦Passwords – special characters, numbers,

upper cases◦CAPTCHA

Protect Your Identity

Page 25: Financial literacy

Retirement accountshttp://www.irs.gov/Retirement-Plans/Plan-Sponsor/Types-of-Retirement-Plans-1 Investment options Insurance

◦ Health Savings Accounts◦ Auto

◦ Use a retirement calculator◦ http://www.aarp.org/work/retirement-planning/reti

rement_calculator.html

What else is there?

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Credit Reporting Companies◦ Equifax (1-800-525-6285)◦ Experian (1-888-397-3742)◦ Transunion (1-800-680-7289)

Federal Trade Commission (1-877-438-4338) Police Agency Financial Counselor

Resources

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Publications.USA.gov◦ http://publications.usa.gov/USAPubs.php?NavCod

e=C National Financial Educators Council

◦ http://www.financialeducatorscouncil.org/ U.S. Department of Treasury

◦ http://www.treasury.gov/resource-center/financial-education/Pages/commission-index.aspx

Resources

Page 28: Financial literacy

Federal Trade Commission◦ http://www.ftc.gov/bcp/consumer.shtm

Mymoney.gov◦ http://www.mymoney.gov/index.html

Consumer Action Handbook Public Library Association Financial Literacy

Handbook◦ http://www.ala.org/pla/tools/financiallit