"Don't Buy Stuff"

1. "Don't Buy Stuff"

2. SavingStrategies

3. How is the economy today?

4. Signs of Recovery • DOW

6. If you look at the 90-day rate it has been heading straight up — it has not receded.

7. Local Economy • High Electric Bills • Decrease in Unemployment Rates • December 2009 – 12.1% • March 2010 – 11.5% • Reasons for decrease could be hiring of seasonal workers or unemployment benefits ending • Beaufort County Medical Cuts 16 Positions, Explores Future • This decision comes after a difficult year for the medical center which even after drastic cuts lost 1 million dollars this year.

10. Topics Of Discussion • Financial/Spending Plan • Budgeting • Money Management

11. Financial/Spending Plan

12. Establishing Your Financial Plan • Assess your current financial picture! • Define your financial goals! • Create and put your plan into action! • Evaluate your plan regularly!

13. Assess your current financial picture! • Determine your net worth. • What is your cash flow? • Do you have an emergency fund and is it enough? • What is saved for retirement?

14. Define Your Goals • Specific • Define your goal in detail. • Measurable • Assign a specific amount to your goal. • Attainable • Evaluate your goal to ensure that you can reach it. • Realistic • Review your goal to ensure it is achievable. • Time Bound • Allocate a time frame in which to achieve your goal.

15. Define Your Time Frame

16. Create A Plan • Make yourself a priority list. • Make a plan that works for you. • Plan for your Future. Pay Yourself First! • Establish an Emergency Fund Each time you are paid, set aside a portion of your check to deposit into a high interest savings account.

17. Evaluate Your Goals • Continuously monitor each goal to insure they reflect your current lifestyle. Over time your goals can change.

18. Budgeting

19. What Is A Budget? A plan to manage your money for a specified period of time.

20. How a budget can change on you!

21. Benefits Of Budgeting • Provides an organized way for you to save money for your goals. • Helps you determine where you may be spending too much money for things you may not need. • Helps you determine where you are spending your money. • Allows you to save for expensive items without the use of credit cards or loans. • Puts YOUin control of your financial future. Provides financial “FREEDOM”

22. Cash Flow • Income • Any money you receive. • Examples: Paycheck, Child Support • Expenses • Any money you pay out. • Examples: Rent/Mortgage, Loan Payments, Gas

23. Types Of Expenses

24. Creating Your Budget • Determine your Income • Calculate your Expenses • Analyze your Budget

25. Step 1: Determine Your Income • What is your salary? • Do you currently have a 2nd job? • Do you receive any other forms of income? Alimony, Child support, Interest, Dividends…

26. Step 2: Determine Your Expenses • Make a list of everything you pay for monthly. • This includes rent/mortgage, utilities, loan payments, credit card payments, savings account, gas, groceries, etc. • Categorize each expense as fixed, variable or periodic.

27. Step 3: Analyze Your Budget • Compare your Income and Expenses to determine if they are equal. “Cash Flow” • If your Income and Expenses are not equal, ask yourself a series of questions: • Are there expenses that I can decrease? • Is another source of income necessary to sustain my lifestyle?

28. Budget Guidelines

29. Budgeting Resources • It is always a good practice to have your budget written down or on the computer to ensure you are following it. • There are a variety of resources available to assist you in creating your budget. Here are a few examples. • Money Management Planner • Microsoft Money • Quicken • An Excel Spreadsheet • A Budget Template (Using Microsoft Excel)

30. Budget Templates • Personal budget worksheet • Family monthly budget planner • Personal Budget Planner for Bills • Bi-weekly Budget • Household monthly budget • Simple Personal Monthly Budget • Personal expense budget

31. Money Management

32. Example of a recent Financial Assessment Family size of 4 Net household income of $4,542. Fluctuating paychecks 90 days delinquent on their mortgage (Monthly Mortgage Payment of $1,350). Several charge-offs & collections on their credit report.

33. Monthly Expenses: Dry Cleaning $240 Car Payments $952 Direct TV $115 Phone & Internet $350 Car Insurance $100 Vehicle Gas $260 Groceries $850 Progress Energy $215 Bricks Alarm $35 Misc. Expenses + $450 $3,317 Mortgage $1,350 + Monthly Exp. $3,567 = $4,917 Negative Monthly Cash Flow= -$375

34. 3 ways to fix a negative cash flow 1. Earn more money 2. Eliminate and/or cut back on expenses 3. Debt consolidation

35. 1. Earn More Money • Get a 2nd job. • Get family members to contribute by working. • Invest in the stock/bond market. • Obtain higher education to qualify for pay increases.

36. 2. Cut back on expenses • Allow yourself to let go of your “wants”! • Take advantage of coupons and discounts. • Take advantage of employer benefits. -Medical Reimbursement Plan (Health Care FSA) -Dependent Care Reimbursement Plan

37. 3. Debt Consolidation • 1st thing…You need to qualify! • Find a lower rate and/or longer term. • Refinance your house • HOEQ loan • Use a car loan to payoff unsecured debt • Use pay down debt methods that work for you. • Attack the highest interest rate • Snowball Effect “Don’t buy stuff you cannot afford.”

38. Money Management Tips • Always PAY YOURSELF FIRST! Put at least 10% away for retirement. • Build an emergency fund equal to at least 3 months salary. If you do not currently have a savings account, visit your local financial institution to open one today! Sometimes it’s helpful to set up a draft so money is automatically transferred into your emergency fund.

39. Money Management Tips • Make sure your financial goals are outlined and manageable. • Pay more than the minimum on your credit card. • Each time you receive a pay increase, put that extra money in your retirement account, savings account or apply it to a debt.

40. Money Management Tips • Take advantage of banks/credit unions’ programs. -Online Banking -Online Calculators -Financial Counseling • Speak with a financial counselor if you need help.

41. Money Management Tips • Before you go to the grocery store make a list. Remember if it is not on the list, don’t buy it! • Use coupons when shopping and discount cards if available. • If you prefer a soft drink or snacks bring your own from home rather than purchasing it from a vending machine.

42. Money Management Tips • Wash your clothes in cool water. About 80% of energy used in your washer is from heating the water! • Set your temperature in your home during the spring/summer to 76-78 degrees and in the fall/winter to 68-70 degrees. You can save 7-10% of your cooling/heating costs on your energy bill! (Tips provided by NC GreenPower)

43. What If… • You saved 15% of your paycheck each month for 1 year? • You purchased a soda every day for 1 year? • You went out to eat 3 times a week for 1 year?

44. Results • Assume you get paid $2,000 per month, you would save $3,600 (more than 1 month’s paycheck). ($2,000 x .15 = $300 a month)(12 months x $300 = $3,600!) • If a soda costs $.65, you would spend $237.25. (365 days per year x .65 =$237.25) • If it costs $8 each time you eat out, you would spend $1,248. (3 days x $8 = $24/week)(52 weeks x $24 = $1,248)

45. Questions?