Topic: Managing Credit finance essay

Managing credit is an important part of personal financial planning. Consumer credit can be used in one form or another to purchase just about every type of good or service imaginable. It is a convenient way to make transactions, but when consumer credit is misused it can lead to real problems.

Several times in this book, we’ve discussed the different types of financial goals that individuals and families can set for themselves. These goals often involve large sums of money and may include such things as a college education or the purchase of a new car. One way to reach these goals is to systematically save the money. Another is to use a loan to at least partially finance the transaction. Consumer loans are important to the personal financial planning process because they can help you reach certain types of financial goals. You can work a major expenditure or purchase into a financial plan just as easily with a consumer loan as you can by saving. The key, of course, is to successfully manage the credit by keeping the amount of debt used and debt-repayment burden well within your budget!

Objectives:

  • Describe the reason for using consumer credit and identify its benefits and problems.
  • Compare and Analyze different forms of open account credit.
  • Identify the various types of consumer loans and know when to use them.
  • Understand how to choose the best loan.

Assignments:

Discuss 3.1: Benefits of SavingDiscuss 3.2: Payback ConsequencesExercise 3.1: Financial SavvyApply 3.1: Credit ScoresWeek 3 Evaluation

Billingsley, R., Gitman, L. J., Joehnk, M. D., (2016). PFIN (5th Ed.). South-Western College Pub

Readings:

Lecture:

  • Presentation: Chapter 4
  • Video: Worst Ways You Waste Your Money
  • Video: 3 Things Not to Keep in Your Wallet
  • Video: How to Turn Your Collectibles Into Cash

Study Materials:

https://www.daveramsey.com/blog/only-5-things-need-in-wallet

Assignment #1 – Initial response to be minimum 150 word and two follow up responses to be 75 words each. Total assignment word 290. Shall include at least one reference.

Discussion Prompt 1: Benefits of Saving

Saving money is often easier said than done. Everyone knows the benefits of saving, but most of us don not know where to start. The truth is, no matter how small the savings, the bottom line can add up to a considerable amount over time.

Access the Savings Machine Calculator. To use, follow the instructions below in the attachment and then answer the following question(s).

My savings machine: https://www.bills.com/debt/tools/ways-to-save

1. Share with the class the categories you selected and a summary of the amount you saved with your savings plan.
2. What will you do with your “earned savings?

Assignment #2 – this assignment shall be its own document.  All documents are uploaded for reference.

Exercise: Financial Savvy

Please scroll down to read the instructions for this assignment.

Content Requirements

In today’s complex world, people need financial savvy more than ever. Yet, recent studies show that financial literacy amount people is at an all-time low. This week’s planning exercise will look closer at financial management, credit, and interest in a fun interactive problem set.

Access the following PPT attachment and follow the instructions to complete a simple word doc of answers: Week 3 Planning Exercise.

Format Requirements

 
Document TypeMS Word
Paper Size8.5″ X 11″
Margins1″
FontTimes or Times New Roman, 12 pt.
Line SpacingDouble. No extra double space between paragraphs please.
In-text Citations & Reference List StyleAPA – at least one outside reference other than assigned readings
File Naming ConventionLastName_FirstName_Exercise_3.1
Example: Doe_John_Exercise_3.1

Billingsley, R., Gitman, L. J., Joehnk, M. D., (2016). PFIN (5th Ed.). South-Western College Pub

Readings:

Lecture:

  • Presentation: Chapter 7
  • Presentation: Loans
  • Video: How to Fix Errors in Your Credit Report
  • Video: ADDICTED TO DEBT: EP1 How Did We Become Addicted to Credit Card Debt
  • Video: Payday Loans

Study Materials:

https://www.khanacademy.org/economics-finance-domain/core-finance/interest-tutorial/credit-card-interest/v/payday-loans

Assignment #3 – Initial response to be minimum 150 word and two follow up responses to be 75 words each. Total assignment word 290. Shall include at least one reference. This one can be on same page as assignment #1.

Discussion Prompt 2: Payback Consequences

We have learned in Chapter 7 that borrowing money comes with a set of payback consequences (interest rates, etc.) It is easy to say as we read the material that we will be smarter with our future money choices because we understand the concept. In truth, when life happens, it might be harder to remember the suggested guidelines for personal finance success.

For this discussion, play the following game and then answer the question(s):

Spent: http://playspent.org/

1. Share with the class your results.
2. In the game, what was the most difficult choice you had to make when it came to expenses?

Assignment #4 – This assignment shall be its own document in APA

Apply: Credit Scores

Please scroll down to read the instructions for this assignment.

Content Requirements

George and Chris were pleased, but not surprised, when they recently learned that their FICO credit scores from all three credit reporting agencies ranged from 770 to 810 (on a scale of 300 to 850). The high scores reflect the couple’s commitment to paying their bills on time and not borrowing more than they can afford. Currently, the couple owes about $14,000 on two cars, at an average rate of 7%. That is their only debt other than the remaining balance of $63,000 on their 30- year fixed rate mortgage. The home was recently appraised at $150,000. While money has not been a major problem for George and Chris, they are concerned about how they will pay for college for their son, who will graduate from high school next June. The good news: He has been accepted to his top choice school.

The bad news: The school is out of state, and the cost of tuition and board is more than George and Chris had planned and saved for. The couple is also concerned because there have been rumors that Chris’ company may be laying off some of their workforce in the coming year. While Chris believes his job is safe, he can’t be 100% sure.

For the Apply paper, please answer:

1. Should George and Chris borrow against their home equity to pay off their car loan and pay for their son’s college?
2. If so, why, and which type of loan should they choose (lump-sum loan or line of credit)? If not, why not?

Format Requirements

 
Document TypeMS Word
Paper Size8.5″ X 11″
Length1-2 pages 
Margins1″
FontTimes or Times New Roman, 12 pt.
Line SpacingDouble. No extra double space between paragraphs please.
In-text Citations & Reference List StyleAPA – at least one outside reference other than assigned readings
File Naming ConventionLastName_FirstName_Apply_3.1
Example: Doe_John_Apply_3.1
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