Financial literacy is defined as the ability to evaluate and manage finances effectively to achieve life goals. Many American families struggle with debt, with a significant percentage spending beyond their means, and lack of understanding of financial concepts among youth is alarming. The document covers essential topics including budgeting, debt management, savings strategies, and resources for improving financial literacy.

2. What Is Financial Literacy?Formal Definition: The ability to effectively evaluate and manage one’s finances in order to make prudent decisions toward reaching life’s goals.More simply: Knowing what you need to know to achieve your financial goals, or common sense with your dollars and cents.What we will cover:Money and savingsBudgeting (AKA cash flow)Debt/risk managementTaxes/basic financial concepts

3. America’s financial literacyAmerican families:The average American family spends $1.22 for every dollar it earns.One in five American families with annual household income of less than $50,000 is spending 40% of after-tax income to service its debt.In 2003, the average American household owed over $8,000 in credit cards, compared to $2,600 in 1989.In 2005, over 2 million Americans filed for bankruptcy – the highest amount in history.

4. America’s financial literacyAmerican families: (continued)Only 26% of teens understand how card interest and fees work. (2007 Charles Schwab Teens & Money Survey)The average college senior will graduate with $4,100 in credit card debt before they even have a job. (Sallie Mae’s 2009 National Study of Usage Rates and Trends)Nearly 20% of bankruptcy filers are college students. (Sallie Mae’s 2009 National Study of Usage Rates and Trends)

5. Money and SavingsTime is moneyContinuous educationSavings and the power of compounding interest“Make all you can, save all you can, give all you can.”- John Wesley

6. Money and SavingsTime is moneyHow many hours do you need to work to pay for your rent/mortgage, car insurance, electricity bills, extras, etc?Paid $10/hrRent is $200Food is $100Electric $50If I make $10 hr then I will need to work 35 hours in order to pay out $350 that is due for that week.

7. Money and SavingsContinuing EducationCongratulations!The other side of the time equationMore knowledge/skills = greater payYou will either learn to manage money, or the lack of it will always manage you! "All days are not same. Save for a rainy day. When you don't work, savings will work for you." - M.K. Soni

8. Money and SavingsThe power of compounding interest“Get Rich Quick” never works. You will lose your money. Saving faithfully over time will always build wealth – it just takes a little while (and patience)The story of Ben and Arthur:Both save $2,000 per year at 12%. Ben starts at age 19 and stops at age 26, while Arthur starts at age 27 and stops at age 65.At age 65, Ben has more than $2.2 million, while Arthur has only $1.5 million.

9. Savings and Investing –8 Simple StrategiesStart smallContribute to your retirement planSave through payroll deduction plansRound up your mortgageBank your raisesKeep paying off a loanPay off your credit cardsKeep track of where the money goes"Money grows on the tree of patience." Proverb

10. Budgeting AKA Cash Flow ManagementBudgeting Prioritizing“Life is like a coin you can spend it only once. Choosing one thing over all the rest throughout life is a difficult thing to do. This is especially true when the choices are so many and the possibilities are so close.” - Chuck SwindollYou can only spend what you have if you want to reach your financial goals.

11. Creating a BudgetYour financial plan

12. Track income and expenses

13. Unique to you

14. Budget necessities/priorities first

15. Communication (with family, spouse, roommate or partner)Today, there are three kinds of people: the have's, the have-not's, and the have-not-paid-for-what-they-have's. -Earl Wilson

16. BudgetingGross monthly incomeNet incomeFixed expensesFlexible expensesDiscretionary expensesTotal it upIncrease your savingsA nickel ain't worth a dime anymore. -Yogi Berra

17. Debt Management Credit Cards Pay Day Loans Credit Reports

18. Know the EnemyIn 2003, 4 billion credit card offers were mailed

19. Capital One spends $280 million a year on credit cards offers

20. Citibank spends over $100 million a year on marketing to college students only

21. Debt Traps: Pay Day Loans, Title Loans, and Six month no interest credit card scamsIt is an unfortunate human failing that a full pocketbook often groans more loudly than an empty stomach. -Franklin Delano Roosevelt

22. Steps to Getting Out of DebtStop using credit cards and other types of creditHave a cash flow planSave $500 - $1000 for emergenciesSell something to pay off a debtUse money from a part-time job or overtime to payoff debtDevelop a plan to pay off your debt

23. Plan for Paying off DebtList your debts starting with the smallest firstMake the minimum payments each month on each debt except for the smallest onePay more than the minimum on the smallest debt until it is paid offOnce the smallest debt is paid off, add that payment amount to the next debt on the list so that you are paying more than the minimum paymentContinue until all debts are paid off

24. Danger of Credit Cards – What You Don’t Know Can Hurt YouBe aware of teaser rates

25. Stick with one credit card

26. Pay in full every month

27. Stay within the limit

28. Review your statementsReport a lost or stolen card immediatelyProtect personal informationPay on timeAvoid cash advancesProtect your credit historyIf you think nobody cares if you're alive, try missing a couple of car payments. -Earl Wilson

29. Pay Day LoansA Pay Day Loan is a small advance, usually $300 - $500

30. The borrower gives the lender a postdated check or other authorization to repay the loan on payday

31. On payday, the borrower must repay the loan, plus pay a fee, but is also given the option to renew the loan

32. The borrower is led to believe that he is receiving more money and the new fees applied are not explained until the debt amount is unmanageable and the borrower is trapped