saving strategies. how is the economy today? the number of people who were late making their...
TRANSCRIPT
SavingSaving StrategiesStrategies
How is the economy
today?
•The number of people who were late making their mortgage The number of people who were late making their mortgage payments shot up 53 percent in the fourth quarter of 2008 payments shot up 53 percent in the fourth quarter of 2008
from the same period in 2007, according to data provided by from the same period in 2007, according to data provided by TransUnion.TransUnion.
Ratio Of Mortgage Borrowers Currently 60 Days Or Ratio Of Mortgage Borrowers Currently 60 Days Or More Past DueMore Past Due
Local Impact From The Local Impact From The Mortgage CrisesMortgage Crises
The percentage of homeowners facing foreclosure in Charlotte has quadrupled in just the last four months.
The numbers are daunting, 2200 new foreclosures in the last 30 days for Mecklenburg County.
By ALEX REED / NewsChannel 36 E-mail Alex: [email protected] 11:17 p.m. ET, Sun., April 26, 2009
Topics Of DiscussionTopics Of DiscussionFinancial/Spending Plan
Budgeting
Money Management
Financial/Financial/Spending PlanSpending Plan
Establishing Your Financial Establishing Your Financial PlanPlan
1. Assess your current financial picture!
2. Define your financial goals!3. Create and put your plan into
action! 4. Evaluate your plan regularly!
Assess your current Assess your current financial picture!financial picture!
Determine your net worth.
What is your cash flow?
Do you have an emergency fund and is it enough?
What is saved for retirement?
Define Your GoalsDefine Your GoalsSpecific
Define your goal in detail.
MeasurableAssign a specific amount to your goal.
AttainableEvaluate your goal to ensure that you can
reach it.
RealisticReview your goal to ensure it is achievable.
Time BoundAllocate a time frame in which to achieve
your goal.
Define Your Time FrameDefine Your Time Frame
Goals Length of Time
Example
Short-Term Less than 3 months
Concert tickets.
Intermediate 3 months – 1 year A down payment on a new car.
Long-Term Over 1 year Save for early retirement.
Create A PlanCreate A PlanMake yourself a priority list.Make a plan that works for you.Plan for your Future. Pay
Yourself First!
Establish an Emergency FundEach time you are paid, set aside a portion of your check to deposit into a high interest savings account.
Evaluate Your GoalsEvaluate Your Goals
Continuously monitor each goal to insure they reflect your current lifestyle. Over time your goals can change.
BudgetingBudgeting
What Is A Budget?What Is A Budget?
A plan to manage your money for a specified
period of time.
How a budget can change on How a budget can change on you!you!
Source: www.GasBuddy.com
Benefits Of Benefits Of BudgetingBudgeting
Provides an organized way for you to save money for your goals.
Helps you determine where you may be spending too much money for things you may not need.
Helps you determine where you are spending your money.
Allows you to save for expensive items without the use of credit cards or loans.
Puts YOU in control of your financial future. Provides financial “FREEDOM”
Cash FlowCash FlowIncome
Any money you receive. Examples: Paycheck, Child Support
ExpensesAny money you pay out.
Examples: Rent/Mortgage, Loan Payments, Gas
Types Of ExpensesTypes Of Expenses
Types Characteristics Examples
Fixed Amounts do not change
Car Payment
Variable Amounts change frequently
Grocery Bill
Periodic Amounts vary can be fixed or variable
Phone Charges
Creating Your Creating Your BudgetBudget
1. Determine your Income
2. Calculate your Expenses
3. Analyze your Budget
Step 1: Determine Your Step 1: Determine Your IncomeIncome
What is your salary?
Do you currently have a 2nd job?
Do you receive any other forms of income? Alimony, Child support, Interest, Dividends…
Step 2: Determine Your Step 2: Determine Your ExpensesExpenses
Make a list of everything you pay for monthly.
This includes rent/mortgage, utilities, loan payments, credit card payments, savings account, gas, groceries, etc.
Categorize each expense as fixed, variable or periodic.
Step 3: Analyze Your Step 3: Analyze Your BudgetBudget
Compare your Income and Expenses to determine if they are equal. “Cash Flow”
If your Income and Expenses are not equal, ask yourself a series of questions: Are there expenses that I can
decrease? Is another source of income necessary
to sustain my lifestyle?
Budget GuidelinesBudget Guidelines
35%
10%
15%
15%25% Debt
Housing
Savings
Transportation
Other
Budgeting ResourcesBudgeting Resources It is always a good practice to have your
budget written down or on the computer to ensure you are following it.
There are a variety of resources available to assist you in creating your budget. Here are a few examples. Money Management PlannerMicrosoft MoneyQuickenAn Excel SpreadsheetA Budget Template (Using Microsoft Excel)
Money Money ManagementManagement
3 ways to fix a negative cash 3 ways to fix a negative cash flowflow
1. Earn more money
2. Eliminate and/or cut back on expenses
3. Debt consolidation
1. Earn More Money1. Earn More Money
Get a 2nd job.Get family members to
contribute by working.Invest in the stock/bond market.Obtain higher education to
qualify for pay increases.
2. Cut back on expenses2. Cut back on expensesAllow yourself to let go of your
“wants”!Take advantage of coupons and
discounts. Don’t be afraid to negotiate on pricing or service.
Take advantage of employer benefits.-Medical Reimbursement Plan (Health Care FSA)-Dependent Care Reimbursement Plan
3. Debt Consolidation3. Debt Consolidation1st thing…You need to qualify!Find a lower rate and/or longer term.
Refinance your house HOEQ loan Use a car loan to payoff unsecured debt
Use pay down debt methods that work for you. Attack the highest interest rate Snowball Effect
“Don’t buy stuff you cannot afford.”
Money Management TipsMoney Management Tips
Take advantage of banks/credit unions’ programs.-Online Banking
-Online Calculators-Financial Counseling
Speak with a professional financial counselor if you need help.
Questions?Questions?