Financial literacy from indiana secretary of state
Secretary of State
Improving Financial Literacy
Did you know?
• 40% of Americans say they live beyond their
• 50% say they live paycheck to paycheck
• Fewer than 50% of Americans have calculated
how much they need for retirement
• The average American spends 20 years in
Are you ready?
What is Financial Literacy?
It is the ability to use knowledge and skills
to manage financial resources effectively
for a lifetime of financial well-being.
What knowledge and skills can
help you to be financially
Balancing a checkbook
• What is budgeting?
– Spending less than you’re bringing in
– Planning for the long and short term
Why can budgeting fail?
•Failure to prioritize expenses
•Failure to budget practically for normal outof-pocket expenses such as groceries and
•Failure to plan for unexpected events
•Spending more money than you have
How to budget
• List Expenses
• Prioritize Expenses
– Car loan/car licensing
– Insurance fees
– Unsecured debt
– Discretionary expenses
List total amount of each expense & date its due
Make your budget work for you!
• Priorities first!
• Evaluate discretionary expenses
• Cut down on grocery or personal items
• Carpool or use public transportation
Balancing a checkbook
• Verifies your records match the bank’s;
• Monitors for bank mistakes;
• Prevents you from running low or out of funds;
• Recognizes issues right away; and
• Evaluates your expenditures.
How to balance your checkbook
1. Reconcile your checks/deposits.
2. Reconcile your ATM withdrawals & debit card
3. Record interest earned & bank fees.
4. List outstanding checks/deposits.
5. Record your bank’s ending balance.
6. Calculate your balance.
• Powerful tool
– Gives access to student loans, mortgages,
credit cards, auto loans, etc.
• Why is good credit important?
– Shows trustworthiness
– Saves you money/best interest rates
• Five Cs
– Credit History
Credit Card Management
• Limit the number of credit cards
• For debt, look into 0% transfer programs
• Be aware:
Annual Membership fees
• Pay at least minimum every month
• Pay extra on the card with highest interest rate (if
Monitor Your Credit
• Go to www.AnnualCreditReport.com;
• Call 1-877-322-8228; or
• Write to:
Annual Credit Report Request Service
PO Box 105281
Atlanta, GA 30348-5281
Would you rather have a million dollars right
now or a penny doubled every day for 30
Let’s do the math
Day 1 = 1 cent
Day 7 = 64 cents
Day 14 = $81.92
Day 21 = $10,485.76
Day 30 = $5,368,709.12
What is compound interest?
Interest is paid on original amount of deposit plus
any interest earned.
(Original $ Amount + Earned Interest) x Interest
Rate x Length of Time = Amount Earned
interest (at age
302 West Washington Street, Room E – 111
Indianapolis, IN 46204
Phone: (317) 232 – 6681
Toll Free: (800) 223 – 8791
Fax: (317) 233 – 3675
Indiana Investment Watch