Welcome to the

1. Welcome to the The Prosperous Teen™ Ordinary Money Habits create Extraordinary Results!

2. The Prosperous Teen™ Release of liability and legal disclaimer Please note: This is general advice. You should consult with your own financial advisor before making any major financial decisions, including investments or changes to your portfolio. Kids Cash Coach ™/Teens Cash Coach ™ and Patti Handy are not stockbrokers nor investment advisors and that no investment advice is given or implied. All information provided, including references to stocks, investment strategies or formulas, is for educational and illustrative purposes only. You should seek appropriate legal, financial, tax and other professional services as needed. You agree to hold Kids Cash Coach ™/ Teens Cash Coach ™ and Patti Handy harmless from any and all loss, damages, liabilities, demands, claims, actions, or suits, incurred as a result of use of any information presented in this DVD curriculum or that may be asserted against me by third parties by reason of your use of any information presented in products. Taping, reproduction, distribution, or resale of material owned or delivered by Kids Cash Coach ™/Teens Cash Coach ™ or Patti Handy, without prior written authorization, is prohibited. Patti Handy is not a registered investment advisor and the information provided in this DVD/workbook curriculum should be considered educational in nature, but it is not a substitute for legal or professional financial advice. If you believe you need the help of a Certified Financial Planner or other investment counselor, please seek a qualified professional. Patti Handy is not responsible for any losses, damages or claims that may result from your financial decisions or the information provided herein.

3. With Patti Handy Money Coach

4. Section 1

5. Let’s talk about tips for using credit cards correctly!

6. When you get your first credit card, start with a very low limit. Recommendation- $300 Gives you an opportunity to test the waters. You can always increase limit later after you show responsibility.

7. Try to obtain a ‘major’ credit card, such as MasterCard or Visa. If you get turned down, go with gas cards or major department stores. Try to avoid the smaller retail stores. Once you establish some credit, you can go back and reapply with major cards.

8. When offered a discount for opening a card with a smaller retail store, smile and say “No thank you.” You only need 3-5 credit cards to build credit history. Sometimes less is more at the beginning of this journey.

9. Find a bank that doesn’t charge an annual fee on the credit card. If they charge you a fee, try to negotiate this. Be willing to walk and shop it!

10. Very important!- Find out what rate they are charging you! Ask if this credit card has a fixed rate or a low introductory rate. Sometimes they offer an introductory rate for a few months, and then shock you with a higher rate later. You want a fixed rate, not variable or introductory.

11. Keep in mind your rate is not an issue if you pay your card in FULL every month! There are no interest charges when you pay in full! You were able to borrow the money for a few weeks with no cost to you. Be careful here though! Don’t lose sight of what we have discussed earlier.

12. The best way to build a credit history is to use your credit card and pay in full every single month. It shows the credit bureaus your ‘ability to repay’. We’ll discuss credit history and credit bureaus in a moment.

13. Never spend more than your credit limit. The bank may increase your interest rate and you may not be able to get it down again. You may also be subject to additional finance charges or late fees. This is wasted money!! You work too hard for your money, please don’t give it to them!

14. Action Items! Write down 3 of the most important things you should do with credit cards. Then, share it with your parents.

15. Section 2

16. What’s the big deal about credit?

17. You need to use credit to build credit history. What exactly is credit history? A credit history is a ‘reporting’ of your credit usage. It shows how well you can manage your money.

18. As you use and pay on your credit cards, you are being ‘graded’. If you use and pay wisely, you will get a good grade. Your grade is your FICO score.

19. There are 3 credit bureaus- Experian, TransUnion and Equifax They will score you, based on various factors.

20. You are also scored on car payments, mortgages, school loans and other debt. Any debt you have, will show on your credit report. Except those of personal nature...money borrowed from family or friends.

21. Here’s a breakdown of general scoring and grading: 740+ A 700-740 B 680-700 C 620-680 D 620 or below F

22. These aren’t grades written in stone, just guidelines for you to strive for. Interest rates on cars, mortgages or other debt will be better if your scores are high. This is why it is so important to have good credit scores! You can save potentially thousands of dollars, or more, over time just by having good credit scores.

23. Did you know that some employers will pull credit before they hire you? They want to see how responsible you are! Some insurance companies will pull credit too!

24. Credit scores are addressed in detail in later modules with tips on how to increase scores and keep scores up. For now, make sure you respect your credit cards! Don’t put anything on credit that you can’t pay for in full when the bill arrives. It’s okay that I sound like a broken record!

25. You can pull credit once a year for free at www.annualcreditreport.com This report will give you details of your credit, but not FICO score. Go to www.myfico.com for scores...they will charge you nominal fee.

26. Section 3

27. Time for the checking account!

28. Writing out a check is easy...here are the simple steps: 1. Date- Write out the date in full, including year. Example, January 2, 2009 or 1/2/2009 2. Pay to the order of- This is the person or place you are paying. Do not leave this blank or allow someone else to fill it out. If the store has ‘stamp’, this is fine, just watch them stamp it.

29. 3. Amount- Enter an amount in dollar and cents. Example, $24.19 4. Dollars line- You need to write out the dollar amount, such as Twenty four dollars and 19/100------- Be sure to draw a line to the end of the space. 5. Sign the check! This is your promise to pay! 6. Memo- An optional place for you to make a note to yourself of what you paid for.

30. Sample Check

31. You have the option of ‘banking online’ and paying your bills via the bank’s website. You still need to document your spending in your checkbook register and keep a running balance. Many people do both online banking and personal check writing. Just be certain to document all spending in one place (checkbook register.)

32. Section 4

33. Balancing your checkbook!

34. This is actually very simple, yet imperative. By balancing your checkbook, you are making sure all activities on your account are correct. Sometimes banks will make errors or charge you for something you weren’t aware of.

35. This will also double check your math, as you add or subtract your deposits and withdrawals. You are basically comparing your checkbook register against your monthly bank statement. You will track any service charges (which hopefully you won’t have) and interest credited. Some of the most common mistakes are in the arithmetic, so if it helps, use a printing calculator.

36. If you use a debit card that is tied to this same account, be sure to write down what you did! If you took out $20 cash from the ATM, write it in your checkbook register. It’s no different than writing a $20 check to yourself.

37. Some banks will charge a monthly service fee, phone bank fee, ATM fees or overdraft fee. Please be sure to check for these every month! You may not realize you incurred a fee and then overdraft (spend money that you didn’t have in your account). Overdraft fees can be very expensive!

38. Many banks have special accounts for teens that waive the monthly service fee. If you use an ATM, be sure it’s linked with your particular bank. Otherwise you will incur ATM fees. Banks make mistakes too! Be sure to check your monthly statement carefully for charges that many be incorrect. If you find an error, contact bank immediately and have them reverse fee.

39. Step by step~ Balancing your checkbook

40. * On your bank statement do the following: Start with: ending balance from statement: $______ Add: Deposits not on statement: $______ Subtotal = $______ Subtract: Checks outstanding (did not clear) $______ BALANCE: (this should agree with checkbook) $______

41. * From your checkbook register: Start with: balance from checkbook $______ Add: interest earned or other credit shown on statement, but not in check book. $______ Subtotal = $______ Subtract: Service charges or other debits shown on statement, but not in checkbook. $______ BALANCE: (this should agree with statement) $______

42. Do this every month to minimize overdraft fees and to stay on top of your finances! Don’t be shy about contacting bank if you’ve been charged incorrectly!

43. If you don’t have a checking account yet, check with your parents and see if they will allow you to practice with their account. Which brings us to our next topic~ entrepreneurship! They may even pay you for this ‘work’ !