Cash Course: what you should know about money. Fall 2014

Cash Course:

what you should know about money

Financial Capability Spending Plans

Banking Basics

Student Loan Interest Credit Management

Identity Protection

Financial Knowledge Financial Access Consumer Protection

Financial Capability

Why is Financial Capability

Important?

Security

Investment

Creating Behaviors

1) Set Financial Goals 2) Identify Income 3) Track Expenses 4) Evaluate & Adjust

Four

Basic

Steps

SMART Financial Goals

1) Set Financial Goals 2) Identify Income 3) Track Expenses 4) Evaluate & Adjust

Four

Basic

Steps

Wants vs. Needs

• Something you would like

to have

Want

• Something you have to

have

Wants vs. Needs

• Roof over your head • Enough food and water

• Basic health care and hygiene products • Clothing that is comfortable and

appropriate and AFFORDABLE Physical • Security • Community • Love • Self-Esteem • Respect Psychological

Wants vs. Needs

Don’t borrow money just because you are eligible for it

Borrow what you need, not what you want

Decline loans that exceed your needs

In case of an unexpected shortfall, previously declined money can be obtained

Wants vs. Needs

• Don’t make a payment directly to the loan service agency

• Visit your USCFAST page and click Required Information and Forms to submit and Appeal Concerning Work-Study or Loan Change.

• USC will return the funds you don’t want to the federal program.

• When you receive your next bill, pay the balance created on your USC e-pay account.

If you borrowed more than you need and want to reduce your loan:

Wired to Spend

Shopping Releases Endorphins and Dopamine

• Shopper Remorse is an affect of those chemicals diminishing

Stores and Friends Encourage us to Spend

• Shopping is not a social activity

• Marketers understand how the brain reacts to money

Impulse Control

• Always shop with a list

• Spend Cash instead of Credit or Debit Card

Wired to Spend

Know what you’re spending –

Most people aren’t aware how much money they spend on daily basis.

If you spend $5.00 per day on coffee

• In 5 days, you’ve spent $25

•

•

Non-Bank ATM Fees $2 for withdrawals, transfers, balance inquiries.

Other Bank ATM Fees You may be charged by the owner of the ATM in addition to any fees charged by your bank.

Overdraft Fee /

NSF Returned Item Fee

$35 each item. Not more than 10 items in one day.

Extended Overdrawn Balance Fee

$35 for each time that we determine that your account has been overdrawn for more than 5 consecutive days

Bank Fees

Checks Over the Counter or ATM Deposit not available for 3-5 business days

Out of State Checks / Large Items Deposit not available for 5-10 business days

Student Loan Interest

Interest Accrues on Unsubsidized Loans and Graduate PLUS Loans from the Date of

Disbursement.

Graduate/Professional Students will not receive Subsidized Stafford Loans

Dependent Undergraduate Student Loan

Interest

Principal

+

₌

Principal

$8,000

$8,931

$931

Addition of unpaid interest to the principal

Independent Undergraduate Student Loan

Interest

Principal

+

₌

Principal

$26,000

$28,934

$2,934

Addition of unpaid interest to the principal

Graduate Student Loan Interest

Principal

+

₌

Principal

$106,000

$116,848

$10,848

Addition of unpaid interest to the principal

Student Loan Challenge

Borrowing $1,000 less each year will REDUCE:

Monthly Payment By: $50 (+) The Total Loan Cost By: $5,000 (+)

Satisfactory Academic Progress (SAP)

• Qualitative - Meet a minimum grade point average;

• Pace - Earn a minimum number of units each semester; and

• Quantitative – Complete degree objective within a maximum number of

semesters and a maximum number of attempted units.

• Credit card payment example: • 18.9% credit card

• $2,500 balance

• Minimum payment (2% of balance)

Paying Off Your Balances

Results Minimum monthly payment

2% $50 $75

Total cost to pay off: Total interest paid: Number of years: $3,388 $888 3.8

Credit Cards

Your FICO Score

• A credit score is a number that

summarizes your credit risk, based on a snapshot of your credit report at a

particular point in time.

• A credit score helps lenders evaluate your credit report and estimate your credit risk.

35% 30% 15% 10% 10% Payment history

Utilization rate (amount owed) Length of

credit history New credit

Type of credit used

Entitled to an annual free copy of your Credit Report

• www.annualcreditreport.com

• (877) 322-8228

• www.myfico.com – fee for service

*Estimated California interest rates as of 09/10/2014 (myfico.com). This table illustrates how different FICO score ranges can affect rates and monthly payments

on a $25,000, 36-month fixed rate auto loan.

Higher the FICO Score, the Lower the Payment

FICO® score APR Monthly payment Total Interest Paid 720-850 3.295% $730 $1,290 690-719 4.864% $748 $1,919 660-689 6.895% $771 $2,746 620-659 9.923% $806 $4,008 590-619 14.742% $863 $6,085

• DETER

• DETECT

• DEFEND

• Passwords

– Use password protection – Use g00d_p@ssvvord$ • Computers

– Avoid Automatic Log In – Update Virus Files

• Watch what information you share on social networks

– Limit your audience to friends only

• 888-5 OPTOUT (888-567-8688)

– www.optoutprescreen.com

• Guard Your Mail and Trash from Theft

• Deposit Outgoing Mail at the Post Office

• Place Mail on Hold when on Vacation

• Shred, Shred, Shred

• Charge Receipts

• Insurance Forms

• Checks and Bank Statements

• Expired Credit or Debit Cards

• Credit Applications or Offers

• Don’t share PINs and Passwords

Detect

• Review your bank statements and credit cards carefully

• If you suspect ID theft:

– Place a Fraud Alert with the 3 major credit reporting agencies

– Close Accounts (use spreadsheet/software) – File a Police Report

– Report to FTC

www.ftc.gov/idtheft

Resources

Although every effort is made to provide the most accurate and up-to-date information, the content

of this publication is subject to change due to alterations in federal, state, university or lender policy or procedure. The USC Financial Aid Office

cannot be held liable for the consequences of such changes in policy or procedure.