Weekly lecture for Jim’s personal finance course to introduce the credit crush assignment setup.
Key Takeaways
The secret class collaboration is to think about what being debt-free would mean for you
For the assignment, update your age to be 10 years older, add at least $10k in credit card debt, research interest rates, and add a car loan and mortgage
Link accounts in RightCapital if you want to use the budgeting tool, but transactions are private
Spending tracking assignment requires showing all transactions, so manual tracking in Excel may result in deductions
Topics:
Introducing Credit Crush Assignment
The credit crush assignment is a 2-week process to learn strategies for managing debt
This week is just setting up the scenario by adding debt to your financial plan
Next week will go through the strategies using the dashboard debt tool
Secret Class Collaboration
Think about what being 100% debt-free would mean to you and feel like
Jim shares a story about how he and his wife decided to pay off their mortgage after he earned extra income, despite his desire to invest the money
After becoming debt-free, he experienced an unexpected feeling of financial freedom
Assignment Instructions
Update your age to be 10 years older
Add at least $10k in credit card debt
Research interest rates you would pay
Determine minimum monthly payment
Add a car loan for your dream car
Research loan terms
Add a mortgage
Research home prices and down payments
Make sure your home ownership setting is updated from renting
Link property to mortgage
RightCapital Tools
Use the income tool to update your salary to an expected post-graduation amount
You can link external accounts for aggregation, but transactions remain private
Linking accounts allows you to use the budgeting tool
Spending Tracking Assignment
Manual tracking in Excel may result in deductions compared to apps that capture all transactions
Requirements:
Show all transactions
Categorize transactions
Provide a graph summary
Written reflection
Next Steps:
Complete credit crush setup in RightCapital
Post secret class collaboration reflection
Watch for next week’s lecture on credit crush strategies
Meet Billy and Sally
Part One: Researching Your Financial Future
In order to get full credit in this week’s assignment, you’ll need to research the following information:
Your Annual Income AFTER you graduate
Based on your major
Based on your industry
What is the average % of one’s income spent on Housing costs?
What are the basic categories needed in every household budget?
What are the average costs for each budget category?
Housing
Food
Utilities
Clothes
Taxes
Phone
Insurance
Maintenance
What are you missing?
Capstone Next Steps
This week, you’re going to assume you’ve already graduated and you’re earning whatever amount you hope to be earning once you’ve landed your dream job.
Your Income
What is the average income for your major?
What income are you using for your plan?
What % of your income are you using for your mortgage in this assignment?
Three Big Purchases for Next Week’s Assignment
Buy your dream house
Buy that car you always wanted
Rack up some serious debt on your New Credit Card
The Mortgage on Your Home
What % will go toward your Mortgage
Buy the biggest house you can afford to get full points.
Buy the smallest, cheapest house you can find if you want fewer points on this assignment.
Your Mortgage Information
Total Purchase Price of your Home
How Many Years for your mortgage
30 years
15 years
Your New Home, and Mortgage
Why did you choose your house
How did you come up with that mortgage payment
What Interest Rate are you using on your mortgage?
How many years is your mortgage?
Your New Ride
Why did you choose that car?
How did you come up with that financing?
What is the interest rate on your car loan?
Your Credit Card
What is the balance on your “pretend” credit card for this week’s assignment — I’m looking for anywhere from $5k to $25k for most students
How did you come up with that interest rate? (I’m looking for any where from 12% — 30%)
4 Screenshots to Include from Your Planning Portal
Income
Mortgage Loan
Car Loan
Credit Card Account
Write Your Article
I don’t care how many words, but do include a title, screen shot of week 5 quiz, and your comments addressing each element above.
Now that you’ve moved out on your own, invested in your dream house, purchased your cool ride, and racked up some credit card debt, let’s learn a few debt payment strategies to help you move toward your goal of becoming a millionaire by age 50.
Final Steps
— Add Wk 5 Quiz Screenshot
— Add Wk 5 Class Collaboration [Comment] Screenshots:
In addition to the class collaboration item listed below, be sure to include a screenshot for this week’s “secret” class collaboration component(s) as outlined in this week’s Zoom Meeting.
