First at work Saving & budgeting

American Family Financial Statistics If you think your personal finances are in need of an overhaul, you aren’t alone. According to the US Census, the average American household is falling short of their savings goals. In today’s session, we hope to give you some basic tools to help you establish and achieve your personal financial goals. Average savings balance: $3,800 Percent of working Americans who are not saving for retirement: 40% Percent of Americans with no savings at all: 25% Average amount saved for retirement: $35,000 Average household debt: $117,951 Percent of Americans who do not have an emergency fund prepared: 62% Source: Federal Reserve, US Census Bureau, Internal Revenue Service; 7/26/2012

Meet the Taylors Follow our fictional family as they take steps to put themselves in financial balance. Mr. Taylor works as a graphic designer and earns $65,000 per year. Mrs. Taylor works as a teacher and earns $35,000 per year. Their goals are to balance their budget, pay off debt, and grow their savings.

Putting Yourself in Balance Balance “wants” vs. “needs” to determine where you are spending too much ― or not enough. Income figured as household 1. Breaking it down Monthly Net Income: You should spend 50% Needs 30% Wants 20% Savings 2. Where does it really go?

Putting Yourself in Balance Balance “wants” vs. “needs” to determine where you are spending too much ― or not enough. Net Income = Gross Income – Taxes *An average person will pay approximately 30% in taxes $100,000 x .30 = $30,000 out for taxes $70,000/12 months = $5,833 per month 2. Where does it really go?

Putting Yourself in Balance Balance “wants” vs. “needs” to determine where you are spending too much ― or not enough. Income figured as household 1. Breaking it down Monthly Net Income: $5,833 You should spend 50% Needs 30% Wants 20% Savings 2. Where does it really go?

Putting Yourself in Balance Balance “wants” vs. “needs” to determine where you are spending too much ― or not enough. Income figured as household 1. Breaking it down Monthly Net Income: $5,833 You should spend 50% Needs $2,916.50 30% Wants $1,749.90 20% Savings $1,166.60 2. Where does it really go?

Putting Yourself in Balance Needs Things you are contractually obligated to pay or that you depend on for survival. $1100 housing/taxes/insurance $150 auto/life/other Insurance $225 car payment $40 out of pocket medical $2,915 $200 gas, parking, transit $600 child care/child support $0 tuition/school fees $200 utilities/phone $300 groceries $100 loan/credit card payments $0 other

Putting Yourself in Balance Wants Be sure to make room for fun! Here you are aiming for 30% of your income. $100 clothes vacations $200 dining out $150 entertainment $75 recreation/gym $300 internet/cell phone/cable tv $175 misc cash spending household items personal care $250 other $2,915 $1,750

That’s about 300 private islands – with money left over for a latte. In 2011, Americans spent $10.7 billion on their wants That’s about 300 private islands – with money left over for a latte. Pretzels $550 million (Reuters) Pet Halloween Costumes $310 million (National Retail Federation/ American Pet Product Association) Chocolate $16 billion (we eat 2.8 billion pounds of it!) (IBIS) Golf Balls $500 million (Forbes) Girl Scout Cookies $800 million (Girl Scouts of America) What items are you spending your money on without including it in your budget?

Putting Yourself in Balance Savings Be sure to save for your future - - and also use this to pay down consumer debt! $582 retirement saving $168 long term savings $125 college savings $50 short term savings $100 extra mortgage payments extra credit card payments $0 other extra payments $40 child savings $2,915 $1,165 $1,750

The Elements of Saving Keep your hard earned cash! Simple savings tips to help you stretch your dollar.

The Elements of Saving Keep your hard earned cash! shop with a list Simple savings tips to help you stretch your dollar. shop with a list coupon, coupon, coupon pack your lunch buy reliable, not cheap use daily deal sites buy in bulk…sometimes

American Express Spending & Saving Tracker. The Elements of Saving Keep your hard earned cash! Simple savings tips to help you stretch your dollar. A top resolution in the U.S. is to save more money, The following figures are the consumer savings goals per year: 2010: $14,000 2011: $2,600 2012: $7,633 2013: $10,893 Though savings goals are currently on the rise, we are still a far cry from 2010 goals. Why? American Express Spending & Saving Tracker.

The Elements of Saving Save smart! Be strategic in your savings to maximize results. www.kiplinger.com

The Elements of Saving Save smart! set a realistic goal Be strategic in your savings to maximize results. set a realistic goal pay yourself first start now start small use separate accounts www.kiplinger.com

The Elements of Saving Save smart! Retirement Retirement - short term, and long term… both are important. But how much should you put in each? Retirement myth: save at least 10% of your income for retirement. truth: depending when you START saving, that may not be the case: 20-30 10% - 15% 30-40 15% - 25% 40-45 25% - 35% 45+ see an advisor

The Elements of Saving How much…and where? Long term savings Retirement - short term, and long term… both are important. But how much should you put in each? Long term savings Also known as your emergency savings, these funds should cover the ‘what ifs’ in life. Why? -If you were to lose your job, it would take approximately 3-6 months to find a similar job/pay. -If you were to become disabled, it would take about 90 days for disability pay to kick in. How would you manage during this time without an emergency savings account established? Most experts agree that you should have a minimum of 3 – 6 months of living expenses in your emergency savings fund. Why?

The Elements of Saving How much…and where? Long term savings Retirement - short term, and long term… both are important. But how much should you put in each? Long term savings Also known as your emergency savings, these funds should cover the ‘what ifs’ in life. disability medical expense unemployment house or auto repairs insurance deductibles Why? -If you were to lose your job, it would take approximately 3-6 months to find a similar job/pay. -If you were to become disabled, it would take about 90 days for disability pay to kick in. How would you manage during this time without an emergency savings account established? Most experts agree that you should have a minimum of 3 – 6 months of living expenses in your emergency savings fund. Why?

The Elements of Saving How much…and where? Short term savings Retirement - short term, and long term… both are important. But how much should you put in each? Short term savings Good news – you get to spend this money and within the next year!

The Elements of Saving How much…and where? Short term savings Retirement - short term, and long term… both are important. But how much should you put in each? Short term savings Good news – you get to spend this money and within the next year! home remodel new auto purchase large household purchase vacation holiday shopping weddings

Holiday Shopping Statistics Guess what? History tells us that holidays come at the same time every year! In 2011, Americans spent over $52 Billion between November 1st and December 16th on holiday gifts. However, a vast majority of us do not figure holiday shopping into our annual budget. How do you think this gets paid for each year? Source: Comscore, Shoporg, Technet, American Research Group; 9/19/2012

The Elements of Saving Debt Drop Minimum payments Paying off accounts with the highest interest rates first isn’t always the fastest way out of debt. Minimum payments $800 Major Credit Card $20 $1,450 Store Credit Card $80 $7,400 Car Loan $230 $13,400 Student Loan $154 $22,000 Home Equity Line $340

Apply $200 from savings toward debt The Elements of Saving Debt Drop Paying off accounts with the highest interest rates first isn’t always the fastest way out of debt. Apply $200 from savings toward debt $800 Major Credit Card $220 $1,450 Store Credit Card $80 $7,400 Car Loan $230 $13,400 Student Loan $154 $22,000 Home Equity Line $340 Apply the $200 from savings towards your first debt listed

Apply $200 from savings toward debt The Elements of Saving Debt Drop Paying off accounts with the highest interest rates first isn’t always the fastest way out of debt. Apply $200 from savings toward debt $800 Major Credit Card $220 $1,450 Store Credit Card $300 $7,400 Car Loan $230 $13,400 Student Loan $154 $22,000 Home Equity Line $340 Once your first debt listed is paid off in full, you DROP that payment you were making on it to the next debt in line. You go from making a $80 store credit card payment to making a $300 store credit card payment You continue this concept until you are on your last debt listed. By this time you are applying all of your money to you largest and last debt!

Apply $200 from savings toward debt The Elements of Saving Debt Drop Paying off accounts with the highest interest rates first isn’t always the fastest way out of debt. Apply $200 from savings toward debt $800 Major Credit Card $200 $1,450 Store Credit Card $300 $7,400 Car Loan $530 $13,400 Student Loan $154 $22,000 Home Equity Line $340

Apply $200 from savings toward debt The Elements of Saving Debt Drop Paying off accounts with the highest interest rates first isn’t always the fastest way out of debt. Apply $200 from savings toward debt $800 Major Credit Card $200 $1,450 Store Credit Card $300 $7,400 Car Loan $530 $13,400 Student Loan $684 $22,000 Home Equity Line $340

Apply $200 from savings toward debt The Elements of Saving Debt Drop Paying off accounts with the highest interest rates first isn’t always the fastest way out of debt. Apply $200 from savings toward debt $800 Major Credit Card $200 $1,450 Store Credit Card $300 $7,400 Car Loan $530 $13,400 Student Loan $684 $22,000 Home Equity Line $1,024

Apply $200 from savings toward debt The Elements of Saving Debt Drop Paying off accounts with the highest interest rates first isn’t always the fastest way out of debt. Apply $200 from savings toward debt $800 Major Credit Card $200 $1,450 Store Credit Card $300 $7,400 Car Loan $530 $13,400 Student Loan $684 $22,000 Home Equity Line $1,024

The Elements of Saving Debt Drop Paying off accounts with the highest interest rates first isn’t always the fastest way out of debt.

The Elements of Saving Debt Drop Paying off accounts with the highest interest rates first isn’t always the fastest way out of debt. No Drop Total Paid: $54,258.13 Length of Pay: 8 Yr 7 Mo Emphasize on the difference between paying your debt off with the debt drop and without.

The Elements of Saving Debt Drop Paying off accounts with the highest interest rates first isn’t always the fastest way out of debt. Total Paid: $50,781.48 Drop Length of Pay: 4 Yr 1 Mo Emphasize on the difference between paying your debt off with the debt drop and without.

Total Saved $3,476.65 in interest 4 years 6 months of payments The Elements of Saving Debt rolldown Paying off accounts with the highest interest rates first isn’t always the fastest way out of debt. Total Saved $3,476.65 in interest 4 years 6 months of payments That’s $55,296 in saved payments!

The Elements of Saving Ways to save Savings Accounts Money Markets There are just as many ways to save as there are reasons to save. Find what is best for your buck. Savings Accounts Money Markets Certificates of Deposit Investments Online Savings Accounts

The Elements of Saving Interest compounding is the “greatest mathematical discovery of all time.” - Albert Einstein

The Elements of Saving Compounding interest Banks want your money and are willing to pay you for it. Make sure you are interest savvy to get more bang for your buck. Annual Percentage Yield (APY): the annual rate of return on an investment after compounding compounded interest essentially pays you interest on your interest always compare APY over Rate when shopping for savings vehicles the more frequent the compounding, the more money you make the longer your investment sits, the more you earn

5 Years | Contributions: $3,000 | Total Balance: $3,315 The Elements of Saving Compounding interest With the power of compounding interest, it's easy to earn more in interest than you take from your own pocket. All you need is a little bit of patience. With a $50 a month contribution and an assumed 5% savings rate, let’s watch how your money grows. These slides are built to show the impact of compounding interest over time. 5 Years | Contributions: $3,000 | Total Balance: $3,315

15 Years | Contributions: $9,000 | Total Balance: $12,947.14 The Elements of Saving Compounding interest With the power of compounding interest, it's easy to earn more in interest than you take from your own pocket. All you need is a little bit of patience. With a $50 a month contribution and an assumed 5% savings rate, let’s watch how your money grows. These slides are built to show the impact of compounding interest over time. 15 Years | Contributions: $9,000 | Total Balance: $12,947.14

The Elements of Saving Compounding interest With the power of compounding interest, it's easy to earn more in interest than you take from your own pocket. All you need is a little bit of patience. With a $50 a month contribution and an assumed 5% savings rate, let’s watch how your money grows. These slides are built to show the impact of compounding interest over time. With compounding interest, you’ve doubled your money in 30 years! 30 Years | Contributions: $18,000 | Total Balance: $39,863.31 That’s almost $22,000 in free money!

Next Steps write it all down cut back on ‘wants’ set savings goals Taking action Making a plan is the most important part of balancing your personal budget. write it all down cut back on ‘wants’ set savings goals find quick savings wins pay down debt make interest work for you

Questions? Thank you for your time! Consider First National Bank Personal Checking & Savings Accounts Personal Loans Home Mortgage Loans Business Banking needs Wealth Management College Savings RetailFirstAtWork@fnni.com

Resources http://www.practicalmoneyskills.com/personalfinance/savingspending/saving/howitworks.php https://www.onebudget.com/savings-and-investments/type-of-saving.html http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=1016 http://www.kiplinger.com/columns/editor/archives/ten-secrets-to-saving.html#ixzz1V75Ey6zC