Financial Fitness

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• Financial Fitness
• Living on What you Earn

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Living on What You Earn

• Welcome Introductions

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Agenda

• The Psychology of Money
• Track Your Spending
• Create a Spending Plan (Budget)
• Establish Goals
• Pay Down Debt the Smart Way
• Deciding When to Spend
• Save for Emergencies and Planned Purchases
• Credit
• Conclusions

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Psychology of Money

• What does it mean to you?
• Security
• Ability to purchase
• Status
• power
• Who shaped your values
• Family
• Friends
• Why do You Spend

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Track Your Spending

• If you dont know where to start you cant
  envision the finish line
• Tracking your spending is easy and effective
• Electronically or with paper and pencil record
  all of your spending
• This means all of your spending for at least 30
  days

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More Track Your Spending

• Make sure you include cash back when using a
  debit card
• You must record all of the credit purchases
• Now find all of those bills that are not paid
  monthly like Insurance, utilities and Homeowner
  Association Dues
• Divide them by the time period they cover and
  include that portion that equals 30 days

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Create a Spending Plan (Budget)

• Electronically or with paper and pencil
• Income and the dates that you receive your income
• Fixed Expenses and the dates that they are due
• Variable expense (student Loans, credit cards)
• Daily or Weekly
• Impulse purchases

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Debt

• Total up all of your
• Fixed Debt (Mortgage or rent, car note, student
  loans)
• Credit Card Debt
• Personal Loans
• What Percentage of your income does it consume?

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Debt Management The Virtuous Circle

• Decide to understand and address your debt
  situation
• Know your debts and the terms of each
• Decide what your goals are
• Develop a plan to attack your debt
• The Virtuous Circle it works!

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Reduce Your Debt The Virtuous Circle
Loan 1 Loan 2 Loan 3

Amount 2000 6000 10000
Interest Rate 12 18 24
Term 96 months 96 months 96 months 96 months

Minimum Payment 32.51 118.34 255.14

Total Minimum Payments Total Minimum Payments 405.99
Add 100 Payment Add 100 Payment 100
Total Payments Total Payments 505.99

Original Payment 32.51 118.34 255.14
New Money 100 132.51 250.95
New Payment 132.51 250.85 506.09
New Term 17 months 43 months 43 months 63 months
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Establish Goals

• Now that you know where your money goes and how
  much money you owe.
• Establish Financial Goals
• Pay down debt
• Save for an Emergency
• Save for Retirement
• Save for Investment

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Pay Down Debt the Smart Way

• Review Your Spending Plan to find 50.00 a month.
• Pay all of your credit card balances on time at
  least the minimum.
• Add the 50.00 to one of them each month until it
  is paid off.
• Then use all of that to pay down the next one
  until you do not carry balances over from one
  month to the next.

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Places to Find Savings

• Shop your automobile insurance every 6 months
• If you are receiving a large tax refund every
  year change the number of deductions
• Shop your cell phone contract
• Bring your lunch one day a week
• Eat out less
• Establish a brake for spending (need or want)

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Deciding When to Spend

• Stress Spending
• Impulse Spending
• Need vs Want
• Discuss big purchases with family
• Use cash only for discretionary spending
• Respect the bottom Line
• Establish a Cheat

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Save for Emergencies and Planned Purchases

• Short Term
• Pay down debt while saving for a rainy day
• Mid-term (2 to 6 years)
• Save for a larger down payment on a new car
• Save for New Home down payment
• Education Fund
• Long Term (6 30 years)
• Retirement
• Investments

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Credit Scores

• Know its importance
• How it is computed
• 30 Payment History
• 30 Credit Used
• 10 type of credit
• Fixed Interest
• Compounding Interest

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Get Help When Needed

• If more than 50 of your monthly pay is used to
  pay debt.
• If you are paying for necessities with credit
• If you are carrying credit card balances of more
  than 10,000
• Credit Counseling
• Non-profit
• For profit

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Conclusions

• Have a positive balance at the end of the month
• Plan and control spending
• Track your spending
• Pay down your debt
• Hold family financial meetings regularly
• Let everyone participate
• Stay positive

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How Your EAP Can Help If youd like to receive
more support consider contacting your EAP

• 4 Face-to-face counseling sessions
• Legal/Financial consultations
• Child/Eldercare consultation referrals
• Daily life resources
• ID theft recovery
• Free credit monitoring
• Tobacco cessation coaching online
• Comprehensive website
• Resources
• Self assessments
• Live-connect feature
• Health/wellness library
• Legal forms

Call [phone] or go to our website at
www.anthemeap.com Login Mary Baldwin College
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Thank you!