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"Don't Buy Stuff" Saving Strategies How is the economy today? Signs of Recovery DOW If you look at the 90-day rate it has been heading straight up — it has not receded. Local Economy High Electric Bills Decrease in Unemployment Rates December 2009 – 12.1% March 2010 – 11.5%

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"Don't Buy Stuff"

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"Don't Buy Stuff"


SavingStrategies


How

is the economy today?


Signs of Recovery

  • DOW


If you look at the 90-day rate it has been heading straight up — it has not receded.


Local Economy

  • High Electric Bills

  • Decrease in Unemployment Rates

    • December 2009 – 12.1%

    • March 2010 – 11.5%

    • Reasons for decrease could be hiring of seasonal workers or unemployment benefits ending

  • Beaufort County Medical Cuts 16 Positions, Explores Future

    • This decision comes after a difficult year for the medical center which even after drastic cuts lost 1 million dollars this year.


Topics Of Discussion

  • Financial/Spending Plan

  • Budgeting

  • Money Management


Financial/Spending Plan


Establishing Your Financial Plan

  • Assess your current financial picture!

  • Define your financial goals!

  • Create and put your plan into action!

  • Evaluate your plan regularly!


Assess your current 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 Goals

  • Specific

    • Define your goal in detail.

  • Measurable

    • Assign a specific amount to your goal.

  • Attainable

    • Evaluate your goal to ensure that you can reach it.

  • Realistic

    • Review your goal to ensure it is achievable.

  • Time Bound

    • Allocate a time frame in which to achieve your goal.


Define Your Time Frame


Create A Plan

  • Make yourself a priority list.

  • Make a plan that works for you.

  • Plan for your Future. Pay Yourself First!

  • Establish an Emergency Fund

    Each time you are paid, set aside a portion of your check to deposit into a high interest savings account.


Evaluate Your Goals

  • Continuously monitor each goal to insure they reflect your current lifestyle. Over time your goals can change.


Budgeting


What Is A Budget?

A plan to manage your money for a specified period of time.


How a budget can change on you!


Benefits Of Budgeting

  • 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 YOUin control of your financial future. Provides financial “FREEDOM”


Cash Flow

  • Income

    • Any money you receive.

      • Examples: Paycheck, Child Support

  • Expenses

    • Any money you pay out.

      • Examples: Rent/Mortgage, Loan Payments, Gas


Types Of Expenses


Creating Your Budget

  • Determine your Income

  • Calculate your Expenses

  • Analyze your Budget


Step 1: Determine Your Income

  • 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 Expenses

  • 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 Budget

  • 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 Guidelines


Budgeting 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 Planner

    • Microsoft Money

    • Quicken

    • An Excel Spreadsheet

    • A Budget Template (Using Microsoft Excel)


Budget Templates

  • Personal budget worksheet

  • Family monthly budget planner

  • Personal Budget Planner for Bills

  • Bi-weekly Budget

  • Household monthly budget

  • Simple Personal Monthly Budget

  • Personal expense budget


Money Management


Example of a recent Financial Assessment

Family size of 4

Net household income of $4,542.

Fluctuating paychecks

90 days delinquent on their mortgage (Monthly Mortgage Payment of $1,350).

Several charge-offs & collections on their credit report.


Monthly Expenses:

Dry Cleaning$240

Car Payments$952

Direct TV$115

Phone & Internet$350

Car Insurance$100

Vehicle Gas$260

Groceries $850

Progress Energy$215

Bricks Alarm $35

Misc. Expenses +$450

$3,317

Mortgage $1,350 + Monthly Exp. $3,567 = $4,917

Negative Monthly Cash Flow= -$375


3 ways to fix a negative cash flow

1. Earn more money

2. Eliminate and/or cut back on expenses

3. Debt consolidation


1. 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 expenses

  • Allow yourself to let go of your “wants”!

  • Take advantage of coupons and discounts.

  • Take advantage of employer benefits.

    -Medical Reimbursement Plan (Health Care FSA)

    -Dependent Care Reimbursement Plan


3. Debt Consolidation

  • 1st 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 Tips

  • Always PAY YOURSELF FIRST! Put at least 10% away for retirement.

  • Build an emergency fund equal to at least 3 months salary. If you do not currently have a savings account, visit your local financial institution to open one today! Sometimes it’s helpful to set up a draft so money is automatically transferred into your emergency fund.


Money Management Tips

  • Make sure your financial goals are outlined and manageable.

  • Pay more than the minimum on your credit card.

  • Each time you receive a pay increase, put that extra money in your retirement account, savings account or apply it to a debt.


Money Management Tips

  • Take advantage of banks/credit unions’ programs.

    -Online Banking

    -Online Calculators

    -Financial Counseling

  • Speak with a financial counselor if you need help.


Money Management Tips

  • Before you go to the grocery store make a list. Remember if it is not on the list, don’t buy it!

  • Use coupons when shopping and discount cards if available.

  • If you prefer a soft drink or snacks bring your own from home rather than purchasing it from a vending machine.


Money Management Tips

  • Wash your clothes in cool water. About 80% of energy used in your washer is from heating the water!

  • Set your temperature in your home during the spring/summer to 76-78 degrees and in the fall/winter to 68-70 degrees. You can save 7-10% of your cooling/heating costs on your energy bill!

    (Tips provided by NC GreenPower)


What If…

  • You saved 15% of your paycheck each month for 1 year?

  • You purchased a soda every day for 1 year?

  • You went out to eat 3 times a week for 1 year?


Results

  • Assume you get paid $2,000 per month, you would save $3,600 (more than 1 month’s paycheck).

    ($2,000 x .15 = $300 a month)(12 months x $300 = $3,600!)

  • If a soda costs $.65, you would spend $237.25.

    (365 days per year x .65 =$237.25)

  • If it costs $8 each time you eat out, you would spend $1,248.

    (3 days x $8 = $24/week)(52 weeks x $24 = $1,248)


Questions?


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