Saving to Achieve Your Goals Thanks for the opportunity to be here. I encourage an interactive session with questions as we go. Sharing ideas and experiences is welcome so we all can learn from each other. We’re going to focus on saving to achieve goals through budgeting. What we hope to achieve – is to provide some solid rules and tools to create and maintain a strong personal and/or family budget. QUESTION - How many of you have started down the path only to hit a roadblock? ANSWER – Everyone. QUESTION – What do you do to overcome the roadblock? ANSWER – Attendees will say, “Cry”, “Reevaluate and move forward”, and “Plow right on through” among others. READ - “Failure List” QUESTION - What do the people referred to on the “Failure List” have in common? ANSWER - PERSEVERANCE is the common denominator. HANDOUT – Hand out the “Encyclopedia of Money Savings Tips”. You can READ a few of the savings tips each time you introduce or leave a topic.

Saving – Points to Ponder Saving rates in the U.S. “Pay yourself first” Make savings part of the budget Save to achieve all goals – short, medium, long-term Savings rates have been at a very low level for many years. QUESTION – Why aren’t people saving money? ANSWER – Take answers from the audience and write them on a flip chart or white board. If you have never heard “Pay yourself first,” let me be the first to introduce it to you. QUESTION – What does “Pay yourself first mean?” ANSWER – Take answers from the audience. When you pay yourself first, you make “savings” an expense in your budget. This means you must live at or below your means. Savings can be used to achieve all of your goals – short, medium, or long-term. READ – a few more of the money savings tips from the Encyclopedia of Money Savings Tips.

Set Goals to Guide You Characteristics of goals How much? How long? Measurable? Reasonable and realistic? Write them down and read them often QUESTION - Why set goals? ANSWER - To take action toward a dream (home purchase, vacation, new car) To alleviate a concern (repay debt, retirement planning) EXERCISE – Ask the group if “Having financial security in retirement” is a dream or a goal. The answer will generally be split where half will say it’s a dream and half will say it’s a goal. This is a good introduction into the characteristics of goals. Read the following: The major difference between financial success and failure is understanding the difference between a dream and a goal. If you tell me you want “adequate financial security at retirement”, you have a dream. When you tell me you need to have “x dollars of income at age y and the income must last for a life expectancy of x years”, that’s a goal” Characteristics of goals Specific (How much? How long?) Measurable (How will I know when I get there?) Reasonable and realistic (It fits within my budget) EXERCISE – Review the “Setting Goals” worksheet in Figure 1 of the booklet. Ask the group to write a short, medium, or long term goal using the characteristics of goals. Then ask someone to share his/her goal. Write it on the white board/flipchart and ask the group to critique it. Does it have all of the characteristics of a goal? Remember to involve all family members in goal setting because of competing interests. Prioritize time, cost, and sacrifice when discussing and setting goals with the family. READ – a few more of the money savings tips from the Encyclopedia of Money Savings Tips.

Budgeting Basics and Assumptions All family income comes into family budget Plan once each year Work it weekly Modify as needed Keep your budget as simple as possible. If you do, you will find it easier to manage. Sometimes a budget can be too complex and hard to manage. Which leads to frustration and giving up. If you include all family members in the budgeting process, plan well, make budgeting part of your weekly routine and adjust as needed, you will be successful. READ – a few more of the money savings tips from the Encyclopedia of Money Savings Tips.

Saving Begins with Budgeting Budgeting outline – Income, expenses, debts Budgeting worksheet Annual budget Income log Monthly expense log Weekly income and what to pay this week Periodic expense charts A good system can help you save to achieve your goals through budgeting. INTRODUCE – the five budgeting worksheets that will be used in the budgeting process in Figures 2 through 6. Once your goals are set, the budget will be the plan to help you achieve those goals. READ - Words of Wisdom… “It’s not how much we earn in this life, it’s how much we spend that keeps us from achieving our goals.” Sheryl Crowe, in her 2002 song called Soak Up the Sun, had some lyrics that can be discussed in terms of how we live our lives in relation to money. She sang, “It’s not having what you want, it’s wanting what you got” READ – a few more of the money savings tips from the Encyclopedia of Money Savings Tips.

Annual Budget Write in November or December Review amount spent on items in previous year Set goals Include family members Spend to achieve your goals Create balanced budget QUESTION - Who has a budget at home – either on paper or on a computer? ANSWER – Generally, about 20-30% of the group will raise their hand saying they have a budget. Most Americans do not “work” a budget on a routine basis – that is, weekly, monthly, and annually. Most Americans keep their budget in their head and pay their bills via checkbook or online when the bills come due. The budget is the cornerstone of anyone’s personal financial plan. Whether you are saving lots of money for retirement or you’re behind on the financial obligations, the budget is the key to achieving your goals. Encourage everyone to have a budget and to include the family in developing and maintaining it. QUESTION - How many expense items do you have in your budget? ANSWER – Most in the group will say anywhere between 5-15 expenses. People will generally remember the most prominent expenses in their budget – the mortgage, car payment, and the like. However, to do a thorough budget, many more expense items need to be identified, listed, and tracked. EXERCISE – Go to the “Annual Budget” in Figure 2 of the Booklet and put a check mark next to the expenses that you have at home. Then compare the number you answered above with the total of your checkmarks. How do the two numbers compare? DISCUSSION – When people sit down and put a budget together, they will find that they have 35-40 different expense items. Income sources are not as complex. Usually there are 2 to 3 to 4 income sources in the household depending on how many wage earners live there. But, the expenses can be a troublesome area of the budget. That’s why it is so important to get a handle on the budget. QUESTION - How many of you have tracked your expenses in detail for three months? Was it fun? What did you learn? ANSWER – A few attendees will raise their hand and say that they have tracked every penny for a period of time. Most will say that it was not fun, but they learned where the money “really” goes. It is not until you know where your money really goes that you can make adjustments to your behavior and thus reduce or change expenses in order to free up money to save to achieve your goals. Within most expense items, there are pockets of savings where you can find money to save by making small changes in your habits. It is that money that helps you achieve your goals. Encourage everyone to track expenses and get a handle on where their money goes. Use the Annual Budget in Figure 2 to plan what your monthly income and expenses will be for the upcoming year. Then use the worksheets to maintain your budget weekly and monthly. READ – a few more of the money savings tips from the Encyclopedia of Money Savings Tips.

Monthly Worksheets Income Log Monthly Expense Log REVIEW – the examples in the booklet on pages 7 and 8 on how to use these worksheets. READ – a few more of the money savings tips from the Encyclopedia of Money Savings Tips.

What to Pay this Week Plan out a couple of months Stick to it – week in and week out Cross off as you pay Some expenses will be listed every week Check off monthly expenses log as you pay REVIEW – the example in the booklet on pages 9 and 10 on how to use this worksheets. READ – a few more of the money savings tips from the Encyclopedia of Money Savings Tips.

Managing Periodic Expenses Budget killers Examples – entertainment, car repair, house repair, gifts, vacation, clothes A way to save to make purchases Make them a monthly expense REVIEW - Discuss periodic expenses and how to mange them - pages 11-17 in the booklet. Periodic expenses are those expenses that Americans usually put on credit cards because they are not budgeted for ahead of time. This results in escalating debt. READ – a few more of the money savings tips from the Encyclopedia of Money Savings Tips.

Managing Periodic Expenses Use credit cards to pay for expenses Tracking – keep receipts and ID expense category

Create Your Budget HANDOUT – some blank forms of each of the budget worksheets. EXERCISE – give the attendees some time to put their budget together using the method presented. READ – a few more of the money savings tips from the Encyclopedia of Money Savings Tips.

Going Forward Make the commitment – Go for it! Make it one of your routines Expect setbacks Be flexible Whether you use the budgeting method presented here or some other method, find a method that works best for you and DO IT!!

Saving to Achieve Your Goals