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The dangers of payday loans

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The dangers of payday loans

  1. 1. BUDGETING To Avoid Personal Financial Crisis
  2. 2. KEEP MORE MONEY IN YOUR POCKET <ul><li>Plan a budget (spending plan) </li></ul><ul><ul><ul><ul><ul><li>Monitor your budget </li></ul></ul></ul></ul></ul>
  3. 3. <ul><li>Do you ask yourself where all the money goes at the end of every month? </li></ul><ul><li>Do you lose track of which bills you’ve paid and which are due? </li></ul><ul><li>Do you have a special project you’d like to save for? </li></ul><ul><li>Do you need a new car? </li></ul>
  4. 4. <ul><li>Remember, it’s not about how much money you earn… </li></ul><ul><li>I It’s about how well you manage </li></ul><ul><li>your money! </li></ul>
  5. 5. <ul><li>! </li></ul><ul><ul><li>A helpful tool that tracks all of your financial </li></ul></ul><ul><ul><ul><li>information at a glance. </li></ul></ul></ul><ul><ul><li>A great way to organize your finances and pinpoint ways to save money. </li></ul></ul>
  6. 6. YOUR SPENDING PLAN Creating and maintaining a livable, breathable spending plan is based on following 6 easy steps .
  7. 7. In addition to salary, think of all other expected sources of household income including tax refunds, bonuses, tips, etc. IDENTIFY YOUR INCOME
  8. 8. Be honest with yourself about all household expenses, including eating out, salon services, hobbies and habits. Include all of your regular monthly bills and payments to creditors. IDENTIFY YOUR EXPENSES
  9. 10. PAY YOURSELF FIRST Always put a few dollars aside in a savings account each month. Credit Counselors say the amount is not as important as establishing the savings habit! Money adds up!
  10. 11. MAKE ADJUSTMENTS Making expenses fit your income is not always easy. Consider consulting with a Certified Credit Counselor to structure a personalized spending plan that that focuses on your long-term goals.
  11. 12. DUMP THE DEBT Building a strong financial future means getting rid of your debt. Pay down highest interest rate credit card bills first. Hardship? A Debt Management Plan may be the solution.
  12. 13. TRACK YOUR RESULTS Check your spending plan monthly to monitor how much closer you are to reaching your financial goals! Balance your checkbook regularly!
  13. 14. <ul><li>SPENDING PLAN STRATEGIES: </li></ul><ul><li>D etermine wants vs. needs </li></ul><ul><li>E stablish short term and long term goals </li></ul><ul><li>S tay strong! </li></ul>
  14. 15. SPENDING PLAN
  15. 16. <ul><li>Household </li></ul><ul><ul><li>Do your own repairs and painting </li></ul></ul><ul><ul><li>Shop for the best insurance rates (homeowners, automobile, health) </li></ul></ul><ul><ul><li>Grow a vegetable or herb garden </li></ul></ul><ul><ul><li>Turn the thermostat up when not at home </li></ul></ul><ul><ul><li>Consider budget billing </li></ul></ul><ul><ul><li>Re-evaluate cable TV service </li></ul></ul><ul><ul><li>and internet costs </li></ul></ul>
  16. 17. <ul><ul><li>Pack lunches for school and work </li></ul></ul><ul><ul><li>Eat out less </li></ul></ul><ul><ul><li>Consider store brands </li></ul></ul><ul><ul><li>Use coupons </li></ul></ul><ul><ul><li>Shop buy one get ones </li></ul></ul><ul><ul><li>Do warehouse shopping </li></ul></ul><ul><ul><li>Limit shopping to once a week </li></ul></ul><ul><ul><li>Plan menus and shop with a list </li></ul></ul><ul><ul><li>Brew your own coffee </li></ul></ul>
  17. 18. <ul><ul><li>Car pool to school & work </li></ul></ul><ul><ul><li>Try public transportation </li></ul></ul><ul><ul><li>Ride a bike! </li></ul></ul><ul><ul><li>Keep your autos maintained for better gas mileage </li></ul></ul><ul><ul><li>Be a bargain gasoline hunter </li></ul></ul>
  18. 19. <ul><ul><li>Discover outdoor activities for the family </li></ul></ul><ul><ul><li>Rent DVDs for $1.00 </li></ul></ul><ul><ul><li>Use restaurant coupons and join dining clubs </li></ul></ul><ul><ul><li>Take advantage of early bird offers at restaurants and movie theatres </li></ul></ul>
  19. 20. <ul><li>ATM Fees Computerware Home Parties Cosmetics Online Services </li></ul><ul><li>Beauty Shop Over limit fees Dating </li></ul><ul><li>Ice Cream Parking Fees CD’s DVD’s Gifts Bottled Water Bounced Checks Clubs Cigarettes Greeting Cards Tanning Haircuts Cable TV Late Payment Fees Dinners Out </li></ul><ul><li>Bar Night Books Fast Food Attacks Dry Cleaning </li></ul><ul><li>Car Washes Lottery Tickets Magazines Movie Rentals Sports Lunches Out Gambling Prescriptions Household Items </li></ul><ul><li>Pet Costs Licenses Speeding Tickets </li></ul><ul><li>Cash Advance Fees Munchies Vending Machines Souveniers </li></ul><ul><li>  </li></ul>
  20. 21. <ul><li>Necessities </li></ul><ul><ul><li>Food </li></ul></ul><ul><ul><li>Housing Related Bills </li></ul></ul><ul><ul><li>Medical </li></ul></ul><ul><li>Car Payments </li></ul><ul><li>Income Tax </li></ul><ul><li>Child Support </li></ul><ul><li>Court Judgments </li></ul><ul><li>Student Loans </li></ul><ul><li>Uncollateralized Debt </li></ul>
  21. 22. <ul><li>Can this expense be adjusted somehow? </li></ul><ul><li>Can this expense be eliminated altogether? </li></ul><ul><li>Could this bill be negotiated for better terms until times get better? </li></ul>
  22. 23. CREDIT CARD DON’TS Don’t carry more than two cards with you Don’t use them for cash advances Don’t use them to pay for basics: rent, groceries, utilities. (unless you pay the bill in full each month) Don’t charge more than you can pay that month Don’t let others borrow your credit car d
  23. 24. CREDIT CARD DO’S <ul><li>Use a debit card vs. a credit card </li></ul><ul><li>Use a card with no annual fee and low interest rates </li></ul><ul><li>Know all of your cards’ hidden fees </li></ul><ul><li>Always pay more than the minimum each month </li></ul><ul><li>Pay on time, all the time </li></ul>
  24. 25. THE REAL COST OF CREDIT…. What happens when you a $50 dinner? charge A $50 dinner over 20 years on a 22.8% APR credit card would end up costing $4,579.04. Paying only the minimum payment due could mean you never pay off your credit cards for your entire life. Finance Period 10.8 percent 16.8 percent 22.8 percent 1 Year $55.68 $59.08 $62.67 10 Years $146.53 $265.17 $478.49 20 Years $429.39 $1,406.31 $4,579.04
  25. 27. GOOD VS. BAD DEBT Good debt returns something of long term value - higher education or a home. Bad debt is “feel good” debt for purchases that you can’t afford and don’t really need. Any bad debt over 15% of your annual income after taxes should set off an alarm.
  26. 28. DEBT WARNING SIGNS <ul><li>Being able to make only minimum </li></ul><ul><li>payments on credit card bills </li></ul><ul><li>Making late payments or skipping payments </li></ul><ul><li>Having credit cards at or near your credit limit </li></ul><ul><li>Arguing with family or friends over your spending habits or hiding purchases </li></ul><ul><li>Being unsure of how much you really owe </li></ul><ul><li>Using cash advances or payday loans to pay your bills </li></ul><ul><li>Having your credit card purchases declined </li></ul><ul><li>Having increasingly more of your income paying for debts </li></ul><ul><li>each month </li></ul>
  27. 29. 8 Tips for Staying Financially Healthy <ul><li>Develop and stick to a spending plan that includes saving some money each month </li></ul><ul><li>Make a habit of paying off the majority of your credit card balances each month </li></ul><ul><li>Live within your means </li></ul><ul><li>Transfer any credit card debt to a lower interest rate credit card </li></ul>
  28. 30. Staying Financially Healthy (cont’d) <ul><li>Plan ahead for large purchases </li></ul><ul><li>Teach children the “3 Ss”: </li></ul><ul><li>Saving, Spending, Sharing </li></ul><ul><li>NEVER turn unsecured debt into secured debt! </li></ul><ul><li>Consult with a Certified Credit Counselor for </li></ul><ul><li>advice and confidential assistance </li></ul>
  29. 31. If you need help creating a Spending Plan contact : 14051 NW 14 th Street Sunrise, FL 33323 www.americandebtcounseling.org (888) DEBT USA
  30. 32. Thank you! Good luck!

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