“Smart Money Skills”

Personal Financial Workshop

Brought to you by: Shawn Spruce

First Nations Development Institute

Who We Are: • 501(c)(3) non-profit founded in 1980

• Three pronged strategy of education, advocacy, and capitalization • Promoting financial education in communities nationwide

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Financial Education Products and Services: • Building Native Communities curriculum

• Financial education training • Program support • Online resources

• Experiential learning 3

Does it Work? • 2009 Federal Reserve Study

• Pre car purchase training for soldiers stationed at Fort Bliss, TX

• Key Findings:

Financial education is most effective when presented in a timely, as needed method with topics that are

relevant to lives of participants

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Pop Quiz!!

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In the U.S. more people file for bankruptcy than graduate from college:

True

False

More students quit college due to credit card debt than bad grades?

True False

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How much does the average four-year college student owe in student loans upon

graduation?

$7,700

$25,200 $39,300

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Making the Minimum Payment

$3,000 charged to a credit card will take how many

years to pay off?

3 Years 18 Years

10 Years

How many advertisements is the average American exposed to each day?

500 1,500

3,000

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In Gallup, NM there are more payday lenders than fast food restaurants:

True False

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Men are better than women at managing their money:

True False

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Within two years of retirement, what percentage of former NFL players are bankrupt or under

financial stress due to joblessness or divorce?

10% 25% 50% 78%

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A person with $1,000,000 is more likely to be happy than a person with $50,000:

True False

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Select the phrase that is closet to how you feel about money.

– Money = Love – Money = Power – Money = Greed – Money = Happiness – Money = Opportunity – Money = Loneliness – Money = Security

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What does Money Equal to You?

Materials Developed by Inger Giuffrida, Financial Educator and Asset Building Consultant.

Common Generation Name Birth Years

• GI and Silent Generation 1909 – 1942

• Boomer Generation 1943 – 1964

• Generation X 1965 – 1981

• Generation Y (Millennials) 1982 - 2002

Generational Differences Regarding Money

Veterans and Silent Generation • Born 1909 – 1945

• Formative Events

– The Great Depression – Pearl Harbor – WW II – Hiroshima – The New Deal – The Korean War

Core Values

Tradition Respect for authority Conformity Prefer consistency and

uniformity Discipline Strong work ethic

Baby Boomers Generation • Born 1946 – 1964

• Formative Events

– The Civil Rights Movement – John F. Kennedy, Robert

Kennedy, Martin Luther King assassinations

– Vietnam War – Woodstock – The Moon Landing – The Cold War – Roe vs. Wade – First generation raised with

television and advertising

Core Values Optimistic Want involvement/to be

involved High value on education Competitive Status conscious Driven (work long hours &

expect the same of others)

Generation Xers • Born 1965 – 1980

• Formative Events – Watergate – Iran Hostage Crisis – Fall of the Berlin Wall – Challenger explosion – The Gulf War – The PC boom – The Reagan Presidency

Core Values Skepticism Work to live NOT live to

work (work/life balance) Self reliance Fun Flexibility Independence

Generation Y/Millennials

• Born 1981 – 2000

• Formative Events – Oklahoma City Bombing – 9/11 Terrorist Attack – The Internet boom – Columbine School Attack – Corporate malfeasance – The Great Recession – First generation raised with

personal computers, cell phones, etc.

Core Values Realism Confidence Innovation Extreme Fun Social/connected Environmentally conscious

• Buy Now, Pay Later

– Veterans and the Silent Generation – Baby Boomers – Generation X – Millennials

Name that Generation’s Core Money Value

• Savvy spender and saver

– Veterans and the Silent Generation – Baby Boomers – Generation X – Millennials

Name that Generation’s Core Money Value

• Earn to spend, but newly frugal

– Veterans and the Silent Generation – Baby Boomers – Generation X – Millennials

Name that Generation’s Core Money Value

• Buy Now, Pay Now

– Veterans and the Silent Generation – Baby Boomers – Generation X – Millennials

Name that Generation’s Core Money Value

Common Core Money Values Generation Veterans

(Silent) Baby Boomers

Generation X Generation Y (Millennials)

Birth Years 1909 –1945 1946 – 1964 1965-1980 1981-2000

Money Values

Put it Away Pay Cash

Buy Now Pay Later

Cautious/Savvy Conservative Save

Earn to Spend

Money = Security

Tool Resource ?

Where Does My Money Go?

3 Types of Expenses

• Fixed: costs that don’t change

•Flexible: costs you can control

•Luxury: purchases you don’t need

How Important To You Is:

• Owning a fancy vehicle • Eating out often • Wearing brand name clothing • Living in a fancy place • Sports activities or working out • Entertainment: movies, concerts, parties • Helping friends or family • Carrying a deluxe phone or electronic device • Buying gifts •Vacation time/travel

Set 3 types of Goals Short term………….less than 12 months Intermediate term…………1 to 5 years Long term………….more than 5 years

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Know the difference

Budget for short term goals Save for medium goals Invest for long term goals

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Budgets for Everyone

Everyone has a method that works for them. • Organized- accordion file folder, spending plan or

budget worksheets • Paperless- excel worksheet, mint.com, quicken books • Visual- cork board, calendar, dry erase board

*Budget group exercise- • 4 groups

Group exercise

If all you had was $10 to buy dinner. What would you buy?

If all you had was $20 to buy snacks for a month.

What would you buy?

Understanding Credit

Credit Trust given to another person for future payment of a loan, credit card balance, etc. Creditor A person or company to whom a debt is owed.

Types of Credit

Secured Requires something of value as a guarantee that you will repay your debt. Unsecured No guarantee is required.

Types of Credit

Revolving Allows you to borrow money at any time up to a set limit. Installment Allows you to borrow a specific amount at one time for a specific purchase.

Types of Interest

Simple Interest only calculated on principal Compound Interest calculated on BOTH principal and previous interest

Credit Cards

Fee Will charge lower interest No-Fee Will charge higher interest

Bank cards or Store Cards?

Pizza Cost Comparison

Payment Methods

Terms Cost to Consumer

Cash Pay now $10

Credit Card with Balance

Pay off over 18 months with 18%

interest

$42.40

Credit Reports

What is a Credit Report? It is a factual record of an individual’s credit payment history as reported by his or her creditors. It’s main use is to help a lender quickly and objectively decide whether to grant you credit, (i.e., buy a vehicle). Other uses include: renting an apartment, getting a job, qualifying for low insurance rates, buying a home, obtaining insurance, getting a cell phone.

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Credit Report Information Includes: *Identifying information such as name, current and previous addresses, telephone number, social security number, date of birth and current and previous employers. *Credit information – specific information about each account (date opened, late payments, collection accounts, current amount owed, credit limits, debt related lawsuits) *Public record information. *Inquiries – names of those who obtained information about your credit history. Remember to check reports for errors regularly. 42

Fair Credit Reporting Act *The fair credit reporting act outlines how long information can be retained on your credit report. *Good credit can stay indefinitely. *Derogatory credit can only be reported for 7 years from the date that the account first became delinquent. *Bankruptcy: Chapter 7 is reported for 10 years and credit included in a Chapter 7 will only be reported for 7 years. *Bankruptcy: Chapter 13 is reported for 7 years.

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Free Credit Report

AnnualCreditReport.com Or

1-877-322-8228 by mail

The FICO Score

• Fair-Isaac Co.

• Scores range from 350 to 850

• Good: Over 700

• Not so good: 600 and below

3 Credit Bureaus

• Different FICO score for each bureau

• 3 scores (auto, mortgage, consumer)

• One free report a year from each bureau, but no free score

www.whatsmyscore.org

FICO Score Breakdown

35% Payment History 30% Current Debt 15% Length of History 10% Types of Credit 10% Applications

What is Warren Buffet’s credit score?

718

824

850

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Tips for a Healthy Credit Score

• Pay credit card bills within one week • Contact lenders about problems

• Don’t over borrow

• Don’t bounce checks

Tips for a Healthy Credit Score

• Beware of “third party assistance”

• Pay utilities, parking fees, and library fees on time

• If you’re late once ask creditor to delete a 30 day late item or to “reage” the account

• Add relevant information to your credit report

More Tips . . . • Maintain at least one good account

• Avoid excessive inquiries

• Cancel newer cards

• Caution when co-signing

More Tips . . .

• Pull your credit report once a year and/or stagger them

• Don’t apply for in-store credit

• Credit utilization ratio below 30%

• Pay attention to “no limit” cards

More Tips . . .

• Capital 1 is #1 for consumer complaints

• Start early!!

• Diversify credit • Consider piggybacking

Other Credit Scores and Bureaus

• FICO Expansion Score

• Vantage Score (501-990) • Innovis (mailing lists)

1-888 5OPTOUT OptOutPrescreen.com

Where Should I Put My Money?

First Nations Development Institute Financial Education Consultant 2217 Princess Anne St. 600 Montclaire NE Suite 111-1 Albuquerque, NM 87110 Fredericksburg, VA 22401 (505) 247-8861 (540) 371-5615 (505) 917-0709 mobile www.firstnations.org agoyopi@gmail.com www.investnative.org Contact: Sarah Dewees Contact: Shawn Spruce