Budgeting Basics

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Budgeting Basics
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Goals

• Learn the importance of budgeting
• Set financial priorities based on values
• Develop a budget based on goals
• Control and manage debt effectively
• Evaluate your financial picture

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Lets Get Philosophical

• If you dont know where you are going, youll
  end up somewhere else Yogi Berra
• Everywhere you go, there you are! ???

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Why bother with a budget?

• To know how much money you have
• To know where your money goes
• Make goal directed decisions about spending
• Avoid unnecessary interest charges and debt
• To Save and Plan for the future

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Setting Financial Priorities

• Start now!
• Identify your financial goals
• Be prepared for competing priorities
• Rank goals in order of importance
• Include everyone in the planning
• Be prepared for change

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Developing a Budget

• Identify where your money goes
• Look at spending habits
• Incorporate goals
• Track your spending
• Keep goals foremost in your mind

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Discover Your LATTE FACTOR?

• 5 per day (the average cost of a latte and a
  muffin) x 7 days 35 per week
• 35/week 150/month
• 150 per month invested at a rate of 10 annual
  return
• 1 year 1,8852 years 3,9675 years
  11,61610 years 30,72715 years 62,17130
  years 339,073
• 40 years 948,611

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Warning Signs of Too Much Debt

• You dont have any savings.
• You make minimum payments on your credit cards.
• You use credit cards for things you used to buy
  with cash, such as groceries.

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Warning Signs of Too Much Debt

• You use increasing amounts of your total income
  to pay off debts.
• You have more than two or three major credit
  cards.
• After you pay your credit card bill, you increase
  your balance by the same amount (or more) the
  following month.

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Your Dirty Little Secret

• Are you a financial infidel?

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Managing Your Debt

• Get a copy of your credit report
• Good debt vs. Bad debt
• Pay off credit card debt
• Be prepared for the unexpected
• Get help

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Evaluate Your Financial Picture

• Is your Budget realistic?
• Is it based on your unique needs
• Are your goals clear?
• Are you carrying credit card debt?
• Do you have a will and life insurance?
• Do you have a safety net?
• Are you saving for retirement?

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Quick Review

• Budget! Budget! Budget!
• Set Financial Priorities
• Discover Your LATTE FACTOR
• Know the Signs of Too Much Debt
• Dont be a Financial Cheater
• Managing Your Debt
• Evaluate Your Financial Picture

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Resources

• For a free credit report
• www.annualcreditreport.com
• Credit repair and credit repair scams (Fair
  Trade Commission)
• www.ftc.gov/bcp/conline/pubs/credit/repair.htm
• Also, check out www.livingonadime.com or Larry
  Wingets Big Spender, TV feature on AE.