Documents
Resources
Learning Center
Upload
Plans & pricing Sign in
Sign Out

Fleetboston Financial Foundation - PowerPoint

VIEWS: 10 PAGES: 45

Fleetboston Financial Foundation document sample

More Info
									 Achieving Financial Fitness
(and Avoiding Potential Pitfalls)
       But, first…….

   Can You
  Survive a
   Financial
Fitness Quiz?
        Financial Fitness Pop Quiz

Q. In 1999, outstanding consumer debt was higher on:


A. Auto debt

B. Credit-card related debt
        Financial Fitness Pop Quiz

Q. In 1999, outstanding consumer debt was higher on:


B.   Credit-card related debt, which totaled
     $595.6 billion in 1999; whereas, auto debt
     only totaled $465 billion
        Financial Fitness Pop Quiz

Q. Of the 105 million households in the U.S., how many
     had at least one credit card in 1999?
A. All of them
B. 78 million
C. Less than half
D. 56 million
        Financial Fitness Pop Quiz

Q. Of the 105 million households in the U.S., how many
     had at least one credit card in 1999?


B. 78 million
           Financial Fitness Pop Quiz
Q. The percentage of families in the U.S. that have credit card
      debt that exceeds 40% of their income is:
A.    20%
B.    < 1%
C.    9%
D.    13%
        Financial Fitness Pop Quiz

Q. The percentage of families in the U.S. that have
     credit card debt that exceeds 40% of their income
     is:


D. 13%
        Financial Fitness Pop Quiz

Q. The 1999 average APR on all bank credit cards
     was:
A. 9.5%
B. 21.3%
C. 17.11%
D. 11.5%
        Financial Fitness Pop Quiz

Q. The 1999 average APR on all bank credit cards
     was:



C.   17.11%
         Financial Fitness Pop Quiz
Q. The 1999 average amount of credit card debt carried by
     households that do not pay off the balance was:
A. $7,564
B. $1,216
C. $10,097
D. $5,123
         Financial Fitness Pop Quiz
Q. The 1999 average amount of credit card debt carried by
     households that do not pay off the balance was:


A. $7,564, which is up 5 % from 1998
       Financial Fitness Pop Quiz

Q. How many U.S. households are “unbanked?”
A. None
B. Two million
C. Six million
D. Twelve million
         Financial Fitness Pop Quiz

Q. How many U.S. households are “unbanked?”


D.    Twelve million households
     – 80% have incomes under $25,000
     – Over 50% are non-white
         Financial Fitness Pop Quiz

Q. Which statement is not true?
A. The national savings rate is now negative.
B. 20% of U.S. households have a negative net
   worth.
C. There are 3.5 billion credit card solicitations
   annually.
D. Over 2/3rds of the U.S. population hasn’t
   benefited from stock market gains.
        Financial Fitness Pop Quiz

Q. Which statement is not true?


  They’re all TRUE!
     Personal Savings Rate
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
     1960-69 1970-79 1980-89 1990-94   1996   1997   1998
        Financial Fitness Pop Quiz

Q. What was the total number of personal bankruptcy
    filings in 1998:
A. 500,000
B. 1.4 million
C. 3 million
D. 750,000
        Financial Fitness Pop Quiz

Q. What was the total number of personal bankruptcy
    filings in 1998:


B. 1.4 million, which reached an all-time high
        Financial Fitness Pop Quiz

Q. If you buy a pizza on a credit card with a balance,
      how much more do you pay for it than with cash?
A. No more
B. $10.54
C. $32.40
D. $5.03
        Financial Fitness Pop Quiz

Q. If you buy a pizza on a credit card with a balance,
      how much more do you pay for it than with cash?


C. $32.40
      Pizza Cost Comparison
   Payment              Terms         Cost to
    Methods                          Consumer
Cash               Pay now             $10


Credit Card with   Pay off over 18    $42.40
Balance            months with 18%
                   interest
        Financial Fitness Pop Quiz

Q. What is the % difference for the APR on a personal
    loan from a regulated bank and a payday lender?
A. 355%
B. 105%
C. 250%
D. 500%
        Financial Fitness Pop Quiz

Q. What is the % difference for the APR on a personal
    loan from a regulated bank and a payday lender?


A. 355%
        APRs for Fringe Banking
   Check Cashing    152-365%
   Pawn Shop        180-240%
   Car Title Loan   264%
   Rent-to-Own      180-360%
   Payday Loan      391%
   Cash Lease       730%
   Regulated Bank   36%
         Recliner Cost Comparison
  Payment Method                  Terms            Cost to Consumer
Cash                    Pay now                         $500
Furniture Co. with      Pay $25/mo.: 1 yr. @ 0%,       $519.21
0% interest for 1 yr.   then 23%:9 mo.

Credit Cart with 0%     Pay $25/mo.: 6 mo. @           $545.83
interest for 6 mo.      0%, then 18%: 16 mo.

Credit Card             Pay $25/mo. (min.)             $598.92
                        @18%: 24 mo.
Rent-to-Own Co.         Pay $13.99/wk.: 78 wk.        $1,091.22
Payday Lender           Pay $100.07/2 wk. @20%        $4,425.01
                        bi-weekly
Financial Fitness Program
             Lack of Financial Fitness

   Many people haven’t benefited from recent
    economic boom
   10% of U.S. households don’t have bank
    accounts
   Median net financial assets for households are
    $1,000
             Lack of Financial Fitness

   Families lack skills to save and
    invest
   Explosion of predatory lenders
    threaten to strip away the wealth
    and assets acquired by lower
    income families
          Financial Fitness Program

   High-quality financial fitness training in 23
    cities nationwide

   In partnership with Providian Financial,
    FleetBoston Financial, Visa USA,
    Metropolitan Life Foundation and Morgan
    Stanley
          Financial Fitness Program

   Purpose is to help homebuyers achieve home
    ownership and homeowners to maintain
    ownership

   Incorporation into Full-Cycle Lending system
            Program Components

   Identify curriculum to create national
    standard of at least 10 hours of training
   Deliver training-for-trainers course at
    NRTI
   Provide funding to organizations to
    sustain program
            Program Components

   Train 100 people per organization per
    year
   Develop partnerships to promote
    program and create brand awareness
            Program Components

   Evaluate short- and long-term impact
   Develop a clearinghouse of resource
    materials and training tools
              Proposed Principles

   Financial literacy skills can be taught.
   Schools generally don’t teach these
    skills.
   Managing money is first step in creating
    wealth and achieving goals.
             Proposed Principles

   Moving families into mainstream (and
    away from fringe) is key.
   Growing debt burden is a trouble spot.
   It’s not about how much you make.
       Recommended Model
               Group Orientation Session


  10 hours     Financial Fitness Education
In 1-4 weeks


                 Homebuyer Education
                     for buyers
Recommendations for
financial fitness
education
providers…
         Recommended Standards

   At least ten hours
   Group and individual counseling
   Certified trainers
   High-quality curriculum
   Face-to-face, interactive training
         Recommended Standards

   Content and format tailored to audience
   Customer satisfaction surveys and evaluations
   Certificates of completion for graduates
   Code of ethics for volunteers
   Referrals to homebuyer education classes for
    potential buyers
              Core Content

   Basic Financial Planning and Money
    Management
   Saving and Investing
   Banks and Other Financial Institutions
             Core Content

   Credit
   Taxes and Insurance
     Best Practices in Customer Tracking

   Track progress of
    graduates with internal
    databases
   Develop an effective
    intake form
          Best Practices in Content

   Survey audience for needs and
    interest
   Keep segments short and
    focused
   Develop a savings agreement
    form
   Use counseling tools

								
To top