credit, finance, financial management, savings, money

1. Welcome to the
The Prosperous Teen™
Ordinary Money Habits create Extraordinary Results!

2. Please note: This is general advice. You should consult with your own financial
advisor before making any major financial decisions, including investments or
changes to your portfolio.
Kids Cash Coach ™/Teens Cash Coach ™ and Patti Handy are not stockbrokers
nor investment advisors and that no investment advice is given or implied. All
information provided, including references to stocks, investment strategies or
formulas, is for educational and illustrative purposes only. You should seek
appropriate legal, financial, tax and other professional services as needed.
You agree to hold Kids Cash Coach ™/Teens Cash Coach ™ and Patti Handy
harmless from any and all loss, damages, liabilities, demands, claims, actions, or
suits, incurred as a result of use of any information presented in this DVD
curriculum or that may be asserted against me by third parties by reason of your
use of any information presented in products.
Taping, reproduction, distribution, or resale of material owned or delivered by
Kids Cash Coach ™/Teens Cash Coach ™ or Patti Handy, without prior written
authorization, is prohibited.
Patti Handy is not a registered investment advisor and the information provided in
this DVD/workbook curriculum should be considered educational in nature, but it
is not a substitute for legal or professional financial advice. If you believe you
need the help of a Certified Financial Planner or other investment counselor,
please seek a qualified professional. Patti Handy is not responsible for any losses,
damages or claims that may result from your financial decisions or the
information provided herein.
The Prosperous Teen™
Release of liability and legal disclaimer

3. With Patti Handy
Money Coach

4. Section 1

5. Debit
&
Credit Cards

6. Let’s talk about Debit Cards!
Definition- Do’s – Don’ts

7. •Little plastic card that
looks just like a credit
card, but it’s not!
•Debit card is more
like a check than
anything. When
used, money is taken
out of account
almost immediately.
•Tied to your
checking or
savings
account.

8. Used at the ATM
machine to withdraw
or deposit money.
ATM stands for Automated Teller Machine.
My personal definition is
‘Always Takes Money’.

9. Looks like a credit
card, but acts very
differently!
18 years is the
minimum age for
credit cards, but you
can get a debit card
much earlier, check
with your local bank or
credit union.
Most financial
institutions have
minimum age of 16
years, without the need
for parent as custodian
if you can prove you
have a job, driver’s
license and school ID.
You can get a debit
card at a much
younger age, with
parent as custodian
on your account.

10. When you use your
debit card, be sure
to put purchase in
spending tracker or
checkbook register!
Keep a running balance at all times so you don’t
overdraft.
Some lenders won’t let transaction take place without
sufficient funds.
Some will allow the transaction and then charge you
overdraft fees.
If you have that kind of money to burn, give it to
your parents!

11. When you
withdraw
money from
ATM, be sure to
note that
transaction too!
To use a debit
card, you will
need to enter
a PIN number
on the
keypad.
PIN stands for
Personal
Identification
Number
Keep this
number safe, but
not in your wallet
or purse. Don’t
share PIN with
anyone, except
your parents!

12. Overview of DO’s:
Track every purchase!
Keep a running balance, so you don’t overdraw account.
Realize money comes out of account almost immediately.
Keep PIN number in a safe place at home.

13. Overview of DON’TS:
Don’t overdraft! Fees are nasty!
Don’t spend frivolously.
Don’t share your PIN with anyone but
parents.

14. Section 2

15. Let’s talk credit cards!
When you think
credit card,
think bad debt.
If used incorrectly, it will wreak havoc on your life.
If used correctly, using
credit cards can help
build a solid credit
history and improve
credit scores (more on
this later)

16. oUsing a credit card is
different from debit
card in that your
purchase is not
deducted from your
checking or savings
account.
oYou will receive a
monthly bill for all of
your purchases that
you need to pay,
preferably in full.
oIf you have more
than one credit card,
be aware that
different cards will
have different billing
cycles.
WATCH DUE DATES!

17. When I say using credit cards
incorrectly, what do I mean?
Purchasing items without
the intent of paying bill in
FULL!
Paying bill late and
incurring late fees.
Paying
interest/finance
charges as a result
of carrying balance.

18. Once you are in the
cycle of carrying
balance, it is very difficult
to get out from under that
debt.
The interest charges keep
adding up and it becomes
increasingly more difficult to
pay the card off in full.
This is a major
struggle many
people are
facing today!

19. ~~When you purchase an item with
your credit card, you should be in
the habit of knowing you have, or
will have, the cash to pay it off. I
know I sound like a broken record,
but this point is imperative to
understand!!
It can take years
to pay off one
item you have
purchased.
The true cost of those
$50 pair of jeans
becomes far more
than $50.

20. Beware that
things add up
very quickly.
This is why a
spending tracker is
very important.
There won’t
be any
surprises
when the bill
arrives.
Keep all receipts
organized, so you
know what to expect.

21. ~When you get your bill,
you will be given the
option to pay ‘minimum
payment’.
~Don’t make the
mistake, thinking
that minimum
payment is full
payment.
~Credit card
companies love
charging you
finance fees
and late fees. ~If you happen to
go over your credit
limit (the most you
are ‘approved’ to
spend) they can
increase your
interest rate.
~If the interest rate
is raised, you may
not be able to bring
it down again.

22. Pros to Credit Cards:
Good alternative to carrying
cash, especially when traveling.
Will help build credit history if
used correctly.
Can be a Godsend in an
emergency situation.

23. Cons to Credit Cards:
Will create years of stress and
debt if credit is abused.
Easy to overuse due to
accessibility.

24. Section 3

25. Let’s talk about the true cost of
an item if you don’t pay the
card in full...
You really, really want
a new cell phone that
costs $500.
The bill comes and
you can’t pay it in
full, so you pay the
minimum.
Assuming your interest
rate is 20% and you pay
$25 minimum, what is the
true cost of the item over
time?

26. Are you ready for this?
It would take you over 2
years (25 months to be exact)
to pay off that $500 cell
phone.
You would have
paid $113 in interest
(wasted money).
The true cost of
that $500 cell
phone was
$613.

27. This doesn’t take into
consideration what you
could have done with that
money if you saved or
invested it.
This also doesn’t take into
account any additional
finance fees or late fees if
they applied.

28. A few more examples:
How about a $2,000
credit card balance
at 20%?
Assuming you pay only $50
minimum payment per month, take
a wild guess what the interest cost
would be...
You’ll never guess this one...

29. A whopping $1,323 in
interest alone, that’s on
top of the $2,000!!
It would take you 67
months to pay that off,
that’s almost 5 ½ years.
That’s just plain
crazy!!!

30. What’s the lesson here?
~Pay your credit
cards in FULL every
single month!!
~If you buy
something, be sure
you have the money
to pay for it.
~If you don’t have the
money, you just can’t
buy it!!

31. Refer back to the
spending tools I
gave you.
Remember the need
vs. wants question you
should ask yourself.
Think hard about
‘why’ you are
buying this item.

32. Let’s see some more
examples:
What if you bought that
cell, and then some
clothes or shoes, totaling
$1,000.Using an interest rate of
18% and a minimum
payment of $50 per month,
what would your true cost
be?
It would take you 24 months to
pay this off (assuming you didn’t
make additional purchases) and
the interest cost would have been
$198!!

33. Let’s look at some
larger balances,
because things do
add up!If we have a credit card
balance of $5,000, with
an interest rate of 18%
and pay a monthly
payment of $100...
This one hurts...
You will be paying
an interest of
$4,311! That’s just
interest!!
It would take you
94 months to pay
off- that’s almost 8
years!

34. These numbers will
hopefully be shocking
enough to you that you
think twice, even three
times before using a
credit card.
Recognize that your
purchases will be
following you, and
costing you dearly if
you don’t pay the bill in
full.
Letting the balance carry
forward to the next month
will begin a very large
snowball effect.

35. Let’s turn this around for a minute...
Using your credit card
regularly and paying in
full every month, will help
build credit history!
This is key for credit
scoring, which I will
cover in detail later.
Don’t be afraid to
use credit cards, if
you know you
have the cash!!

36. On the next disc, we’re
going to cover interest
rates on cards.
Setting credit limits and...
The impact of using credit
cards on your credit
score!

37. Action Step:
If you have credit cards, take a
close look at your statement to
determine you interest rate and
terms.
If you don’t have a
credit card yet,
starting doing some
homework by going
online and
examining your
choices in cards.
Make sure to
check annual
fees, interest
rates and late
fees.