budgeting deep dive
TRANSCRIPT
B U D G E T I N G D E E P D I V EW I T H K AT E D O R E
KATE DORE
@CashvilleSky
MY STORY
FROM BURNT OUT AND BROKE TO FRUGAL AND FREE
IS YOUR FINANCIAL HOUSE IN ORDER? MINE WASN’T.
BUDGETING DEEP DIVE
K E Y Q U E S T I O N S• How much do I earn?
• How much do I spend?
• What is my credit score?
• How much debt
• How does my debt
do I have?
compare to my income?
YOU NEED TO KNOW
HOW MUCH IS COMING IN
VS. HOW MUCH IS GOING OUT
NO ONE LIKES
FACING THE NUMBERS,
BUT YOU NEED TO KNOW
EXACTLY WHERE YOU STAND.
BUDGET PARTY!
BANK STATEMENTS + SPREADSHEETS
BANK STATEMENTS + SPREADSHEETS +
WINE
BRUNCH & BUDGET
BUDGET DATE NIGHT
LOOK CLOSELY AT EXPENSES
ARE THERE MONEY LEAKS?
MONEY LEAKS YOU MAY NOT HAVE THOUGHT OF
INSURANCE PREMIUMS
MONTHLY SUBSCRIPTIONS
RIDE SHARINGFOOD DELIVERY
BANK FEESCELL PHONE
HEATING & COOLING
DID YOU KNOW NEARLY EVERY BILL IS NEGOTIABLE?
COMPANIES THAT WILL NEGOTIATE YOUR
BILLS FOR YOU:
• BILLFIXERS • BILLCUTTERZ
BUT THEY DO CHARGE A FEE…
GOT A PROBLEM AREA?
SWITCH TO A 30-DAY
CASH DIETFOR YOUR
PROBLEM AREA(S)
TIRED OF BUDGETING SPREADSHEETS?
PERSONAL CAPITAL
COST: FREE
MINT
COST: FREE
YOU NEED A BUDGET (YNAB)
COST: $50 PER YEAR
POCKETGUARD
COST: FREE
MVELOPES
COST: FREE - $95 PER YEAR
TWO THINGS ARE CRITICAL:
• 3-6 MONTH EMERGENCY FUND
• KNOWING YOUR BARE BONES BUDGET
WHAT’S THE RIGHT AMOUNT FOR YOU?
Does your employer or union provide a loss of income protection plan like short or long-term
disability insurance?
How robust is your medical insurance plan?
What is your level of fixed expenses and debt? You should still have an emergency fund of at
least $1,000 if you’re dealing with debt.
Does your family have additional sources of income?
Do you have access to a home equity line of credit?
WHERE TO STASH YOUR EMERGENCY FUND:
• CHECKING • SAVINGS • MONEY MARKET DEPOSIT • CERTIFICATE OF DEPOSIT
WHAT IS YOUR BARE BONES BUDGET?
WHAT MAKES A CREDIT SCORE?
WHAT MAKES A CREDIT SCORE?
• 35% - Payment History
• 30% - Total Debt & Utilization
• 15% - Length of Credit History
• 10% - Types of Credit in Use
• 10% - New Credit
WHAT IS A GOOD CREDIT SCORE?
FICO SCORES
VANTAGESCORES
WHY DO CREDIT SCORES MATTER?
BEING APPROVED FOR CREDIT
• Mortgages
• Refinancing Student Loans
• Credit Cards
• Personal Loans
• Car Loans
AFFORDABLE INTEREST RATES
30-year fixed rate mortgage for $240,000
840 - 850 score:
3.5% interest - $147,975 total
680 - 699 score:
4.375% interest - $191,382
THAT’S $43,407 EXTRA IN INTEREST!
DO YOU KNOW WHO ELSE CHECKS YOUR CREDIT SCORES?
• Your written request
• Satisfying a federal court order or subpoena
• Financial institution completing a credit application for a loan
• Utility companies
• Insurance underwriters
• Government agencies for certain licenses or government benefits
• Landlords
• Potential Investors
• Current creditors for collections efforts
• Child support enforcement
• Prospective employers (only with your written consent)
Yup, 47% of employers conduct credit checks!
WHERE CAN YOU GET YOUR CREDIT SCORE?
ANNUALCREDITREPORT.COM
• Free, once per year • Raw credit scores from Experian, TransUnion, Equifax
WHY MONITOR YOUR CREDIT REPORT?
1 in 4 people have an error in one of their credit reports.
1 in 20 people have a SERIOUS error in one of their credit reports.
WHERE TO MONITOR FOR FREE
Credit Karma - Experian & TransUnion
Quizzle - Equinox
Credit Sesame - TransUnion
These aren’t FICO scores, but some banks are starting to offer those for free, as well.
TACKLING DEBT
WHAT IS YOUR DEBT-TO-INCOME RATIO?
GROSS MONTHLY INCOME /
TOTAL DEBT
WHY DEBT-TO-INCOME MATTERS
40 - 50% DEBT TO INCOME IS RISKY
50% OR MORE DEBT-TO-INCOME CAN BE DANGEROUS
A STRONG CREDIT SCORE & LOWER DEBT-TO-INCOME RATIO EQUALS MORE OPTIONS
• BALANCE TRANSFER CREDIT CARDS • LOW-INTEREST PERSONAL LOANS
BUDGETING, YOUR CREDIT SCORE, AND DEBT PAYOFF ARE TOOLS
THESE TOOLS MAKE ROOM FOR THE MOST IMPORTANT QUESTION:
HOW MUCH IS AN HOUR OF YOUR LIFE WORTH?
GOT QUESTIONS?
CashvilleSkyline.com
@CashvilleSky
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