Financial management is a skill that really need to be mastered. This document covers factors that affects our usage of finances, budgeting and debt management. Author. David Omisi

1. Financial literacy
FINANCIAL LITERACY MEANS HAVING THE KNOWLEDGE, SKILLS, AND
CONFIDENCE TO MAKE RESPONSIBLE FINANCIAL DECISIONS
THROUGHOUT YOUR LIFE – FROM HOW TO SPEND YOUR ALLOWANCE
– TO SAVING FOR SCHOOL, TRAVEL, OR A HOME – TO ULTIMATELY RETIRE
IN COMFORT. LEARNING HOW TO MANAGE YOUR FINANCES WHEN YOU
ARE YOUNG HELPS TO BECOME INDEPENDENT AND GIVES YOU THE
BUILDING BLOCKS TO GET THE MOST OUT OF LIFE.

2. Factors Affecting Money Decisions
Think about the last item of clothing that you bought.
What factors affected your decision?
• Emotions: Was it how you felt looking at the item – that is, your emotional
response?
• Friends and Peers: Was it your friends – and what you thought they
would think aboutyour choice – that is, some kind of “peer pressure”
affecting your decision?
• Customs, Traditions, and Habits: Was it because it was the style of
clothes that youhave always tended to wear in the past – that is, your
custom, tradition, habit, or just falling in line with past choices?

3. • Family Members: Did your parents, siblings, or other family members
have any influence on your choice – that is, what they would think and
how they would react?
• Latest Styles and Fads: Was it because of any latest style or fad – that is,
trying to staycurrent and with current trends?
• Advertising: Was it because of any commercial, ad, promotion, or
celebrity endorsement that you saw that had an impact on you – that is,
some form of advertising?
• Incentives: Was it because of a “sale” that was on or a discount coupon
that you had –that is, some kind of incentive provided by the store to
make you buy that product?

4. • Your Values and Confidence: Was it because of what you thought – and what you
wanted – and your own sense of values, style, and knowing what you want.
Which of the above factors do you think have the
most influence on your moneydecisions?
When you make decisions about money, take a moment to think about factors
that couldbe affecting your decision. Are you in control of your decisions –
or are other affecting what you do?
Try and be in control of your own decision.
This presentation highlights how you can utilize Budgeting, Saving,
Investment and debtmanagement in gaining the control of your money
decision

5. BUDGETING
 A budget is a plan that lays out what you will do with your money.
 Any one rich or poor can use a budget to manage money .A budget serves as
a master plan for the future. Budgets are a road map that can help you get
from where you are nowto a financial goal down the road. Financial goals
can short term such as getting out of debt, meeting day to day expenses
without borrowing, paying school fees or saving for a special need or desire.
 You can do three things with your money.
 Spend it
 Save it
 Invest it

6. BENEFITS OF A BUDGET
 Eases decision-making about spending and
saving
 Encourages cautious spending
 Encourages disciplined saving
 If allowed, helps you to meet financial goals
Helps you to take control of your money

7. How Do You Make a Budget?
 Keep track of your income and expenses
 Set your financial goals
 Create budget categories that are appropriate for you.

8. SPENDING SAVINGS
 Necessities(rent, school
fees, health utilities,
food, insurance,
transportation, clothing)
 Debt repayment (loans,
hirepurchase, other
debts)
 Discretionary
expenses
(Entertainment,
charitable
contributions etc.)
 Emergency Fund
 Short- term savings
 Medium-term savings
 Long term savings

9.  Allocate your income across your budget
categories.
If your cash flow provides a good and detailed
estimate of your current income and
expenditures, You should be able to identify
opportunities to reduce spending and save
more.

10. When you allocate money across budget categories,
consider your priorities and financial goals.

11. DEBT MANAGEMENT
Debt management is a way to get your debt under
control through financial planning and budgeting. The
goal of a debt management plan is to use these
strategies to help you lower your current debt and move
toward eliminating it completely.

12. Debt: Is the state of owing money to others
CAUSES OF DEBTS
 Low income or underemployment.
 Divorce and relationship breakdown.
 Poor money management.
 High costs of living.
 Overuse of credit cards.
 Unexpected expenses.
 Declining health and medical expenses.
 Job loss.

13. You can get out of debt by changing a few habits. Here are ten
ways you can reduce your debt;
1. Develop a budget to track your expenses
A budget can help you monitor how much you’re earning and
spending, and what you’respending money on. Being more aware of
your income and expenses can help you to eliminate or reduce
unnecessary costs.

14.  2. Don't take on more debt
Work toward paying down what you currently owe before adding any
new debt. Avoid any unnecessary purchases. Adding more debt by
making unnecessary purchases when you still have debt to repay will
make managing your debt more difficult.
 3. Pay your bills in full and on time
Paying your bills in full and on time will allow you to avoid high
interest rates and late fees. If you're unable to make full payments, aim
to pay more than the minimum due to avoid paying more in interest and
fees.

15.  4. Check your bills carefully
When you receive your bills and statements, make sure they are
accurate and your rates remain the same. If there are errors or
your rates increased without any explanation, call your lender to
fix accordingly.
 5. Pay off your high-interest debts first
If you have multiple bills to pay, paying off the debts with the
highest interest rates and fees first will reduce the amount of
money you owe in the long run.

16.  6. Reduce the number of credit cards you have
Consider having only a few credit cards to manage your debt. Make
sure they have thelowest rate available.
 7. Look for the best interest rates when consolidating your debts
By obtaining a debt consolidation loan from a bank or credit union, you
are able to manage your debts more easily since you make only one
payment to the bank or credit union rather than several payments to all
of your current lenders. Often, the bank or creditunion may offer you a
lower interest rate than the rates on the loans you owe, so shop around
for the best rate before consolidating.

17.  8. Contact your creditors about repayment plans
Speak directly to the companies to which you owe money. They may be willing to set
up
a repayment schedule that is more realistic for your budget and reduce
monthlypayments.
 9. Speak to credit counselors
If you need help in developing a debt repayment plan, consider speaking with a
creditcounselor
 10. Stay vigilant
Once you've reduced or paid off your balances, remember to guard against incurring
debtagain. Consider phasing out credit cards and using debit cards or cash instead.

18. Strategies to get out of debt
 Pay more than the minimum payment. Go through your budget and
decide how muchextra you can put toward your debt. ...
 Try the debt snowball.
 Refinance debt.
 Commit windfalls to debt.
 Settle for less than you owe.
 Re-examine your budget.

19. Tips to Avoid Debt
1. Build an Emergency Fund.
2. Choose a Spending Plan.
3. Stick to a Savings Routine.
4. Pay Your Full Credit Card Bill Each Month.
5. Only Borrow What You Need.
6. Keep Your Credit Score Strong.
7. The Power of Keeping Debt in Check.