Financi
al
Literac
Ag enda
• KEY TOPICS DISCUSSED
IN THIS PRESENTATION
• What is Financial
Literacy
• Budgeting Basics
• Impact of Interest
Staying
• Savvy by Saving CreditDept Issues
• Identity Theft Issues and
Safety
What is Financial Literacy?
•is the ability to use knowledge and skills to manage
financial resources effectively for a lifetime of financial
wellbeing. Or the ability to make informed judgments
and make effective decisions regarding the use and
management of money.
•it's also a core life skills in an increasingly complex
world where people need to take charge of their own
finances, budget, financial choices, managing risks,
savings, credit, and financial transactions.
Is financial literacy important to us? Or is financially
literate one of the solutions to prevent such losses while
achieving financial security and freedom?
• YES, but only if it is backed up with actions that lead to behavior changes.
• When such knowledge leads to action and changes in behavior, we can say
that financial education turns into financial literacy.
5 Financial Improvement
Strategies
1.Identify your starting point.
2.Set your priorities.
3.Document your spending.
4.Lay down your dept.
5.Secure your financial future.
1.Budgeting Basics
2.Impact of Interest
3. Staying Savvy By Saving
4.Credit-Dept Issues
5.Identity Theft Issues and Safety
1.Budg eting Basics
What is Budgeting?
Budgeting is creating a plan to spend your money.
the fundamental step in achieving financial literacy,
and by extension, reaching financial security and
freedom.
Step 1: Set Realistic Goals.
Goals for your money will help you make smart spending choices.
7 Steps to Good
Budgeting
Step 2: Identify Income and Expenses.
Once you have established some goals for your money, it’s time to look at
where it comes from and where it goes right now.
It’s easy and you might be amazed by what you find out
Step 3: Separate N eeds from Wants.
Set clear priorities for yourself and the decisions become easier to make
by identifying wisely those that are really needed or just want.
Step 4: D esig n your Budg et.
7 Steps to Good
Budgeting
Make sure that you are not spending more than you make. Balance your budget to accommodate
everything you need to pay for.
Step 5: Put your Plan into Action.
Match your spending to when you receive your income. Decide ahead of time what you’ll use each payday.
Non- reliance to credit for the living expenses will protect one from dept.
Step 6: Plan your Seasonal Expenses.
Set money aside to pay for these expenses so you can afford them without going into debt.
Step 7: Look Ahead.
Having a stable budget can take a month or two. Don’t be afraid to ask for help if things aren’t falling
into place.
2. Impact of Interest
As interest rates increase, the cost of
borrowing money becomes more
expensive.
This makes buying certain goods and
services, such as homes and cars, more
costly. This in turn causes consumers to
spend less, which reduces the demand
for goods and services.
3. Staying Savvy by
Saving
A financially savvy person is well versed
in dealing with expenditures, credit and
other money matters.
While this term can mean many different
things to different people, the overall
idea of being savvy financially focuses
on one concept: maintaining a healthy
financial standing through proper
planning and budgeting.
Here are just a few ways:
•Track your spending. As any behaviorist knows,
it's important to know your habits before you can
change them. ...
•Make a budget. Based on your spending, create
a monthly budget. ...
•Think small. ..
•Think big. ..
•Borrow less and pay the interest. ...
•Invest the money you save. ...
•Save for retirement.
4. Credit- Debt Issues
Why have a credit card?
A c re d it c ard is a p ow e rf ul
f inanc ial
tool
w it h d iv e rse
a d v a n t a ge s ,
e spec ially
for
b uild ing
y our c re dit
hist ory .
At
the
same
t i m e t h o u gh , i t
should
b e m a n a ge d
v ery c arefully , bec ause
it
may
c ause y ou t o spend more
money t han y our
b u d ge t a l l o w s . To b e c o m e
f inanc ially
se c ure it is ne c essary
to learn how to
m a n a ge y o u r c r e d i t
c ard s w ise ly .
Advantages of using Credit
Card
The use of a credit card, instead of
cash or personal funds, offers the
following advantages:
Building credit history.
A quick source of funds in an
“absolute” emergency.
No accrued interest if bill is
paid
on time and in full each month.
Zero liability as consumers is not
responsible for fraudulent charges
when reported promptly.
Consumer protection.
Disadvantages of using
Credit Card
Along with the advantages listed
above, the use of credit cards can also
have several disadvantages:
Established credit-worthiness needed
before getting a credit card.
Encouraging impulsive and
unnecessary “wanted” purchases.
High-interest rates if not paid in full by
the due date.
Annual fees for some credit cards – can
become expensive over the years.
Fee charged for late payments.
Negative effect on credit history and
credit score in case of improper usage.
4. Credit- Debt Issues
What is a Dept Issue?
A d e b t i s s u e r e f e r s t o a f i n a n c i a l o b l i ga t i o n
t hat allows t he issuer t o raise funds by
promising t o repay t he lender at a c ert ain
point in t he fut ure and in ac c ordanc e wit h
the terms of the c ontrac t.
Debt inc reases t he c ost of ev ery day it ems
a s p e o p l e m a ke e n d s m e e t b y u s i n g d e b t t o
pay more for it ems t hat would ot herwise
c ost less.
5. Identity Theft
Issues and Safety
What is Identity Theft?
Id e n t i t y t h e f t h a p p e n s w h e n s o m e o n e u s e s
y o u r l e gal n ame , c r e d i t c ar d n u mb e r , s o c i al
sec uri t y numb er, p asswo r d s o r p i n s o f yo ur
f i n a n c i a l a c c o u n t s , t o m a ke p u r c h a s e s , ge t
c ash o r c o mmi t f raud i n yo ur name.
How to protect my Identity from theft?
1.Secure your mailbox.
2.Buy a criss-cross shredder.
3.Use the internet safely.
4.Stay in control of your
inquiries.
5.Check your credit
report regularly.
“Money without financial
intelligence is money soon
gone.” – Robert Kiyosaki
Thank you and God Bless!!