This presentation is from GapCafe's Financial Seminar where participants learn how to become more financial astute and financially empowered.

1. FINANCIAL LITERACY SEMINAR
DECEMBER 19, 2016
Christina Massalay, Stuart Williams
For Informational Purposes Only

2. Where Do I Stand Financially?
For Informational Purposes Only

3. Statistics
 42% of American workers live paycheck to paycheck,
including 25% of those earning more than $100,000
per year
 29% of American workers have less than $1,000 in
savings
 Millennials have a savings rate of negative 2%, thanks
to factors like high student loan debt and skyrocketing
rent prices
 The average U.S. household with debt carries $15,675
in credit card debt and $132,158 in total debt
For Informational Purposes Only

4. What is Financial Literacy?
 The ability to understand how money works in the world: how someone manages to
earn or make it, how that person manages it, how he/she invests it (turn it into more)
and how that person donates it to help others. (Wikipedia)
 The President’s Advisory Council on Financial Literacy defines personal financial
literacy as “the ability to use knowledge and skills to manage financial resources
effectively for a lifetime of financial well being.“
For Informational Purposes Only

5. Why is Financial Literacy Important?
 To understand the language of money
 To reduce the significant gap between the rich and
everyone else
 To learn how to manage income and expenses
 Save, invest, negotiate costs, etc.
 To make wiser financial decisions (e.g., new car or
certified pre-owned)
 To not leave your financial decisions up to others
who are not qualified
For Informational Purposes Only

6. Did You Know…
 Economic Indicators (unemployment numbers, interest
rate changes) impact your finances
 Federal Reserve changing rates
 Presidential elections impact your daily finances
 Globalization impacts your finances (e.g., 401k
impacts from global companies or
election/referendum results)
 Policy changes
 DOL Fiduciary Ruling
For Informational Purposes Only

7. Myths about Money
 Debt is expected and unavoidable
 Saving is not necessary since tomorrow is not
promised
 I can take money out of my 401(k), TDA, etc. at any
time because it is my money
 You have to be rich to invest
 I don’t earn enough to save
 My Partner takes care of the money so I don’t have
to worry about it
For Informational Purposes Only

8. Debt
 Types of Debt
 Student Loans
 Health care bills
 Mortgage Loans
 Car Loans
 Credit Cards
 Causes of Debt
 Overspending/lack of financial education
 Emergency situations
For Informational Purposes Only

9. Credit
 Components of Credit Score (FICO)
 Payment History – 35%
 Credit Utilization – 30%
 Length of Credit History – 15%
 New Credit – 10%
 Credit Mix – 10%
 Interest rate changes
 Fed increases rates  impact on auto loan rates,
mortgage rates, credit card rates, etc.
For Informational Purposes Only

10. How Debt Affects your Credit
How FICO Scores Affect Mortgage/Auto Rates
760 to 850 tier 5.780% 620 to 659 tier 7.096%
700 to 759 tier 6.002% 580 to 619 tier 8.583%
600 to 699 tier 6.286% 500 to 579 tier 9.494%
For Informational Purposes Only

11. Budgeting
 Many say it is difficult to stick to a budget
 Create a budget
 Track expenses daily for a few months
 Create categories and allocate amounts to those categories
 Accountability partner
 Cash based lifestyle
 Minimal credit card usage
 Apps for Budgeting
 Mint Budgeting App
 You Need a Budget App
 Every Dollar – Dave Ramsey
For Informational Purposes Only

12. Basic Financial Products
For Informational Purposes Only

13. Investment Strategies
 Buy and Hold
 Indexing
 Mutual Funds
 Growth Strategy
 Value Investing
 Ben Graham/Warren Buffet
 Asset Allocation
For Informational Purposes Only

14. Retirement Vehicles
 Pension Plans
 401(k), 403(b), SEP (Simplified Employee Pension)
 529 Plans
 Traditional IRA vs. Roth IRA
 Life insurance plans (replacement income)
 Employee Stock Ownership Plans (ESOPs)
For Informational Purposes Only

15. Taxes
 Not one size fits all
 Engage a CPA who regularly performs tax returns & is
adept in changes to tax rules
 Income tax returns are not free money (instead they
are an interest free loan all year to the
government)
 Charitable donations – tax benefit
 Churches, organizations, etc.
For Informational Purposes Only

16. Estate Planning
 A Will
 Living Revocable Trust
 Name executor of estate
 Set up trust accounts to limit estate tax
 Establishing a guardian for living dependents
 Life insurance policies
 Set up durable Power of Attorney (POA)
 Update beneficiaries on documents (e.g., IRA)
For Informational Purposes Only

17. Questions?
For Informational Purposes Only