PERSONAL FINANCE MONEY MANAGEMENT

Savings Money not spent so as to use it at a later date Short term of 0-5 year dreams or emergencies Small denominations typically $1000-$25,000 Available for emergency High degree of liquidity

TYPES OF SAVINGS PASSBOOK ACCOUNTS MONEY-MARKET ACCOUNTS TIME DEPOSITS Savings account in which deposits and withdrawals are recorded by the bank in a depositor’s passbook MONEY-MARKET ACCOUNTS Pass higher rate of return based on rates in the money markets (trading short-term commodities) TIME DEPOSITS Savings with restriction on the term or period of time before withdrawals can be made (ex. CD)

Investment Set aside money for when income decreases Long term – built over 40 years of working Large denominations ($2-5 million) Non-liquid account Designed for retirement

TYPES OF INVESTMENTS BONDS STOCKS MUTUAL FUNDS Loan of money to a government/corporate entity for a defined period of time and a fixed rate of interest STOCKS Security that signifies ownership in a corporation with claims on assets and earnings MUTUAL FUNDS Pool of funds collected from many investors operated by money managers

PORTFOLIO Collection of financial assets PROPERTY SAVINGS INVESTMENTS DEBTS INSURANCE PHILANTHROPY

Other ITEMS found IN A Portfolio Checking account Savings account Money Market Account Certificate of Deposit INSURANCE Health Life Home Auto DEBTS College Car House REIT Real Estate Stocks Bonds SEPP Precious Metals Mutual Funds Pensions Public Retirement Systems

What type of account do you have? What is debit? draws money directly from your checking account when you make the purchase. Keep running balance in you account Must use a PIN No extra purchasing power What is credit? allows you to borrow money in small amounts at local merchants. Charges interest if not paid at the end of the month Extra money available Universally accepted

debts Something, typically money, that is owed or due Personal loans like credit cards and car loans are typically thought of as bad debts Some people think that student loans and mortgages are worth risking debt because they become an investment with future rewards Are there GOOD and BAD debts ?

insurance Guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium (usually paid monthly) Property with guaranteed replacement cost Auto with plenty of liability (may not need collision) Health may have many options to consider Disability that pays at least 65% of wages Long-term Care for in-home or facility nursing services Identity Theft with restoration services Term Life to cover all debts and death expenses Generally up to 10-15 times yearly salary

PHILANTHROPY The desire to promote the welfare of others, expressed especially by the generous donation of money to good causes Research where all your money goes Some charitable organizations are better than others at getting funds to those in need, and must provide their records upon request Once you begin to give prepare to get more requests Wisely learn to say no to the groups you do not have a passion for Give generously For many people this can be 10% of their monthly budget Be unnoticed Your philanthropy is for those in need, not your ego

10-25-10 Plan If you follow these simple principles in the following areas of most budgetary concern your financial health should be OK. Spend no more (including payments, insurance, and maintenance) than these percentages of your income on … 10% Automobiles 25% Housing Spend at least this percent of your income (from the first paycheck to your last) on: 10-15% Retirement 10% Giving (optional for those so inclined)