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Air Education and Training Command

Air Education and Training Command. Financial Management 5 September, 2002. MSgt Nick Kopcho HQ AETC/XPRI DSN: 487-8035. I n t e g r i t y - S e r v i c e - E x c e l l e n c e. Financial Planning Value of Time Common Misconceptions Developing Your Plan When to Begin How to Begin

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Air Education and Training Command

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  1. Air Education and Training Command Financial Management5 September, 2002 MSgt Nick Kopcho HQ AETC/XPRI DSN: 487-8035 I n t e g r i t y - S e r v i c e - E x c e l l e n c e

  2. Financial Planning Value of Time Common Misconceptions Developing Your Plan When to Begin How to Begin Tips for Success Final Thoughts "When it is a question of money, everyone is of the same religion.“ – Voltaire, French writer and philosopher Overview

  3. “When it is a question of money, everyone is of the same religion.” Voltaire, French writer and philosopher FINANCIAL PLANNING

  4. Plan First "Though usually overlooked, setting up a good personal budget is the first step to any money management activity. Without it, you cannot control your finances and will always fall short of your goals.” - Mark J. Randall, Certified Financial Planner No one plans to fail, they just fail to plan Planning is crucial to achieve a desired result FINANCIAL PLANNING

  5. Benefits of Financial Planning Awareness Control Organization Communication Opportunistic Timesaving Less Waste FINANCIAL PLANNING

  6. Compounding—your money’s best friend A – Age 21—$100/Month X 10Yrs = $12,000 B – Age 35—$100/Month Till Age 65 = $36,000 8% Annual Growth till Age 65 A = $300,053 B = $150,030 If “A” continued $100/Month till Age 65 = $52,800 + 8% Annual Growth = $489,120 Start now—something is better than nothing “The best place to start is where you are with what you have.” - Charles Schwab, Industrialist/Banker VALUE OF TIME

  7. You must suffer to maintain a budget You are already “Budgeting” Reactive not Proactive Free up money—eliminate waste Budgets are for those in financial trouble Avoid trouble Handle crises Takes more time Upfront work Easier in the long term COMMON MISCONCEPTIONS

  8. Keep it simple and easy Communicate with and involve family Define goals—plan is roadmap to achieve goals Understandable—Primary and Alternate Customizable—Flexible Build in fun—rewards Organization—not penny-pinching Knowledge and Understanding—not rules Should let you know how much you have now DEVELOPING YOUR PLAN

  9. NOW!! A change in your marital status An addition to the family A new job A PROMOTION, or a raise A new home Retirement A major purchase January 1st (or the beginning of any month) WHEN TO BEGIN • NOW!! • NOW!! • NOW!!

  10. Where does your money go? Look up the past Bills Checkbook Bank Statements Track your spending for one – three months Keep a log of every penny At least one full cycle of your money Eye-opening experience You will be surprised HOW TO BEGIN

  11. Get Organized Current Working Files—used on a routine, bill-paying session basis Reference Files—standard information Safety Files—important original documents Archival Files—repository of old papers. Balance your checkbook!! Establish the Habit HOW TO BEGIN

  12. Make impulse buying difficult—leave checkbook, credit cards at home Make savings an "expense" item Make debt repayment an "expense" item—this is what credit counselors do for you Pay off the highest interest rate cards first Don't use credit cards again until balance is paid off After a loan is paid off, keep paying the loan amount to yourself—make a vacation fund, or next car fund TIPS FOR SUCCESS

  13. Have some fun money for each family member Budget for a fun item Plan with one income Don't divide couple's paychecks functionally Don't over categorize your budget—simplicity Use an interest-bearing checking account Set aside money monthly, for bills that are due quarterly, semi-annually, or yearly TIPS FOR SUCCESS

  14. Reconcile your budget at least once a month; when reconciling your checking statement Make sure to mark your last reconcile point in your budget Try to get utilities or banks to change due dates of bills to make your work easier Remember: just the act of identifying your expenses is extremely valuable Be Proactive—not reactive TIPS FOR SUCCESS

  15. Keep future in mind Involve everyone Review annually or when there is a change TIPS FOR SUCCESS

  16. Plan for your future Budget is a tool Roadmap to your goals Start NOW!! Benefits of compounding Establish a habit for life Be proactive FINAL THOUGHTS

  17. Define Goals Develop plan to achieve goals Keep it easy and understandable Involve entire family Get organized and get started FINAL THOUGHTS

  18. Questions?

  19. Replenishing the Combat Capability of America’s Air Force I n t e g r i t y - S e r v i c e - E x c e l l e n c e

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