This document provides information about financial literacy topics such as saving for retirement, credit cards, student loans, FICO scores, and budgeting. Some key points include: - Historically, the S&P 500 has averaged a 9.86% annual return, meaning $250,000 could grow to over $3.8 million over 30 years with investment. Starting younger allows for greater growth. - Credit cards can be used to build credit history but also carry risks if not paid off in full each month. Knowing your credit card terms is important. - Federal student loans offer repayment options like income-driven plans but consolidation may cost more in interest. Managing loans and only borrowing what is needed are advised.

1. Financial Literacy
Backpack to Briefcase
Immaculata University

2. What would you do if you all of a
sudden had $250,000?

3. Stock returns historically have averaged 9.86%, based on the total
average annual return of the Standard & Poor's 500 Composite
Stock Price Index from 1970 through 2009.
30 Year Growth of $250,000
$4,500,000
$4,000,000
$3,821,979
$3,500,000
$3,000,000
$2,500,000
$2,173,956
$2,000,000
$1,500,000
$1,000,000 $1,024,552
$500,000 $530,465
$250,000
$0
0 8 15 23 29

4. Start Younger & End Stronger
 $10,000 investment at age 22
 $1,101,488 by retirement (age 72)
 $10,000 investment at age 32
 $430,114 by retirement
 $10,000 investment at age 42
 $167,953 by retirement
 $10,000 investment at age 52
 $65,583 by retirement

5. Saving for Retirement - Tips
i. Pay Yourself First!
ii. Start Early
iii. Utilize Tax Advantaged Accounts
iv. Know Your Investment Risk Tolerance
v. Compare Investment Costs

6. Contents
I. Saving For Retirement
II. Credit Cards
III. Student Loans
IV. FICO Score
V. Budgeting

7. Debit Cards vs. Credit Cards
Debit Card Credit Card
 Linked to a Bank Account  Available Line of Credit
 Money Automatically  Purchases Lower Amount of
Withdrawn from Account Available Credit
 No Monthly Bill  You are Responsible to Pay a
 Activity Not Reported to Bill Each Month
Credit Agency  Activity Reported to Credit
Agency

8. Why Have A Credit Card?
 To make purchases for which you may not have
cash.
 Insurance Protection – Identity Theft Protection
 Builds Your Credit History

9. Credit Cards - Tips
i. Know Your Objective
i. Carrying Debt
ii. Transactional Use
ii. Shop Around for the Credit Card that is Best for
You
i. Interest Rate & Annual Fee
ii. Rewards Programs
iii. Manage Your Credit Card Responsibly
i. Don’t Borrow More Than You Need
ii. Pay Your Bill On-Time

10. Know Your Student Loans
Where to find… What information…
 Federal Stafford Loans  Amount(s) Owed
 www.nslds.ed.gov  Interest Rate(s)
 Federal Perkins Loans  Payment Amount
 Contact Your School
 Payment Due Date
 Private Loans
 Contact Your Individual
Lender

11. Federal Student Loans
Repayment Options
 Standard 10 year
 Graduated 10 year
 Extended 25 year
 Income Contingent/Based Repayment
 must financially qualify
 payment amount reevaluated every year
http://www.direct.ed.gov/calc.html

12. Loan Consolidation
www.loanconsolidation.ed.gov
Pros Cons
 One payment per month  Loss of grace period
 Could lower your monthly  Loss of control to target
payments payments
 Can be deferred if you’re  Students continuing school
enrolled half-time will lose subsidized status
 Could end up paying more
interest

13. Federal Student Loans – Tips
i. Only Borrow What You Need
ii. Know Your Loans
iii. Determine Your Appropriate Repayment
Option
iv. Understand Your Forbearance & Deferment
Options – Communicate with your Lender
v. Pay Your Loans On-Time – Signup for
Automatic Payments

14. FICO Scores
 Credit scores are used by lenders to determine
your credit risk
 3 Credit Reporting Agencies each with their own
score
 Experian
 TransUnion
 Equifax
 Affects both how much and what terms (interest
rate, etc.) lenders will offer you

15. FICO Score Breakdown
 How you pay (Payment History) 35%
 Capacity (Amounts Owed) 30%
 Length (Oldest single reported trade) 15%
 Accumulation (Inquiries for credit) 10%
 Mix (Revolving versus installment) 10%

16. Good vs. Bad FICO Score
Auto Loan Mortgage
 Good Score  Good Score
 $20,000 loan @ 3.49% for 60  $200,000 loan @ 3.125% for
Months 30 Years
 Payment = $363.75/month  Payment = $856.75/month
 Total Repaid = $21,825.00  Total Repaid = $308,430.00
 Bad Score  Bad Score
 $20,000 loan @ 9% for 60  $200,000 loan @ 7% for 30
months Years
 Payment = $415.17/month  Payment = $1,330.60/month
 Total Repaid = $24,910.20  Total Repaid = $479,016.00

17. Building Your FICO Score - Tips
i. Always Check Your Credit Report
i. www.annualcreditreport.com
ii. www.myfico.com
ii. Apply and Open New Credit Only When Needed
iii. Keep Balances Low on Credit Cards
iv. Pay Off Debt Rather Then Shifting it Around
v. Pay Your Bills On-Time
i. Use Automated Payments
ii. Setup Payment Reminders

18. Creating A Budget
 How much will be your  What do you expect your
starting annual salary? expenses to be?
 What do you expect to  Will you move home, rent
be your tax rate? an apartment, buy a
home?
 How much will your  Will you have cable &
payroll deductions cost internet? NetFlix?
you?  What will be your student
loan payment?

19. Sample Post Graduation Budget
 Annual Income - $35,000  Retirement (IRA) - $1,020 ($85)
 Rent/Mortgage (18%) - $6,370
 Taxes (25%) - $8,750 ($530)
 Food - $1,800 ($150)
 Deductions (10%) -  Clothing - $600 ($50)
$3,500  Insurance - $1,800 ($150)
Transportation - $1560 ($130)
 Income after 
 Utilities - $3,600 ($300)
Taxes/Deductions -  *Student Loan(s) - $4,200 ($350)
$22,750  Credit Card(s) - $1,800 ($150)
 Personal Savings - ???

21. Budgeting - Tips
i. Create & Update a Budget
i. Remember: Budgets are tools to help you get where you want to go, not
reflections of your success
ii. Underestimate Income & Overestimate Expenses
iii. Pay Yourself First!
i. Retirement
ii. Personal Savings
iv. Go Shopping!
i. Can you get a better price for your expenses?
v. Negotiate with Yourself
i. Do I need this to be Happy or Satisfied?