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Video: Money Management. Building a Career: Skills Matter. Key to building a successful career is to follow your passion and acquire the skills to excel in your field of choice Possessing strong reading comprehension, writing, and analytical skills is no longer optional
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Building a Career: Skills Matter • Key to building a successful career is to follow your passion and acquire the skills to excel in your field of choice • Possessing strong reading comprehension, writing, and analytical skills is no longer optional • Most jobs require you to reason, write, and use information in complex ways • Skills can be acquired in a variety of settings: • College • Internships • Vocational School
Networking • Network: • Speak with high school teachers or neighbors • Take advantage of college professors’ and teaching assistants’ office hours; remember, they know lots of students who have recently graduated • Upon starting a job or internship, get coffee or lunch with colleagues both in your group and other areas of the company to learn more about possible opportunities and career paths for you.
Evaluating purchase decisionsRent v Own • When should you consider buying? • Have a reliable income. • Have enough savings to cover down payment and closing costs (20%). • Have good credit history for minimal interest. • Plan to stay at home for a long period of time. (Usually 5 years) • When should you consider renting? • Have a career that requires you to move frequently. • Have a financial setback. • Poor credit history would lead to high interest costs.
Common Types of Insurance • Auto • Contains: • Property coverage (Theft and damage to car) • Liability coverage (legal responsibility to others) • Medical coverage ( cost of treating injuries) Health Now a Federal requirement • Life • Provides monetary benefit to a • person’s beneficiary • Renters and Home • Covers damage or destruction to home
Common types of risk management and asset protection products - Handout • What should be insured? • Yes or No: • Ashley decides to buy a house. She plans to stay for many years and start a family. • Chris uses a calculator and a notebook every day for class. • Troy Polamalu, who is endorsed by Head and Shoulders, uses his hair for ads and commercials. • 4. Daniel wants to buy a car after high school. • 5. Charlotte just turned 27 and is moving out of her parents’ house. She wants to start thinking more about her health.
Common types of risk management and asset protection products • Living Wills protect your interest!
Investing in Your Retirement • “Consistent, dedicated saving might not be glamorous, but it will give you far more freedom and control over your lifestyle down the road.” • Social Security • Mandatory retirements savings plan administered by the US Government • Funded through taxes • Social Security should not be your only retirement plan • 401(k) & IRA Plans • Reduces your taxable income • Many employers will match your 401(k) contributions = free money • Savings and earnings accumulate without you having to remember to make deposits • Roth 401(k) & Roth IRA: a variation where contributions are after-tax but earnings are not taxed
Calculate retirement costs • KEY: SAVE EARLY • Case study: Frankie Yankee and Amber Ranger • Both saved $2000 a year • Frankie Yankee saved for 12 years, beginning at 22 years old • While Amber Ranger saved for 32 years, starting when she was 34 • WHO DO YOU THINK SAVED MORE?
Saving for Retirement – 401k Account • 401k is a type of employer-sponsored retirement account • Sign up as soon as you join a company! • Deductions from your paycheck can often start right away • Most employers match employee contributions • Free money! For example, if you contribute 6% of your income, your employer may “match” the first 3% • Note that employer “match” funds often have to vest, which means that you have to remain an employee at the company for a certain period of time before the “match” funds are yours to keep • “Roll-over” funds to a different account if leave company
Understand the benefits of charitable giving: Giving back! “May your charity increase as much as your wealth.” Proverb
Money TalkCommunicating shared financial responsibilities • Whether it’s your roommate, spouse, partner or parents, there are some tips when it comes to talking about money • Communication is key • Create a budget plan together (past sessions) and stick to it • With partner/spouse, discuss how you like to spend your money, any debts you may have, and goals (short, med, long) • Money disagreements are one of the key reasons for relationship discord, so be open and honest. If you don’t reach a specific savings goal, figure out why and try again. • With roommate, discuss splitting the utility and cable bills (not to mention shared expenses such as paper towels) 50/50, but be sure to talk it over before you move in
Talk About It! Ask your parents, family members/relatives and older friends: • Do they have a 401K plan? • Do they know how much money they would need to save for retirement?
Any questions? The End Module 8
