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Financial Financial

ManagementManagement5 September, 20025 September, 2002

MSgt Nick KopchoHQ AETC/XPRIDSN: 487-8035

TEAM RANDOLPH NCO ORIENTATION COURSE

• Financial Planning

• Value of Time

• Common Misconceptions

• Developing Your Plan

• When to Begin

• How to Begin

• Tips for Success

• Final Thoughts– "When it is a question of money, everyone is of the same

religion.“ – Voltaire, French writer and philosopher

Overview

TEAM RANDOLPH NCO ORIENTATION COURSE

• “When it is a question of money, everyone is of the same religion.”

– Voltaire, French writer and philosopher

FINANCIAL PLANNING

TEAM RANDOLPH NCO ORIENTATION COURSE

• Plan First– "Though usually overlooked, setting up a good

personal budget is the first step to any money management activity. Without it, you cannot control your finances and will always fall short of your goals.” - Mark J. Randall, Certified Financial Planner

– No one plans to fail, they just fail to plan

• Planning is crucial to achieve a desired result

FINANCIAL PLANNING

TEAM RANDOLPH NCO ORIENTATION COURSE

• Benefits of Financial Planning– Awareness– Control– Organization– Communication– Opportunistic– Timesaving– Less Waste

FINANCIAL PLANNING

TEAM RANDOLPH NCO ORIENTATION COURSE

• Compounding—your money’s best friend– A – Age 21—$100/Month X 10Yrs = $12,000– B – Age 35—$100/Month Till Age 65 = $36,000– 8% Annual Growth till Age 65

• A = $300,053 • B = $150,030

– If “A” continued $100/Month till Age 65 = $52,800 – + 8% Annual Growth = $489,120

• Start now—something is better than nothing– “The best place to start is where you are with what you

have.” - Charles Schwab, Industrialist/Banker

VALUE OF TIME

TEAM RANDOLPH NCO ORIENTATION COURSE

• You must suffer to maintain a budget– You are already “Budgeting” – Reactive not Proactive– Free up money—eliminate waste

• Budgets are for those in financial trouble– Avoid trouble– Handle crises

• Takes more time– Upfront work– Easier in the long term

COMMON MISCONCEPTIONS

TEAM RANDOLPH NCO ORIENTATION COURSE

• Keep it simple and easy• Communicate with and involve family• Define goals—plan is roadmap to achieve goals• Understandable—Primary and Alternate• Customizable—Flexible• Build in fun—rewards• Organization—not penny-pinching• Knowledge and Understanding—not rules• Should let you know how much you have now

DEVELOPING YOUR PLAN

TEAM RANDOLPH NCO ORIENTATION COURSE

• NOW!!• A change in your marital status• An addition to the family• A new job• A PROMOTION, or a raise• A new home• Retirement• A major purchase• January 1st (or the beginning of any month)

WHEN TO BEGIN

•NOW!! 

•NOW!! 

•NOW!! 

TEAM RANDOLPH NCO ORIENTATION COURSE

• Where does your money go?– Look up the past

• Bills

• Checkbook

• Bank Statements

– Track your spending for one – three months• Keep a log of every penny

• At least one full cycle of your money

• Eye-opening experience

• You will be surprised

HOW TO BEGIN

TEAM RANDOLPH NCO ORIENTATION COURSE

• Get Organized– Current Working Files—used on a routine, bill-

paying session basis – Reference Files—standard information – Safety Files—important original documents – Archival Files—repository of old papers.

• Balance your checkbook!!

• Establish the Habit

HOW TO BEGIN

TEAM RANDOLPH NCO ORIENTATION COURSE

• Make impulse buying difficult—leave checkbook, credit cards at home

• Make savings an "expense" item

• Make debt repayment an "expense" item—this is what credit counselors do for you– Pay off the highest interest rate cards first– Don't use credit cards again until balance is paid off– After a loan is paid off, keep paying the loan amount

to yourself—make a vacation fund, or next car fund

TIPS FOR SUCCESS

TEAM RANDOLPH NCO ORIENTATION COURSE

• Have some fun money for each family member

• Budget for a fun item

• Plan with one income

• Don't divide couple's paychecks functionally

• Don't over categorize your budget—simplicity

• Use an interest-bearing checking account

• Set aside money monthly, for bills that are due quarterly, semi-annually, or yearly

TIPS FOR SUCCESS

TEAM RANDOLPH NCO ORIENTATION COURSE

• Reconcile your budget at least once a month; when reconciling your checking statement

• Make sure to mark your last reconcile point in your budget

• Try to get utilities or banks to change due dates of bills to make your work easier

• Remember: just the act of identifying your expenses is extremely valuable

• Be Proactive—not reactive

TIPS FOR SUCCESS

TEAM RANDOLPH NCO ORIENTATION COURSE

• Keep future in mind

• Involve everyone

• Review annually or when there is a change

TIPS FOR SUCCESS

TEAM RANDOLPH NCO ORIENTATION COURSE

• Plan for your future– Budget is a tool– Roadmap to your goals

• Start NOW!!– Benefits of compounding– Establish a habit for life

• Be proactive

FINAL THOUGHTS

TEAM RANDOLPH NCO ORIENTATION COURSE

• Define Goals– Develop plan to achieve goals– Keep it easy and understandable– Involve entire family

• Get organized and get started

FINAL THOUGHTS

TEAM RANDOLPH NCO ORIENTATION COURSE

Questions?

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