setting financial goals

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Post on 06-May-2015



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Presentation on setting financial goals


  • 1.Building: Knowledge, Security, Confidence Setting Financial Goals

2. Does this sound familiar? 3. Today, we will

  • Learn how to manage money by preparing a personal spending plan (budget)
  • Identify ways to decrease spending and increase income
  • Avoid debt!

4. After today

  • Track your daily spending habits
  • Prepare a personal spending plan to estimate monthly income and expenses
  • Explore ways to decrease spending and increase income
  • Use budgeting tools to help youmanage your money

You will be able to: 5. What is a Spending Plan? Having a Spending Plan is:

  • The best way to take control of your financial situation
  • About choices choosing how to make and spend money

6. Why have a Plan? Usually for1 month 7. Preparing a Spending Plan Having a Spending Plan is about:

  • Choosing how to use your money now and for the future
  • Knowing what your income and expenses are every month

8. Set Your Goals Want to save for a new car or a fantastic vacation? Consider your goals when planning a budget:

  • Be realistic
  • Be specific
  • Have a time frame
  • State the action to be taken
  • Set milestones

9. Four Stepsto Preparing a Spending Plan

    • Keep track of your daily spending
    • Determine what your monthly income and expenses are the month before they are due
    • Decrease spending
    • Increase income

10. Step 1:Keep Track of Daily Spending Many people spend all their money and have no clue where it went!

  • Where did your $50 go?
  • Do you know exactly what you bought?Where it all went?
  • Lets go to the mall

11. Daily Spending Diary Control Your Money! Watch your spending closely by using a spending diary or log:

  • Youll see where your money goes
  • Youll be able to cut expenses to save for goals

12. Activity 1:Daily Spending Diary

  • Write down what you spend in a typical day
  • Keep track of everything you spend no matter how small the amount!
  • Do this for 1 month
  • Expect to be surprised

13. Step 2:Your Income & Expenses Income comes in the form of:

  • Allowances
  • Wages from a job
  • Miscellaneous work (like cutting grass)
  • Interest and dividends from investments

14. What You REALLY Earn: Income

  • Your employer must subtract certain taxes from your paycheck
  • The time it takesto meet goals forsaving mayincrease

15. Gross Income: Total income without deductions Net Income: Gross income after deductions or subtractions, such as Social Security and other taxes What You REALLY Earn: Income (contd) 16. 17. Expenses Expenses:Everything you pay for in a time period

  • There are two types of expenses:
        • Fixed
        • Flexible


  • Fixed Expenses do not change
  • Car payment
  • Rent
  • Flexible Expenses might change
  • Electricity
  • Food
  • Clothing or entertainment

Expenses (contd) 19. Expenses : items you pay for each month

  • Housing & car payments
  • Insurance/Utilities
  • Food & clothing
  • Cell phone bills
  • Personal, child or pet care

Step 2: Your Income & Expenses

  • Eating out
  • Entertainment
  • Education costs

20. ATM Fees ComputerwareParties Cosmetics Online Services Nail Services Sneakers Cell Phones Dating Ice Cream Parking Fees CDs Gifts Bottled Water Bounced Checks Clubs Cigarettes Greeting Cards Tanning HaircutsVideos Cable TV Late Payment Fees Dinners Out Gasoline Books Fast Food Attacks Dry Cleaning Car Wash Lottery Tickets Magazines Movie Rentals Sports Lunches Out iTunesGambling Prescriptions Household Items Pet Costs Licenses Speeding Tickets Cash Advance Fees MunchiesVending Machines Souvenirs 21. Activity 2:Monthly Income & Expense Worksheet

  • You will list all of your income & expenses on this worksheet
  • You may need to check your bills or invoices at home for exact amounts
  • Estimate expenses that do not occur on a monthly basis

22. Step 3:Find Ways to Decrease Spending 23. What are some ways we can decrease our spending? Step 3: Find Ways to Decrease Spending 24.

  • Carrying limited cash and controlling your debit/credit card use
  • Not shopping for fun
  • Remembering your spending plan & savings goals
  • Buying only what you need
  • Paying your bills on time to avoid extra fees and charges

You can decrease spending by: Step 3: Find Ways to Decrease Spending 25. What are some ways we can increase our income? Step 4:Find Ways to Increase Income 26. Step 4: Find Ways to Increase Income

  • Get a job (if you dont have one)
  • Ask for a raise, if you have a job
  • Get a better paying job
  • Get a second job
  • Do freelance work
  • Sell some of your stuff!

27. Your Spending Plan Tools These tools will help you manage your spending plan:

  • Monthly payment schedule
  • Monthly payment calendar
  • A computer spreadsheet


    • A monthly payment
    • schedule and a monthly
    • payment calendar will help
    • you:
    • Record income in advance
    • Plan ahead to pay your bills

Spending Plan Tools (contd) 29. Activity 3:Monthly Payment Schedule

  • Use the Income and Expenses Worksheet to transfer info
  • Complete due dates and amount due in columns
  • Enter the date when expense has been paid

30. Activity 4:Monthly Payment Calendar

  • Use the Monthly Payment Schedule to fill in your calendar:
  • Transfer income sources & amounts to the dates income is paid
  • Transfer your expenses to the dates they are due
  • Use one color ink for income and a different color for expenses
  • Check off each bill as it is paid

31. Monthly Payment Calendar Month:June2010 Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 $300 paycheck $25 savings $20 expenses3 $100 car insurance 4 5 $25 interest 6 $50 cell phone 7 8 9 $300 paycheck $25 savings $20 expenses10 $25 gas 11 12 $ 20 haircut 13 14 15 16 $300 paycheck $25 savings $20 expenses 17 18 $150 car payment 19 20 $20gift card 21 22 23 $300 paycheck $25 savings $20 expenses24$25 gas 25 26 27 $20 Sun Pass28 $40entertain-ment 29

  • $300 paycheck
  • $25 savings
  • $20 expenses

32. Help! I Cant Pay My Bills! Scenario:You add up your bills and the total is $900, but your income is only $600. What do you do? Think about the bills that would be the most important! 33. Help! I Cant Pay My Bills! (contd) If you have to choose, think of major obligations first: 34. Activity 5:A Hole in Todds Pocket Can we come up with 6 ideas to help Todd? 35. Spending Plans rock! 36. Setting Financial Goals

  • How to track what you spend each day
  • How to prepare a personal spending plan (budget) to estimate monthly income and expenses
  • Ways to decrease spending and increase income
  • About tools for better money management

Congratulations! You have learned: 37. Knowledge Check

  • The main reason why it is helpful to track daily spending habits is to:
    • Spend more
    • Know exactly how your money is spent
    • Increase your income
    • Decrease your spending

38. Knowledge Check

  • 2.Before you prepare a spending plan, the two most important things you must know are:
    • Total income and expenses
    • Your car payment and gas
    • How to budget for entertainment
    • What your cell phone costs

39. Knowledge Check

  • 3.A personal spending diary will help you to:
    • Spend more money
    • Borrow money
    • Keep track of where you spent your money
    • Keep your spending a secret

40. Knowledge Check

  • 4.If youre having trouble meeting your expenses, you should first:
    • Stop paying your bills
    • Take a payday loan
    • Pay your rent or mor