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Six Ways to Increase Wealth

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Six Ways to Increase Wealth

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  1. Six Ways to Increase Wealth Laura Connerly, Ph.D. Assistant Professor

  2. Wealth Recommendations • Balance income & expenses • Calculate debt load • Check credit report • Know your credit score • Save for emergencies • Plan for retirement

  3. Balance Income & Expenses • Income Statement • Expense Statement • Spending Plan • Fixed • Variable • Periodic www.uaex.edu

  4. Your Spending Plan $?$?$? Total Income - Total Expenses

  5. Calculate Debt Load • List monthly payments: • Car 325 • Student loan 100 • Credit cards 75 • TOTAL 525 • Divide by monthly net income: 525÷2500=.21 OR a 21% debt load • Credit Management factsheets: • Managing Credit • Financial Fitness Series: Trim Your Credit Line • Credit Reports and Credit Scores www.powerpay.org

  6. Check Your Credit Report • Equifax • Experian • TransUnion Credit Bureaus Online at: www.annualcreditreport.com

  7. Know your credit score • Credit scores must be purchased • Each credit bureau varies • Two major types: • Fair Issac Corporation – FICO Score • VantageScore

  8. Save for Emergencies • Take Small Steps • Work toward 10% • Start and increase • Build Emergency Fund • Critical safety net • Start with $1,000 • 3 to 6 months of income

  9. Plan for Retirement Most people don’t save enough. Prepare for financial stability in later life: • Maximize matched contributions to employer provided plan • Maximize allowed contributions to IRA • Minimize debt to retire debt free • Save and invest www.extension.org

  10. Six Ways to Increase Wealth Laura Connerly, Ph.D. Assistant Professor