“The Art of Building a
Financial Future”
Securing Our Future Through Smart
Money Management
A Consumer Education Program by
LULAC and MasterCard International
What is “The Art of Building a
Financial Future”?
• A program designed by MasterCard and LULAC to help U.S. Latinos
educate themselves about smart financial management.
• Includes community workshops and bilingual materials that will be
distributed through LULAC councils to Latinos.
• Addresses areas of particular interest to Latinos.
What is “The Art of Building a
Financial Future”?
• It is NOT a sales pitch.
• “The Art of Building a Financial Future” is a consumer education
program.
• It provides useful money management tips to help Latinos build their
financial futures.
• At no time will anyone be asked or encouraged to sign up for a credit
card.
A Shared Vision
• Both LULAC and MasterCard are committed to advancing financial
management messages to increase financial literacy and to help
economically empower Latinos.
LULAC’s Vision
• LULAC has a rich history of advocacy in civil rights, education, economic
development, immigration, and equal opportunity.
• LULAC has identified economic empowerment as the critical next step toward
improving the quality of life for Latinos in the U.S.
• Advancing financial management messages among the LULAC membership
and throughout the Latino community will lead to increased financial literacy
and economic empowerment.
• Economic empowerment will better position Latinos to take advantage of the
opportunities that this economy offers.
MasterCard’s Vision
• MasterCard believes it has a special responsibility to provide consumers with
information that will help them use payment products responsibly and
effectively.
• MasterCard is committed to consumer education that will enable consumers to
make responsible money management decisions.
• MasterCard has a well-developed expertise in financial management and
consumer education and has created dozens of consumer education programs
on a wide range of topics.
Why Build a Financial Future?
• Because one of the most important steps
toward building a strong financial future for
yourself and your family is learning how to
manage your money.
The Art of Building a Financial
Future...
• Five Basic Actions
– Create and manage a budget.
– Understand the basics of credit and
debit.
– Use financial tools effectively.
– Establish a good credit history.
– Avoid fraud.
Why Create a Budget?
• Creating and following a budget is an essential
first step to sound financial management.
• Benefits of budgeting:
– To understand how you are spending money so
you can take advantage of opportunities to save.
– To set and meet long-term financial goals, such as
buying a car, a house or saving for college tuition.
Creating a Budget
• It’s a three step process:
– List and add up all your monthly income;
– List and add up all your monthly expenses; and
– Subtract your expenses from your income to
find out how much you have left over.
* Make budgeting a family project to help everyone learn good
money management.
Add Monthly Income
• Total Monthly Income =
–
–
–
–
–
Primary Job +
Secondary Job(s) +
Spouse’s Income +
Income from Others in Household +
Any Additional Income
Subtract Monthly Expenses
• Total Monthly Expenses=
–
–
–
–
–
–
–
–
–
–
–
–
–
Mortgage/Rent +
Utilities +
• Electricity/Gas
• Water
• Telephone
Home Maintenance/Other Expenses +
Groceries +
Clothes +
Transportation (fares, tolls) +
Car Loan Payments/Repair/Gas/Parking +
Entertainment +
• Movies
• Eating Out
• Vacation
Medical Expenses/Health Insurance +
Personal Care (e.g. haircuts) +
Savings +
Emergencies +
Miscellaneous
Budgeting Tips
• If your expenses exceed your income,
determine ways that you can cut back.
• Always set aside some money for savings
and emergencies.
– Even a little each month will add up.
Budgeting Tips
• When adding up your expenses, remember
to always keep track of the following:
– All checks written, ATM withdrawals, fees and
deposits;
– Debit card purchases;
– Monthly checking account statements; and
– Monthly credit card statements.
Budgeting Tips
• If you find that your financial life is too
complicated, it may help to get
organized and simplify.
• Think about reducing the number of
checking accounts or credit cards that you
have.
Banks: A Helpful Resource
• Banks can help you improve your
financial management skills and grow
your money.
Banks: A Helpful Resource
• Many banks provide information in Spanish.
• Any money deposited in an accredited bank
account is insured by the U.S. Government,
up to certain limits. Look for the “FDIC” or
similar signs.
• Banks generally will not share your
information with government organizations,
such as the Internal Revenue Service or the
Immigration and Naturalization Service.
Banks: A Helpful Resource
• Banking products and services include:
– Savings account: Your money will earn
interest.
– Checking account: Allows you to pay bills
using checks instead of cash, which can be a
cheaper and more convenient alternative to
money orders and certified checks.
– Payment cards: Credit and debit cards are
secure and convenient alternatives to cash and
are accepted by merchants all over the world.
Banks: A Helpful Resource
• Reasons to Use a Bank:
– Federal law requires the government to issue
many payments, including welfare and social
security benefits, electronically. This process
requires a bank account.
– Banks provide an alternative to check cashing
outlets.
• Check cashing outlets force consumers to carry large
amounts of money.
• Check cashing outlets often charge large fees for their
services.
Four Types of Payment Cards
• Credit – Allows you to pay for purchases and
carry over or “revolve” a balance from month to
month.
• Secured – A credit card with a credit line or limit
that is equal to an amount deposited with the
bank.
Four Types of Payment Cards
• Charge – Must be paid in full each month.
• Debit – Withdraws money directly from a bank
account (like a check).
Understanding Credit Cards
• Credit card charges are loans from a bank
to help you make purchases --and debts
that you must repay.
• A credit card allows you to carry part of the
balance over to the next month, but you will
be charged interest.
Understanding Credit Cards
• Before applying for, accepting or using the
card, understand all the rules, terms and
conditions of use.
• Credit cards should only be used for
purchases you can afford to pay back in a
short period of time.
Credit Card Tips
• If you decide to apply for a card, choose
carefully.
– Ask questions about anything that sounds
too good to be true or that you don’t
understand.
– When applying for a credit card, you may
be asked to provide certain information,
such as proof of residency or job history.
Credit Card Tips
• Know your credit card interest rate, due
date and credit limit as well as any, fees
charged.
• Always pay your credit card bill on time.
– Interest charges are always added
when the bill is not paid in full.
– You may be charged a fee for late
payment.
– Your credit record is damaged when
you pay late.
Credit Card Tips
• Always pay more than the minimum
amount due on your credit card
statement.
– If you only pay the minimum amount
due, you will not reduce your balance.
Did You Know???
• Question: How long does it take to pay off:
– A $1,000 credit card balance
– With a 19.8% interest rate
– If you pay only the minimum balance due
each month?
Did You Know???
• Answer:
– Eight years!!
– It would cost $843 in finance charges,
almost doubling the amount of the original
purchases.
Credit Card Tips
• Keep track of how much credit you have
available and limit your spending to how
much you can afford to pay in a short
period of time.
• Fees are usually charged, and your credit
record is likely to be damaged if your
credit limit is exceeded.
Your Credit Card Statement
• You can track your spending with the monthly
statement issued by the bank.
– Each month, you will receive a statement that will
list all of the purchases you made during the last
billing cycle.
– If you do not pay the balance in full, the bank will
also charge you interest on the remaining amount.
– The statement will also include a minimum amount
due.
– Review your statement with your family members.
This is a good opportunity to explain how to
manage a credit card.
Understanding Secured Cards
• Secured Cards
– The credit line or credit limit is equal to the amount
deposited with the bank.
– They help those with damaged, little, or no credit
history to build a good credit record.
– Secured cards look like “regular” cards and are
accepted by merchants in the same way.
– There is often an annual fee assessed.
– Some offers are better than others; read the “fine
print.” to check for fees that will be assessed.
Understanding Debit
• Debit cards can be used like a credit card to
make purchases anywhere the logos on these
cards are accepted.
• Debit cards can also be used to withdraw cash
from an ATM.
Understanding Debit
• In some cases, your debit card will require the
use of a Personal Identification Number (PIN)
and sometimes a signature.
• The amount of the purchase or withdrawal is
deducted directly from your checking account.
Use Debit Wisely
• Always record your debit transactions.
• Always know how much money you have in
your bank account.
Use Debit Wisely
• Never overdraw your account.
– You will be charged fees by the bank and possibly
the merchant.
– You may damage your credit record.
• Some debit card transactions take several days to be
deducted from your account, so tracking your balance
through only an ATM is not the most effective way to
manage your account.
Protect Your Debit Card
• Check your wallet often and report lost or
stolen cards immediately.
• Sign your card as soon as you receive it.
• Read the security precautions that come with
your debit card and follow them.
Protect Your Debit Card
• Memorize your Personal Identification Number
(PIN)
– Never write it down, especially on the
card.
– Never share it with anyone.
– Don’t carry it with your card.
Facts About Your Credit Report
• A credit report, also known as your
credit history, is a collection of
information that indicates how well
you’ve managed your finances.
Facts About Your Credit Report
• Negative credit information such as: late
payments, non-payment, or exceeding your
credit limit can stay on your credit report for
seven years.
• Bankruptcy can stay on your credit report
for seven to 10 years.
Facts About Your Credit Report
• A poor credit record can:
– Hurt your chances of renting an apartment
or buying a house;
– Prevent you from being approved for a car
or new business loan;
– In some cases, affect your chances of
getting a new job.
Establish a Good Credit History
• Your credit record is critical to
establishing a strong financial future.
• Review your credit report annually and
correct any mistakes.
• Credit records can be obtained (for a
small fee) from three national bureaus.
Credit Bureaus
• Equifax Information Service Center
1-800-997-2493 or 1-800-865-1111
P.O. Box 740241, Atlanta, GA 30374-0241
www.equifax.com
• Experian Information Solutions, Inc.
1-800-682-7654 or 1-800-397-3742
PO Box 740241, Chatsworth, CA 91313
www.experian.com
• Trans Union Corp.
1-800-888-4213 or 1-800-916-8800
Consumer Disclosure Center
Box 390, Springfield, PA 19064-0390
www.transunion.com
What If Credit Is Refused?
• Sometimes a bank will determine that your
application for credit is too great a risk for
them to loan you money.
• If you are refused credit, you have the right
to receive a free copy of you credit report.
How to Repair Your Credit
• There are steps you can take to rebuild
your credit record so that you can qualify
for a credit card or a loan.
How to Repair Your Credit
• Create and maintain a budget.
• Pay your bills on time over time.
• Review and correct your credit report (if there are errors).
• Consider getting a secured credit card.
• Be sure to always pay at least the minimum amount due
on time each month.
– The strongest credit reference is a bank card, paid on time,
over time.
How to Repair Your Credit
• Beware of credit repair companies offering
to “erase” negative information from your
credit report.
– This cannot be accomplished by an
any outside agency.
• Repairing your credit takes time and
discipline. There is no quick fix.
Avoiding Fraud
• Credit and debit fraud are easy to prevent if
you follow a few simple rules.
Avoiding Fraud
• Do not give your card number to any unknown
caller or anyone who refuses to put an offer in
writing.
• Do not allow a merchant to record your card
number on a check, receipt or other document.
Avoiding Fraud
• Do not write your PIN on your credit or debit card.
• Dispose of copies of receipts and other documents
that display your card numbers.
Avoiding Fraud
• When online:
– Never provide your credit card number to an
Internet merchant who does not run a secure
server. (Look for an unbroken key or closed lock
at the bottom of the browser window.)
– Never send your credit card number through email.
– Never give your credit card number to an Internet
merchant without first learning about the
merchant.
Avoiding Fraud
• If you suspect fraud, contact the bank that
issued your card immediately.
• Most MasterCard cardholders are protected if
unauthorized charges result from a lost or
stolen card.
For More Information
• For more tips on money management, ask
your LULAC trainer for the “The Art of Building
a Financial Future” brochure.
• For more sources of information, ask your
LULAC trainer for the list of helpful telephone
numbers and web sites.
“The Art of Building a
Financial Future”
Latinos and Smart Financial
Management
A Consumer Education Program by
LULAC and MasterCard International