Finance 101 & creative ways to save and budget your money!!

What we will talk about:  Understanding the basics  Assets vs liabilities  Understanding the economy  Understanding capitalism  Determining my income to debt ratio and establishing a budget

Understanding the basics So where do I start?  Financial education  The ECONOMY  Establish a transaction and you establish an asset to the lender and a liability to the borrower  Principle vs Interest payments  When we buy we stimulate the economy  CREDIT is the single biggest factor  The more you borrow now, the more you will have to pay back at some point in the future—you are borrowing against future income (what goes up, must come down)

Viewgraph 5 Lifestyle Choices Spending less than you make begins with how you live...

 Envelope shuffle Using envelopes can help you visualize and manage those everyday variable expenses with more control. You can use actual paper envelopes or virtual ones, with photos or labels to mark each one with a variable expense such as entertainment or eating out. Put a set dollar amount into each envelope to cover that expense for a set period of time. The rules of this game dictate that once that money is gone, it’s gone until the next pay cycle. You can move money in and out of other variable expense envelopes, but you can't dip into the savings bucket or use the credit card.

Understanding the basics So where do I start?  Budgeting 101  How can I set an OBTAINABLE goal?  List all income vs. expenses (income to debt ratio)  Estimate of monthly and yearly expenses  Lets get a volunteer (Christmas expenses)

Personal Monthly Budget © 2008 Vertex42 LLC INCOME BudgetActualDifference[42]MONTHLY BUDGET SUMMARY BudgetActualDifference Wages & Tips2, Total Income2, Interest Income - Total Expenses1, ,527.00(146.00) Dividends - NET (146.00) Gifts Received - Refunds/Reimbursements - Transfer From Savings -DAILY LIVING BudgetActualDifference Other -Groceries - Other -Personal Supplies - Total INCOME 2, Clothing - Cleaning - HOME EXPENSES BudgetActualDifferenceEducation/Lessons - Mortgage/Rent1, Dining/Eating Out - Home/Rental Insurance Salon/Barber - Electricity (17.00)Pet Food - Gas/Oil (9.00)Other - Water/Sewer/Trash7.00 -Total DAILY LIVING Phone ENTERTAINMENT BudgetActualDifference Cable/Satellite Videos/DVDs - Internet Music - Furnishings/Appliances (150.00)Games - Lawn/Garden0.00 -Rentals - Maintenance/Supplies Movies/Theater - Improvements0.00 -Concerts/Plays - Other0.00 -Books - Total HOME EXPENSES 1, , (146.00)Hobbies - TRANSPORTATION BudgetActualDifferenceFilm/Photos - Vehicle Payments -Sports - Auto Insurance -Outdoor Recreation - Fuel -Toys/Gadgets - Bus/Taxi/Train Fare -Vacation/Travel - Repairs -Other - Registration/License -Total ENTERTAINMENT Other -SAVINGS BudgetActualDifference Total TRANSPORTATION - - -Emergency Fund - HEALTH BudgetActualDifferenceTransfer to Savings - Health Insurance -Retirement (401k, IRA) - Doctor/Dentist -Investments - Medicine/Drugs -Education - Health Club Dues -Other - Life Insurance -Total SAVINGS Veterinarian/Pet Care -OBLIGATIONS BudgetActualDifference Other -Student Loan - Total HEALTH - - -Other Loan - CHARITY/GIFTS BudgetActualDifferenceCredit Cards - Gifts Given -Alimony/Child Support - Charitable Donations -Federal Taxes - Religious Donations -State/Local Taxes - Other - - Total CHARITY/GIFTS - - -Total OBLIGATIONS SUBSCRIPTIONS BudgetActualDifference[42]MISCELLANEOUS BudgetActualDifference Newspaper -Bank Fees - Magazines -Postage - Dues/Memberships -Other Total SUBSCRIPTIONS - - -Total MISCELLANEOUS - - -

 Make a commitment to track your spending  Budget worksheet  Mint  Walmart money card  Define spending and priorities & make savings contributions automatically  StickK can help us…..  Pay with cash out of the envelop (easier to not overspend)  Strategically pay down expensive debt build a safety net  Live within your means Simple steps to creating a budget

Needs vs. Wants Buy only what you need. Need Want

 Budget worksheet  Mint  Smarty Pig  StickK  Free Credit reports-Invest in them bi-annually at a minimum  Suze Orman – Young Fabulous & Broke  Rich Dad Poor Dad  Dave Ramsey – Financial Makeover DVD  The 7 Habits of highly effective peopleThe 7 Habits of highly effective people Financial Resources

In review…….  Understanding the basics  Assets vs liabilities  Understanding the economy  Understanding capitalism  Determining my income to debt ratio  Establishing a budget  Using available resources  Making a commitment and believing I can do it by focusing on opportunities and not obstacles  ??Questions??