1 Your Financial Check-up

2 Julie Judy Extension Educator University of Maryland Cooperative Extension Montgomery County

3 $$$ Smart Money Tip #1 CHART YOUR COURSE

4 Start with financial dreams  What are your financial dreams?  Do you dream about being wealthy?

5 Wealth-building strategies Change these dreams to specific goals: Save $40 a month through bank or to pay off debt I will play Bingo every other week and I will use the extra $40 to save or to pay off my debt by October Drive a car that is paid for By packing (not buying) lunch 2 days per week, I will pay an extra $50/month on my car payment so my car will be paid off by Dec

6 Set S.M.A.R.T. Financial Goals! SS pecific MM easurable AA greeable RR ealistic TT ime

7 $$$ Smart Money Tip # 2 ORGANIZE FINANCIAL RECORDS

8 How long to keep records

9 In the case of Identity Theft, an ounce of prevention is worth a pound of cure. Clearing Your Good Name from Identity Theft may take Two to Three Years.

10 $$$ Smart Money Tip #3 KNOW HOW YOU ARE DOING

11 Your Net Worth Assets - Liabilities = Net Worth

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14 $$$ Smart Money Tip #4 BE A MONEY DETECTIVE

15 Set Spending Levels Keep a record for 2 to 3 months

16 Make Your Spending Plan Useful A spending plan or budget is… $ Your spending guide $ Personal and unique $ Realistic $ Flexible

17 How does money slip through your fingers? Try to identify the leaks.

18 Use 70% of take-home pay for living expenses Use 20% to repay debt. Save 10% for you and your future. Important Reminder

19 $$$ Smart Money Tip #5 BE CREDIT SMART

20 What do Credit Bureaus do? Collect data:  Personal information  Employment history  Credit Use and Repayment history Provide information to:  Creditors  Employers  Insurers  Landlords

21 3 Major Credit Bureaus:  Equifax  Experian  Transunion Credit Bureaus

22 Start Here

23 Correcting a Credit Report Contact company that reported the error Ask company to correct error, in writing, with each credit bureau Photocopy pertinent documents Write credit bureau, explain error and enclose documentation Send certified mail with return receipt

24 What Is A Credit Score?

25  – Low Risk  – Medium Low Risk  – Medium Risk  – Medium High Risk  620 and Below – High Risk or Sub-Prime Credit Score Ranges

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27 $$$ Smart Money Tip #6 PAY OFF DEBT

28 Signs of Credit Trouble Exceeding 20 percent rule Second salary used to pay debts Dishonest about credit use Credit not thought of as debt Use credit impulsively Use cash advances to pay bills

29 Signs of Credit Trouble Bills paid late Paying only the minimum due each month Defaulting on payments Anticipated income increase committed to credit Don’t know total amount of debt

30 Minimum Payment Trap Credit card:Pay Minimum per Month: Balance of $3000 4% of balance (starts at $120/mo.) 19.0% interest 134 months $1, in interest Total Paid: $4, Pay More each month: 4% of balance + $15/mo. 53 months $1, in interest Total Paid: $4, Power Payment: $120/month (fixed payment) 33 months $ in interest Total Paid: $3,849.27

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32 ( Check the Yellow Pages for Credit and Debt Counseling Services in your area.

33 $$$ Smart Money Tip #7 DEVELOP A SAVINGS HABIT

34 Every Little Bit Counts

35 Pay Yourself First at 5% interest Save this each week In 10 years, you will have $ 7.00 $ 4,720 $ $ 9,440 $ $ 14,160 $28.00 $ 18,880 $35.00 $ 23,600

36 Painless Ways To Save $ Continue to make loan payments into savings after debt has been paid $ Try a crash savings diet by purchasing only bare necessities $ Kick a habit and save the money $ Adjust your tax withholdings and save the difference $ Save windfall money from lottery, inheritance and gifts $ Save money from pay raise, bonus or working overtime $ Start a part-time job and save the money

37 Join Maryland SAVES to build wealth not debt

38 $$$ Smart Money Tip #8 BUY ADEQUATE INSURANCE

39  Buy insurance - don’t let someone SELL you insurance  Buy appropriate insurance  Buy adequate coverage  Consider disability income insurance  Consider long term care

40  Follow “Rule of 3”  Update beneficiary designations  Keep essential coverage in force until a new policy starts  Keep up with changes in Medicare as you approach retirement

41 Emergency Fund GoalsBudget Financial Plan Financial Statements Financial Records Credit Record LifeHealth Insurance Disability Property Financial Foundation Liability

42 $$$ Smart Money Tip #9 INVEST WISELY

43 Financial Foundation Goals Emergency Fund Budget Financial Records Credit Record Life Disability Health Property Liability Financial PlanInsurance Insured Savings, Savings Bonds, Money Market Funds, Certificates of Deposits Life Insurance Investments Government Securities High Quality Corporate Stocks, Bonds and Mutual Funds Real Estate Aggressive Growth, Junk Bonds, Stocks and Mutual Funds Futures Contracts Collectibles Pyramid of Investment Risk Increased Risk

44 DID YOU KNOW… $5 a week until age 65 -Start at 20 = $114,282 - Start at 30 = $49,701 - Start at 40 = $20,606 Today may be a good time to start!

45 $$$ Smart Money Tip #10 TAKE ADVANTAGE OF TAX DEFERMENT

46 TAX DEFERRAL MAGIC $2,000 Annual 5% 5$11,603.83$11,133.26$ , , , , , , , , , , , , , , , , , , , , , YearsTax DeferredTaxed InvestedInvestmentInvestmentSavings

47 $$$ Smart Money Tip #11 PLAN FOR RETIREMENT

48 Do Your Own Ball Park E$timate For Retirementhttp://

49 $$$ Smart Money Tip #12 CREATE A PLAN FOR YOUR ESTATE

50 Your Estate Plan A will or trust A guardianship/trust for minor children or disabled loved ones A power of attorney (general, financial, health care) Health Care Advanced Directives Personal Property Inventory with named recipients

51 $$$ Smart Money Tip #13 Make a TO DO list to help Manage Your Personal Finances!

52 Julie Judy Extension Educator University of Maryland Cooperative Extension – Montgomery County Office Your Financial Check-Up