Saving Strategies

How is the economy today?

The number of people who were late making their mortgage payments shot up 53 percent in the fourth quarter of 2008 from the same period in 2007, according to data provided by TransUnion. Ratio Of Mortgage Borrowers Currently 60 Days Or More Past Due The number of people who were late making their mortgage payments shot up 53 percent in the fourth quarter of 2008 from the same period in 2007, according to data provided by TransUnion. Ratio Of Mortgage Borrowers Currently 60 Days Or More Past Due

Local Impact From The Mortgage Crises  The percentage of homeowners facing foreclosure in Charlotte has quadrupled in just the last four months.  The numbers are daunting, 2200 new foreclosures in the last 30 days for Mecklenburg County. By ALEX REED / NewsChannel 36 Alex: updated 11:17 p.m. ET, Sun., April 26, 2009

Topics Of Discussion  Financial/Spending Plan  Budgeting  Money Management

Financial/Spending Plan

Establishing Your Financial Plan 1.Assess your current financial picture! 2.Define your financial goals! 3.Create and put your plan into action! 4.Evaluate your plan regularly!

Assess your current financial picture!  Determine your net worth.  What is your cash flow?  Do you have an emergency fund and is it enough?  What is saved for retirement?

Define Your Goals  S pecific  Define your goal in detail.  Measurable  Assign a specific amount to your goal.  A ttainable  Evaluate your goal to ensure that you can reach it.  Realistic  Review your goal to ensure it is achievable.  Time Bound  Allocate a time frame in which to achieve your goal.

Define Your Time Frame GoalsLength of TimeExample Short-TermLess than 3 monthsConcert tickets. Intermediate3 months – 1 yearA down payment on a new car. Long-TermOver 1 yearSave for early retirement.

Create A Plan  Make yourself a priority list.  Make a plan that works for you.  Plan for your Future. Pay Yourself First!  Establish an Emergency Fund Each time you are paid, set aside a portion of your check to deposit into a high interest savings account.

Evaluate Your Goals  Continuously monitor each goal to insure they reflect your current lifestyle. Over time your goals can change.

Budgeting

What Is A Budget? A plan to manage your money for a specified period of time.

How a budget can change on you!  Source:

Benefits Of Budgeting  Provides an organized way for you to save money for your goals.  Helps you determine where you may be spending too much money for things you may not need.  Helps you determine where you are spending your money.  Allows you to save for expensive items without the use of credit cards or loans.  Puts YOU in control of your financial future. Provides financial “FREEDOM”

Cash Flow  Income  Any money you receive.  Examples: Paycheck, Child Support  Expenses  Any money you pay out.  Examples: Rent/Mortgage, Loan Payments, Gas

Types Of Expenses TypesCharacteristicsExamples FixedAmounts do not change Car Payment VariableAmounts change frequently Grocery Bill PeriodicAmounts vary can be fixed or variable Phone Charges

Creating Your Budget 1. Determine your Income 2. Calculate your Expenses 3. Analyze your Budget

Step 1: Determine Your Income  What is your salary?  Do you currently have a 2 nd job?  Do you receive any other forms of income? Alimony, Child support, Interest, Dividends…

Step 2: Determine Your Expenses  Make a list of everything you pay for monthly.  This includes rent/mortgage, utilities, loan payments, credit card payments, savings account, gas, groceries, etc.  Categorize each expense as fixed, variable or periodic.

Step 3: Analyze Your Budget  Compare your Income and Expenses to determine if they are equal. “Cash Flow”  If your Income and Expenses are not equal, ask yourself a series of questions:  Are there expenses that I can decrease?  Is another source of income necessary to sustain my lifestyle?

Budget Guidelines

Budgeting Resources  It is always a good practice to have your budget written down or on the computer to ensure you are following it.  There are a variety of resources available to assist you in creating your budget. Here are a few examples.  Money Management Planner  Microsoft Money  Quicken  An Excel Spreadsheet  A Budget Template (Using Microsoft Excel)

Money Management

3 ways to fix a negative cash flow 1. Earn more money 2. Eliminate and/or cut back on expenses 3. Debt consolidation

1. Earn More Money  Get a 2 nd job.  Get family members to contribute by working.  Invest in the stock/bond market.  Obtain higher education to qualify for pay increases.

2. Cut back on expenses  Allow yourself to let go of your “wants”!  Take advantage of coupons and discounts. Don’t be afraid to negotiate on pricing or service.  Take advantage of employer benefits. - Medical Reimbursement Plan (Health Care FSA) -Dependent Care Reimbursement Plan

3. Debt Consolidation  1 st thing…You need to qualify!  Find a lower rate and/or longer term.  Refinance your house  HOEQ loan  Use a car loan to payoff unsecured debt  Use pay down debt methods that work for you.  Attack the highest interest rate  Snowball Effect “Don’t buy stuff you cannot afford.”

Money Management Tips  Take advantage of banks/credit unions’ programs. -Online Banking -Online Calculators -Financial Counseling  Speak with a professional financial counselor if you need help.

Questions?