1. Managing Your Money How to Make Things Happen Presented by: Greg Johnson (Hayes & Assoc.) February 7, 2008

2. Needs vs. Wants “Needs” are items that you must have for basic survival. “Wants” are things you desire but can live without.

3. Examples of Needs vs. Wants You need shelter but you may want the 5- bedroom house with 6 baths and a swimming pool. You need food but you may want the steak/shrimp/lobster. You need clothing but you may want designer fashions. In order to save money you need to focus on your goals and stick to your budget !

4. Teaching Others Needs vs. Wants If you have children, when your child is ready to earn an allowance, allow him or her to do so. That is the perfect time to help them learn important life skills such as: “Working for it” and not just “wishing for it”. Saving their own money. Valuing their possessions and taking care of them. Learning how to comparison shop.

5. Why Develop a Budget? In an effort to combat the temptations of spending, consider developing a budget. Planning: Developing a budget allows you to determine if your total income meets your total expenditures. Motivation: A budget can help motivate you by making short-term objectives achievable. Control: A budget allows you to control your finances by enabling you to see how you actually spent your income versus how you planned to spend your income. Given this information, you can alter your budget and spending habits.

6. Reasons for Developing a Budget Help you meet monthly financial obligations. Know where your money goes. Eliminate or reduce unnecessary debts and loan balances. Increase savings for emergencies. Determine what you can afford. Prevent or reduce impulse spending. Save for education, retirement or big purchases. Reduce over-spending.

7. How to Develop a Budget To Develop a budget, consider the following questions: 1.What are my fixed expenses? (Fixed expenses stay the same every month, for example, a car payment.) 2.What are my variable expenses? (Variable expenses change from month to month, for example, groceries.)

8. How to Develop a Budget Create your spending categories. Project monthly expenditures for each category. List anticipated income for each month. Integrate your goals. Define both financial and non-financial goals.

9. Steps for Developing a Successful Budget Determine your monthly income. List your fixed monthly expenses. Know your variable expenses. Track and plan for large, periodic expenses. Set priorities, goals and limits. Set a savings plan and make it a priority. Always keep an emergency fund. Plan ahead for major purchases, thus avoiding impulse decisions.

10. Tips for Sticking to a Budget Be determined and exercise willpower. Communicate with household members. Be prepared to compromise. Develop a user-friendly system of documenting expenses. Be creative and use incentives. Revisit your budget periodically.

11. The Role and Importance of Good Spending Habits To further assist you in developing a budget and a savings plan, you will need to examine your spending habits by asking yourself the following questions….

12. Spending Habits Are you currently unable to save any money? Have you reached the limit on your credit cards? Are you able to make only the minimum required payments on your credit cards? Are you buying things simply to make you feel good?

13. Spending Habits Are you frequently buying merchandise only to return it upon discovering you have no need for it? Are you consistently “borrowing” from your savings or emergency fund to pay for current obligations? Do your monthly debts (excluding your mortgage) exceed 20% of your monthly take- home pay? Have your creditors asked you to return any credit cards or have you been denied credit?

14. The Importance of Saving Your potential savings is the difference between the amount of your net income and the amount that you spend. Savings and investments can help you become financially secure and to meet your goals and priorities.

15. The Importance of Saving Saving money and maintaining a budget is hard work. Temptations to spend are all around us! Television ads, sales promotions, magazines, radio and newspapers are all littered with advertisements for items on which to spend your money.

16. Savings Plan Considerations Ask yourself: Are there any variable expenses that I can reduce or eliminate? What one thing do I spend money on that I can eliminate this month and put the funds into a savings account?

17. How to Establish a Savings Plan Focus on saving: A savings plan is another way to change spending habits Plan to save every month, even if it is only $30 per month. At this rate, even without interest, you will have saved $360 the first year, and after three years, $1,080. Specify which categories cuts will come from to make up your projected savings. For example, you can save $30 a month by cutting entertainment by $15 and clothing by $15.

18. Tips for Saving Money Pay yourself first Use payroll deductions Save windfall income Try frugality Break a habit Save lunch money Save sale money Have a “nothing week”

19. Additional Tips for Saving Money Before purchasing, always research the costs of major items. For example, research and compare the cost of cars, car insurance, and home insurance. (Be sure to check for discounts for safety features.) Read newspaper and circulars for sales in grocery stores. Use coupons and discounts Utilize outlet stores, shop off-season and buy clothes that will endure.

20. Additional Tips for Saving Money Become an informed buyer. Which grocery store has the best prices? Where are the specials this week? Buyers’ clubs and/or warehouses may help you stretch your dollars. Don’t buy more than you need.