Buying a Car

What is the process of obtaining a loan?

1. Find the car you want.
2. Research interest rates.
3. Find out how much your CURRENT car is worth as a trade in.
4. Determine how much of a down payment you can make.
5. Now, apply where you get the BEST rates, and where the monthly payments and length of the loan fit YOUR budget.
6. If you get turned down for the loan because of your credit score, then take 6 months, build up a better one, and apply again.

CATION: DOWN PAYMENTS ARE EXTREMELY IMPORTANT!
Making a down payment on your loan is VERY important. By doing this you are not paying interest on that amount, and it makes your monthly payments less, you own less, i mean come on, can anyone think of a reason why making a good down payment is a bad idea? Didn't think so. 

Time Frame: The longer it takes you to pay it back, you're paying more then you think you are. After all the interest adds up, and all that hooha, you were better off paying AS MUCH AS YOU CAN, WHENEVER YOU CAN, then making minimal payments.

Over time, the value of your purchase becomes more and more expensive for you, the longer you wait. Don't put yourself through that. PAY IT OFF ASAP. Overtime your car would decrease in value, but you're paying EVEN MORE then you would have when you first signed up for the loan, even though the value of your car has went down.


When buying a car, and getting a loan and all that good stuff, three things you should know are:

1. MAKE A DOWN PAYMENT OF AT LEAST 10% OR MORE OF THE PRICE OF THE CAR.
2. HAVING A REALLY GOOD CREDIT SCORE AND THE "3 C'S" (COLLATERAL, CAPACITY, CHARACTER) THE BETTER DEAL YOU'RE GETTING! ( AS LONG AS YOU CAN PAY A GOOD AMOUNT EACH MONTH.)
3. ALTHOUGH YOU HAVE A GOOD CREDIT SCORE AND CAN GET A LARGER LOAN, DON'T THINK THAT MEANS YOU HAVE TO. DON'T PUT YOURSELF IN A TIGHT SPOT, WHERE YOUR LOAN DOESN'T MATCH UP WELL WITH YOUR BUDGET!

 

 

 

CAR LOANS ARTICLE



Resources: youtube, ehow, yonglongai, wandzi

Credit Cards

What are some of the charges on credit cards?
Finance Charge: The finance charge is an interest fee charged on revolving credit accounts. Finance charges are calculated using the APR and the balance.
APR: (Annual Percentage Rate) It is a finance charge expressed as an annual rate. 
Late Fees: When you are late on your payments, it comes at a price. Depending on how much you own, they decided how much your fee will be.
Over Charge: When you over charge on your card and pass over your limit the credit card company set you up with. So you get charged.

How do you apply for a credit card?

To apply for a credit card, first you must find the place you want to get your credit card from. Then, make sure you have a GOOD CREDIT SCORE...or in a younger persons spot, make sure you have a credit score in general. Now is the time, you would go to your bank, or what ever company you are looking into for applying for a card, and having them decided on what your APR would be, and your limit, you know...so then in the end you can decide if you like what they're offering you as your cards..for shortage of words.. "benefits". But it's not really benefits, those would be more like... your rates and stuff. See, now it's getting complicated.

What are the Pros and Cons of owning a credit card?
PROS: 

• Earlier Consumption
• Convenience
• Use for emergencies
• Establishment of a GOOD credit history
• Consolidation of debts
• Benefits

CONS:

• Costs more, if unpaid balance is not paid monthly
• Ties up future income (Buying now, Paying later)
• Tempts to overspend   

When owning a credit card, three things you should always keep in mind are, always pay as much as you can right now, so when interest is charged, not as much is put on because you paid a good amount. So always try to pay more then the suggested amount. Then, make sure you know that in the future, you won't struggle to pay it off. Don't charge too big of amounts. Lastly, remember, it's not your money yet, but when it is, you're paying MORE then you were actually spending at the time. (Unless of course you pay it all off before any interest can be charged.) 

 

News article on Picking the Perfect Card For You :]

Resources: Wanzi, About.com, economichelp.org, wikipedia, cartoonstock.com, youtube

Inflation (important thing we've learned)

Inflation- It's an increase in average price levels
effect of inflation is to decrease the purchasing power!

There 2 types of inflation-
Demand pull- increase in demand, causes increse in prices. "more dollars chasing fewer goods"
Cost push- Increase cost of production force business to nicrease the price they sell goods and services at.

How is it measured?? Consumer price index.  The gov establishes a dollar value, point total of a market baset of goods and services that consumers have purchases recently. 

Who is helped by inflation??

• People who owe money
• People who make more money and receive COLAS
• People who can anticipate inflation

Debate on if inflation is good or bad!
read this and it explains pros and cons

video on inflation

Retirement

Difference between IRA and 401(k)-
Ira- a private investment funded solely by your own money.
401k-is offered through your place of work and involves your contributions and often contributions from your employer

Social Security- government program that provides economic security to people who are retired, unemployed, or unable to work. The U.S. Social Security program was established in 1935 and its funds come from employers and employees.were i found definition

Why a big deal now-  50 million Americans depend on Social Security, and it gives many benefits to people.  The big issue lately is that it faces a 5.3 trillion deficit over the next 75 years!  Social Security is funded by the payroll taxes of current workers to pay the benefits of current retirees, but because of the recession the programs costs aren't sustainable.  Another issue is that in 2016 the "baby boomers" will be retirees and will be putting lots of pressure on Social Security.
Freezing money?!?!

Personal savings and Social Security??  Many people are afraid that social security isn't going to be there for them when they retire so people are saying that we need to be extra concious on our personal savings so that if we don't have social security to fall back on that we have our own savings. 

Start retirement funds now!!  People usually don't think about starting a retirement fund till after college and once they have a career but we need to change that up!  The sooner people start retirement funds the more money you can have when you want to retire.  Once out of high school people should start some sort of savings and put any kind of money in it every month.  The earlier you start the better!!
video about negative social security

Personal Budget

What is the difference between fixed and flexible expenses? 

1. Fixed Expenses are basically like your bills that for the most part, stay the same each month. It could be things like your mortgage, loan payments, your groceries and your utilities.  
2.  Flexible Expenses are the expenses that can vary month to month. Higher this month then it was last month. So it would be things like your entertainment, little splurges, savings or investment, and even your shopping sprees. 

What is the difference between compound and simple interest on a savings account?

1. Simple Interest is interest charged on your first balance. So its when make your first deposit you get a certain interest charged on it, then every time you get interest it the same amount of interest as it was the first time and the second time, ect. So if you got $10 of interest for your first deposit, then every interest amount gained from then on will be $10.
2. Compound Interest is when the interest gained changes when your amount changes. So lets say you have $100 dollars for your first deposit and get 5% interest, so you get $5. Then next month comes around, and you have $200 in your account. You get 5% interest of the $200 dollars instead of 5% of your initial balance of $100 dollars. 

The Importance of Savings:

1. It's always nice to have money saved up kind of for the security of it. Knowing that if at any point in time, you need something like if your car breaks down or just any old thing, and you know you have at least something saved up, you don't have to freak out too much. Then lets say you feel like doing a little shopping to give your home a little spring make over. If you have some money saved up, whether it's in the bank or in your special place, you don't have run to a credit card to get your extra cash. 

What advice would you give someone regarding savings? 

1. One thing i would definitely recommend is nothing is too little to save up. whether it's $1 or $100 save what you can, when you can. Everything will add up eventually. Also, make sure that what you do save, you don't waste on something that's not worth it. Give yourself a legit reason to save, and leave your money untouched until necessary. 

Is it okay to spend money now?

1. Of course it is! You should definitely enjoy the money that YOU earn. I mean saving money is VERY important, but at the same time you need to at least splurge some one your hard earned cash on somethings for yourself!

Relevant News Story:
http://articles.moneycentral.msn.com/CollegeAndFamily/MoneyInYour20s/HowToBuildYourFirstBudget.aspx 

Resources: Youtube, cartoonstock, and notes from Wandzi :]
 

Investments

Stocks- "the capital raised by a corporation through the issue of shares entitling holders to an ownership interest (equity)"Were i got the definition

Mutual funds- company that brings together money from many people and invests it in stocks, bonds or other assets.were i got the definition

Bonds- can be known as fixed income securities

Risk of investing-A concern with any investment is that you may lose the money you invest, which is known as your capital  video about risk of investing

Different Investing- People can do long term investments which they put money into but they wont see the progress of the investment for many years.  This type of investment is usually for people that want to have money in 30 years when they retire.  Then there is short term investments which you may see progress in months or couple years.  Theses are investments for people that need money now or soon .

Difference between investments and Saving?  Saving is something safe that you put money in and have access to at anytime.  For examples: saving account, and checking accounts. 
Investing  is when you put money in something at a risk of loosing it.  Unlike a saving account the federal government doesn't insure your money when its put in a mutual fund or stock. A good thing about investing though is that you can make more then what you put in unlike a savings account.

Three tips for Successful Investing-

1- Make sure you know what type of investor you are and be constant with it
2-  Think independently, and for your best outcome
3-  Make sure you do your research on a stock or anything you invest in and have a good reason for making that investment.

article about investing! check it out

Day 1: Beautify.