Presented by Jeanne Nguyen

 Setting Priorities  Making a Budget ◦ How to Start a Budget ◦ How to monitor  Qualified Funds (401(k), Roth, IRA, and SEP)  Good Debt vs. Bad Debt  Questions?

 Narrow your objectives ◦ Decide what keeps you up at night ◦ What are you saving up for? ◦ Have long term and short term financial goals  Focus first on the goals that matter  Start Now! ◦ Take advantage of compounding interest on your money

 Importance of creating a budget ◦ Identify how you are currently spending your money (monthly) ◦ Evaluate your current spending ◦ Set goals for yourself that take into long-term financial objectives  Use a Personal finance Program (Quicken or MSFT Money) or Excel Spreadsheet

 Monitoring ◦ A budget is useless if you aren’t tracking your spending ◦ Compare your budget to actual and adjust accordingly ◦ Does not mean you aren’t going to meet your financial goals, just means you need to pay more attention

IDEAL Housing & Debt (Credit Card, Auto Loans, Personal Loans, Child Support) 30% Taxes (FIT, Property)25% Insurance (Life, Auto, Health, Homeowner, Disability, and Other) 4% Savings and Investments (401(k), IRA, Roth, Stocks & Bonds, College Savings) 15% Living Expenses (Food, Clothing, Electricity & Fuel, Water, Telephone, Cable & Internet, Gas, Parking, Personal Care, Day Care, Doctors, Dentists, Rx Drugs, Entertainment and Hobbies) 26% Expenses % of total Income100%

 Eliminate trivial but needless costs ◦ Expensive premium latte or afternoon snack ◦ Shop during sales ◦ Take on chores that you usually pay someone else  Reduce larger expenses ◦ Trade in the luxury car or SUV for something a lot cheaper to buy, fuel and maintain  Refinance your mortgage  Cut your taxes

 Represents a way to reduce your taxable income  Federal limit is $16,500 or $22,000 if you’re 50 or older  Matching contributions are “free money”  Taking money out of a 401(k) before retirement is expensive  You’re limited to the investments your employer chooses for your 401(k) plan

 The max contribution for 2011 Roth/IRA is $5,000.  SEP annual contribution is the lesser of either 25% of compensation or $49,000.

 On average the American household has approximately $10,000 in credit-card debt  Borrowing for a home or college usually makes good sense  Don’t use a credit card to pay for things you consume quickly such as meals and vacations, if you can’t afford to pay off your monthly bill in full in a month or two. Put aside cash.

 Pay off your highest-rate debts first  Don’t fall into the minimum trap  Expect the unexpected ◦ Build a cash reserve for emergency funds, it should be worth 3 to 6 months of living expenses  Don’t be so quick to pay down your mortgage

 Home ◦ Mortgages tend to have lower interest rates than other debt ◦ You can deduct the interest you pay on the first $1 million of a mortgage loan  College ◦ Saving for kids education (529 plans)  Financing a Car