Financial Smarts

Financial Smarts For Teachers

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Personal Finances

Financial Security • Live comfortably • Use credit appropriately • Insure life/health/home • Invest wisely • Save for retirement

Path to Financial Security • Research • Figure out needs • Learn money management • Seek advice • Ask • Are you satisfied with your circumstances? • How can you control your finances?

Influences • Beliefs • Values • Attitudes • Expectations • Goals

Determine • How you make financial choices • How your behavior needs to change

Building Blocks • Foundation: Regular Income • Provides for basic lifestyle • Funds emergencies

Building Blocks • Base • Checking account • Savings account • Money market account • Insurance protection • Employee fringe benefits

Building Blocks • Establish • Long-term goals • Short-term goals • Financial records • Realistic budget • Emergency savings fund

Building Blocks • Manage • Housing expenses • Transportation expenses • Insurance expenses • Income taxes • Contingencies

Building Blocks • Handle • Credit cards • Installment loans • Savings accounts • Education costs

Building Blocks • Invest • Mutual funds • Stocks and bonds • Real estate • Pension plans

$700,000 $713,574 14% $600,000 $500,000 $482,665 12% $400,000 $328,988 $300,000 10% $226,556 $200,000 8% $158,116 $100,000 6% 0 10 30 20 Years Investing Value of investing$2,000 annually

Budgeting Process Set Goals

Budgeting Process Organize

Budgeting Process Decide

Budgeting Process Implement

Budgeting Process Control

Budgeting Process Evaluate

Budgeting Process Evaluate Control Monitor Review Revise Implement Decide Organize Set Goals

Budgeting Process Success!

Step 1: Set Goals Long Term

Step 1: Set Goals Short Term

– What you own Net worth Step 2: Get Organized • Figure net worth • How do you determine value? What you owe

– Expenses Cash flow Step 2: Get Organized • Determine cash flow Income

Step 3: Create a Plan • Spending plan should be • A guide, not a master • Personal and unique • Practical and realistic • Flexible • Include some “mad” money 

Step 3: Create a Plan • What do you plan to spend on • Food? • Housing? • Clothing? • Compare to actual expenses

Step 4: Implement • Putting your financial plan together • Net worth • Income • Expenses • Goals • Budget • Alternative ways to reach goals

Step 5: Control • Keep track of what you spend

Step 5: Control • Rational spending(planned) • Well thought out • Controlled • Impulse spending • Unplanned spending • Spur of the moment

Step 5: Control • Financial records • What’s important? • How long to keep? • Where are they kept? • Who else knows?

Step 6: Evaluate • Manage your money • Control cash flow • Establish and manage credit • Buy appropriate insurance

Step 6: Evaluate • Contribute to savings, investments • Minimize tax burden • Plan retirement • Plan estate

Step 7: Revise Monitor Review Access

Pay Yourself First

Financial Smarts