Math 1324 class power point

1. Money Management Skills:
The Education That our
Schools Missed.
By
Gabriel Mendoza

2. Disclosure
• All of this information was retrieved for
education purposes only any relationship to
your life it is just coincidence.
• All of the material presented was retrieved
from the internet.
• I do not claim to be a financial advisor or author
of the material.

3. The “F” word that will change your world.
What is FICO?
• FICO(R) mid-1980s after analyzing raw data
provided by Experian, Equifax and
TransUnion.
• FICO score -- it's short for Fair Isaac Corp.
• Experian/Fair Isaac Risk Model (Experian),
BEACON (Equifax) and FICO Risk Score,
Classic (TransUnion) •

4. How is my Score Calculated?
• Your score is calculated by a series of questions
based on both your credit report & debt-to-income
ratio. Each answer accumulates a certain number of
points that are then added together for your final
score. A typical scoring considers:
• How long you've lived at your current address
• Your job or profession
• Your financial obligations (debt-to-income ratio)
• Any late payments
• The amount of credit you have outstanding
• The amount of credit you are using
• The amount of time you've had credit established

5. Most Weighted Factors
• Current balances on accounts
• too few bank revolving accounts
• too many bank revolving accounts
• number of accounts with balances
• number of accounts opened in the last 12 months
• length of time accounts have been established
• amount of past due accounts, number of delinquent
accounts
• too few accounts rated "current," recent derogatory
public record of collection
• past due balances, number of credit inquiries made

6. What is Considered a Good score?
• A FICO score of 700 and higher means
Excellent or Very Good credit.
• 680 to 699 means Good.
• 620 to 679 is OK.
• Less than 620, they will not even lend you the
pencil to fill the application.

7. Better Your Credit
• pay bills on time.
• Try to keep the amount borrowed under
35-50% of the credit limit.
• Call every six months for a lower APR
• Wants Vs. Needs
• Use a payment calculator
• Don’t fall for tricks
(i.e. six months free interest)
• Don’t close accounts

8. • Never max a credit card or your car
insurance will go up.
• Avoid Department store credit cards
(i.e. Victoria Secret, JC penny, SEARS,
Lowes, Homedepot, compusa, bestbuy)
• Automatic Withdraw
• NEVER Cosign for ANYBODY
• Buy your home first than your car
• TRY to read your credit card statements
• Children

9. Compound Formula
A = P (1 + i ) n
A = P(1 + ) r
m
mt
• P = money, r = rate or %, m = # of times they charge
interest, t = time in years, and A = total to pay.

10. A = Pe rt
Periodic Compounding
A = Pe rt
P = money, r = interest or %, t = time in yrs, e = 2.718, and A = total to pay.

11. Savings Plan Formula
(Regular Payments)
 r
( mt )

1 +  − 1
 m 
 

A = PMT ×
r
 
m
A = accumulated savings plan balance
PMT = regular payment (deposit) amount
r = annual percentage rate (as a decimal)
m = number of payment periods per year
t = number of years

12. Loan Payment Formula
(Installment Loans)
r
P× 
PMT = m
  r
( − mt )

1 − 1 +  
  m
 

PMT = regular payment amount
P = starting loan principal (amount borrowed)
r = annual percentage rate
m = number of payment periods per year
t = loan term in years

13. What I Need to Know to Buy a Home
• Where do I want to live.
http://www.realtor.com
• Who is my neighbor?
http://216.140.183.80/SOMAP/somapSearch.cfm
http://www.familywatchdog.us

14. How Much is My Future Home
www.zillow.com
http://www.elpasocad.org

15. Cry baby Cry
How much can I afford
http://finance.yahoo.com/calculator/real-estate/h
Amortization calculators
http://finance.yahoo.com/calculator/real-estate/h
Bi-weekly calculator
http://mortgage-x.com/calculators/biweekly.htm

16. PMI
• Principal Mortgage Insurance
• 20% down
• 45-60 dollars a month
• 1% of the value of the home

17. Help for Teachers
• The Teacher Next Door program was
established by the Department of Housing and
Urban Development (HUD) to offer single-family
houses, townhouses and condominiums for sale
to a teacher at a 50 percent discount. The goal
through the Good Neighbor Next Door program
is to encourage teachers to buy homes in low
and moderate-income neighborhoods.
http://www.fhainfo.com/teachernextdoor.htm

18. Teacher Next Door Program
HUD phone number 1-800-225-5342
DHUD
Denver Homeownership Center
Program Support Division -
23rd Floor
1670 Broadway
Denver, CO 80202-4801

19. Other Calculators
• Credit card
http://www.csgnetwork.com/creditcardcalc.html
• Retirement
http://finance.yahoo.com/calculator/retirement/ret-02
• College
http://finance.yahoo.com/calculator/college-education/c

20. Educational/Fun Websites
• www.ohdontforget.com
• www.howstuffworks.com
• www.travelzoo.com
• www.apple.com/trailers
• www.skype.com
• www.engaget.com
• www.atomiclearning.com
• www.portablesoftware.com
• www.google.earth.com
• www.kbb.com www.edmundlist.com

21. Contact Information
• Gabriel Mendoza
• gmendo24@epcc.edu
• 915-831-4403