The seminar stress the importance of financial education in achieving life plans. It starts with financial awareness, creating a plan, taking control and seeking knowledge to ensure financial wellbeing and success. Examines the money mindset, spending habits and examining the YOLO lifestyle.

1. Jason Vitug
@jasonvitug
Personal Finance
Money Mindset: The Road to Financial Wellness

2. My Story
“Make more
money. Spend
more money. Work
more hours.”
But…
“It’s not the size of
the paycheck that
matters but how
it’s managed.”
www.phroogal.com
@phroogal

3. Financial Rough Waters
“My relationship
with money
wasn’t always
positive.”
www.phroogal.com
@phroogal

4. Living My Dreams
“We don’t have
to wait till a
‘retirement age’
to live our
dreams.”
www.phroogal.com
@phroogal

5. Understanding Perspective
“We all see
things differently
but it’s our
perspective that
matters.
Don’t like it?
Change it.”
www.phroogal.com
@phroogal

6. Change of Mindset
“The secret to
financial wellbeing
is an awareness of
lifestyle goals,
financial planning
and action.”
www.phroogal.com
@phroogal

7. Introduction
• My Background
• The plan is to provoke discussion and interest
in the subject of personal finance.
• The goal is to incite action in furthering your
education and knowledge.
• My hope is to build the foundation for you to
achieve prosperity.
www.phroogal.com
@phroogal

8. Prosperity is the
successful and
thriving living
condition with
respect to finances.

9. Why Financial Education?
• We learn the area of a triangle but not the value
of the dollar.
• We can calculate the circumference of a circle but
not compounding interest.
• Money is a taboo subject but we learn our
financial habits through family and social
interactions.
• Tremendous amount of information; confusion
• Don’t be fooled. Money impacts your life!
www.phroogal.com
@phroogal

10. Why Financial Education?
What we hear about money?
• American consumers owe:
– $854.2 billion in credit card debt
– $8.15 trillion in mortgages
– $1.12 trillion in student loans
• Consumers paid $32 billion in overdraft fees
• 70 million Americans are “underbanked”
• Financial relationships, credit reports and credit scores
impact your well being.
Education empowers you to make better informed
financial decisions.
www.phroogal.com
@phroogal

11. Road to Financial Wellness
• Imagine a cross country road trip without a
plan and the tools to reach the destination.
• Your destination to financial wellbeing
requires planning and you can choose to get
there sooner.
• Have a life plan not just a financial plan.
– Financial goals without an understanding of how it
contributes to your desired lifestyle prevent you
from achieving your life plan.
www.phroogal.com
@phroogal

12. A lifestyle is the way
in which you live.

13. Financial goals are
targets that revolve
around money.

14. Lifestyle Choices
• Envision the life you want to live.
– Ask yourself, “What brings happiness into my life?”
– Ask yourself, “If I had no debt or financial obligations, how
would I spend my time?”
• Beware of Lifestyle Inflation – spend more when you
have more to spend.
– When you earn more the cost of your lifestyle choices
increases accordingly limiting your ability to build wealth.
• Keeping up with the joneses.
– Purchases are made to keep up appearances.
• Lifestyle choices are sticky. Income fluctuates.
www.phroogal.com
@phroogal

15. Wealth is not
measured by how
much you spend but
how much you’ve
saved.

16. Financial Habits
• Influenced by the Culture of Debt.
• Taught a spending habit.
• Consumerism has taught us quantity of stuff
not quality. Disposability not usability.
• Savings is postponed for instant gratification.
• Purchase things over experiences.
www.phroogal.com
@phroogal

17. If you won a million
dollars, what would
you do?

18. Was the first thought
about paying for
stuff?

19. Mindset - Mind the Gap
• What’s your relationship with money?
– Do we control it or control us?
– Do we value life by how much we spend?
• Money is personal.
– It’s not just numbers.
• Spending Habits
– Mindless spending can prevent you from spending on needs and wants.
– The longing of a purchase is more impactful than the ownership.
– Place more value on things we can’t afford.
• Savings Habits
– Waiting to have more income to save.
• Retirement isn’t an age.
– Choose the time period to live your dream lifestyle.
www.phroogal.com
@phroogal

20. Mindset - Happiness
• Money does buy happiness.
– Ensures we don’t worry about basics to sustain life.
• Materialism does not buy happiness.
– Wealthiest don’t want it all.
• Fear: More money more problems.
– Lottery winners lose winnings.
• Buying things or experiences are the same.
– It’s the value you place on them.
• Personal satisfaction can’t ever be purchased.
• Money is a tool not the answer.
– Used wisely can help you continuously achieve.
• Money does not give you purpose in life.
– Makes it easier to achieve a purpose.
www.phroogal.com
@phroogal

21. Cutting expenses is
more powerful than
increasing income.

22. Understanding Income
• Income comes and goes.
• It’s not how much more you can make. It’s the
relation to how much you spend.
• You can live paycheck-to-paycheck with a six
figure salary.
• It’s not just the paycheck. It’s the benefits too!
• Diversify income sources.
www.phroogal.com
@phroogal

23. Do I have cash to make
the purchase now or am I
willing to work more
hours in the future to pay
for it?

24. Savings
• Savings is necessary to get capital needed to make wealth.
• Prioritize Savings – Pay yourself first.
• Find ways to reduce spending and save more.
• Have a Purposeful Savings Strategy
– Emergency Fund – 6 months of expenses in liquid account for use in
event of loss of employment or underemployment.
– Short Term (within a year) – Vacation, Holidays, Taxes
– Midterm Goals – Home and auto purchase, college expenses, growing
family.
– Long Term and Retirement
www.phroogal.com
@phroogal

25. Investing
• Benefits of
an early
start
• Compound
Interest
• 401(k)
match
• Roth IRA
www.phroogal.com
@phroogal

26. Do you want to be
the Starbucks loving
apartment renter or
the Folgers Crystal’s
homeowner?

27. Spending Habits
• What we need is
actually much less
than “what we
think” we want.
• Loyalty to brands
and stores.
• Impulse buys and
retail therapy.
• Present bias putting
immediate
gratification over
future needs.
www.phroogal.com
@phroogal

28. Mindful Spending
• Awareness of how money is spent to improve
quality of life.
• Knowing purchases made today can impact ability
to retire early.
• Questioning purchases.
– Do I need it?
– Do I need it now?
– What will happen if I don’t have it?
www.phroogal.com
@phroogal

29. Spending Rules:
A bargain isn’t a
bargain if you actually
don’t need it.

30. Spending Rules:
Don’t spend more
than what you make.
Spending > Income =
Downward Spiral

31. Spending Rules:
Love it.
Need it.
Like it.
Want it.

32. Mindset on Financing
• Purchase on credit only when buying long lasting
assets with short lasting financing.
• Don’t finance items for longer than their usable life.
• The importance of credit and impact to lifestyle.
• Necessity of loans as an investment (education, home,
car).
• Just because you’re approved doesn’t mean you can
afford it.
• Ask yourself, “How does the loan or line of credit
improve your life long term?”
www.phroogal.com
@phroogal

33. Spending Rules:
Just because you’ve
been approved for
credit doesn’t mean
you can afford it.

34. Reality of Debt
• Debt is a ball and chain that prevents you
from living your dream lifestyle.
• Borrowed money keeps you bound.
• Avoid debt collectors, bankruptcy and
financial stress by avoiding debt.
• In debt? Prioritize debt repayment.
www.phroogal.com
@phroogal

35. Debt is reserving
your future time to
work rather than fun.

36. Retirement as a Lifestyle
• Through planning and sound financial management retirement can be
achieved sooner.
• The amount needed to retire differs from one person to another.
• Power of Time. Start saving and investing early for retirement sooner.
• Know your life plan, preferred lifestyle and financial goals.
• Understand and use retirement savings vehicles:
– 401(k) and other Defined Contribution Plans
– Individual Retirement Accounts (IRA)
– Investments and Brokerage Accounts
– Pensions
– Company Stock Options
– Social Security
www.phroogal.com
@phroogal

37. At age 23, you made
$40,000/year and by 30 years
old you’ve saved $40,000 into
your 401(k). If you decided not
to contribute another dime till
retirement and realizing an 8%
return, your $40,000 would be
over $600,000.

38. FACTS over Lotto Dream
• Financial Wellness FACTS Process
– Financial Awareness
• Be mindful of your life plan, financial situation and your money habits.
• Ask questions and understand. Change mindset and perspectives as needed.
– Creating a plan
• Have a life plan, set financial goals and budget for everything.
• Change is certain and plan a response.
– Taking control
• Prioritize savings and diversify income.
• Pay down debt, control spending and decrease expenses.
• Automate and use financial tools.
– Seeking knowledge
• Invest in yourself through education and skills attainment.
www.phroogal.com
@phroogal

39. Achieving Financial Freedom
• Ignorance isn’t bliss. Financial independence begins
with financial knowledge.
– The more you know about personal finance the more
control over your financial future.
• Change is inevitable. Have a plan, avoid lifestyle
inflation but be flexible and prioritize saving.
• Retirement can be a lifestyle not an age. The magic
number for retirement varies greatly for each person.
• Increase wealth. Lower expenses, curb spending, save
on purchases, diversify and supplement income.
www.phroogal.com
@phroogal

40. You Only Live Once
• YOLO is knowing the value of your time to create
experiences and memories.
– Spend what you make only leads you to “living at the
workplace” more often than you need.
– If you only live once, why not spend it doing the things you
want to do all the time rather than just the weekends?
• YOLO is using knowledge, resources and time to
achieve desired lifestyle in this lifetime.
– You can spend your days/nights working to pay for a
lifestyle you can’t afford.
www.phroogal.com
@phroogal

41. • The more you know about personal finance the more control
Lisbon, Portugal, 2012
Financial Awareness
you have over your future.
• Don’t wait in the unknown.
• Begin to live in the know(ledge).
 Know your actual take home pay
 Know your credit history and credit score
 Know the power of time
 Know how much money you truly owe
 Know the interest rates, terms, fee structures
 Know the fine print on your credit cards and loans
 Know your financial statements
 Know the total cost of borrowing
 Know the resources and tools available
www.phroogal.com
@phroogal

42. Resourcefulness
• Your Knowledge
– Invest in learning more.
• Budgeting
– Helps achieve financial goals and life plan.
• Banking Relationships
– Not all created equally choose the right program.
• Free Resources
– Take advantage of all available resources from colleges,
non-profits and government sources.
www.phroogal.com
@phroogal

43. Action Plan
1. Envision the life you want to live without money or
things.
2. Analyze and accept your true financial standing
(income and expenses, savings and debt) and set
goals.
3. Ask questions and research to increase your financial
knowledge any which way you can.
4. Ask yourself what can you do today/in 3 months/this
year?
5. Practice financial awareness and stay proactive.
www.phroogal.com
@phroogal

44. Learn more about personal finance at
www.phroogal.com