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Personal Finance

Personal Finance. Saving & Budgeting. Let’s Discuss…. What does it mean to be financially successful? What does it mean to be rich?. Are we already rich?. Roughly 40% of the world’s population (over 2 BILLION people) live on less than $2 a day!. What do you want out of life?.

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Personal Finance

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  1. Personal Finance Saving & Budgeting

  2. Let’s Discuss… • What does it mean to be financially successful? • What does it mean to be rich?

  3. Are we already rich? • Roughly 40% of the world’s population (over 2 BILLION people) live on less than $2 a day!

  4. What do you want out of life? • The curse of options • The importance of goals • Know what you want • Don’t wait for things to happen • Activity – Your Goals

  5. Activity: Your Goals • I want to be: • ______________ • ______________ • ______________ • I want to do: • ______________ • ______________ • ______________ • I want to own: • ______________ • ______________ • ______________ • Estimated Costs • _________________ • _________________ • _________________ • _________________ • _________________ • _________________ • _________________ • _________________ • _________________

  6. In order to meet your goals… • …you need to have a plan! • FINANCIAL PLAN – a set plan for spending, saving, and investing the money you earn. Helps you: • Evaluate options for your money. • Avoid wasteful spending • Organize your financial resources • Avoid money worries by planning ahead

  7. Meeting your goals - Savings • Develop a habit of saving money • Make money your employee

  8. Saving Money • How much should we save? • Depends on a number of factors… • Rules of thumb on savings • Working adults - @ least 10% of wages/salary • Teenagers… • Some could save up to 100% • Should you save 100%??

  9. Saving Money • Strategies for saving money • “Pay Yourself First” • Spend less • Closets and Debt • Keeping track of spending (necessity vs. wants) • Create a budget

  10. Saving Money • Strategies for saving money • Think of opportunity costs • Cost of giving up one alternative for another • $1 spent today is equal to $8 in twenty years and more than $60 in forty years • For every $100 you spend today, you are giving up $6,000 in forty years • 18 year-old saving $50 a month and investing it into the stock market will have $800,000 by age 65.

  11. So… • …I can never spend any money or buy anything I want?!??!!

  12. Meeting your goals - Budgeting • Create a budget! • BUDGET – a spending and saving plan based on your income and expenses. • Helps you see where your money is going • Guides your purchasing decisions • Budgets are the roadmap that leads to financial success. • Few actually prepare budgets 

  13. A sample high school budget

  14. Steps in preparing a budget • Estimate expected income for a certain period of time. • Usually one month • Decide how much of your income you want to save • Save at least 10% of your disposable income each pay period • Estimate/calculate your expenses • Balance your budget

  15. Once you have created a budget • Ask yourself…is it realistic? • Perfect it. • Follow it. • Make sure that you are always leaving room for savings (10% minimum)!

  16. Budgeting tips • Keep good personal records • Receipts, ATM slips, Paystubs, Bank Statements, etc. • Remember: Starting is the hardest part! • So, we’re going to help you get started today!

  17. Budgeting Project • The little income/expense book • Write down all of the money you take in and all of the money you spend over the next 30 days • I will NOT collect these • Excel Budget Spreadsheet • Complete the budget spreadsheet • I WILL collect these

  18. Suggested Reading… • Put Savings (And Yourself) First With A Budget - Yahoo Personal Finance • Resist The Urge to Splurge - CNBC

  19. Tomorrow… • The Millionaire-Making Magic of Compounding • The Rule of 72 • Banks & Savings Accounts

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