Presented by

FINANCIAL FREEDOM

Today, we will cover,5 steps to Financial Freedom:

� Net Worth and Financial Goals

� Budget Analysis

� Spending Plans

� Wise use of Credit

� Savings

Where are you now?

Take the One-Minute Financial Quiz…

Assess Your situation

NEVER= 0 points SOMETIMES- 1 point ALWAYS=2 points

0-10 Points: Indicates a need to take control of your finances.

Develop and practice better money management skills.

10-15 Points: Reflects a good effort to effectively manage yourmoney. Determine what changes can be made to improve yourfinancial well- being

16-20 Points: Demonstrates ability to successfully manage yourfinances. Continue to make money management a priority.

Benefits of Managing Money

� Free up time � Do things you enjoy

� Less stress � Better health

� Achieve goals � Satisfaction

� Greater control � Peace of mind

TIPS to Achieve Financial Independence

�Spend less than you earn

�Write it down (track what you have and what you owe)

�Work with professionals (accountant, financial advisors,

credit unions and those you trust)

�Do your own research: (study, listen, research)

�Define financial freedom: What is your definition?

�Dream big. How would you spend your life if youwere financially independent?

Your Net Worth

� Net worth, not income,not lifestyle, is a truemeasure of yourfinancial health

� Subtract what you OWEfrom what you OWN

Are you going ahead?

Are you falling behind?

Establish Financial Goals

�Short-term(within the next six months)

�Intermediate-term(within the next one to

five years)

�Long-term(more than five years away)

Set Clear Financial Goals

� Dream!

� Reduce dreams to writing(SMART goals)

� Organize your dreams

� Put plan in action

� Celebrateaccomplishments

SMART GOALS

� Specific

� Measurable

� Adjustable

� Realistic

� Time-Oriented

Budgets and Spending Plans

Budget Analysis

A blueprint of your day today personal finances:

Two key components:

– Income

– Expenses

Budgeting: Know what you are spending vs. earning

�Income

all sources

�ExpensesHousing Pets

Utilities Clothing

Food Investments

Health & Medical & savings

Transportation Miscellaneous

Debt Payments

Entertain/Recreation

�Surplus/

Shortage

Where does your money go?The little things add up…

Methods to tracking expenses

� Receipt method

� Envelope method

� Checkbook ledger

� Account book

� Computer program

� FinanceWorks

Determine monthly expenses

How do you spend money now?

� Fixed (mortgage, car payment)

� Flexible (food, clothes, utilities, gifts)

� Periodic (insurance, taxes)

Spending Plan Guidelines

35%

10%15%

15%

25%

Housing

Savings

Transport

Debt

Other

Use Credit Wisely�Bad debt means borrowing money strictly for

consumption purposes:

�Necessary debt means borrowing money to obtain ahome, a vehicle, or an asset needed in your work.

Credit Card Balances

�Under 15%:

RELAX

�15%-20%:

BE CAUTIOUS

�Over 30%

DANGER

Use Credit Wisely

� Only charge what you can pay in full

� Eliminate late payment fees; pay on time

� Understand terms and conditions of each card

� Never skip a payment

� Read the APR on your statement

� Avoid credit card check offers!

� Know when to use credit vs. debit cards

The Cost of Credit

� Outstanding balance $1,000

� Interest rate 16.9%

� Minimum monthly payment $20.00 (2%)

� Years to pay off 7 YEARS!

� Interest cost over loan period $742.00

The Cost of Credit

� Outstanding balance $1,000

� Interest rate 16.9%

� Minimum monthly payment $45.00

� Years to pay off 2 years and 3 months

� Interest cost over loan period $208.00

� By paying just $25.00 more than the minimum, youwould save over $525 and be paid off 5 years earlier!

DANGER!

Savings

�43% of Americans live paycheck to paycheck

�50% of Americans have less than $1,000 in liquid assets

�Pay yourself first… if you wait to see what’s left over, youwont ever begin saving

Reasons to Save

Primary reasons to save:

� Retirement

� College Education

� Home Purchase

� Travel

� Emergency Fund

“If you have a purpose for

saving, you are most likely to

save…”

3 Keys to ALL Savings

� Spend less than you earn

� Spend less than you earn

� Spend less than you earn

� Savings is an Insulation

� From the shocks life hands out

� From natural anxiety about future

� From loss of integrity

� From loss of dignity

Watch your Savings Grow

6143,400

7,764

29,775

76,301

1 year 5 year 10 year 25 year 40 year

Save $50 a Month With a

5% Yield

The key to successful saving is starting early

Financial Freedom

“Money is only a tool.

It will take you wherever you wish, but it will not

replace you as the driver”

-Ayn Rand.

THANK YOU!

� Questions?

� Please Fill out the Evaluation Form