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MATH QUIZ

MATH QUIZ. Choose a number between 1 and 7 Multiply the number X 2 Add 5 Multiply X 50 If you have already HAD your birthday in 2014, add 1764 If you HAVE NOT had your birthday yet this year, add 1763 Subtract the 4 digit year you were born Should have a three digit remainder.

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MATH QUIZ

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  1. MATH QUIZ • Choose a number between 1 and 7 • Multiply the number X 2 • Add 5 • Multiply X 50 • If you have already HAD your birthday in 2014, add 1764 • If you HAVE NOT had your birthday yet this year, add 1763 • Subtract the 4 digit year you were born • Should have a three digit remainder

  2. PERSONAL FINANCIAL MANAGEMENT (PFM) INSIGHT TOTHE NAVY’S PFM PROGRAM BRIAN PAMPURO, AFC FLEET AND FAMILY SUPPORT CENTER NAVAL SUPPORT ACTIVITY BETHESDA, MD 301 400-2414 brian.pampuro@med.navy.mil dochmcm@aol.com & Facebook/LinkedIn

  3. TERMINAL OBJECTIVES • Understand the United States Navy policies applicable to sound personal financial management and the career benefits to effective money management. • Be able to reference the United States Navy Personal Financial Management Education, Training and Counseling Program directive (OPNAVINST 1740.5B) as a leadership tool. • Be familiar with resources that can assist service members and/or their families in achieving personal financial fitness.

  4. ENABLING OBJECTIVES Identify techniques for increasing income, decreasing living expenses, decreasing indebtedness and improving a spending plan. Identify least two sources of assistance for personal financial management information and referral, education and counseling. • Identify at least two career benefits of maintaining an effective spending plan. • Define three levels of the Financial Planning Pyramid. • Define net worth, monthly income, net income and gross income, monthly savings, living expenses and debt-to-income ratio.

  5. LIFE, UHG! Debt! Debt! Kids Braces! Taxes! PLUS MORE DEBT! Debt! LIFE !!!!! Home Repairs Debt! Daycare! New transmission! Car Registration! Debt!

  6. Do you (or someone you know) constantly worry about finances ? At work ? At home ? At night ? Lose sleep because of financial concerns or situation ? Living paycheck to paycheck and still wondering if ends will meet ? What about your Troops?

  7. Stressor Individual, Shipmate, Family Responsibility Caregiver Responsibility Unit Leader Responsibility Stress Continuum Model • Good to go • Well trained • Prepared • Fit and focused • Cohesive units & ready families • Distress or impairment • Mild and temporary • Anxious, irritable, or sad • Physical or behavioral changes • Stress injuries that don’t heal without help • Symptoms persist for >60 days, get worse, or initially get better and then return worse • More severe or persistent distress or impairment • May leave lasting memories, reactions, and expectations

  8. Key Contributing Factors to Financial Struggles (My Thoughts) • THINGS I NEVER LEARNED IN HIGH SCHOOL: • How to do taxes • What taxes are • How to set up a budget and manage a household income • How to buy a house or car • Anything to do with banking • But I’m so glad I know the Pythagorean Theorem • Not educated – No financial training. • Don’t distinguish our wants from our needs. What are our basic needs in life? • We are a “need it now” society. • We are victims of social media and advertising! • We develop bad spending habits way too early in life. FROM WOMB to TOMB

  9. IMPORTANCE OF MONEY MANAGEMENT • Poor money management leads to poor operational readiness, it also leads to poor performance, lower quality of living, and lowers chances for reenlistment. • Poor money management can affect you in: • Obtaining a security clearance • Getting assignments overseas • Getting special assignments • Getting better interest rates • and credit ratings

  10. Military Policies NAVY: “Members of the naval service are expected to pay their just debts and financial obligations in a proper and timely manner.” OPNAVINST 1740.5B Admiral Jonathan W. Greenert CHIEF OF NAVAL OPERATIONS 10

  11. NAVY’S PERSONAL FINANCIAL MANAGEMENT & EDUCATION PROGRAM • OPNAVINST 1740.5B (May 2007) • Applies to all USN/USNR personnel assigned to Regular and Reserve commands • Directs the accountability and responsibility of all Navy service members regarding management of their personal finances.

  12. NAVY’S PERSONAL FINANCIAL MANAGEMENT PROGRAM • MISSION – Provide education, counseling, information and referralto service personnel and commands in an effort to increase personal, family and operational readiness. • # 1 Purpose – of financial difficulties! PREVENTION

  13. Options, Commodities, etc. Spending Plan Wise Use of Credit Financial Planning Pyramid How to build Financial Security Base Pay BAH BAS Special Pay Incentive Pay Haz Duty Pay SGLI FSGLI TSGLI DIC VA Benefits

  14. Financial Success happens by“FINDING A BALANCE” FINANCIAL PLANNING ISN’T SQUEEZING EVERY DOLLAR BILL SO TIGHT THAT WASHINGTON HAS A TEAR IN HIS EYE!

  15. “Many people report finding more money than they thought they had when they create a realistic spending plan and stay with it.” — Dave Ramsey

  16. What can Budgeting do for you? • A written method to help you achieve your financial goals by measuring and managing your money! (Gives every dollar you earn a name)

  17. Why is my budget not working? La La Land 17

  18. We Forget the Little Stuff $ $ $ $ $ $ $ $ $ $ $ $19.00 X 20 $380.00 ANOTHER TWENTY MISSING 18

  19. Out of Pocket SpendingWhere does it all go? BUDWEISER STARBUCKS MARLBORO KRISPY KREME

  20. WHAT ABOUT YOUR SPENDING HABITS? IMPULSE SHOPPING IS A BUDGET KILLER !!!!!

  21. Chain Reaction Shopping One purchase leads to more purchases $ $ $ $ $ $ $ 22

  22. Building A Spending Plan(Budget) Six key components • 1. Net Worth Statement • 2. Monthly Income • 3. Monthly Saving/Expenses • Indebtedness • Track Spending • Action Plan

  23. The Net Worth Section(Page 1-Go-By)

  24. Step 1 – What is your Net Worth? Assets - Liabilities = Net Worth (What you OWN minus what you OWE) A measure of your wealth at a certain point in time Calculate yearly Why should you care about your Net Worth?

  25. Knowing your Cash Flow 2 1 3 4 EVERY DOLLAR GETS A NAME

  26. The IncomeSection(Page 2–Go-By)

  27. Hawk Your Income

  28. The Savings(10%) andLiving Expense (70%)Sections(Page 3–Go-By)

  29. How many of your Piggy Banks look like this? ESTABLISH LONG TERM AND SHORT TERM FINANCIAL GOALS START NOW! – “PROCRASTINATION IS THE THIEF OF TIME” REMEMBER – “SAVINGS ISN’T SAVINGS UNLESS YOU SAVE IT”

  30. Assess Your Monthly Savings Monthly Contributions to Emergency Fund Reserve Fund Goal-Getter Fund Investments/IRAs, etc. TSP Use Savings for “Short Term Goals” Use Investments for “Long Term Goals” What‘s the difference between “Saving” and “Investing” ?

  31. Find ways to save SOMETHING each month !!! Not necessarily by giving yourself your own haircut

  32. The decision to save and invest is simple - WOULD YOU RATHER BE DOING THIS WHEN YOU RETIRE? OR THIS? THIS WILL BE YOU IN A FEW YEARS. BE PREPARED !!!

  33. Define Your Living Expenses • Monthly Amounts • Typical Expenses • Housing and Utilities • Food • Transportation • Child Care • Clothing • Insurance and Healthcare • Leisure, etc.

  34. Track Expenses Track for 30 to 60 days Record all expenses each day Identify expense category & compare to Living Expense section (Page 3) Total monthly expenses for each category

  35. The Debt(20%) andSummary Sections(Page 4–Go-By)

  36. CASH IS KING !!!

  37. Tackle Your Indebtedness • List Creditor and Total Balance Due • List only the Minimum Monthly Payment Amount • List Interest Rate • Total it up!

  38. Discovering YourDebt-to-Income Ratio Example of Formula: Net income = $2980 Total minimum monthly debt payments= $545 545 / 2980 = .1829 .1829 * 100 = 18.29 Debt-to-income ratio = 18.29% What does that mean?

  39. Debt-to-Income Explained 4.18

  40. Free Credit “Stuff”www.saveandinvest.org Code good until 28 Feb 2014 PPALIJB8 (202) 728-8920 CreditScore@finra.org(Marlene Cohen) -------------------------------------------- www.creditkarma.com -------------------------------------------- www.annualcreditreport.com

  41. Guidelines for Total Net Income • 70% - Living Expenses • 15% -Indebtedness • 15% - Savings • ______ • =100% • 70% - Living Expenses • 20% -Indebtedness • 10% - Savings ______ =100% SHOULD ACCOUNT FOR 100% OF YOUR INCOME *Percentages will vary based on lifestyle, but guidelines prove effective in helping to develop a sound financial plan and keeping debt at a reasonable level.

  42. HERE IS A SNAPSHOT OF A FINANCIAL SUMMARY 00.00% 76.00% 15.56% Total 91.56% INDIVIDUAL IS NOT ACCOUNTING FOR 8.44% OF HIS NET INCOME ($380.00)

  43. The Action Plan Increase Income Decrease Living Expenses Decrease Indebtedness

  44. KNOWLEDGE IS GREATER THAN RICHES ! ---------------------------------------- IT IS OKAY FOR YOU TO KNOW MORE THAN YOU ARE EXPECTED TO !

  45. Teach Kids how to Save NOW!

  46. THE THREE PIGGY BANK CONCEPT FOR KIDS $20.00 ALLOWANCE – Use singles and or change 2 3 1 SAVINGS 10 – 20 % $4.00 Can add interest GIVING BACK Church, Charity, Community 10 – 20 % $4.00 FUN MONEY Needs vs. Wants $12.00 You can help

  47. Establish financial goals. Prepare a written budget. Make it realistic and plan to stick with it. You can make your money go 10% farther. Limit credit cards to those you absolutely need. To avoid interest penalties, pay all accounts within 30 days. Set up a category in the budget for entertainment. This is an expense that often drags families down. Establish two reserves, one of them an emergency fund in the checking account, the other a larger fund, in an accessible savings account, equal if possible to a month’s income. Before going to a store, make a list. Avoid buying anything that isn’t on the list. Get in the habit of realizing that dollars add up. Spend each one as if it were your last. “Survival suggestions from the doctor” LIFE Magazine article – February 13, 1970 edition “ Side Stepping the Money Gap”

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