Personal Finance - Money Mindset and The Road to Financial Wellness by Phroogal

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The seminar stress the importance of financial education in achieving life plans. It starts with financial awareness, creating a plan, taking control and seeking knowledge to ensure financial wellbeing and success.

Transcript of Personal Finance - Money Mindset and The Road to Financial Wellness by Phroogal

  • Personal Finance Road to Financial Wellness Jason Vitug @jasonvitug
  • Make more money. Spend more money. Work more hours. But Its not the size of the paycheck that maHers but how its managed. My Story
  • Financial Rough Waters My relaKonship with money wasnt always posiKve.
  • Living My Dreams We dont have to wait Kll a reKrement age to live our dreams.
  • Borobudur, Indonesia 2012 Bagan, Myanmar 2012 Understanding PerspecKve We all see things dierently but its our perspecKve that maHers. Dont like it? Change it.
  • Borobudur, Indonesia 2012 Change of Mindset The secret to nancial wellbeing is an awareness of lifestyle goals, nancial planning and living.
  • IntroducKon My Background The plan is to provoke discussion and interest in the subject of personal nance. The goal is to incite acKon in furthering your educaKon and knowledge. My hope is to build the foundaKon for you to achieve prosperity.
  • Prosperity is the successful and thriving living condi2on with respect to nances.
  • Why Financial EducaKon? We learn the area of a triangle but not the value of the dollar. We can calculate the circumference of a circle but not the power of compounding interest. Money is a taboo subject but we learn our nancial habits through family and social interacKons. Tremendous amount of informaKon; confusion Dont be fooled. Money impacts your life!
  • What we hear about money? Why Financial EducaKon? American consumers owe: $854.2 billion in credit card debt $8.15 trillion in mortgages $1.12 trillion in student loans Consumers paid $32 billion in overdraft fees 70 million Americans are underbanked Financial relationships, credit reports and credit scores impact your well being. EducaKon empowers you to make beHer informed nancial decisions.
  • Road to Financial Wellness Imagine a cross country road trip without a plan and the tools to reach the desKnaKon. Your desKnaKon to nancial wellbeing requires planning and you can choose to get there sooner. Have a life plan not just a nancial plan. Financial goals without an understanding of how it contributes to your desired lifestyle prevent you from achieving your life plan.
  • A lifestyle is the way in which you live.
  • Financial goals are targets that revolve around money.
  • Lifestyle Choices Envision the life you want to live. Ask yourself, What brings happiness into my life? Ask yourself, If I had no debt or nancial obligaKons, how would I spend my Kme? Beware of Lifestyle InaKon spend more when you have more to spend. When you earn more the cost of your lifestyle choices increases accordingly limiKng your ability to build wealth. Keeping up with the joneses. Purchases are made to keep up appearances. Lifestyle choices are sKcky. Income uctuates.
  • You Only Live Once Spend what you make only leads you to living at the workplace more oden than you need. If you only live once, why not spend it doing the things you want to do all the 'me rather than just the weekends? YOLO is using knowledge, resources and Kme to achieve desired lifestyle in this life'me. You can spend your days/nights working to pay for a lifestyle you cant aord. YOLO is knowing the value of your Kme to create experiences and memories.
  • Wealth is not measured by how much you spend but how much youve saved.
  • Financial Habits Inuenced by the Culture of Debt. Taught a spending habit. Consumerism has taught us quanKty of stu not quality. Disposability not usability. Savings is postponed for instant graKcaKon. Purchase things over experiences.
  • If you won a million dollars, what would you do?
  • Was the rst thought about paying for stu?
  • Mind the Gap - Mindset Whats your relaKonship with money? Do we control it or control us? Do we value life by how much we spend? Money is personal. Its not just numbers. Spending Habits Mindless spending can prevent you from spending on needs and wants. The longing of a purchase is more impaciul than the ownership. Place more value on things we cant aord. Savings Habits WaiKng to have more income to save. ReKrement isnt an age.
  • Happiness Mindset Money does buy happiness. Ensures we dont worry about basics to sustain life. Materialism does not buy happiness. Wealthiest dont want it all. Fear: More money more problems. LoHery winners lose winnings. Buying things or experiences are the same. Its the value you place on them. Personal saKsfacKon cant ever be purchased. Money is a tool not the answer. Used wisely can help you conKnuously achieve. Money does not give you purpose in life. Makes it easier to achieve a purpose.
  • [email protected] expenses is more powerful than increasing income.
  • Understanding Income Income comes and goes. Its not how much more you can make. Its the relaKon to how much you spend. You can live paycheck-to-paycheck with a six gure salary. Its not just the paycheck. Its the benets too! Diversify income sources.
  • Spending > Income = Downward Spiral
  • Mindful Spending Awareness of how money is spent to improve quality of life. Knowing purchases made today can impact ability to reKre early. QuesKoning purchases. Do I need it? Do I need it now? What will happen if I dont have it?
  • Do I have cash to make the purchase now or am I willing to work more hours in the future to pay for it?
  • Savings Savings is necessary to get capital needed to make wealth. PrioriKze Savings Pay yourself rst. Find ways to reduce spending and save more. Have a Purposeful Savings Strategy Emergency Fund 6 months of expenses in liquid account for use in event of loss of employment or underemployment. Short Term (within a year) VacaKon, Holidays, Taxes Midterm Goals Home and auto purchase, college expenses, growing family. ReKrement
  • InvesKng Benets of an early start Compound Interest 401(k) match Roth IRA
  • Do you want to be the Starbucks loving apartment renter or the Folgers Crystals homeowner?
  • Spending Habits What we need is actually much less than what we think we want. Brand loyalty, impulse buys and retail therapy. Immediate graKcaKon over future needs.
  • A bargain isnt a bargain if you actually dont need it.
  • Thoughts on Financing Purchase on credit only when buying long lasKng assets with short lasKng nancing. Dont nance items for longer than their usable life. The importance of credit and impact to lifestyle. Necessity of loans as an investment (educaKon, home, car). Just because youre approved doesnt mean you can aord it. Ask yourself, How does the loan or line of credit improve your life long term?
  • Reality of Debt Avoid debt collectors, bankruptcy and nancial stress by avoiding debt. A ball and chain that prevents you from living your dream lifestyle. Borrowed money keeps you bound. In debt? PrioriKze debt repayment.
  • Debt is reserving your future 2me to work rather than fun.
  • ReKrement as a Lifestyle Through planning and sound nancial management reKrement can be achieved sooner. The amount needed to reKre diers from one person to another. Power of Time. Start saving and invesKng for reKrement early. Know your life plan, preferred lifestyle and nancial goals. Understand and use reKrement savings vehicles: 401(k) Individual ReKrement Accounts (IRA) Investment/Brokerage Accounts Pensions Company Stock OpKons Social Security
  • At age 23, you made $40,000/ year and by 30 years old youve saved $40,000 into your 401(k). If you decided not to contribute another dime 2ll re2rement and realizing an 8% return, your $40,000 would be over $600,000.
  • FACTS over LoHo Dream Financial Wellness FACTS Process Financial Awareness Be mindful of your life plan, nancial situaKon and your money habits. Ask quesKons and understand. Change mindset and perspecKves as needed. CreaKng a plan Have a life plan, set nancial goals and budget for everything. Change is certain and plan a response. Taking control PrioriKze savings and diversify income. Pay down debt, control spending and decrease expenses. Automate and use nancial tools. Seeking knowledge Invest in yourself through educaKon and skills aHainment.
  • Achieving Financial Freedom Ignorance isnt bliss. Financial independence begins with nancial knowledge. The more you know about personal nance the more control over your nancial future. Change is inevitable so have a plan, avoid lifestyle inaKon but be exible and prioriKze saving. The magic number for reKrement varies greatly for each person. Increase wealth by lowering expenses, curbing spending, saving on purchases, diversifying and supplemenKng income.
  • Resourcesfulness Your Knowledge Invest in learning more. BudgeKng Helps achieve nancial goals and life plan. Banking RelaKonships Not all created equally choose the right program. Free Resources Take advantage of all available resources from colleges, non-prots and government sources.
  • phroogal www.phroogal.com Learn more at