Docstoc

Introduction to Financial Management PowerPoint Presentation - You

Document Sample
Introduction to Financial Management PowerPoint Presentation - You Powered By Docstoc
					Financial Wellness Curriculum

Introduction to Financial Management

     More information available at YouCanDealWithIt.com
      This presentation has been developed by and paid for by AES.




                                                                     1
Introduction to Financial Management

• Understand short and long term goals

•   Where does your money go

•   How to use student loan money wisely

•   Learning to budget

•   Understand how to manage debt

•   Smart ways to think about money
                                           2
Setting Financial Goals

• Short Term Goals:
   » Have enough money to last the semester
   » Go out Friday night
   » Pay off a department store credit card


• Long Term Goals:
   » Buy a car
   » Go to Cancun for spring break
   » Buy a laptop



                                              3
Know Where your Money is Going

• Evaluate and track spending
   » Keep a record of all your receipts for an entire month
    » Update your check register


• Remember that spending beyond your limits is
  dangerous




                                                              4
Track Expenses

•   Education expenses
     »   Books
     »   Transportation
     »   Meals

•   Living expenses
     »   Rent
     »   Utilities
     »   Cell phone

•   Debt payments
     »   Car
     »   Credit cards

•   Savings
     »   Pay yourself first

                              5
70-20-10 Rule

Use this as a guide to show you how to divide your money
  successfully.

•   Spend 70%
    » Use for living and education expenses - rent, food, clothing, tuition,
      etc.

•   Save 20%
    » 5% for emergency funds
    »   5% for specific goals – vacation, computer, etc.
    »   10% invest for the long-term

•   Spend 10%
    » For debt payments – car loan, credit card, student loans
                                                                               6
Determining Financial Priorities

• If you have $50 what would you spend it on?
   »   Savings or Personal Appearance
   »   Social Activity or Paying a Debt
   »   Sports or Eating Out
   »   Hobbies or Paying a Debt
   »   Personal Appearance or Sports
   »   Paying a Debt or Clothes
   »   Eating out or Savings




                                                7
Use Your Student Loan Money Wisely

• Use student loan money for school-related expenses only
   » Tuition
    » Books
    » Supplies
    » Transportation

   Loans are not free money
   Don’t incur unnecessary debt
   Remember: Your student loan must be paid back!


                                                            8
Creating a Budget

• Not restricting, but empowering

• Lets you have more control over your life

• Helps you see exactly where your money is going

• Think spending plan, not budget




                                                    9
Budget Calculator




                    10
Managing Debt

• Monthly debt:
   »   Credit cards
   » Student loans
   » Car payments
   » Personal Loans


• If your debt is:
   »   Under 15% - Relax
   » 15-20% - Be Cautious
   » Over 20% - Red Flag
                            11
Before You Buy …

• Do you spend without thinking?

• Before you make your next purchase - even if it is a “just”
  a new pair of jeans – walk away for 15 minutes and think
  about the following:
   »   Do you NEED it?
   »   How will you pay for it – cash or credit?
   »   Where are you going to put it?
   »   What will happen if you don’t buy it?



                                                                12
Smart Ways to Think about Money

• Make Your Money Last
   » Find ways to increase your earnings
   » Create and commit to a monthly budget
   » Stay on top of your goals


• Reduce Debt
   » Stop charging
   » Break the habit of paying only the minimum
   » Transfer high rate credit card balances



                                                  13
Debt Repayment Calculator




                            14
Introduction to Financial Management

• Understand short and long term goals

•   Where does your money go

•   How to use student loan money wisely

•   Learning to budget

•   Understand how to manage debt

•   Smart ways to think about money
                                           15

				
DOCUMENT INFO