Personal Finance Guide

Resources

2011-05-22T19:31:00.000-07:00

http://www.finweb.com/retirement/key-differences-between-a-401k-and-ira.html

http://www.fool.com/teens/teens01.html

chacha.com
about.com

mortgageunderwriters.com
homebuyers.colorado.org

What we learned from Economics

2011-05-22T19:30:00.000-07:00

Most important topic of economics this semester

because...

you need it for good credit history
there are many costs if you don't know how to use it
it's convenient
makes life easier
need to know what the different rates are (Late fee, interest rate, APR)
tempts to overspend if you don't know how to use it

Credit Card Fraud for Dummies

11 Charged in Massive Credit Card Fraud

Investment

2011-05-22T18:55:00.000-07:00

Stocks:

shares in ownership of a company
riskful

Mutual Funds:

investment program funded by shareholders
trades diversified holdings
professionally managed

Bonds:

debt security
similar to an I.O.U.

Risk of Investment

Whats the difference between saving accounts and investment?

saving accounts are riskfree, investments are not
you always gain a percentage of money on your saving account
you can make a lot of money on your investment or lose all of it

Does time play a role in investments?

bigger chance of making money in long-term investments
conditions affect time of investment rates

3 Things about Investing:

no guarantees + no perfect way to invest
understand how your investment works
make a plan to determine your needs + goals

Bonds bounce back

Buying a home - Loan

2011-05-22T18:45:00.000-07:00

Step One Pre Qualificaton Letter

App: Beginning loan precess complete a mortgage app

Processing:

occurs between 5-20 days
credit reports are reviewed by processor
debt + payment history is reviewed

Underwriting:

occurs between 21-30 days
tells if Credit, Debt + Payment histories are acceptable for a loan

Mortgage:

loan is submitted to private mortgage insurer
if there is not enough history it gets send back within 48 hours

Pre-closing:

occurs between 25-30 days
title insurance is ordered
closing time gets schedualed if approval contingencies are met

Closing:

occurs between 25-45 days
receive money from loan
finish last bit of loan prcess
buy the HOUSE

Down Payments:

important because of credit card crisis
if you have bad credit history need to show good down payments
Benefits of Down Payments

eliminates private mortgage insurance
smaller mortgage = less interest
instant equity

Time Frame:

takes 3 to 4 weeks
depending on type of loan

3 Things about buying a home

You are responsible for developing your budget
plan for the unthinkable
live within your means

What can go wrong when buying a house

Retirement

2011-05-22T17:43:00.000-07:00

IRA:

private investment fund
your own money
anyone can get one

401(K):

offered of your place of work
involves your constributions
must work for a certain period at the company to get it
contributions of employee

What is Social Security?

supplemental retirement system
funded out of payroll taxes

Obama fights Privatization of Social Security

How does retirement relate to personal savings?

more money after retirement
more benefits
more possibilites
not tied up in debt

Investment calculator

See what Investment could do

Year	Start with	Add 10%
0	$100	$10
1	$110	$11
2	$121	$12.10
3	$133.10	$13.31
4	$146.41	$14.64
5	$161.05	$16.11
6	$177.16	$17.72
7	$194.88	$19.49
8	$214.37

Saving Social Security

Credit Cards

2011-05-22T11:05:00.000-07:00

Defintion: Loan from a company that you agree to pay back later with interest.

Interest rates: The amount that is charged as an annual percentage rate. It's like a rental or leasing charge, that you pay back to the company or bank.

APR: The actual yearly cost funds over time of a loan like a credit card.

Late Fees: A fee if you don't pay the money back on time.

Over charge: When you borrow to much money from your loan.

How to apply for a credit card:

research about credit card plans, and different interest rates and APR's
fill out paper application for credit card
apply on phone
apply online
compare features
apply for multiple credit card plans
fill in details and double-check information
make a choice and pick one credit card

Why should I get a credit card?

Earlier consumption
convenience
use for emergencies
establishment of a good credit history
use of goods while paying for them

Why should I not get a credit card?

costs more if unpaid balance is not paid monthly
ties up for future
tempts to overspend
decrease future buying power

Tips for credit card users

set a budget
pay on time
don't go over your limit

Saving accounts

2011-05-19T08:35:00.000-07:00

Defintion: An account at a bank or company where you earn interest by putting in money on your account over time.

Saving Account Tips

Why is saving important?

security
safety
planning ahead
emergencies
college
enjoying life

Is it okay to spend money now?
Yes, if you...

spend it wisely
need it
you can stay out of debt
save some of it
know how to limit your

No, if you...

can't avoid splurging
have to borrow
don't need it
can't limit yourself

Saving account efficiency

Compound and simple interest

Simple interest:

grows slowly
principle amount

Compound interest:

speeds up the progress
principle + any earned interest amount

Youth with saving accounts

Fixed and Flexibe expenses

2011-05-18T08:31:00.000-07:00

Fixed:

spendings
monthly
can change
bills like loans, or gas payment

Flexible:

spendings
entertainment
clothes