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Building Futures through Financial Literacy - Money Matters Series

Clothing Budget

The Bureau of Labor Statistics estimates that the average American spends About $1,800 on clothes each year. That’s $150 a month! $150 could cover the monthly payment on $12,000 student loan.

Some ways to save on clothing expenses include buying…

• Clothes that do not need to be dry cleaned
• At thrift stores - you’d be surprised at the quality clothing available
• Clothes on sale or clearance
• Items that can easily be mixed to match with other clothes

The Four C’s of Credit

Capacity - Capacity is the ability to repay loan. Lenders want to know the borrowers:

• Debt level
• Income sources
• Length of employment

Character - Will the borrower repay the Loan? The lender looks at his or her:

• Types and amounts of credit used
• Timely payment bills

Collateral - Is something of value that the borrower agrees to surrender if the loan is not repaid.

Capital - Capital is another word for the borrower’s accumulation of wealth, measures in terms of: Net worth Other assets that could be used to repay the debt.

A $750 Lunch?

What’s the value of your lunch? Get this: if you ate homemade lunches instead of buying them, you could expect to save at least $5 a day. Do this three times a week and you’ll save at least $15. Practice this routine 50 weeks a year and the savings build to $750.

If you applied that $750 toward credit card payments, you would not only reduce your balcance dramatically, you’d also save on accumulated interest. Now, that’s a real value.

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