1. Building a Better Budget © 2005 BALANCE FINANCIAL FITNESS PROGRAM

2. Why Budget? Achieve goals Use money efficiently Become financially secure

3. Obstacles to Getting Started Feeling there is never enough money Easy to postpone saving Hard to confront past decisions Goals are overwhelming Don’t want to make lifestyle changes

4. Your Lifetime Earnings $30K$60K$90K 10 years$ 395,400$ 790,800$1,186,300 20 years$1,103,600$2,207,100$3,310,700 30 years$2,371,700$4,743,500 $7,115,200 It’s not the size of your paycheck… it’s how you use it. (NOTE: Figures assume 6% annual increase)

5. Characteristics of Goals Specific Cost Date Measurable Reasonable and realistic

6. Make a Priority List Set short-, intermediate-, and long-term goals: Emergency 1 year$1800$150 Repay debt3 years$5000$200 Retirement 30 years$1,000,000$350

7. Financial Goal Chart

8. Establish an Emergency Account 3-6 months x living expenses Liquid account

9. Repay Debt While Saving for Other Goals Promote good habits Won’t rely on credit for emergencies Reduce taxable income

10. Visa Card Example Balance$2000 Interest rate$19.8% Annual fee$40 Making only the minimum payments… It will take31 years It will cost $10,200

11. Start Saving Now Don’t wait until after bills are paid Consider yourself an essential expense

12. Track Where It Goes Write it all down Keep receipts Use checks or debit cards Monitor ATM use Computer tracking programs

13. Tracking Expenses

14. Construct the Budget Paper budget form Spreadsheet

15. Income Withholding Non-guaranteed income Overtime Bonuses Fluctuating income Commissions Seasonal

16. Income

17. Expenses Evaluate cash-flow Essential expenses Fixed and variable Discretionary expenses Periodic

18. Expense Form

19. Action Item List Increase income Overtime, part-time, better pay, sell things Decrease spending Reduce, substitute,postpone, forego

20. Budget Busters - Debt Stop charging – close accounts Seek lower interest rates Consolidate payments

21. Budget Busters - Spending Need vs. Wants Test Do I need it? Do I need it now? What would happen if I didn’t have it?

22. Stay Motivated Visualize success Stay organized Be realistic Monitor progress Expect setbacks Reward yourself along the way

23. What Are You Going to Do Now? What can you do today? What can you do in the next 3 months? What can you do this year?

24. Duke Credit Union Financial Education Center Contact: Scottie Dowdy, CCUFC Cassandra Taylor Financial Counselors Call: 684-6704 www.dukefcu.org