• the desire to use something you have already paid for
• ex: paying for season uga football tickets, you are gonna wanna go since they cost you money vs. if a friend gave you thier season pass you would not feel as bad if you missed a game

1. setting financial goals and creating plans
2. activating plans
3. evaluating and revising plans: going forward

• A budget is a financial plan based on income and expenditures in a month. 
• to develop a budget you need financial records from the past and organized paperwork
• fixed expenses: rent 
• variable expenses: food/entertainment
• net worth: assets - liabilities

• provide a safety net and are helpful for saving money for the future
• provide a sense of comfort and security
• an emergency fund: 3-6 months of salaries set aside as savings is recommended as a financial goal. 
• should be kept in a liquid interest-bearing account such as a money mkt fund, short term certificates of deposit, or a savings account. 
• americans saving rate has dropped to 0%. 

• are payments of money to federal, state, and local govts
• each level of govt has various methods of taxation
• excise tax: collected from the manufacturer of a product. ex: you pay an excise tax every time you purchase a gallon of gas. 
• excise taxes are regressive taxes meaning they take a smaller share of peoples income as people's income grow.
• the federal income tax is progressive, the more you make, the more you pay. 
• the greatest percentage of federal income dollars is spent on human resources
• tax evasion: is not paying taxes or reporting all income 

A certificate of Deposit or CD is a time deposit, a financial product commonly offered to consumers by banks, thrift institutions, and credit unions.

CDs are similar to savings accounts in that they are insured and thus virtually risk-free; they are "money in the bank" (CDs are insured by the FDIC for banks or by the NCUA for credit unions). They are different from savings accounts in that the CD has a specific, fixed term (often three months, six months, or one to five years), and, usually, a fixed interest rate. It is intended that the CD be held until maturity, at which time the money may be withdrawn together with the accrued interest.

In exchange for keeping the money on deposit for the agreed-on term, institutions usually grant higher interest rates than they do on accounts from which money may be withdrawn on demand, although this may not be the case in an inverted yield curve situation. 

• there became different rules and more players in the financial market
• the Depository Institutions Deregulation and Monetary Control Act of 1980 opened up competition: New forms of banking emerged including banks w/o main offices or branches and which became even more popular with the advent of the internet in the early 1990s
• new services opened up as well and mergers took place more readily

• Pew Internet and American-Life project survey revealed that online banking is the fastest growing internet application outpacing online auctions and stock trading
• in 2003, there were more then 37 million online bank users in the US vs 14 million in 2000. 

requires all national banks to file a suspicious activity report when they detect certain known or suspected violations of federal law or suspicious transactions related to a money laundering activity or a violation of the BSA. 

The Bank Secrecy Act of 1970 (or BSA, or otherwise known as the Currency and Foreign Transactions Reporting Act) requires financial institutions in the United States to assist U.S. government agencies to detect and prevent money laundering. Specifically, the act requires financial institutions to keep records of cash purchases of negotiable instruments, and file reports of cash purchases of these negotiable instruments of $10,000 or more (daily aggregate amount), and to report suspicious activity that might signify money laundering, tax evasion, or other criminal activities. Many banks will no longer sell negotiable instruments when they are purchased with cash, requiring the purchase to be withdrawn from an account at that institution.

--movements of money over 5000 are likely to be noted. 

Financial Planner

Financial Counselor

• looks at person's or family's total financial picture and helps that person or family define and prioritize goals and then works out a plan to achieve those goals. 

• financial planning requires involvement and commitment from everyone in the family or household in order to succeed
• over 500,000 people in the US call themselves financial planners
• an industry that is largely unregulated. 

500,000

**This is an industry that is largely unregulated so let "the buyer beware"

--one who is trained to focus on who gets the assets in divorces and who works alongside attorneys who handle legal documents and child custody issues. 

-about 1000 certified planners today

-mostly women

--you are both liable for the debt even if the relationship dissolves

--credit card document trumps divorce decree

--if your name is on the credit card its your debt too

--the cost of using money

--the rate of interest is determined by supply(the amt of money lenders are willing to lend) and demand (amount of money borrowers are willing to pay)

--interest rates are expressed as percentages 

Credit Protection: 

Fair Credit Reporting Act

Fair Credit Billing Act

Equal Credit Opportunity Act

Truth in lending

Fair Debt Collection Practices Act

Fair Credit Reporting Act: consumers have the right to see their credit file from Credit Reporting Agencies 

Fair Credit Billing Act: Consumer have 60 days to dispute a credit bill

Equal Credit Opportunity Act: consumers cant be discriminated against bc of race, age, or gender

Truth in lending: consumers have to be told the APR. 

Fair Debt Collection Practices Act: debt collectors have to follow rules when attempting to collect on past-due bills. 

convenience

**credit cards came into being in 1973

--allows people the cash now aspect with the promise to repay in the future. 

-you have the rights to receive a copy of your credit report

-you have the right to know the name of anyone who received your credit report in the last year for most purposes and in the last year for employment purposes

-companies that deny your application must supply the name and address of the CRA

-you have the right to a free copy of your credit report when your application has been denied

-if you disagree with the accuracy of the info you can file a dispute with the CRA and the company that furnished the info. 

--amount that is owed

--can be in the form of bonds, notes, mortgages, and other forms of paper evidence amounts owed and payable on specified datets or on demand

-a debtor is a person who owes money

1. debt collectors may contact you only between 8am-9pm
2. debt collectors may not contact you at work if they know your employer disapproves
3. debt collectors may not harass, oppress, or abuse you
4. DC may not lie when collecting debts, such as falsely implying that you have committed a crime
5. DC must identify themselves to you on the phone
6. DC must stop contacting you if you ask them to in writing 

1. National Foundation for Credit Counseling 
2. Consolidated Credit Counseling Service

10 yrs.

--try to do everything possible to avoid bankruptcy

Bankruptcy options:

Chp.7 vs Chp. 13

• most people want to choose chp.7 but bc of changes most are steered towards chp.13 now. 
• chp.7 is known as "straight liquidation chapter" bc in return for elminating debts the debtor agrees to turn over nonexempt assets and pay as much possible to creditors
• chp. 13 allows debtors to repay some of the debt they ower and in return they get to keep most of their property (usually this type of debtor is a person with regular income)
• chp.13 looks better on your credit report, debts have to be paid between 5-7 years

• when people declare bankruptcy they file petitions and schedules with the clerks office of the federal bankruptcy court
• in the petition there will be a list of assets, income sources, liabilities, living expenses
• lenders may show up in court and after the court case will try to talk to the debtors and their attorney for their money
• Attorneys help: advise, complete forms, attend the first meeting of creditors with the debtor with is called the 341 meeting, represent debtor in the courtroom 
• process takes between 4-6 months to complete

--americans write 42 billion checks each year

--before a check lands back in your mailbox, it has been handles more then 15 times. 

cosignor

collateral

leigns

cosignor: a person who agrees to pay the loan if the original person does not

collateral: property such as a car, boat, etc. that can be taken up if a loan is not payed off

leigns: the legal rights to obtain property if a loan is not payed off. 

--have to pay to see

--ranges from 300-850

--score of 500 or below is considered bad bc you are a subprime borrower and it may be harder for you to obtain a loan or you may be charged high interest rates. 

--the median score is 623

--over 750 is a veryyy good score and 800 is unusual.

--employers check FICO scores before hiring someone. 

negative info can stay on your credit report for how many years?

bankruptcy info?

-35.4 years old

-married women with children

-has low to middle income

-owes several thousands of dollars to over 10 creditors.