1 Jerry L. Basford sa.utah.edu/personalfinance

2 Top Priorities Get out of debt. Get out of debt. –National credit debts is at $970 billion, 50% higher than in Strike the word “deserve” from your conversations. Strike the word “deserve” from your conversations. –What you deserve is irrelevant; what you can truly afford is what counts. Decide once and for all if you want to indulge or protect your family. Decide once and for all if you want to indulge or protect your family.

3 5 Important Components of Goals (SMART): Specific Specific Measurable Measurable Attainable Attainable Realistic Realistic Timely Timely

4 How Financial Planning Affects Your Cash Flow 1. Budgeting and Tax Planning Your Cash 7. Products and Service 5. Investing 4. Income and Asset Protection 2. Managing Liquidity (Cash and Credit Management) 3. Managing expenditures for major purchases $ Credit $ Deposit $ Loans $ Spending $ Investments $ Invest for Retirement $ Insurance $ Income 6.Retirement and Estate Planning

5 Good Debt vs. Bad Debt Debt incurred for consumption is bad debt. Debt incurred for consumption is bad debt. Bad Debt = Debt Danger Ratio Annual Income Debt Danger Ratio beyond 25% can spell trouble.

6 Income Statement

7 Balance Sheet

8 Investment Terminology Bull Market – A random market movement causing an investor to mistake him/herself for a financial genius. Bull Market – A random market movement causing an investor to mistake him/herself for a financial genius. Bear Market - a 6 to 12 month period when the kids get no allowance and adults get no date nights. Bear Market - a 6 to 12 month period when the kids get no allowance and adults get no date nights. P/E Ratio – The percentage of investors wetting their pants as the market keeps crashing. P/E Ratio – The percentage of investors wetting their pants as the market keeps crashing. Broker – What my broker has made me. Broker – What my broker has made me. Standard & Poor – Your life story in a nutshell. Standard & Poor – Your life story in a nutshell. Financial Planner – A person that actually remembers their wallet when they run to the for toilet paper and milk. Financial Planner – A person that actually remembers their wallet when they run to the for toilet paper and milk. Market Correction – The day after you buy stocks. Market Correction – The day after you buy stocks. YAHOO – What you yell after selling it to some sucker for $240 a share. YAHOO – What you yell after selling it to some sucker for $240 a share. Windows 7 – What you jump out of when you’re the sucker that bought Yahoo for $240 per share. Windows 7 – What you jump out of when you’re the sucker that bought Yahoo for $240 per share.

9 If you’d invested $1,000 in 1950 Perfect timing and missed 20 worst months through June 2008 Perfect timing and missed 20 worst months through June 2008 –$800,000 If you’d missed the 20 best months If you’d missed the 20 best months –$11,500 Let it ride Let it ride –$73,000

Rule 10% Savings 10% Savings 20% Debt not including mortgage 20% Debt not including mortgage 30% Debt including mortgage 30% Debt including mortgage

11 10 Top Finance Tips Pay yourself first and spend less than you make. Pay yourself first and spend less than you make. Stick to a budget. Stick to a budget. Pay off credit card debt. Pay off credit card debt. Contribute to a retirement plan. Contribute to a retirement plan. Have a savings plan. Have a savings plan. Invest. Invest. Maximize employee benefits. Maximize employee benefits. Review your insurance annually. Review your insurance annually. Update your will. Update your will. Keep good records. Keep good records.