"Don't Buy Stuff"

SavingSaving StrategiesStrategies

How is the economy

today?

Signs of Recovery

DOW

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

receded.receded.

Local EconomyLocal Economy

High Electric BillsDecrease 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 DiscussionTopics Of DiscussionFinancial/Spending Plan

Budgeting

Money Management

Financial/Financial/Spending PlanSpending Plan

Establishing Your Financial Establishing Your Financial PlanPlan

1. Assess your current financial picture!

2. Define your financial goals!3. Create and put your plan into

action! 4. Evaluate your plan regularly!

Assess your current Assess your current financial picture!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 GoalsDefine Your GoalsSpecific

Define your goal in detail.

MeasurableAssign a specific amount to your goal.

AttainableEvaluate your goal to ensure that you can

reach it.

RealisticReview your goal to ensure it is achievable.

Time BoundAllocate a time frame in which to achieve

your goal.

Define Your Time FrameDefine Your Time Frame

Goals Length of Time

Example

Short-Term Less than 3 months

Concert tickets.

Intermediate 3 months – 1 year A down payment on a new car.

Long-Term Over 1 year Save for early retirement.

Create A PlanCreate A PlanMake yourself a priority list.Make a plan that works for you.Plan for your Future. Pay

Yourself First!

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

Evaluate Your GoalsEvaluate Your Goals

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

BudgetingBudgeting

What Is A Budget?What Is A Budget?

A plan to manage your money for a specified

period of time.

How a budget can change on How a budget can change on you!you!

Benefits Of Benefits Of BudgetingBudgeting

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 YOU in control of your financial future. Provides financial “FREEDOM”

Cash FlowCash FlowIncome

Any money you receive. Examples: Paycheck, Child Support

ExpensesAny money you pay out.

Examples: Rent/Mortgage, Loan Payments, Gas

Types Of ExpensesTypes Of Expenses

Types Characteristics Examples

Fixed Amounts do not change

Car Payment

Variable Amounts change frequently

Grocery Bill

Periodic Amounts vary can be fixed or variable

Phone Charges

Creating Your Creating Your BudgetBudget

1. Determine your Income

2. Calculate your Expenses

3. Analyze your Budget

Step 1: Determine Your Step 1: Determine Your IncomeIncome

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 Step 2: Determine Your ExpensesExpenses

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 Step 3: Analyze Your BudgetBudget

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 GuidelinesBudget Guidelines

35%

10%

15%

15%25% Debt

Housing

Savings

Transportation

Other

Budgeting ResourcesBudgeting 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 PlannerMicrosoft MoneyQuickenAn Excel SpreadsheetA Budget Template (Using Microsoft Excel)

Budget Templates

Personal budget worksheetFamily monthly budget plannerPersonal Budget Planner for BillsBi-weekly BudgetHousehold monthly budgetSimple Personal Monthly BudgetPersonal expense budget

Money Money ManagementManagement

Example of a recent Financial Assessment

Family size of 4Net household income of $4,542.Fluctuating paychecks90 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 3 ways to fix a negative cash flowflow

1. Earn more money

2. Eliminate and/or cut back on expenses

3. Debt consolidation

1. Earn More Money1. 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 expenses2. 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 Consolidation3. Debt Consolidation1st 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 Money Management TipsTips

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 TipsMoney 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 TipsMoney 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 TipsMoney 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 Money Management TipsTips

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…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?

ResultsResultsAssume 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?Questions?