Dr. Helen K. Simon, CFP

State Farm Financial Literacy Lab

April 7, 2011

Schedule of Events

April 21st :Credit & Banking April 28th: Investing Basics May 5th: Personal Financial Planning

What Is Stress?

Stress affects most people in some way Its a combination of emotional and

physical pressures It almost always involves a feeling you

have little control over the situation (s) and/or you just can’t finish anything

Dealing with Stress

You can’t deal with it, until you name it! What is causing stress in your life?

Leading Cause of Stress?*

#1 = Finances According to a poll by LifeCare, Inc.(2005), 23% of

respondents named finances as the leading cause of stress in their lives. Financial stress has led the list in many other polls. Just GOOGLE it!

Some who name finances as the leading cause of stress cite major purchases they have to make, such as a home or car. Others are stressed by a loss of income, or mounting credit card debt. For some, financial stress will eventuate in bankruptcy. While college students stress over paying for an education, Baby Boomers and older senior citizens find that retirement income can be a major cause of stress.

*downloaded from: http://ezinearticles.com/?7-Leading-Causes-of-Stress&id=473303

We have become a culture of what we have instead of who

we are

Happy to help us…..

CREDIT CARDSTurn from victims into victors!

High APRs - Cash Back! Excessive spending - Budgeting

tool

Resources

Find the right credit card for you: http://www.bankrate.com/credit-cards.aspx.

Check your credit report often! https://www.freecreditreports360.com/freecreditreport/lp/43

7-dc4c/.

Use Quicken: http://quicken.intuit.com/.

Be a Frugalista !! “People who keep up with fashion trends

without spending a lot of money. Frugalistas stay fashionable by shopping through alternative outlets, such as online auctions , secondhand stores and classified ads. They also reduce the amount of money spent in other areas of their lives, such as by growing their own food and reducing entertainment expenses. This is a popular term during recessions. “

Downloaded from http://www.investopedia.com/terms/f/frugalista.asp?partner=TOD01.

SAVY SPENDING www.Couponheaven.com. Your credit card

www.discovercard.com www.chaserewardsplus.

com Online bill paying www.froogle.com The Sunday newspaper Organized shopping trips Have your cocktail at

home Groupon FL restaurants run great

specials in the off season Breakfast is a bargain!

The Latte Factorhttp://www.wisegeek.

com/what-is-the-latte-factorreg.htm.

The Millionaire Next Door

Don’t always think that bigger is better! The warehouse

shopping paradoxSometimes Publix

BOGO is way better!

EMPLOYEE BENEFITS FSA (Flexible Spending Account) Deferred savings Tuition reimbursement Disability insurance

Chances of becoming disable pre 65 is 5 Xs greater than dying

Life insuranceDo you have enough? Or too much?

Discounted Services: http://www.bcbsfl.com/DocumentLibrary/DiscountPrograms/

BlueComplementsBrochure_20032.pdf

FSA - example 45 Zyrtec tablets cost $25 at drugstore.com That’s .55 per pill or $202.78 per year after tax -

$ 259.56 before tax dollars = $202.78 in after tax dollars (in the 28% tax bracket)

On this one small item, the FSA saves $56.78 per year!

Some FSA eligible expenses

Some possible FSA eligible expenses

IRS publication 969

Health Insurance deductibles and co-payments

Adult day care Acne treatments Body Scans Sunscreen Hand Sanitizer Medically necessary vitamins (need Rx)

How much do you spent per year in FSA eligible expenses? If you are in the 28% margin tax bracket: $500? – save $140 $1000 ? – save $280 $2000? – save $ 560

Retirement Savings

403b 457 Roth IRA

Tuition Reimbursement

The best investment you can make is in yourself!

Education = higher salaries, better jobs, better quality of life

You are NEVER too old or too busy to take a class

And we can do it for FREE!!!!

REALISTIC BUDGETING

Plan for savings first…? How much cash should you keep in your

emergency fund? Where should you keep your emergency

fund?http://home.ingdirect.com/

INVESTMENT MISTAKES Listening to too many financial experts Investing in things you don’t understand Thinking there is a “free-lunch” Thinking you know more than the

“experts” Taking too much risk Using insurance as an investment

TIAA CREF Investment Results over the last decade (average annual return 12/31/1999 – 12/31/2009*)

Equity Index Fund - 0.56% Growth Fund - 4.66% Bond Fund + 5.84% Fixed Account + 6.62%

Downloaded on 1/8/2010 from https://www3.tiaa-cref.org/perfview/performance

Fixed savings example

$10,000 per year in a 403B (in the 28% tax bracket)

Immediate tax savings of $2800 $135,706 in 10 years

TROPHY KIDS

http://www.thetrophykids.com/

Be a good parent – but not too good!

Are you stressed out about your child’s college education?

Have you sacrificed your own retirement savings planning to pay for your child’s education?

Does your child have a job? Is your child employable?

Available on the FIU library or used on Amazon for <$5

In closing…

What would you like us to cover?

Thanks to Kate Kominars for her assistance with this program.