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PERSONAL

FINANCIAL

MANAGEMENT

CHALLENGES AND OPPORTUNITIES

Vinay PatilVinay RVinay Kayasth

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DEFINITION

Personal finance:the process of

planning your spending, financing, and

investing so as to optimize your

financial situation

Personal financial plan:a plan that

specifies your financial goals anddescribes the spending, financing, and

investing plans that are intended to

achieve those goals

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CREATING AND MANAGING

A BUDGET: KNOW YOUR

HABITS

First, know your

habits by tracking

your expensesto fully understand

how you spend

your money

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CREATING AND MANAGING

A BUDGET: MONITOR YOUR BUDGET

Commit to your budget

Track and compare actual expenses

against monthly budget

Make choices to reduce expenses

Start saving for your short and

long-term needs

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The case of Mr Ramesh and Suresh

RAMESH SURESHMonthly Income : Rs 50000 Monthly Income : Rs 50000

EXPENSES:

Monthly rent : Rs 15000

Food : Rs 12000

Credit card : Rs 8000

Miscellaneous exp : Rs 12000

(Fuel, bills, partying,etc)

EXPENSES:

Monthly rent : Rs 8000

Food : Rs 7000Miscellaneous exp : Rs 10000

(Fuel, shopping, bills,etc)

SAVINGS: Rs 3000 SAVINGS: Rs 25000

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CREATING AND

MANAGINGA BUDGET:

WANTS V NEEDS

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OPPORTUNITIES

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INCOMETake-home pay minus taxes,

social security, health insurance,401K

SAMPLE BUDGET

Based on 60% solution from msn.Money

FIXED EXPENSES: 60%Rent/Mortgage, Utilities, Home/Cell

phone, Commuting, Car payment,

Insurance, Work-related (clothes, dry-

cleaning), Student Loan Payments,Credit Card PaymentsSAVINGS: 20%

Money set aside for vacations, major

repairs, new appliances, to pay down

existing debt, emergenciesa down-payment on a car or house,

charity

RETIREMENT: 10%

Ideally, 10% of your gross incomeJUST FOR FUN: 10%

Everybody needs some fun

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Where can I save or invest

my money?Types of Accounts: Saving and Investing

Savings Accounts

Certificates of Deposits (CD)

Stocks and Bonds

Real Estate

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POWER OF COMPOUNDING:

START SAVING NOW!

SAVING Rs 50 A DAY AMOUNT YOU PUTIN ACTUAL WORTH*

Year 5 Rs 91250 Rs 100650Year 10 Rs 182500 Rs 229550Year 20 Rs 365000 Rs 603450Year 30 Rs 547500 Rs 1212500

*Assumes Rs 18250 is deposited at the end of each year for the # of years listed. Return is compounded annually. Above amounts are pre-tax.

Benjamin Franklin said: "If you know how to spend less than you

get, you have the philosopher's stone."

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CHALLENGESTOPERSONAL

FINANCING

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FINANCIAL MANAGEMENT

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CREDIT CARDS

Although credit cards may

seem like your ticket to buy

anything you want but it isimportant to

understand just how much

that little piece of plastic

could really cost you

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HOWTHEINTERNETFACILITATESFINANCIALPLANNING

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INTEGRATINGKEYCONCEPTS

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THANK

YOU