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GM: WINS

GM: WINS. Financial Planning for High School Juniors, Seniors, and Parents. January 14th 2013 Jon White JWFinancialCoaching.com/GMWINS JW's Financial Coaching-Giving you a new perspective on your money. Today's Presentation.

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GM: WINS

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  1. GM: WINS Financial Planning for High School Juniors, Seniors, and Parents. January 14th 2013 Jon White JWFinancialCoaching.com/GMWINS JW's Financial Coaching-Giving you a new perspective on your money

  2. Today's Presentation • Visit http://JWFinancialCoaching.com/GMWins to hear this presentation as well as get a copy of the notes • Discuss Four main topics today • 1. How financial decisions today impact our finances tomorrow. • 2. Importance of college and how to save/pay for it. • 3. How to make it in the New Economy and how that impacts "YOUR" economy. • 4. How to develop an overall financial plan that works.

  3. How Financial Decisions Today Impact our Finances Tomorrow Money Facts about Teenagers: • 81% of teens agree “it’s important to me to have a lot of money in my life.” • Only 22% of teens say they know how to invest money to make it grow. • 1 in 4 teens agree that since they are young, saving money isn't that important.

  4. How Financial Decisions Today Impact our Finances Tomorrow • The financial decisions you make in the next five years will likely shape your financial options throughout your life. • What we are talking about tonight isn't some get rich scheme or some magic pill. • It's about having a plan and being intentional with your money. • Handling your money isn't so much about the math as it is your behavior.

  5. How Financial Decisions Today Impact our Finances Tomorrow • What holds us back the most is by having debt. • Debt is borrowing money you don't have to buy something today that you will pay back later. • However debt limits your choices later, your future income is already committed. • Easiest way to get into debt after high school is through: • 1. Credit Cards • 2. Car Payments • 3. Student Loans

  6. How Financial Decisions Today Impact our Finances Tomorrow • Taught that debt is the way to prosper • Debt doesn't allow you to prosper, instead it allows the bank to prosper. • Debt is a never ending cycle that you can only win if you don’t borrow. • Those that rely on debt keep digging a deeper hole for themselves.

  7. But there is Hope! • Only way to break the cycle of debt is to say “No” to debt! • Instead try the old fashioned method of paying for purchases when you have the money in hand. • Cash is King! • Make better spending decisions • Be more disciplined about your spending • Won't get you into trouble

  8. Don't fall into the Credit Score trap • Don't buy into the myth that you need a credit score to succeed. • The credit score is about going into debt so that later you can go into debt. • Components of the Credit score: • 35% Payment history • 30% Amount of debt • 15% Length of credit history • 10% Type of credit • 10% New Credit • The credit score is about how much you borrow!

  9. What to focus on instead • What’s not in your credit score: • How much money you have in your bank account • What your income is • Instead focus on your debit score! • Having money in the bank is more important than a FICO score. • What happens in your 20'sdoesn't stay in your 20's

  10. The Importance of Education Before we talk further about education let’s take a True or False Quiz: • T or F Where you go to school is more important than what you learn at school • T or F By getting a college degree you are “set” for life • T or F When picking a major for college you should always pick the major that makes the most money, not the major that you have an interest in • T or F Whether you go to college or not, you must continue to learn new skills throughout your life • T or F There are a wide variety of ways to pay for college

  11. Importance of Education • Best way to distinguish yourself in the job market is to have distinguishable skills. • One way to do this is to go to college • College is important but not necessary • Just getting college degree doesn't guarantee success in life • Get a degree in something you have a passion for • Important to Invest in yourself • 1. Read non-fiction • 2. Take a workshop or seminar • 3. Learn a new skill

  12. Saving and Paying for College • College is a great investment in yourself • But student loans can turn into a nightmare • The average college student graduates with approximately $25,000 in student loans. • College graduates are instead drowning in debt.

  13. Most important thing when picking a school • Pick a school that you can afford! • We never do a cost-benefit analysis when choosing a school. • It’s not as important where you graduated from as it is important that you graduated! • The application of your degree will take you further than your pedigree.

  14. Saving for College • Just starting High school or younger • Consider opening up a 529 or Educational Savings Account (ESA) • Sheltered from taxes, the interest you earn is tax free • Needs time to grow. • Seniors and Juniors • Little late to open some of the tax advantaged accounts • Instead if you are just starting off, save in a basic savings account. • Won’t make anything in interest, but won’t lose any of it either

  15. Paying for college • Three main ways to pay for school • 1. Scholarships • Plenty available, just need to find them • Many aren't dependent on GPA • 2. Work while in school • Won't harm you to work while in school • Looks good on a resume • Those who work 20 hours have higher GPA • 3. Student Loans • Discussed the danger earlier • “Easiest” way initially, hardest way after school

  16. New Economy • There is a new model in getting a job. The old model of getting paid for showing up is gone • Get paid for what we know, not for our time • Ask yourself the questions • "What is my unique ability or talent" • "What service can I provide?" • Truth is that most jobs today aren't advertised, they are created.

  17. Tips on getting a job • Let friends and family know you are looking for a job • Follow up with potential employers • Interview tips • Be on time • Smile • Dress appropriately • Express interest in the company not yourself • Share why you want to work for the company • You need to be able to answer the question "Why would somebody want to hire you?"

  18. Overall Financial Plan • Key to managing money is to be intentional with your money • Too often we let money happen to us • Being intentional with money is looking at your finances in both the short term and the long term

  19. How to be intentional with our money • The best way to be intentional with your finances is to have a spending plan. • A spending plan is telling your money where to go before the month beings • How to create a spending plan? • Writing down how much money you will earn each month • List your monthly expenses • Prioritize from most important to least important • Go down the line until you run out of money • “You have to tell your money where to go, so you don't have to wonder where it went” ~ John Maxwell

  20. Prioritizing your spending • Take care of your 4 walls first: • 1. Food • 2. Shelter/Utilities • 3. Basic Transportation • 4. Basic Clothing • Taking care of 4 walls first allows you to take care of your basic needs first. • Anything left over goes to debt and saving.

  21. Why do we save • Saving must be a priority • We save for the following reasons: • Emergency Fund • Purchases • Wealth Building • Emergencies are going to happen. Count on it! • Emergency savings is your first priority • Instead of using debt to make purchases use cash. • Wealth Building is a marathon not a sprint

  22. Investing • Investing is putting aside money to be used in 5 years or later. • The best way to invest and build wealth is the power of compound interest. • Can work either for you or against you • “Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.” Albert Einstein

  23. The story of Ben and Arthur • Both save $2,000 per year at 12%. Ben starts at age 19 and stops at age 26, while Arthur starts at age 27 and stops at age 65. • Ben invests a total of $16,000. Arthur invests a total of $78,000 • Arthur never catches up! • The sooner you invest now, the less you have to invest later!

  24. YOUR Economy • There is only one economy you can control; YOUR Economy! • So often we get caught up on what others are or aren't doing. • The person who will impact your future the greatest is yourself. • The best investment you can make is in yourself.

  25. Fill in the blank quiz 1. Handling your money isn't so much about the math as it is your _______. 2. ______ must become a priority. 3. The easiest ways to get into debt after high school are student loans, _______, and car payments. 4. __________ is interest on interest. 5. Instead of worrying about your FICO score, worry about your ____ score. 6. In the new economy you get paid for ___ 7. When it comes to college the most important thing is ____ you graduated. 8. Always budget your ______ first. A. Credit B. Knowledge C. Compound Interest D. Saving E. Debit G. Time G. credit cards H. behavior I. that J. where K. 4 Walls L. Bills

  26. Three main points to remember • Please take away these 3 main points 1. The financial decisions you make in the next few years will impact you for years to come. 2. There is a new economy. Become valuable by asking yourself "Why would someone want to hire me." 3. Continually learn and grow.

  27. Stay in Touch Ways to get in touch with me: • Email-JWFinancialCoaching@gmail.com • Blog-JWFinancialCoaching.com • Weekly Podcast • iTunes-JWFinancialCoaching.com/iTunes • Stitcher-Stitcher.com/JW • Twitter-JWFinancialCoaching.com/Twitter • Facebook-JWFinancialCoaching.com/Facebook • LinkedIn-JWFinancialCoaching.com/LinkedIn

  28. Feedback • How was the length of the presentation? Circle One (Too long, too short, just right) • Were the visual aids helpful? Circle One (Very helpful, Somewhat helpful, not helpful) • Were the subjects covered sufficiently? _______________________________________________ • What was your favorite part of the presentation? _______________________________________________ • What was your least favorite part of the presentation? _______________________________________________ • Was there anything you would have liked to seen covered that wasn't in the presentation? • ________________________________________________

  29. Examples: Saving for a car • You want to buy a used car for $3,000 to use during college • How long will it take to save up to pay for the car with cash? • You work part-time after school and on weekends and earn $100 a month • If you: • Save $100/week ($400/month)-7 1/2 months • Save $75/week ($300/month)-10 months • Save $50/week ($200/month)-15 months • Save $25/week ($100/month)-30 months

  30. Examples: How much interest costs us • You borrow $4,000 for a new dining room set • Borrow at 24% and make a monthly $211 payment for 24 months. • Pay a total of $5,064 • If you simply saved the $211 each month it could have been yours in 18 months in cash • When you pay with cash you can almost always receive a discount, so you will be able to buy it even sooner!

  31. Example: How to pay for College • Year 1 at a Community College • Cost $2,700 • Books/Supplies $500 • Room and Board & Transportation $4,000 • Total Cost $7,200 • Parents contribute $15/wk = $780/YR • Student work avg of 30 per wk (less in school, more during breaks and summer). • Saves 25 hours per wk at $9 an hour = $11,700/YR • Year 1 Intake: $12,480 • Year 1 Surplus: $5,280

  32. Example: How to pay for College continued • Year 2 at a Community College • Cost $2,700 • Books/Supplies $500 • Room and Board & Transportation $4,000 • Total Cost $7,200 • Parents contribute $15/wk = $780/YR • Student work avg of 30 per wk (less in school, more during breaks and summer). • Saves 25 hours per wk at $9 an hour = $11,700/YR • Year 2 Intake: $12,480 • Year 2 Surplus: $5,280 • Year 2 Accumulated Surplus: $10,560

  33. Example: How to pay for College continued • Year 3 at a public university • Cost $9,000 • Books/Supplies $1,000 • Room and Board & Transportation $8,000 • Total Cost $18,000 • Parents contribute $20/wk = $1,040/YR • Student work avg of 30 per wk (less in school, more during breaks and summer). • Saves 25 hours per wk at $9 an hour = $11,700/YR • Year 3 Intake: $12,740 • Year 3 Deficit: $-5,260 • Year 3 Accumulated Surplus: $5,300

  34. Example: How to pay for College continued • Year 4 at a public university • Cost $9,000 • Books/Supplies $1,000 • Room and Board & Transportation $8,000 • Total Cost $18,000 • Parents contribute $20/wk = $1,040/YR • Student work avg of 30 per wk (less in school, more during breaks and summer). • Saves 25 hours per wk at $9 an hour = $11,700/YR • Year 4 Intake: $12,740 • Year 4 Deficit: $-5,260 • Year 4 Accumulated Surplus: $40

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