• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content

Loading…

Flash Player 9 (or above) is needed to view presentations.
We have detected that you do not have it on your computer. To install it, go here.

Like this presentation? Why not share!

Budgeting Workshop Power Point Michael Meyer Ms&T Rev. 1

on

  • 1,051 views

This presentation was made at the Missouri University of Science and Technology to help students understand the importance of budgeting.

This presentation was made at the Missouri University of Science and Technology to help students understand the importance of budgeting.

Statistics

Views

Total Views
1,051
Views on SlideShare
1,051
Embed Views
0

Actions

Likes
0
Downloads
0
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment
  • Fast Forward Sinbad video to 2:50 for “broke” sketch
  • before flashing this, might be good to ask them for their ideas. what expenses do they have? Mention some they might not have thought of or had yet (e.g. still in dorms…) They will be pleased to see how CC worksheet matches up… Make sure they all have these as handouts.
  • >50% is spent on housing and food
  • before flashing this, might be good to ask them for their ideas. what expenses do they have? Mention some they might not have thought of or had yet (e.g. still in dorms…) They will be pleased to see how CC worksheet matches up… Make sure they all have these as handouts.
  • The FICO score is a three digit number that determines the interest rate that you will pay on your credit cards, car loan, home mortgage, rental apartment Fair Isaac Corporation The score really is a measure of risk and how likely you are to pay back money that is loaned to you.
  • before flashing this, might be good to ask them for their ideas. what expenses do they have? Mention some they might not have thought of or had yet (e.g. still in dorms…) They will be pleased to see how CC worksheet matches up… Make sure they all have these as handouts.

Budgeting Workshop Power Point Michael Meyer Ms&T Rev. 1 Budgeting Workshop Power Point Michael Meyer Ms&T Rev. 1 Presentation Transcript

  • Budgeting for the Young Fabulous and NOT BROKE ! Michael Meyer October 2009 |
  • Who are the Millenials?
    • Do not respect the corporate pecking order.
    • Want to know work is meaningful & have input to big decisions.
    • Need constructive feedback about suggestions and want more time.
    • Need encouragement even though they may not be promoted.
    |
  • Who are the Millenials continued? |
    • Want to be treated with respect.
    • Mantra “I want it all and I want it now”
    • Want coaching in four life areas:
      • Financial stability and success
      • Relationships
      • Health & fitness
      • Career
    Gen Y in the Workforce HBR Case Study, Tamara J Erikson, HBR, Feb 2009, Vol. 87, No. 2 p.43-49
  • College Student Financial Literacy
    • Scored 62% on the JumpStart financial survey 1
    • First year students scored 35% on the Jumpstart 2 financial survey
    • Students in the class of 2007 had average loan debt of $20,098 3
    • First year students carry a credit card balance of $1,031 and by senior year increased to $2,063
    | 3. President’s Advisory Council on Financial Literacy 2008 Annual Report to the President, January 6, 2009 1. JumpStart Coalition for Personal Finance, “Financial Literacy Still Declining, April 9, 2008 – 1030 students 2. What College Freshman Admit to Not Knowing about Personal Finance, Manton Edgar, Journal of College Teaching and Learning Vol. 3, No.1 January 2006 p. 43 – 400 students at Texas A&M
  • College Student Financial Literacy
    • >50% of college students accumulated $5000 debt while in school and 33% accumulated $10,000 in debt
    • 62% of 18-24 year old say they are not saving enough or not all
    • 20% of college students say they are “very-well prepared” for managing money in college
    • 32% of college students consider themselves “not at all” or “not very well prepared” for managing money in college
    |
  • What influences financial behavior
    • Parents, modeling and expectations
    • Work
    • Formal financial education in high school
        • Consumer economics
        • Junior achievement
  • Who am I and what do you know ?
    • Boomer to Gen Xer
    • B. S. ChE ‘87
        • 21 years experience
        • Dupont, WSRC, Merck, Dupont Protein Technologies International, Solae, HTRI Inc., Covidien
        • Currently employed as Project manager
    • Single-10 years, Married-13 years
    • Work with coop students
        • 10 Years
        • Started coop education programs in two different companies
    • Lived on a budget for 13 years
    • Provide one-on-one financial counsel to people through a national non-profit and local church
    |
  • What is BROKE?
    • BROKE IS relying on a cash advance on your credit card to pay the rent, mortgage and praying that you have enough left on the credit line to do so
    • BROKE IS having a ton of student loans that make you nauseated when you think about how long it is going to take to pay them all off
    • BROKE IS not opening the credit card bills because you are terrified to see what you owe and have no way of paying. You get hit with the late fee and finance charges
    • BROKE IS eating Raman noodles and not having money for the noodles
    |
  • What is BROKE?
    • BROKE IS counting every coin in your change jar as well as scrounging under the sofa cushions in a desparate attempt to find the dough to cover your bounced check and the $25 check fee
    • BROKE IS not having one penny saved even though you have a good job. If your car breaks down so will you. You don’t have the money for repairs, but you need the wheels to get to work.
    | The Money Book for the Young Fabulous & Broke, Suze Orman, 2005, p. 12-13
  • Budgeting Budgeting/Spending PLAN : Keeping Track of Your Money
  • | “ Spend less than you make. Avoid the use of debt. Build an emergency/liquidity fund. Set long-term goals”. Time Transcendant Principles Ron Blue Budgeting/Spending Plan “ Success is not solely about making more money. It is about knowing where the money you make is going”. Suze Orman “ If all of us had every dime that we have wasted in our lives, we’d be a nation of millionaires”. Jane Bryant Quinn “ Make yourself a spending plan. Not for discipline not for tidiness, not because your mother told you to. Make it for your own sake. That’s the only way to coerce your money into doing what you really want”. Jane Bryant Quinn
  • 10 Reasons to have a Spending Plan
    • To find out where you are spending money
    • To extract money for saving and investing
    • To get out of debt
    • To show your spouse where the money goes
    • To live within your income
    • To prepare for big expenses
    • To prepare for life’s difficulties
    • To prevent wasting money
    • To handle unexpected expenses
    • To define goals rather than spending defining life goals
    |
  • Reasons & Excuses Not To Have a Plan
    • You are rich enough to buy anything you want and still have plenty left over.
    • Making a spending plan takes too much time
    • I will not keep it up
    • I do not want to live in a straightjacket
    • I hate arithmetic
    • None of my friends do it
    • I budget in my head
    • I am too………. (fill in the blank, tired, young, old, busy poor, not poor enough)
    |
  • The Secret Every Millionaire Knows | Live within your income. “ They became millionaires by budgeting and controlling expenses, and they maintain their affluent status the same way” The Millionaire Next Door
  • |
    • 54% of millionaires have a budget
    • >23% create a scarcity mentality by paying themselves first by saving a minimum of 15% before other expenses
    • <23% inherited money or are independently wealthy
    • 62.4% know how much is spent on food clothing and shelter
    • 64.3% have clearly defined daily, weekly, monthly, annual and lifetime goals
    • 65.7% spend time planning their financial future
    • The Millionaire Next Door
    The Millionaire Next Door, Thomas Stanley, William Danko, 1996, p. 40, 41, 45, 46 What about the Millionaire Next Door ?
  • Why Care? It’s Just Your Money! |
    • Managing your money is possible!
    • Reaching goals is possible!
    • Avoiding unnecessary debt is possible!
  • Creating a Spending Plan
    • Define goals
    • Identify Income
    • Track Expenses
    • Define cash flow = Income – Expenses
    • Set priorities and make changes (evaluate needs, wants and desires)
    |
  • Where to Begin? Worksheet available on CashCourse
  • How Students Spend Money Arizona Pathways to Life Success for University Students, The University of Arizona, Soyen Sim, April 2009.
  • Fixed Expenses |
    • Housing
    • Tuition
    • Utilities
    • Car Insurance
    • Cell Phone
  • Variable Expenses |
    • Books
    • Food
    • Entertainment
    • Gifts and celebrations
    • Gas or transportation
  • Choices, Choices, Choices |
    • Electronics
    • Bus pass
    • DVDs
    • Shoes
    • Clothing
    • Cable TV
    • Internet
    • Manicure
    • Eating out
    • Entertainment
  • Needs vs. Wants
  • You Must Be Kidding! | 1 Starbucks® drink @ $3.50 $3.50 x 7 days = $24.50 $3.50 x 365 days = $1,227.50   1 Sonic® burger @ $4.25 $4.25 x 7 days = 29.75 $4.25 x 365 days = $1,551.25   1 carton of cigarettes @ $32.00 $32.00 x 12 months = $384.00 $32.00 x 26 weeks = $832.00  
  • How students cope with a shortfall (%)
  • Your Next Best Alternative |
    • Bus/walk/carpool
    • Free concerts on campus
    • Movies on campus
    • Volunteer at event
    • Grind your own coffee beans
    • Use student discount
  • Now What?
    • Identify where your money comes from.
    • Track where your money goes – keep a spending diary for a month!
    • Create a budget and monitor your spending.
    • Reconsider your wants and needs.
    • Live within your income.
    • Check out the Budget Wizard on CashCourse!
    |
  • When you leave school……… |
  • The FICO Ranges Ranges 720-850 BEST 700-719 675-699 620-674 560-619 500-559 WORST
  • Your FICO Score |
  • What defines a FICO Score? Description Score (%) Paying bills on time. 35 Total balance on credit cards and other loans in relation to credit limit. 30 Length of credit history. 15 New accounts and recent applications for credit. 10 Mix of credit cards and loans. 10
  • Get Educated & Know Your Friends
    • Subscribe to or read a magazine @ the library
        • Money, Kiplinger, Smart Money, Consumer Report
      • Read the Wall Street Journal
      • Read books on financial subjects
        • Ron Blue
        • Larry Burkett
        • Dave Ramsey
        • Jane Bryant Quinn
      • Better Business Bureau
      • Missouri Attorney General Office
    |
  • National Endowment for Financial Education
    • These materials are for non-commercial educational use only.
    • Portions of the content © 2008 National Endowment for Financial Education. All rights reserved.
    • CashCourse is a trademark of the National Endowment for Financial Education
    • www.nefe.org
    • www.CashCourse.org
    |
  • A Reality Check This worksheet available on CashCourse