MONEY MANAGEMENT STRATEGIES

1. MONEYMANAGEMENTSTRATEGIES The Marcy Building167 Polk StWatertown, New York 13601315-788-47901-877-EAP-NEAS www.neaseap.org

2. WHAT DOES MONEY MEAN TO YOU? • Love? • Security? • Independence? • Pay bills and don’t think about the rest? • Never enough of it? • Don’t think you deserve a lot of it? • Afraid to say “I want to be wealthy?”

3. QUESTIONS ABOUT MONEYLEAD TO OUR MEMORIES OF MONEY • What was the family message about money growing up? • Was money discussed in your home? • Did you receive an allowance? Did you work when you were a teenager?

4. MORE MONEY QUESTIONS • When was the first time you went into debt for something you wanted? • When was the first time you remember losing money? • Did money influence your choice of career? • Is money your friend or your enemy?

5. FRIGHTENING STATS • 70% of all consumers live from paycheck to paycheck • On average, workers between the ages 25-34 must spend 25 cents on every dollar earned on debt repayment • Foreclosures have increased 200% since 2007 • 71% of bankruptcies are chapter 7 which is “total”bankruptcy where you lose everything. 95% of those cases were “no asset” cases, meaning they had no assets to lose by the time they go to bankruptcy.

6. MONEY PROBLEMS WILL NOT BE SOLVED WITH MORE MONEY! MONEY PROBLEMS ARE ABOUT • Spending more than you can afford • Choices that have been made • Satisfying wants instead of needs • Being without a plan • Procrastination • Low skill level dealing with finances

7. MONEY ISSUES CAN BE SOLVED BY • Determine needs vs. wants • Learn new skills-how to make effective decisions, positive choices an identify needs • Set goals, prioritize and be realistic • Determine where you want to be • Creating a Budget • Prioritize

8. Values Activity…What’s Important?rate the following activities:1=most important,2=somewhat important, 3=not important(add any other areas personal to you) • Food • Health • Education • Savings • Vacation • Job/Profession • Home • Debt Reduction • Investments • Boat • New car • Family • Insurance • Assets • Clothes • Recreation • Charity • Entertainment • Retirement • Insurance • Health • Friends • Other

9. BUDGETING • Why do we need to budget? • What is a budget? • What do you earn? • Where does your money go if you don’t know where it goes?

10. BUDGETING FOR SUCCESS • Plan for emergencies • Decide what is absolute • Shop when you REALLY need something • Know when it is a WANT instead of a NEED • Grocery shop with a list and stick to it • Get in the habit of saving • SAVE for major purchases

11. ENVELOPE SYSTEM • Make an envelope for each expense category (rent, utilities, food, etc). • Label the envelope with the purpose, amount, and date due. • When you receive income, divide it into amounts to cover the expenses listed on the envelopes Helpful Tip: • Pay your bills right away, so you won't be tempted to spend the money for something else.

12. Start small Automatic deduction Payroll deduction Treat it as a bill. Reduce an expense, save it Round up Tip yourself Everyone has a coffee factor… find yours. Keep paying debt, but to yourself. Budget big for groceries, then save the difference Save your change Pay yourself first EMERGENCY FUND

13. THE BORROWER IS THE SERVANT TO THE LENDER

14. GETTING OUT OF DEBT • Know who you owe, how much, for how long • Look for ways to increase income & decrease spending • Do not use credit to pay debt • It you can’t make payments, contact your creditors as soon as possible • Contact a credit counseling service (consumer credit counseling 782-2227)

15. CREDIT CARDS • If you spend $4,000 on credit cards at 18.5% interest and pay only the minimum payments, it will take you 11 years to pay off ($7,800 total

16. SPENDING LEAKS • 1 cup of coffee = $1.93 • 1 cup everyday for one week = $13.51 • 1 cup everyday for year = $702.52 Add a donut to the equation = $752.00 year Grand Total of $1,454.52 a year For one month keep track of every penny you spend. You’ll be shocked to see where your money goes

17. THE DEBT SNOWBALL Item Payoff Min Payment New Payment Penny’s $150 $15 $0 Sears $250 $10 $25 Visa $500 $75 $100 MC $1,500 $90 $190 Car $4,000 $210 $400 Boat $4,000 $465 $465 House $70,000$700 $1,165 Total $80,400 $1,565 11 years TOTALLY DEBT FREE

18. CHECK SPENDING HABITS DO YOU… - Make a shopping list - Plan how much you can spend - Buy only items on the list - Compare prices and quality - Decide what each family member needs to do to help control spending - Use coupons

19. DECREASE EXPENSES • Pay cash and put credit cards away • Brown bag it • Clip and use coupons • Refinance your mortgage for a lower rate • Bundle insurance policies with one company

20. IN ORDER TO GET OUT OF DEBT QUIT BORROWING!

21. WEBSITES OF INTEREST • www.choosetosave.org • www.thesimpledollar.com • www.aarp.org/money • www.ehow.com • www.cashmoneylife.com • www.billeater.com • www.66ways.org • www.moneymanagement.org • www.ftc.gov

22. MAKE A NEW START • Recognize “triggers” that lead you to spend • Think of your goals/consequences before you spend • Learn to say “NO” • Set up incentive plan for goals reached • Pay cash • Reduce waste and save money • Make your spending plan become a habit

23. FREE CREDIT REPORTS View your credit report online. You can also dispute an item in your credit report and protect yourself from identity theft. • www.equifax.com • www.experian.com • www.transunion.com

24. Presented by:Northern Employee Assistance Services The Marcy Building167 Polk StWatertown, New York 13601315-788-47901-877-EAP-NEAS www.neaseap.org