2. Today, we will cover,
5 steps to Financial Freedom:
Net Worth and Financial Goals
Budget Analysis
Spending Plans
Wise use of Credit
Savings
3. Where are you now?
Take the One-Minute Financial Quiz…
4. 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 your
money. Determine what changes can be made to improve your
financial well- being
16-20 Points: Demonstrates ability to successfully manage your
finances. Continue to make money management a priority.
5. Benefits of Managing Money
Free up time Do things you enjoy
Less stress Better health
Achieve goals Satisfaction
Greater control Peace of mind
6. 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 you
were financially independent?
7. Your Net Worth
Net worth, not income,
not lifestyle, is a true
measure of your
financial health
Subtract what you OWE
from what you OWN
Are you going ahead?
Are you falling behind?
8. 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)
9. Set Clear Financial Goals
Dream! SMART GOALS
Reduce dreams to writing Specific
(SMART goals) Measurable
Organize your dreams Adjustable
Put plan in action Realistic
Celebrate Time-Oriented
accomplishments
11. Budget Analysis
A blueprint of your day to
day personal finances:
Two key components:
– Income
– Expenses
12. Budgeting: Know what you are spending
vs. earning
Income
all sources
Expenses
Housing Pets
Utilities Clothing
Food Investments
Health & Medical & savings
Transportation Miscellaneous
Debt Payments
Entertain/Recreation
Surplus/
Shortage
18. Use Credit Wisely
Bad debt means borrowing money strictly for
consumption purposes:
Necessary debt means borrowing money to obtain a
home, a vehicle, or an asset needed in your work.
20. 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
21. 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
22. 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, you
would save over $525 and be paid off 5 years earlier!
24. 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, you
wont ever begin saving
25. 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…”
26. 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
27. Watch your Savings Grow
76,301
Save $50
a Month
With a
5% Yield
29,775
7,764
3,400
614
1 year 5 year 10 year 25 year 40 year
The key to successful saving is
starting early
28. 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.
