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Dr. Helen K. Simon, CFP State Farm Financial Literacy Lab April 7, 2011.

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Presentation on theme: "Dr. Helen K. Simon, CFP State Farm Financial Literacy Lab April 7, 2011."— Presentation transcript:

1 Dr. Helen K. Simon, CFP State Farm Financial Literacy Lab April 7, 2011

2 Schedule of Events  April 21 st :Credit & Banking  April 28 th : Investing Basics  May 5 th : Personal Financial Planning

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4 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

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

6 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:

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

8 Happy to help us…..

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10 CREDIT CARDS Turn from victims into victors!  High APRs-Cash Back!  Excessive spending -Budgeting tool

11 Resources  Find the right credit card for you:  Check your credit report often! https://www.freecreditreports360.com/freecreditreport/lp/4 37-dc4c/. https://www.freecreditreports360.com/freecreditreport/lp/4 37-dc4c/  Use Quicken:

12 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. “online auctions  Downloaded from

13 SAVY SPENDING   Your credit card com com  Online bill paying   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 Factor om/what-is-the-latte- factorreg.htm. om/what-is-the-latte- factorreg.htm  The Millionaire Next Door  Don’t always think that bigger is better! The warehouse shopping paradox Sometimes Publix BOGO is way better!

14 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 insurance Do you have enough? Or too much?  Discounted Services : ueComplementsBrochure_20032.pdf ueComplementsBrochure_20032.pdf

15 FSA - example  45 Zyrtec tablets cost $25 at drugstore.com  That’s.55 per pill or $ per year after tax - $ before tax dollars = $ in after tax dollars (in the 28% tax bracket)  On this one small item, the FSA saves $56.78 per year!

16 Some FSA eligible expenses

17 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)

18 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

19 Retirement Savings  403b  457  Roth IRA

20 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!!!!

21 REALISTIC BUDGETING  Plan for savings first…?  How much cash should you keep in your emergency fund?  Where should you keep your emergency fund?

22 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

23 TIAA CREF Investment Results over the last decade (average annual return 12/31/1999 – 12/31/2009*)  Equity Index Fund %  Growth Fund %  Bond Fund %  Fixed Account % Downloaded on 1/8/2010 from https://www3.tiaa-cref.org/perfview/performance

24 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

25 TROPHY KIDS 

26 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?

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

29 In closing…  What would you like us to cover?  Thanks to Kate Kominars for her assistance with this program.


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