1. Financial Planning and Spending FONTBONNE UNIVERSITY FINANCIAL LITERACY AND DEFAULT PREVENTION FACILITATED BY JAMES “VINNY” VINCENT ASSOCIATE DIRECTOR, FINANCIAL LITERACY LIAISON

2. The Financial Planning Process Develop Your Goals Determine Your Net Worth Manage Your Budget Monitor and Review Repeat

3. Develop Your Goals S pecific Detailed Specific An outsider would easily be able to see what you want to do M easurable Emphasize how much Be direct with what you are exactly wanting to save/reach A chievable Is the goal realistic? Are you setting yourself up for failure? “I can do this.” R elevant Must be relevant to you Needs to be your goal and no one else’s T ime Framed Dictates how much you need to save Holds you accountable Allows you to move onto more goals How do you achieve personal financial success? Begin by setting S.M.A.R.T. goals:

4. Determine Your Net Worth Assets Cash Checking Savings Investments Real Estate Vehicles Retirement Plans Liabilities Mortgages Loans Credit Card Balances Student Loans Other liabilities or areas of debt Net Worth Assets - Liabilities = Net Worth

5. Manage Your Budget Create a one- month estimated budget (how you think you spend your money) Track a month of actual budget expenses (how you actually spend your money) Compare the two budgets (understand the differences) Create an expected budget for the next 12 months Begin to track and adjust

6. Monitor and Review  Surplus : The great news is that a surplus on your budget represents an increase in your net worth for the month  You could reallocate that surplus into savings, further eliminate debt, or add it to an investment  Shortage : an shortage on your budget represents a decrease in your net worth for the month   See areas in which you can cut spending to allocate toward minimizing further shortages in the months to come

7. Strategies to Improve Financial Success “Let the experience envelop you!” The Envelope System Categories that are not regular monthly payments are individually assigned a marked envelope. Each payment period, insert the budgeted amount of funds into each envelope. Each time money is withdrawn, write on the envelope how much and why. Once you’re out of money in that envelope then you are out until the next payment period. “Paper or Plastic?” Budget Worksheets Use online tools such as the free software from MySpendingPlan.com, etc. Use electronic tools such as Microsoft Excel, Access, etc. Keep a paper ledger if an electronic tool is not what is best for you.

8. Why Most Financial Plans Fail L.I.F.E. L isted Expenses Underestimated I mpulse Buying F orgotten Bills E mergencies

9. Keeping Plans from Failing: S.P.E.N.D. Save for Emergencies Place Your Purchase Establish Your Financial Goals Never Let Others Spend Your Money Don’t‘ forget about non-monthly expenses

10. “More Quarters in the Couch” FoodStay Healthy Go Shopping Buy in Bulk Act Like a 3-yr old Limit eating out. Buying one cup of coffee every day = $624+ per year Eat properly + exercise + no smoking = less time being sick = more $$$ Consult Consumer Reports to best determine a product’s quality May cause initial budget strain Product will last Giving time to save Be creative Clip coupons for things you normally buy

11. Avoid Scams, Shams, Pyramid Programs Rule #1: If it sounds too good to be true, it is.If you did not initiate the correspondence, don’t agree to pay anything.If you have to pay anything to claim your prize, you didn’t really win. If you make money from new recruits, think twice before joining.If it comes from another country, leave it there.

12. Seminar Activity  Step 1: Complete the Pre-Assessment Tool (located on website).  Step 2: Create a one-month budget (see Budget Worksheet attachment).  Step 3: Compare your budget to your income. Do they match? Are you over-budget? Are you under-budget?  Step 4: Relook at your budget and identify at least 3 things you can do to “shave off” some expenses to increase your net worth.

13. Questions?  Contact James “Vinny” Vincent  jvincent@fontbonne.edu jvincent@fontbonne.edu  314.719.4353  Office Hours: Monday thru Friday (8:30am-4:30pm)  Lunch taken daily from 12:30pm – 1:30pm