Making Financial Literacy
Accessible to youth and
other underserved audiences
Dr. Ruby Ward, Utah State University
Ruby.ward@usu.edu
Trent Teegerstrom, University of Arizona
Motivation
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Take the math out of the calculation
Give people more control
They do not need the internet or Excel
Put it in terms they understand
Make it fun
Outline
• Teaching Youth
• Teaching American Indians and others
• Using the App
Teaching Youth
• Get their attention
• What I want to teach
– Credit and savings are tools.
– Effects of time and interest rate on savings
• Saving early gives more time to accumulate
interest
• Higher interest rate makes a difference
– Goals are within their reach. To reach goals
they need to give something up. Life is about
choices
– Buying on credit has a cost
Teaching Youth
• What I tell them I am teaching
– Let’s make you a millionaire
• How much would you have to save each month to
have $1 million when you are 65?
• Put it in terms of what they are giving up each
month
– Hours worked
– Sodas from vending machine
– Trips to movies with concessions
• Vary years and interest rate
Teaching Youth
• Take home messages
– They can become a millionaire if they choose
to
– If they have longer to save, they need to save
less for retirement
– If they have a larger interest rate they need to
save less
Teaching Youth
• Teaching about using credit
• Two examples.
– Both make the same amount of money per
hour and work the same number of hours
– Ask the students to pick something to buy
• How many hours do they need to work?
– Student works and saves
– Student buys on a credit
• If they buy on credit can they afford to have as
many things as someone who does not?
Teaching Youth
• Take home messages
– Buying on credit costs
• They will either need to work more hours
• Or buy less to pay for the cost of credit
– Credit can be a tool. To buy house and other
things may not be possible without credit
Teaching American Indians
• Need to show the effects in ways they
understand
• Then can teach about fixing credit score
and budgeting
• Want them to understand how credit works
and what influences a credit rate
• How can they determine what they can
afford
• Put it more in their control
Is Your Credit Score Good?
A
730 – UP
B
729 – 680
C
D
679 – 630 629 - 600
From Jennifer Kintz, University of Nevada, Reno.
Your Credit Score is Created by
These 5 Things
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35% PAYMENT HISTORY
30%TOTAL DEBT
15% AGE OF ACCOUNTS
10% NEW CREDIT
10% TYPE OF CREDIT
From Jennifer Kintz, University of Nevada, Reno.
Interest Rates for Range of Credit
Scores
• Arizona Used Auto Loans for 48 months (4
years).
720-850
3.73%
690-719
660-689
620-659
590-619
500-589
From MyFico.com
5.28%
7.07%
10.51%
15.63%
18.72%
What does that mean for how
much you pay?
Credit
Score
720-850
690-719
660-689
620-659
590-619
500-589
Interest Monthly
Rate Payment
$449
3.73%
$463
5.28%
$480
7.07%
10.51% $512
15.63% $563
18.72% $595
Buying
$20,000 truck,
financed 48
months
(4 years)
What does that mean for how
much you pay? ($20,000 Truck, 4 yrs.)
Credit Interest Monthly Paid Each
Score
Rate Payment Year
720-850 3.73% $449
$5,390
690-719 5.28% $463
$5,558
660-689 7.07% $480
$5,755
620-659 10.51% $512
$6,146
590-619 15.63% $563
$6,756
500-589 18.72% $595
$7,140
How many calves do you have to
sell? (500 lbs at $2 per cwt)
Credit Interest Monthly Paid Each Head of
Score Rate
Payment Year
Calves
$5,390
5.4
720-850 3.73% $449
$5,558
5.6
690-719 5.28% $463
$5,755
5.8
660-689 7.07% $480
$6,146
6.1
620-659 10.51% $512
$6,756
6.8
590-619 15.63% $563
$7,140
7.1
500-589 18.72% $595
Sell 32% more calves with bad credit.
What about the whole loan? (500
lbs at $2 per cwt)
Credit Interest Total Interest
Score Rate
Paid
Paid
720-850 3.73% $21,558 $1,558
690-719 5.28% $22,231 $2,231
660-689 7.07% $23,021 $3,021
620-659 10.51% $24,584 $4,584
590-619 15.63% $27,023 $7,023
500-589 18.72% $28,562 $8,562
Head of
Calves for
interest
1.6
2.2
3.0
4.6
7.0
8.6
Financial App
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Ready in June
Will notify you when available
In both android and IOS
www.DiverseAg.org/Money will have
teaching materials and instructions