short term goals
TRANSCRIPT
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Short-Term Goals
• Pay yourself first
• Reduce spending
• Savings options
• Compounding interest
Agenda
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Saving vs. Investing
• Investing for long-term goals– More than five years– Retirement– College education
• Saving for short-term goals– Less than five years– Emergency fund– Car or house down payment– Vacation
Saving vs. Investing
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Pay Yourself First
• Today’s habits pay off tomorrow– Include savings in your budget– Save for emergencies– Save for major purchases
Saving vs. Investing
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Reduce Spending
• Clothes– Buy the basics– Shop sales– Shop thrift stores– Make minor repairs
• Personal Care– Shop discount
stores
• Food– Eat out less– Split a meal– Skip daily cup
of coffee– Shop with a list– Buy generic brands– Clip coupons– Buy in bulk
Reduce Spending
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Reduce Spending
• Transportation– Economy car– Used car– Carpool– Public
transportation
• Entertainment– Entertain at home– Pack a picnic – Use student
discounts– Free concerts – Free community
events
Reduce Spending
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Savings Options
• Banks and credit unions– Checking account– Money market account– Savings account– Certificate of deposit (CD)
Savings Options – Getting Started
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Savings – Getting Started
• Checking account– Lowest interest rate– Most transactions
• Savings account– Higher interest rates than checking
Savings Options – Getting Started
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Savings – Larger Amounts
• Money market accounts– Higher rates than checking and savings– Limited number of monthly withdrawals
• Certificate of deposit (CD)– Require minimum deposit– Pays higher interest rate– No transactions for a set period– Early withdrawal penalty
Savings Options – Getting Started
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Rule of 72
Rule of 72
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11Savings growth calculated at 6% interest.
Power of Compound Interest
• Student A
• Age 25
• $100/Month
• 10 Years
• Contributes $12,000
• $73,537 at age 60
• Student B
• Age 40
• $100/Month
• 20 Years
• Contributes $24,000
• $46,435 at age 60
Compound Interest
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Power of Compound Interest
Contributions $12,000
Total Interest $22,435
Savings growth calculated at 6% interest.
Total Value $46,435
Contributions $24,000
Total Interest $61,537
Total Value $73,537
Student A Student B
Compound Interest
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Savings Growth
• $50 a month – $8,194 in 10 years
• $100 a month – $16,388 in 10 years
• $250 a month – $40,970 in 10 years
Savings growth calculated at 6% interest.
Compound Interest
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How To Succeed
• Identify financial goals
• Track expenses and list your debts
• Create a financial plan
• Save in ways that fit your lifestyle
• Start a savings plan—and stick to it!
• Pay off debt
Review
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What’s Next
• Session:
• Date:
• Time:
• Location:
What’s Next
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