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Take Action! Exercise- Comparing Mortgage Costs
Planning for your Financial
You are a first time home buyer and you future starts by Start Saving Now! Literacy
„ I can set aside money from every paycheck for want to compare two possible loans: looking beyond
my retirement the next paycheck „ Save as much as you No. 11

„ I will go online and use a retirement calculator a fixed rate loan of 5.5% and a variable and putting can as early as you
can
rate loan that starts at 3.25% and
to see how much I should be saving now. together a
increases ¼% yearly for the duration of „ Set realistic goals
„ I will clean up my credit report so I can get the the loan. The loan is for 30-year, $100,000 financial plan.
best rate on a mortgage. loan. It also assumes that the variable rate Purchasing a home „ Plan for the

loan has a cap so it cannot exceed 9.25%. and saving for retirement, that time when you purchase of a house
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Investment Basics: 1. At the end of 30 years, which loan cost stop working, are two long term goals to consider or education now.
Stock A portion of ownership in a company. more? Fixed / ARM when saving and investing your money. „ Project your
The better the company does, the more 2. If you are planning to live in your house Buying a home is the largest purchase you’ll ever
More Risk/ money it can make. You can also lose about 10 years and then sell, which loan make and can give you a sense of freedom from retirement expenses
Higher money depending on how well the would you choose? Fixed / ARM Why? renting. When you buy a home, you are making based on your needs.
potential $$ company does and what the economy is ____________________________ an investment that will increase in value. As you Be honest about how
For Evaluation Only
doing 3. When would you choose the fixed rate? you want to live in
Bonds A loan you give a company or the ____________________________ make payments, you are increasing the equity, or retirement and how
government for a defined period of time value, of your home. Planning for the Future
Less Risk/ at a fixed interest rate. They guarantee You can use the following The earlier you begin saving for retirement, the much it will cost
Moderate $ to pay it back mortgage calculators to easier it becomes and the more your money works „ Take advantage

Mutual Funds A combination of stocks and bonds, determine fixed and ARM for you, accumulating interest and increasing the of savings plans
grouped to provide a balance of risk and costs: value of your investments. Put away a little money designed for
safety Fixed: http://www.bankrate.com/
Individual Tax deferred investment account calculators/mortgages/mortgage-loan. from every paycheck and invest it wisely. There are retirement - such as
many different options for investing your money,
Retirement designed for retirement savings. You aspx some geared specifically to retirement savings. 401(k) and IRAs.
Account (IRA) can invest up to $5,000 per year and it
can be a deduction on your income tax. A ARM: http://www.bankrate.com/
Roth IRA is a special IRA that cannot be calculators/mortgages/adjustable-rate-
deducted on taxes, but will have no tax Money Matters
at all when it is taken out. mortgage-arm-calculator.aspx

8 Start saving now for retirement; the sooner you start, the more
Disclaimer: money you’ll have.
Learnovation, LLC’s mission is to empower people to
®
©2017 Learnovation , LLC improve awareness of their own financial situation. 8 43% of workers said they have less than $10,000 in savings.
All Rights Reserved. This information is intended to serve as a general
www.learnovation.com guide of financial principles and strategies. It is not 8 A 401(k) is one of the easiest and best ways to save for retirement.
intended to address individual financial issues, nor
should it be taken as legal, financial, or other advice. 8 An IRA also can boost your savings and give you a tax break.
8 Stocks are the best investment for long-term growth.