Creating A Spending Plan Presented by:Sponsored by : Wendy Perkins, Credit Union of Ohio Financial Counselor

Tools for a Successful Plan  A good spending plan is made up of several parts: A strong organizational system Clearly defined priorities and goals Putting the information on paper An easy bill-payment system Monitoring and tracking your progress

Getting Started  Why is planning so important?  It allows you to make the most of every penny you earn  Helps you to achieve your financial goals  Why do budgets fail?  They are too complicated  They have unrealistic goals and objectives  They are inconsistent

Getting Organized  De-clutter. Take the time to get rid of unnecessary financial records.  Gather all needed information including: pay stubs, creditors statements, bank statements etc.  Create a centralized place to organize and manage your finances.

Set Priorities and Goals  Short term goals – Goals that can be attained within 12 months.  Long term goals - Goals that can be attained in 3-5 years.  Goal Setting Tips Specific Reasonable Measurable

Putting the Budget on Paper  Convert all pay to a monthly figure  Weekly pay x 4.33 = Monthly Pay  Bi-weekly pay x = Monthly Pay  Should be based on consistent Net Pay - not gross  Understand your pay stub  What deductions do you have?  Review your withholdings – The IRS has a withholding calculator at

Expenses  List all your monthly expenses Fixed, Flexible, Periodic and “Misc”  Avoid underestimating your expenses It helps to track expenses for 4 weeks to ensure accuracy.  Break down periodic expenses Put all expenses into a monthly cost

Debt Reduction  Write down all debts including balance, interest rate and minimum payment.  Determine how much extra you can afford to pay and pick one account to apply the extra amount.  Prioritize your debts – pay off credit cards first, then unsecured loans, car loans, student loans and lastly your mortgage.  Try to pay at least the interest + minimum payment

Building Savings  Payroll deduction is key  Start small and be consistent  Ideal goal is to have 3 months of net pay saved for emergencies  Look at various savings options to meet goals  Savings and Holiday Clubs  Money Markets and CD’s  IRA and 401K

Questions  If you have questions or need help creating or maintaining your monthly spending plan, please call me at the Credit Union of Ohio at ext 