Financial Literacy: Getting Organized

Transcription

1 Financial Literacy: Getting rganized irections: Fill in the blanks. Creating a Financial Foundation 1. rganizing and planning, regardless of what you are working on, is always helpful to you to identify what you have to work with, what might be missing that you need, and a way to move forward toward your specific goal. 2. here are three main reasons for organizing your personal information, which includes information on your bank accounts, credit card accounts, medical care, education, legal documents and much more. 3. In taking the time up front to get organized, you will save time as you move forward. s well, this same efficiency means you can find any of your information easily and quickly. 4. Preparation: In taking the time up front to get organized, you will be better prepared to provide documents and other information to third parties, such as a banker who might be considering making a loan to you. 5. Problem-solving: In taking the time up front to get organized, you will be able to minimize mistakes you might make, like forgetting to pay a bill, and to help you avoid a lot of problems in case someone tries to steal your identity. 6. rganization is really a fundamental key to a good financial plan. 7. eep your to-do list in the first file in the first category so you can easily access it. 8. eep your current bills, credit card statements, utility bills, rent or mortgage payments, and so on, in this folder until you can actually pay the bill. 9. If you lose your wallet with your credit card, driver s license and more, you will need a quick way to contact all of the appropriate people so you can let them know someone has access to your information. ccompanies: Financial Literacy: Getting rganized 1

2 Financial Literacy: Getting rganized 10. n this contact sheet, include the account name, account number, contact person or department mailing address, customer service telephone number, and a customer service address for all of your accounts. 11. his category will hold detailed information from your banking, credit cards and investment accounts which you will need to keep for reference when you are applying for a new apartment lease, a car loan and any other type of financial decisions. 12. his will include checking, savings, money markets and certificates of deposit. 13. File two, credit card accounts. his will include any credit or charge accounts you have opened and are actively using. 14. his will include money markets, mutual funds, Is and retirement plans sponsored by your current or previous employer. 15. In each of these three files, keep the following pieces of information: any documents provided to you when you open the account, any correspondence you receive from this institution and your most current monthly account statement to use to balance your account. 16. ny type of insurance policies you currently or are likely on in the future should be filed here. 17. File one, contact information: It will be helpful if you provide the same type of contact information here, but be specific to just your insurance policies as you put on your contact sheet in file five in category one. 18. xamples of policies you will likely have are auto, health, homeowner and life. 19. ince your homeowner s or renter s policy covers the items you have within your home, you will want to make an inventory of all of your items and keep this list in a safe place, where it can t be harmed by fire or water. ccompanies: Financial Literacy: Getting rganized 2

3 Financial Literacy: Getting rganized 20. his list, for each item should include a photo, description, the location where the item is kept, a copy of the original receipt and an appraisal, or estimated current value. 21. ppraisals are usually only provided for more expensive items, such as jewelry, coin collections and so on. 22. p-to-date medical records are very important for you to have on file and accessible by someone you trust in case you are in an accident, or become very ill and cannot get to the records yourself. 23. In this file, keep your receipts, income documents and charitable donations for the current tax year so you have all the information you need to file your tax return after the current year ends. 24. s well, it is a good idea to keep a copy of all your previous tax returns and the supporting documentation, that is receipts, income documents and so on, for up to three years. 25. ou will want to keep hard copies of any type of legal agreements and contracts you sign. 26. his will include a renter s lease, or a mortgage document, and other agreements or contracts related to your home. 27. File two, loan documents. his file will hold any documents which cover loans from banks, individuals, retirement plans and so on. 28. hese types of documents give another person authority to make decisions about your healthcare and about your money when you are not able to make those decisions for yourself. 29. hese documents will include your will and any other estate documents in your estate plan. 30. It is important to be organized, it is important to present a good organizational plan to a lender. It shows a well thought out plan, it shows maturity, it builds confidence in the lender in you as a borrower. ccompanies: Financial Literacy: Getting rganized 3

4 Financial Literacy: Getting rganized Creating a pending Plan 31. our goal in developing a spending plan is to be able to pay all of your expenses each month and put money into a savings or investment account and having a good spending plan in place will help you achieve this goal. 32. spending plan, some might call that a budget, is important no matter what your income level, no matter how large or how small your assets are. 33. he first section of a spending plan is income. 34. he first thing you want to consider is the different types of expenses, which we covered in the vocabulary in the beginning. 35. If someone comes in with a spending plan, it shows they have maturity, they have thought out, they have a little discipline in their financial life. Identifying hat ou wn and we 36. s you buy items and take out loans or use your credit card to pay for these items, you are beginning to collect the information used to create a personal net worth statement. 37. It is considered to be a snapshot of where you stand financially at a specific point in time. 38. here are four basic categories of assets: cash accounts, such as checking, savings, money markets and certificates of deposit; market investments, such as stocks, bonds and mutual funds; personal assets, such as your car, home furnishings, jewelry and collections; and real estate, such as your home. 39. henever you take out a loan, or use a credit card to make a purchase, this means that you owe money to the bank for the loan, or to the credit card company for the charges you made and have not paid off on your credit card. ccompanies: Financial Literacy: Getting rganized 4

5 Financial Literacy: Getting rganized 40. ome loans, also known as mortgages, are considered to be long-term debt, while credit card balances are considered to be short-term debt. 41. Most students today, over half, incur some form of student loan. Protecting our Identity 42. Identity theft, which has become the fastest growing crime in merica, occurs when a person steals your personal information, such as your ocial ecurity number, and begins to get credit in your name. 43. It is already happening to nearly one million mericans every year. 44. our identity can be stolen in a number of different ways, especially with all the technology today, but still, overwhelmingly the most common is dumpster diving. 45. ou can also put your name on the lists known as the o ot Call and o ot olicit lists, which will minimize, if not completely stop any credit card solicitations coming to your home. 46. In addition to trying to steal your identity, they also watch for checks which come in the mail they can take and cash for themselves if they have access to information about your personal identity. 47. he best way to limit their access to your information is to shred everything. 48. o not ever provide information in an directly in the body of the or in an attachment which contains your personal information. 49. ackers can access your cell phone conversations and texts, just like they can your s. 50. hen creating a password for your online accounts, use a combination of letters, upper and lowercase, and numbers. ccompanies: Financial Literacy: Getting rganized 5

6 Financial Literacy: Getting rganized 51. Credit cards are easy and common targets for identity thieves. 52. It is recommended you carry one for purchases you make in person and have a separate card for online purchases. 53. Identity theft can ruin your credit. 54. our credit report is a way for you and potential lenders, landlords and employers to find out how well you pay your bills on time; how much you owe; what, if any, court judgments have been made against you and other basic personal information. 55. hen you realize you have become a victim of identity theft, the first step you must take is to contact all banks and credit card companies where you have an open account and tell them what has happened. 56. hen, file a police report so that they can begin the process to find the criminal. 57. Finally, contact the fraud departments at all three major credit reporting agencies so they can put their procedures into place to also help track the criminal s location from the purchases being made and other types of behavior that might help the police find the criminal. Identifying ays to et Goals 58. hen you handle your money in an organized and well planned way, it is easier for you to set aside money for the different goals that you have be cause you are not carelessly using your money making compulsive purchases. 59. short-term is goal is one you want to achieve in less than 12 months time. 60. n intermediate goal is one you want to achieve in more than 12 months, but less than five years. 61. long-term goal is one you want to achieve in more than five years and possibly up to 30 to 35 years. ccompanies: Financial Literacy: Getting rganized 6

7 Financial Literacy: Getting rganized 62. he better you can identify your goals, the better you can incorporate them into your spending plan. 63. nce you have your goals prioritized, it s time to create a plan to help you achieve these goals. 64. o be able to create an action plan for your goals, you need to know how much each goal will cost, how long you will have to save the money you need to pay for this goal and how much money you will be able to save toward all of your goals. 65. eciding what is important to you helps you not to do impulsive or compulsive purchases, which means you spend your money in a way which is going to enrich your life without bringing a lot of debt. ccompanies: Financial Literacy: Getting rganized 7