Financial Records Safe Deposit Box Birth certificatesMortgage papersCar & house titlesInsurance policiesWill Home File Personal records (SSN, resume,

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Presentation transcript:

Financial Records Safe Deposit Box Birth certificatesMortgage papersCar & house titlesInsurance policiesWill Home File Personal records (SSN, resume, etc)Money Mgmt records (budget, goals, b/s)Financial Records (ckbk, statements)Tax records (W-2 forms, old tax returns) Consumer records (major purchases-manuals, etc) Housing records(lease, repair)Insurance records (health)Investment records (stocks, CD)Estate & Retirement Planning(will, IRA, SS info) Computer BudgetsBanking transactionsResumeTax records

Net Worth Assets Liquid (cash, savings) Real Estate (Mkt value) Personal Property (car, furniture, etc) Investments (retirement, stock) - Liabilities Current (medical bills, Credit cards) Long-term (mortgage, student loan, car loan) = Net Worth Solvent or Insolvent?

Financial Progress? Debt RatioLiabilities divided b net worth $25,000 / $50,000=.5 Compares your liabilities to your net worth. (low ratio is desirable) Liquidity RatioLiquid assets divided by mo. expenses $10,000/$4,000=2. 5 Indicates # of mo. You would be able to pay your living expenses. (the higher the better) Debt-payments Ratio Monthly credit payments divided by take-home pay $540/$3, =15% Indicates how much of a persons earning goes to pay debts(excluding mtg). <20% Savings RatioAmt saved each mo. Divided by gross mo. Income $600/$5,000=.12=1 2% Most financial experts recommend at least 10%

Budgeting Process Pay off car loan, save for college, etc Step 1: Set Financial Goals Salary & Interest Step 2: Estimate Your Income Emergency, vacation, college Step 3: Budget for Unexpected Expenses & Savings Mortgage, car loan, student loan, insurance premiums Step 4: Budget for Fixed Expenses Food, Clothing, Utilities, Entertainment, Medical, Transportation, Personal Step 5: Budget for Variable Expenses Step 6: Record What you Spend Step 7: Review Spending & Saving Patterns

10 Simple Saving Strategies (w/o becoming cheap) 1. Don’t become emotionally separated from your money. (Direct deposit, debit cards…make it very easy!) 2. Understand and be honest about expense classifications. 1. Discretionary expenses = wants (cell phone, take out lunch, non- work clothes, vacation, gifts, movies, etc) 2. Nondiscretionary = needs (house, taxes, doctors, commuting expenses, utilities, gas, food, car, etc) 3. The time to lower your “needs” spending was yesterday. 4. Enjoy free stuff! 5. Major on the major. (more time on major purchases!)

6. Enjoy being with people you like. 7. Don’t blow off the recurring minor (cable bill, cell phone plan, morning coffee, ATM fees, bank fees, dry cleaning, etc) 8. Spend with comfort on items or experiences you value highly. 9. You won’t spend what you don’t see. (automatic transfer) 10. Constant budgeting isn’t required.