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More Month Than Money? The Basic Building Blocks of a More Secure Financial Future

More Month Than Money? The Basic Building Blocks of a More Secure Financial Future. NEA Member Benefits. Why a Financial Wellness Class?. Being in control of financial issues allows for clear focus on your other responsibilities Demanding jobs often lead to lack of planning in personal areas

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More Month Than Money? The Basic Building Blocks of a More Secure Financial Future

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  1. More Month Than Money? The Basic Building Blocks of a More Secure Financial Future NEA Member Benefits

  2. Why a Financial Wellness Class? • Being in control of financial issues allows for clear focus on your other responsibilities • Demanding jobs often lead to lack of planning in personal areas • Being in control allows you to reach your goals more effectively For many, no bigger stress than money issues

  3. Basic Tenants of Financial Success • Have a plan – be realistic – review and modify as necessary • Manage your cash flow – anticipate • Understand your risks – adequate insurance protection • Use credit judiciously • Create systematic, disciplined savings habit (save first/spend last) – capture some portion of your lifetime earnings To help you accumulate, preserve, enjoy and transfer assets

  4. Why People Don’t Plan • Procrastination • Intimidation • Ignorance

  5. What Does Not Being In Control Look Like? • Identifying Financial Stress • Do you routinely spend more than you earn? • Are you forced to make day-to-day purchases on credit? • Are able to make only the minimum payments on monthly credit card bills? • Are you having difficulty stretching your paycheck to meet monthly bills? • Are Bill Collectors Calling? • Would you have a hard time paying next month’s bills if you or your spouse lost your job?

  6. Personal Balance Sheet ASSETS LIABILITIES Cash Equivalent Checking Accounts __________ Savings & Cred. Union Accts __________ Money Market Accts __________ Other __________ Subtotal __________ Investments Stocks __________ Bonds __________ Government Securities __________ Mutual Funds __________ Real Estate __________ Investment Collectibles __________ Certificates of Deposit __________ Other __________ Subtotal __________ Personal Property Home __________ Automobiles __________ Household Furnishings __________ Art/Antiques/Collectibles __________ Clothing/Furs __________ Jewelry __________ Metalware __________ Other __________ Subtotal __________ Deferred Assets Vested Pension __________ IRA/Keogh __________ Trust Payable __________ Loans Payable __________ Life Insurance cash value __________ Annuities __________ Business Equity __________ Subtotal __________ TOTAL ASSETS __________ Short Term Credit Card __________ Bills Payable __________ Short Term Loans __________ Other __________ Subtotal __________ Long Term Home Mortgage __________ Other Mortgage __________ Automobile Loans __________ Education Loans __________ Life Insurance Loans __________ Other __________ Subtotal __________ TOTAL LIABILITIES __________

  7. Goal Chart

  8. Cash Management • Understanding Cash Management • Where oh where does our money go? • Making a budget • Living within that budget • IT DOESN’T ALWAYS TAKE MORE $$$, Sometimes it takes smarter choices!!

  9. Cash Management Benefits ofDeveloping A Budget • It allows you to choose how you will spend your money. • It gives you control over where your money goes. • It provides against financial emergencies. • It helps prevent impulse buying. • It helps financial goals become a reality.

  10. Cash Management Budgeting Rules Set realistic financial goals Distinguish between wants and needs Record monthly expenses Establish an emergency fund equivalent to 6 months of living expenses

  11. Cash Management Budgeting Rules • Track income and expenditures • No lazy money • Establish credit • Shop wisely

  12. Cash Management Steps in Developing Your Budget 1. Determine your income • Include only your net income • Do not include stipends, overtime, bonuses 2. Determine your fixed expenses • Includes rent or mortgage, savings utilities, car payment, etc. • Pay yourself first!

  13. Cash Management Steps in Developing Your Budget 3. Determine your flexible expenses • Easier to control or reduce • Includes clothing, food, entertainment 4. Determine your variable expenses • Can be a problem if not properly budgeted for • Include things like insurance, taxes, annual fees If the payment is due every year, divide by 12 and put aside every month

  14. Cash Management Budgeting Basics • Record monthly expenses • Keep organized records • Reduce spending • Get a handle on credit • Re-evaluate your budget periodically

  15. Cash Management Summary Reduce Expenses • Cut Spending – Eliminate unnecessary spending such as eating out and purchasing expensive entertainment. Clip coupons, shop sales, and avoid impulse buying • Consolidate Debt – Check into mortgage refinancing, home equity loans, and personal loans. • Consider Credit Counseling

  16. Cash Management Summary Get a Handle on Credit Cards By paying $100 towards a $3,000 balance (and not charging any more to the account), it would take 41 months to pay off the balance (18% interest rate) and you would incur $1,042 in interest charges.

  17. Cash Management Summary Lastly, Build a Good Credit Reputation Use credit before you need it Keep within obligation of your agreement Live up to the terms of the contract Establish credit in your own name

  18. Personal Budget Worksheet ITEM Estimate 1st Revision 2nd Revision 3rd Revision Household Groceries for home __________ __________ __________ __________ Family meals out __________ __________ __________ __________ Breakfasts & lunches __________ __________ __________ __________ Personal care items __________ __________ __________ __________ Total Household __________ __________ __________ __________ Clothing New clothing __________ __________ __________ __________ Dry cleaning & laundry __________ __________ __________ __________ Other __________________ __________ __________ __________ __________ Total Clothing __________ __________ __________ __________ Housing Rent or mortgage (P&I only) __________ __________ __________ __________ Real estate taxes __________ __________ __________ __________ Homeowner’s insurance __________ __________ __________ __________ Furniture, furnishings, appliances __________ __________ __________ __________ Lawn & landscaping __________ __________ __________ __________ Cleaning, repairs, maintenance __________ __________ __________ __________ Gas & electric__________ __________ __________ __________ Water & sewer __________ __________ __________ __________ Home telephone __________ __________ __________ __________ Cell phone(s) __________ __________ __________ __________ Cable TV __________ __________ __________ __________ Internet service __________ __________ __________ __________ Other ____________________________ __________ __________ __________ Total Housing __________ __________ __________ __________

  19. Personal Budget Worksheet ITEM Estimate 1st Revision 2nd Revision 3rd Revision Medical Health insurance __________ __________ __________ __________ Doctors, dentists, etc. __________ __________ __________ __________ Medicines, prescriptions, etc. __________ __________ __________ __________ Optometrists, glasses, contacts __________ __________ __________ __________ Total Medical __________ __________ __________ __________ Transportation Car payments __________ __________ __________ __________ Repairs & maintenance __________ __________ __________ __________ Insurance __________ __________ __________ __________ Fuel __________ __________ __________ __________ Public __________ __________ __________ __________ Savings for replacement vehicle __________ __________ __________ __________ Other __________ __________ __________ __________ Total Transportation __________ __________ __________ __________ Entertainment & Hobbies Vacations __________ __________ __________ __________ Weekends __________ __________ __________ __________ Sports, lessons, clubs, etc __________ __________ __________ __________ Total Entertainment __________ __________ __________ __________ Gifts Holidays __________ __________ __________ __________ Birthdays __________ __________ __________ __________ Weddings, anniversaries, graduations __________ __________ __________ __________ Total Gifts __________ __________ __________ __________

  20. Personal Budget Worksheet ITEM Estimate 1st Revision 2nd Revision 3rd Revision Financial Pre-tax retirement savings __________ __________ __________ __________ After-tax retirement savings __________ __________ __________ __________ Non-retirement savings __________ __________ __________ __________ College savings __________ __________ __________ __________ Life insurance __________ __________ __________ __________ Disability insurance __________ __________ __________ __________ Other __________ __________ __________ __________ Total Financial __________ __________ __________ __________ Debt Re-Payment Credit cards (monthly excess) __________ __________ __________ __________ Installment __________ __________ __________ __________ Student loans __________ __________ __________ __________ Total Debt Re-Payment __________ __________ __________ __________ Miscellaneous Babysitting & childcare __________ __________ __________ __________ Personal care __________ __________ __________ __________ Newspapers, magazines, etc. __________ __________ __________ __________ Charitable contributions __________ __________ __________ __________ Job/work related __________ __________ __________ __________ Other__________________ __________ __________ __________ __________ Other__________________ __________ __________ __________ __________ Total Miscellaneous __________ __________ __________ __________ Totals from page 1 __________ __________ __________ __________ Totals from page 2 __________ __________ __________ __________ Totals from this page __________ __________ __________ __________ GRAND TOTAL __________ __________ __________ __________

  21. Develop a Personalized Action Plan Once you have decided what it is you want to do, it’s important to establish deadlines and make a commitment. Start with and use this Action Plan!

  22. How Your Association Can Help We want members to think of us first, before they make any financial or professional decision. Some of your basic needs can be met by using the Programs and Services available to you through membership. We are here to make members lives better. 22

  23. How Your Association Can Help • Start your shopping at www.neamb.com • Automobiles, household goods, food, wine, clothing, travel, and much more at great prices • Read relevant consumer education articles • Get Your Masters Degree or other Professional Development Courses through NEA Academy • Utilize the NEA Money Market and NEA Certificate of Deposit for Emergency Fund • Set-up automatic withdrawal from your paycheck to your Valuebuilder Retirement Account

  24. How Your Association Can Help • NEA Personal Loan • NEA Smart Option Student Loan by Sallie Mae • NEA Home Mortgage Program • Lines of Credit and Refinance available • $200 Gift Card after closing • Check out the NEA Credit Card Offers at www.neamb.com • Cash Rewards Mastercard with no annual fee and cash back on everything • Several different programs designed to meet our members various needs…Worldpoints, Amex

  25. How your Association can help • NEA ID Theft Protection • NEA Long Term Care Insurance • NEA Pet Insurance • NEA Auto Home Insurance • NEA Life Insurance Policies to Meet your Needs • NEA Complimentary Term Life Insurance Plan • NEA Introductory Term Life Insurance Plan • NEA Term Life Insurance Plan • NEA AD&D Insurance Plan • NEA AD&D Plus Insurance Plan • NEA Guaranteed Issue Life Plan

  26. Other Resources…websites and books www.nfcc.org www.mymoney.gov www.quickbooksonline.com www.mint.com www.frugalliving.about.com • The Total Money Makeover • How to Get Out of Debt, Stay Out of Debt, and Live Prosperously • Your Money or Your Life • All Your Worth: The Ultimate Lifetime Money Plan • I Will Teach You to Be Rich • The Complete Tightwad Gazette • The Random Walk Guide to Investing • The Millionaire Next Door • Work Less, Live More: The Way to Semi-Retirement • Why Smart People Make Big Money Mistakes (and How to Correct Them)

  27. Questions?

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