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Money Management

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Managing Your Money

•Determine wants and needs.•Set your goals.•Understand what a budget is.•Create your own budget.•Pay yourself first.

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Managing Your Money is Knowing

•Who you are – habits.•What’s most important.•Where you want to go – goals.•How you want to get there – plan.

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Net Worth

• Assets minus Liabilities.• Assets can be your bank accounts, stocks and

bonds.• Personal Assets can be retirement accounts,

your car, your house and any collectibles.• Liabilities are your remaining mortgage, car

loans, bank loans, student loans, credit card balances, and any other personal debts.

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First Things First: Needs vs. Wants

•NEEDS= must have– Impossible to do without.–Food, rent, utilities.

•WANTS = can live without or can postpone–Possible to do without, or to cut back spending.–Entertainment, travel, clothing, fast food

Fill your NEEDS BEFORE your WANTS5

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What is a budget?

• A plan for spending and saving.• A tool for managing money for

today and the future.• Can be a detailed plan for

everything financial in your life.• A plan for major expenses

and purchases.• A way to track your spending, expenses

and savings.6

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What does budgeting mean?

• It does not mean...• Creating a strict, inflexible plan, or following rules.• Denying yourself fun things.

•But, it does mean...• Making conscious, smart decisions.• Establishing a plan that works for you.

•That way, you have these advantages:• Help to manage spending and expenses.• Help reduce or eliminate debt.• A way to increase your future assets.

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What can you do with a budget?

•Use it as a plan for how you’re going to spend and save money.

•Allocate, or “decide on,” a certain amount of money for each category of expense.

•Track your spending.•Find opportunities to eliminate or choose a

different brand.• Include irregular expenses (such as

insurance).•Keep it flexible.

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How do you create a budget?•Base it on your history of spending.•Use past receipts, credit card bills, and your

check book register.•Start tracking your spending now for two

months.•Write down everything you spend, including:

– Regular expenses you have each day, each week, every month, etc.

– Irregular expenses, such as property insurance, school registration or tuition payments, prescriptions, and insurance premiums.

– Remember to include all incidental expenses like newspapers, magazines, gum, coffee, soft drinks, etc.

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Figure Out Your Income

•Know gross vs. net.•Recognize monthly

irregularities.•Tap your talents.•Trade service for donations.

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Figure Out Expenses

•List expenses.•Fixed or flexible?•Make savings an expense .•Review continually and

make changes when needed.

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Pay Yourself First

•Setting aside money now is the best way to reach goals for your future.

•Put a set amount into savings.•Do regularly.•View this as an expense.

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Build an Emergency Fund•Save money to pay for emergency

expenses.•You will need to pay your expenses if you

are temporarily unemployed, or become ill.

•Building an emergency fund It should eventually cover 3 months worth of expenses.

•You don’t have to create it all at once, but it should be a savings priority.

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Cut Expenses Increase Income

•Focus on needs•Cut back on

wants•Wait - used•Shop around•Look for

alternatives•Change habits

•Work overtime•Get part time job•Barter or swap•Develop and use

skills

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Simple Ways To Save

•Pay attention to coins & change.•Use coupons and sales.•Buy used .• Invest time rather than money.•Tap employee plans.

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In closing • Questions ?• Other classes on

Banking and Credit and ID Theft are offered too.

• Thank you for your time and attention.