1 Your Financial Check-up

2 YOUR NAME HERE Extension Educator University of Maryland Cooperative Extension YOUR County

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

4 $$$ Smart Money Tip #1 CHART YOUR COURSE

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

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

7 Wealth-building strategies Change these dreams to specific goals: Save $40 a month (in the bank) or use it to pay off debt I will play Bingo every other week and I’ll put the extra $40 in savings (or toward debt to pay it off by October 2008). Drive a car that is paid for By packing (not buying) lunch 2 days/wk, I will pay an extra $50/month on my car payment so my car will be paid off by Dec

8 $$$ Smart Money Tip # 2 ORGANIZE FINANCIAL RECORDS

9 How long to keep records

10 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.

11 $$$ Smart Money Tip #3 KNOW HOW YOU ARE DOING

12 Your Net Worth Assets - Liabilities = Net Worth

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15 $$$ Smart Money Tip #4 BE A MONEY DETECTIVE

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

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

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

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

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

21 $$$ Smart Money Tip #5 BE CREDIT SMART

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

23 3 Major Credit Bureaus:  Equifax  Experian  Transunion Credit Bureaus

24 Start Here

25 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

26 What Is A Credit Score?

27  – 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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29 $$$ Smart Money Tip #6 PAY OFF DEBT

30 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

31 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

32 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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34 ( Check the Yellow Pages for Credit and Debt Counseling Services in your area.

35 $$$ Smart Money Tip #7 DEVELOP A SAVINGS HABIT

36 Every Little Bit Counts

37 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

38 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

39 Join Maryland SAVES to build wealth, not debt

40 $$$ Smart Money Tip #8 BUY ADEQUATE INSURANCE

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

42  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

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

44 $$$ Smart Money Tip #9 INVEST WISELY

45 Saving vs. Investing

46 Saving Preserve principal while getting a small return. Investing Increase principal in hopes of getting a greater rate of return.

47 Prerequisites to Investments  Prepare financial statements  Set financial goals  Establish a spending plan  Organize financial records  Establish a positive credit history  Maintain adequate insurance coverage

48 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

49 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!

50 $$$ Smart Money Tip #10 TAKE ADVANTAGE OF TAX DEFERMENT

51 TAX DEFERRAL MAGIC 403b 457 IRA 401k

52 $$$ Smart Money Tip #11 PLAN FOR RETIREMENT

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

54 $$$ Smart Money Tip #12 CREATE A PLAN FOR YOUR ESTATE

55 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

56 $$$ Smart Money Tip #13 Make a TO DO list to help Manage Your Personal Finances!

57 YOUR NAME Extension Educator University of Maryland Cooperative Extension YOUR County Office YOUR AND PHONE Your Financial Check-Up