1. Ten Sound Money Management Principles for Students

2. What are Your $ Questions?
I can’t promise to answer all of them but by knowing your questions before we start I can adjust my presentation
How many parents?
Single parents?
Utah Savers?
Sign up for drawing
PPT on FPW website

3. Money Management Principles
Are timeless and time-tested
Apply to everyone
Work well in up & down economies
Help people grow wealthy over time
Need to be taught in school

4. 1. Go For The Goal Goals provide a “why” for saving
Use goals to develop action plans
Break goals into benchmarks
Make your goals SMART
Specific
Measurable
Attainable
Realistic
Time-Related

5. Invest in your Human Capital
Get a solid education
For career satisfaction
For better health
For higher lifetime earnings
It’s OK to borrow for education
There is an opportunity cost to taking too long to earn degree
Student loans are better than credit cards

6. 2. Time Is Your Friend Time: a young person’s biggest asset
Compound interest is awesome
For every decade that savings is delayed, the required investment triples
Example: $500,000 at 65; 10% yield
Age 25: $ per month
Age 35: $ per month
Age 45: $ per month
Age 55: $ 2,141 per month

7. More About Time Time diversification reduces investment volatility
The Rule of 72
72/interest rate = doubling period
72/doubling period = interest rate
Advantage calulators

8. 3. Live Below Your Means Spend less than you earn
Create a spending plan
Income = Fixed Exp (including savings) + Flexible Exp + 1/12 of Occasional Expense
Distinguish needs from wants
“Step-down principle”
Automate savings so money isn’t spent

9. 4. Establish Emergency Fund
Aka contingency fund
Online savings accounts
No minimum
FDIC insured
4.5% (varies)
Linked to checking account
HSBC
Emigrant
ING & many others

10. Pay Yourself First: Automate Your Savings
Tax-deferred employer plans
Get full 401(k) match from employer
Employer credit unions
Savings bond purchase plans
Mutual fund Automatic Investment Plan
Direct stock purchase plans

11. Utah Saves http://www.utahsaves.org/ Build wealth, not debt
Saver Strategies
Get out of debt
Earned income tax credit
Free income tax preparation
Individual Development Accounts

12. 5. Buy Insurance According to “The Large Loss Principle”
Magnitude- not frequency- of losses
Increase deductible to save $
Spend premium dollars on large potential losses:
Liability
Disability
Destruction of home
Large medical expenses
Loss of household earner’s income

13. 6. Low Income Saver’s Credit
Refundable tax credit up to $1,000/person
Contribution to retirement account: IRA, 401(k), 403(b), or SEP
Couple filing jointly AGI: $50k or less
Single with AGI: $25,000 or less
Sliding scale: 10-50% of contribution

14. 7. Repay Debt Quickly and Borrow For Less
Consumer debt ratio < 15% of net pay
Consumer debt + housing < 50% of net
High debt makes other problems worse
Negotiate lower interest rates
Always pay more than the minimum
Avoid “perma-debt”
Pay promptly to avoid late fees
Family Life Center PowerPay analysis

15. 8. Earned Income Tax Credit
Refundable tax credit for workers

16. 9. Vita tax prep
Provided by USU accounting students in Business building- starts Feb.
AVOID instant tax refunds
High cost loans (similar to payday loans)
Auto deposit
Split your refund
Save a portion, pay debt, spend

17. 9. Buying House/Vehicle
Don’t buy more house than you can afford (Subprime mortgage meltdown)
Don’t’ trust mortgage broker
Don’t buy before you are really ready for the financial commitment
Buy new cars every 8-10 years or buy “new used”

18. Check Your Financial Health
Take the Financial Fitness Quiz
Least common practices
Not having a will
No written financial goals
No written budget
No net worth calculation

19. Financial Education Resources
Investing For Your Future
Home study course
Money 2000 & Beyond
RU-FIT financial independence training
USU Extension

20. Spend Less, Enjoy the Holidays More
Start a UESP account for your kids
Spend time with important people
Avoid gift cards
High fees, money can’t be saved
Pay cash! Avoid debt.

21. Small Steps to Health & Wealth
“This program is designed to motivate consumers to implement behavior change strategies that simultaneously improve their health and personal finances.”

22. Personal Finance Magazines
Kiplinger’s Personal Finance Magazine
Kiplingers.com
Money Magazine
Money.com
Money 101 on-line financial mgmt course
23 lessons

23. FCHD 3350 Family Finance Personal Financial Management
DSS general education
Fall & Spring semesters
Live and on-line
Don’t leave campus without this class!

24. The Financial Checkup by Alena Johnson

25. USU Family Life Center Very low cost financial & housing counseling
PowerPay Debt reduction computer analysis
First time homebuyer workshops
; 495 North 700 East, Logan

26. Financial Planning for Women http://www.usu.edu/fpw
For women of all ages & knowledge
Second Wednesday (except December)
12:30-1:30 in Family Life room 318
7-8:30 pm in Family Life Center
list:
Monthly e-news & program info
Sign up sheet for FPW
PPT will be posted on the website

27. Avoid Common Mistakes of Young Adults
Buying a house before you are ready
Buying too much house
Putting too much $ into vehicles
Keeping a balance on your credit cards
Waiting to invest for retirement until…
Not considering the cost of kids
Spending too much on eating out

28. “If it is to be, it is up to me”
Closing Thought
“If it is to be, it is up to me”
Comments? Questions? Experiences?