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Financial Goal Planning for Increased Financial Literacy

Learn steps to plan for financial goals, including creating a mission statement, categorizing goals, and developing a funding strategy. Short-term goals: Mortgage to income ratio and total debt to income ratio. Techniques include budgeting, automation, and the envelope system.

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Financial Goal Planning for Increased Financial Literacy

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  1. GOALS AND SAVINGS BY: Dr. SCOTT KEHIAIAN

  2. GOAL PLANNING STEPS TO GOAL PLANNING: • Develop a Mission Statement • Brainstorm, write financial goals • Categorize • Prioritize • SMART • Funding Strategy • Action Steps

  3. LONG-TERM GOAL (INCREASE FINANCIAL LITERACY) USA IS 27TH OUT OF 28 COUNTRIES!

  4. SHORT-TERM GOALS • MORTGAGE TO INCOME RATIO • Should remain below 20% of household’s gross income. Most families need to save for a large down payment and purchase a much smaller home in order to make this goal. • TOTAL DEBT TO INCOME RATIO • Should remain below 30% of household’s gross income. To accomplish this, families need to reduce variable expenses enough to reduce debt.

  5. SHORT-TERM GOALS BUILD A MENU PLANNER

  6. INTERMEDIATE TERM GOALS Percent of Net Income (PROBABLY AFTER CHAPTER 13) Fixed Expenses 35% Variable Expenses 35% Periodic Expenses 20% Savings 10%

  7. LONG-TERM INCOME GOALKEEP PACE WITH INFLATION

  8. LONG-TERMSAVINGS TECHNIQUES • BUDGET AS A FAMILY • SET UP MONTHLY BILLS TO BE PAID AUTOMATICALLY • USE THE ENVELOPE SYSTEM (CASH ONLY) • NEVER USE DEBIT OR CREDIT CARDS FOR EVERYDAY PURPOSES • INSTALLMENT PAYMENTS • COUPONS • CHANGE • 60/30/10 RULE

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