Vous êtes sur la page 1sur 43

Give Yourself Credit!

Setting Financial Goals

Getting what you want


Getting what you want doesnt always come easily. Chances are youll have to work hard to get what you want!

What are goals?

Something for which you work and which you achieve by planning and following the plan.

Short, Middle, or Long Term goals?


Replacing a TV set Purchasing a vehicle Paying for your childs college education Planning for your retirement Buying a home Buying a refrigerator

Short, Middle or Long term goals?

How to achieve your goals:

Write down goals and place reminders where youll see them everyday Keep your goals in the forefront of your mind Get people in your life to support you and feed off their inspiration Develop your goals hand-in-hand with your spending plan, and figure ways you can apply more of your money towards achieving them.

Which family will succeed?


The Smith Family HOPE to get out of debt WANT to purchase a home WISH to eventually send their child to college

The Jones Family WILL be out of debt by January of next year based on monthly payments of $600 WILL buy a home by March with $10,000 saved for a down payment. WILL have $14,000 saved for tuition by the time their child is 18 years old.

Organizing Financial Records

Does this look familiar?

Organizing Financial Records


Consequences of not organizing financial records: Time wasted in looking for important documents. Confusion about how much money you have and how much you owe. Difficulty in planning and meeting goals. Not having documents when you absolutely need them. Inability to answer questions regarding discrepancies with your finances. Extra fees for late payments and account overdrafts.

How to Get Organized


Use a file folder system, carton, box or expanding file File regularly to avoid a file pile Commit to staying organized Tell someone where to find your documents in case of emergency

Which documents?

Utilities Bill Birth Certificate Passport & Immigration docs Credit & Debt Card Receipts Bank Account Statements Copy of your tax returns Insurance and Investment Docs Social Security Card Credit Card Bill Police/court documents Will Others????????

When Credit Card Statement arrives

OPEN IT. Make sure the charges listed are yours, or authorized by you. Make sure any payments you made were credited to your account properly. Contact your credit card issuer immediately if you have any questions about charges or payments.

Bank statements
Make sure that all your Debits and Deposits are accurate.

Deposits - money paid into your account.

Debits money taken out of your account and include: - Checks you write - Transactions you make using your debit card - Automatic deductions - car loan payments or insurance payments - Monthly service fees, overdraft fees, ATM charges, NSF fees - Additional charges for exceeding monthly transaction limits - Charges for new checks

Organize your Checkbook

Always date your checks and debit transactions Write the purpose for the check or debit in the memo area of the check or check register Record every check you write in your check register Keep ATM and debit receipts, and enter them promptly in your check register Balance your checking account statement and checkbook every month

Reconcile your Checking Account MONTHLY


When your Bank Account Statement arrives open it!!!! Check every entry debits & credits against your records Search for errors and investigate why even if its $1 If your balances are still different, ask your institution for help.

What is Debt-to-Income Ratio ?

Have you been declined for a loan?


And you pay your bills on time Then maybe your debt-to-income ratio is too high?

So, what is Debt-to-Income Ratio ?


Your earnings Vs.

Your level of debt

Why is it important to monitor my debt-to-income ratio?


By staying aware of your debt-to-income ratio, you can:

Make sound decisions about buying on credit and taking out loans; See the clear benefits of making more than minimum credit card payments; and Avoid major credit problems.

Calculating your debt-to-income ratio: Step 1 Calculate your monthly take home pay

Multiply your paycheck amount by either 26 or 52 - depending on how often you are paid. Now divide your annual take-home pay by 12. This is your monthly take-home pay. If your take-home pay is inconsistent, estimate your monthly takehome pay by dividing last years annual take-home pay by 12. Remember to include: Alimony and child support, bonuses, commissions, tips and any other income.

EXAMPLE: TOTAL MONTHLY TAKE HOME PAY $2000

Step 2 Calculate your monthly debt


Calculate how much you pay every month for your debts Remember to include:

Car payment(s) Loan payment(s) (furniture, appliances, etc.) Financial institution loan(s) Student loan payment(s) Other loans/credit accounts Credit card payments Payment for past medical care

EXAMPLE: TOTAL OF MONTHLY DEBT = $400

Step 3 Calculate the Ratio

Divide your total monthly debt payments by your total monthly take-home pay, or income.

EXAMPLE: Monthly take-home pay = $2,000 Monthly debt = $400 400 divided by 2,000 = .20

DEBT-TO-INCOME RATIO = .20 OR 20%

Is your debt-to-income ratio ok?

16-19% or lower and youre probably okay! 20% or higher and you may: Jeopardize your ability to make major purchases, such as a car or a home. Keep yourself from getting the lowest interest rates and best credit terms. Have difficulty getting additional credit in case of emergencies.

Communicating about money


Family situations can make it difficult for one person to control the spending:

Dual incomes Blended families Childcare costs Eldercare costs Multiple credit, checking, and savings accounts Debts

Why we need to communicate about money


Set ground rules for your money discussions Leave the judgments about who is right or wrong out of the discussion Identify your common problems Agree on common solutions - such as sticking to a budget or allocating savings Establish common goals Decide on which things are important to the entire household

Credit Reports Facts & Myths

What is a Credit Report?

A report which details, in depth information about your credit history. Creditors, insurance providers, employers, leasing agents and any other person you authorize has access to it. Reveals your Credit Score.

Your Credit Report Reveals

Your level of debt

Your bill-paying habits


Length of credit Inquiries made about your credit

How can I get a free copy of my credit report?


Go to www.annualcreditreport.com You are entitled to 1 free copy of your credit report each year

Plus.
You can also get a FREE copy if.

Youve been denied credit, insurance, or employment.

You have 60 days to order a report

Youre on welfare Your credit report is inaccurate because of fraud.

Do you know what your credit score is?

If you answered no then you could be a victim of identity theft. You could have accounts on there that are paid, yet still reflecting a balance.

You may not receive the best terms when applying for credit cards or loans.
Scores range from 300 900 The higher the score the better! Average score - 680

Whats the VantageScore?


Created in March 2006 Used by all three reporting agencies (Equifax, Experian, TransUnion) Scores range from 501 to 990 Number score goes with a letter grade Example: 501-600 = F, 901-990 = A

Whats in my Credit Score?

Whats not included in my Credit Score ?


Race, color, religion, national origin, sex and marital status Your age Your salary, occupation, title, employer, date employed or employment history Where you live Any interest rate being charged Any items reported as child/family support obligations Certain types of inquires

Information taken from www.myfico.com

How can I get a good Credit Score?


Pay all your bills on time


Keep your debt-to-income ratio level low Dispute all negative information Correct inaccurate information with all 3 major reporting bureaus

Make sure old accounts are closed at YOUR request


Request that all missing positive credit information be included in your report Notify in writing your creditors of any change of address

Fill out all credit applications the same


Review your credit report at least once a year!

Innocent mistakes are made


Credit Reports can contain incorrect and inaccurate information from innocent mistakes being made:

A person applied for credit under different names. Someone made an error when transferring information from a hand written application. Payments were applied to the wrong account.

My report contains inaccurate and incorrect information..


You must notify all 3 credit bureaus in writing:

Detailing what is inaccurate/incorrect and why You will need to provide evidence/proof to verify your claim The Credit bureau has 30 days to investigate and respond to you. Information that can not be substantiated, must be removed. If the disputed information is confirmed as accurate, you can include an explanation to be included in your credit report.

It is your responsibility to have the information corrected!

Am I responsible for a co-signed debt?


YES!

If a co-signed debt goes to collection:

A collection agency may try to collect the debt from you. Institutions can sue you and get a judgment against you for the debt plus interest and legal fees.

Lenders may consider co-signed amounts when calculating your debt-to-income ratio before extending you more credit.

How do I repair my credit?

You are fully able to dispute inaccurate and incorrect information yourself! You can use a Credit Repair Company:

Beware of scams and large upfront fees Some companies illegally and deceptively promise to clean up credit reports, erase bad credit, or provide a new credit history

Debt Options

Try and arrange a repayment plan directly with your creditors. Contact a reputable non-profit Credit Counseling Organization to pay off your unsecured debt within 48-60 months with greatly reduced interest. Contact a reputable Debt Settlement company to settle your debt.

Where to get more information:

1 888-DEBT-USA

www.americandebtcounseling.org

Thank you!
American Debt Counseling, Inc.
1 888 DEBT USA www.americandebtcounseling.org