SocialNet Guest Speaker Series: Financial Do's Dont's and How. With Mrs. Lisa Souls

Many thanks to our first guest speaker in the Social Net class, Mrs. Lisa Souls.

Topic: Financial Do's and Don'ts. How to get started.

Here are our cliff notes from the day.

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What should you look for when your borrowing money?

• Interest rates and the cost of funds.
• Looking at interest rates, you need to look at late fees and the interest rates.
• Everything you spend money on goes to a credit report over time and it will follow you for seven to ten years.
• The biggest form of debt is due to credit cards.

Unsecured: Buying a t-shirt on credit, the bank won’t take it back
Secured: Mostly real estate, if you don’t pay, they will take it.

Credit

There are three major credit card bureaus. 300-850 worst to best credit.
You get three free credit reports a year.
Make sure, even if it seems like you're too young, get a credit report. myannualcreditreport.com is a free credit report.

Make sure you can pay off your monthly bill. The interest is sky high so don't use a credit card as a loan.
Get a credit card and pay it off each month. Don't spend what you can't afford. Credit cards themselves aren't bad... how we use them can be. Don't treat it as a loan. The interest is far too high. Don't feel 'entitled' to money you don't have.
Small purchases equal small payments and will help you to establish a credit rating.


Find a credit card that offers benefits that have value to you: money off at the pump, travel benefits, etc. They change all the time. keep up on it. There's no magic formula.

Federal vs. Private loans:
FHA (federal housing administration) is a conventional loan which guarantees the money. Since you don't have the money to put down on the loan they will put down more but they charge more as well. It is not the best program but it helps some people.

Investing

“Save money for a rainy day.” Set a budget. Save at least 10% or 5% if you can out of your income every check. Too many people who could save money don't. Most of them in that scenario end up paying for it later. Life throws obstacles at you.

401k. Take a certain percentage of your salary out of your check directly, tax free, and employers will match it. Usually ranges from 3% on through 5%. This is only applicable if you work for a certain company. If you don't contribute, they wont pay. If they offer it, take it. It's free money!


* Summarized by the class in collaborative editing and published by students.