Premiere parent presentation 2010b

Is Your Student Financially Fit?
Presented by the Financial Fitness Program

Background Research
The average high school student in the US is only able to score 52.4% on a survey measuring knowledge of basic personal finance.
50% of the parents said they think their teens’ knowledge of money management is good to excellent, but only 20% of the teens in question agree.
87% of college students and 90% of high school students rely on their parents for financial guidance.

The Financial Fitness Program
DePaul's Financial Fitness Program provides free services, resources and tools to help students manage costs from freshman year through graduation and beyond.
Individual Advising
Brenda Williams, A.F.C Associate DirectorDePaul Center, 9400
Natalie DanielsAssistant DirectorSAC 192
Workshops
Beginning Level
Money Management 101Debt 101
Intermediate Level Create Your Money PlanManaging Your Debt Load
Studying Abroad without Breaking the Bank

Advanced Level
Post-Graduation Workshop Series
Buying a Home Introduction to Investing
Turning to Teaching
Information & Resources
Website http://financialfitness.depaul.edu
Bloghttp://mytwocentsdepaul.com
Facebook Page
Twitter Feed
Contact Information
financialfitness@depaul.edu E-Mail
312-362-6482 Phone

Issue #1:Not considering if their loan amounts are affordable
People in the 18 to 24 age bracket spend nearly 30% of their monthly income just on debt repayment – double the percentage spent in 1992.
The number of 18 to 24-year-olds declaring bankruptcy has increased 96% in 10 years.

Common Hour
4 questions every student/parent should consider:
How much will I have to borrow?
What will be the monthly payment?
Can I afford it?
Do I need to reduce or eliminate certain costs?

Sample case: Karen S.

Handling Debt
$37,700 Monthly Payment Options

Karen’s “Affordable Monthly Payment” Calculations
Career choice: Accountant
Estimated starting salary $43,197
Subtract 25% for taxes-$10,799
$32,397
Months / 12
Net monthly income = $2699
Standard “affordable” payment is 10% of monthly income = $269 for Karen

Handling Debt
Which would you choose?

Tips for Reducing or Eliminating Costs
Search for free sources of money early every year
www.finaid.org
www.fastweb.com
www.collegeboard.com
www.scholarships.com
Max out federal loans before using alternative/private ones
Fill out FAFSA as early as possible
Don’t pay full price for textbooks
Take the time to evaluate housing costs and meal plans

Issue #2: Not fully understanding credit and how it is linked to their future career
45% of college students are in credit card debt, the average credit card debt being more than $3,000.

Tips for Developing Good Credit
Establish credit before they graduate
Aim for just 1 or 2 credit cards when first starting out
Pay on time
Don’t MAX out their cards – balance should be 30%or less of credit limit
Don’t open up a whole bunch of cards in a short period of time
Check their credit reports once a year

What’s In A Credit Score?

Credit Reporting Agencies
*Free credit reports: www.annualcreditreport.com
Equifax
www.equifax.com
1-800-685-1111
Experian
www.experian.com
1-888-397-3742
Trans Union
www.transunion.com
1-800-888-4213

Issue #3:Not knowing what questions to ask when choosing financial products
Bank Accounts, Credit Cards, Private Loans
Tell them to compare at least three sources for any product

Choosing a Private Loan
What is the interest rate? Is it fixed or variable?
What is the interest rate cap for variable rates?
Are there fees? What are they? Do you have prepayment penalty fees?
When will my repayment begin? What are my repayment options?
What will my monthly payments be?
What will be the total costs of the loan (interest, principal, fees)?
Are there deferment/forbearance options during repayment?

Issue #4:Need guidance on how to set up and stick to a spending plan
50.8% of college-age adults agree with this statement: “I have experienced repeated, unsuccessful attempts to control, cut back or stop excessive money use.”

70/20/10 Budget Guidelines
70% Living Expenses
Rent/Mortgage(<35%), Food, Clothing, Transportation, Utilities, Entertainment
20% Save
5% Emergency Fund
5% Specific Goals
10%Long Term
10% Debt repayments
Car Payment, Student Loans, Credit Cards

Sample Budget Controls
Trouble curbing spending?
- Envelope method
Hate tracking expenses?
- Mint.com
- Wasabe.com
Don’t like online banking?
- Traditional excel sheet
- Collect receipts
Click on View, Headers and Footer to change text footer.

The Financial Fitness Program
DePaul's Financial Fitness Program provides free services, resources and tools to help students manage costs from freshman year through graduation and beyond.
Individual Advising
Brenda Williams, A.F.C Associate DirectorDePaul Center, 9400
Natalie DanielsAssistant DirectorSAC 192
Workshops
Beginning Level
Money Management 101Debt 101
Intermediate Level Create Your Money PlanManaging Your Debt Load
Studying Abroad without Breaking the Bank

Advanced Level
Post-Graduation Workshop Series
Buying a Home Introduction to Investing
Turning to Teaching
Information & Resources
Website http://financialfitness.depaul.edu
Bloghttp://mytwocentsdepaul.com
Facebook Page
Twitter Feed
Contact Information
financialfitness@depaul.edu E-Mail
312-362-6482 Phone

Premiere parent presentation 2010b

by DePaul Career Center on Jul 16, 2010

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