Money Management by wzw10454

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									MoneyWi$e
Money Management Training


      Welcome
      MoneyWi$e is a joint financial
      education project of Consumer
      Action and Capital One



MoneyWi$e: Money Management
The Money Management
course will give you...
      An understanding of what good
       money management is and why
       it is important
      Skills and ideas to help you
       better manage your money




MoneyWi$e: Money Management
Money Management

      Session One
      (Two hours)




MoneyWi$e: Money Management
Course objectives

      This seminar will help you
       understand:
       –   How to prepare a budget
       –   How to balance your accounts
       –   How to cut back on expenses
       –   Ideas for increasing your income
       –   How to save more
       –   How to set financial goals


MoneyWi$e: Money Management
In participants‟ folders

      Manage Your Money Wisely (brochure)
      Checkbook Balancing Activity
       (worksheet)
      Money Management Self Evaluation
      Three Sample Profiles (class exercise)
      Financial Goals Worksheets
      Take-home Budget Worksheet
      Money Management Seminar
       Evaluation Form

MoneyWi$e: Money Management
Money management

      What is money management?
       – Knowing how to save, spend and
         invest your money so that you and
         your family can successfully work
         toward your financial goals




MoneyWi$e: Money Management
Money management activities

      What activities go with money
       management?
       –   Tracking your spending.
       –   Making a budget.
       –   Balancing your checkbook.
       –   Using credit wisely.
       –   Setting long- and short-term goals.
       –   Earmarking money for savings.


MoneyWi$e: Money Management
Be a wise money manager

      Wise money management can
       help you:
       – Pay your bills on time.
       – Make it through times when you are
         not working.
       – Save money.
       – Plan for short- and long-term goals.



MoneyWi$e: Money Management
Budgeting

      What is a budget?
       – A spending plan to help you
         forecast and control your expenses.




MoneyWi$e: Money Management
Making a budget

      How do you make a budget?
       – You need to figure out how much
         you spend each month and
         compare that amount to your take-
         home pay.
       – Track your spending for a set
         period of time, like a month, in
         order to figure out how much
         money you spend.


MoneyWi$e: Money Management
Tracking your spending

      What are some ways to track
       how much money you are
       spending each day, each week,
       or each month?




MoneyWi$e: Money Management
Ways to track spending

      Keep a notebook handy and
       write down everything you buy
       and every bill you pay.
      Keep all your receipts in an
       envelope or shoe box.
      Create a computer file for
       entering your income and
       expenses.

MoneyWi$e: Money Management
Your budget

      What are some of the things that
       should be included in your
       budget?




MoneyWi$e: Money Management
Your budget may include:

      – Housing
      – Food (groceries, restaurants,
        snacks)
      – Automobile (payments, gas,
        repairs, insurance, commuting
        expenses)
      – Clothing & personal grooming
      – Utilities (electric, gas, water, cable)
      – Credit card payments

MoneyWi$e: Money Management
Your budget may include:

      – Student loan payments
      – Child care
      – Insurance payments
      – Entertainment (movies, concerts,
        books)
      – Medical bills
      – Vacations
      – Income taxes


MoneyWi$e: Money Management
Making your budget work

      Does your income cover your
       expenses?
      If not, you need to figure out how
       to spend less or earn more.




MoneyWi$e: Money Management
Bank accounts

      A bank account is an important
       money management tool.
      How can a bank account help
       you manage your money wisely?




MoneyWi$e: Money Management
Bank accounts

      A bank account helps you keep
       track of your spending and how
       much money you have available.
      Use your checkbook register to
       write down and deduct:
       – Every check you write
       – Every ATM or debit card transaction
         or purchase
       – Any bank fees you pay
MoneyWi$e: Money Management
Benefits of a bank account:

      Money is safe.
      Each account is insured.
      Canceled checks prove you paid
       a bill.
      Having a bank account can save
       you money.



MoneyWi$e: Money Management
Let‟s take a break


      Please come back in 15 minutes.




MoneyWi$e: Money Management
Let‟s balance a sample
checkbook
      Take out the checkbook
       balancing activity from your
       folders:
       – Review the sample bank statement.
       – Balance the sample checkbook
         register.
       – Balance the sample account using
         the checkbook balancing
         worksheet.

MoneyWi$e: Money Management
Cutting back on expenses

      What are some ways to cut back
       on expenses?




MoneyWi$e: Money Management
Ideas to help you cut back

      Shop around and compare
       prices.
      Make a shopping list and stick to
       it.
      Prepare meals and bag lunches
       at home.
      Don‟t shop recreationally—you
       could be tempted to buy things
       you don‟t need

MoneyWi$e: Money Management
More ways to cut back

      Use the public library for books,
       magazines, videos.
      Join a buying co-op.
      Lower your thermostat when
       away or sleeping.
      Walk instead of drive.
      Look for a free bank account.



MoneyWi$e: Money Management
Increase your income

      Ways to earn extra money:
       – Part-time or weekend job.
       – Take advantage of income tax
         programs, such as the Earned
         Income Tax Credit.
       – Start a home-based business.
       – Rent out a room.




MoneyWi$e: Money Management
Setting financial goals

      Short-term goal (1-2 years) —
       buying a new car, getting a
       degree or planning a wedding.
      Long-term goal (5-10 years or
       more) — owning a home, starting
       a family, paying for college or
       retiring.


MoneyWi$e: Money Management
Working toward your goals

      A savings plan allows you to
       work steadily toward your
       financial goals.
      The take-home „Financial Goals
       Worksheet‟ will help you figure
       out a savings plan that works
       with your particular goals.


MoneyWi$e: Money Management
Take-home activity

      The Financial Goals Worksheet
       and Chart can be found in each
       of your folders.
      Complete the worksheets at
       home.
      Bring the completed worksheet
       back for the second session.
      See you next time!

MoneyWi$e: Money Management
Money Management


      Session Two
      (Two hours)




MoneyWi$e: Money Management
Money Management

      Welcome back!

      In this session we will focus on
       saving, investing, insurance,
       credit and debt




MoneyWi$e: Money Management
Saving & investing

      Let‟s review your Financial Goals
       Worksheet.
      Saving and investing can help
       you to reach your short-term and
       long-term goals.




MoneyWi$e: Money Management
How to save more

      “Pay yourself first” by
       scheduling automatic deposits
       on pay day that go into your
       savings account or IRA
       (individual retirement account)




MoneyWi$e: Money Management
Retirement accounts

      Does your employer offer a
       retirement savings plan, such as
       an IRA. An IRA can help your
       retirement savings grow faster
       because you do not have to pay
       taxes on the earnings until you
       are eligible to withdraw from the
       account, at age 59 1/2.


MoneyWi$e: Money Management
Saving - CDs

      A CD (certificate of deposit) is a
       safe way to save.
       – Like savings accounts, CDs are
         insured by the government.
       – CDs often earn a higher interest
         rate than savings accounts do.
       – However, CDs require that you
         leave your money for a set period of
         time, such as six months or a year.

MoneyWi$e: Money Management
Investing

      An investment is the use of
       money to create more money
      Stocks, bonds and mutual funds
       are all types of investments
      Consider an investment advisor.
      Be cautious—investments are
       not government-insured and you
       could lose your money.

MoneyWi$e: Money Management
Insurance

      What are the benefits of having
       insurance?
      Insurance protects you against
       financial ruin as a result of an
       unforeseen catastrophe like fire,
       theft or medical emergency.




MoneyWi$e: Money Management
Kinds of insurance

      What are the most important
       types of insurance for you and
       your family?
       –   Automobile insurance
       –   Health insurance
       –   Homeowner‟s or renter‟s insurance
       –   Life insurance



MoneyWi$e: Money Management
Saving money on insurance

      Always ask if you are eligible for
       any insurance discounts.
      Internet sites can help you
       compare premiums:
       – QuoteSmith (www.quotesmith.com)
       – Quicken Insurance
         (www.insuremarket.com)



MoneyWi$e: Money Management
Credit

      Good credit can help you:
       –   Rent an apartment
       –   Purchase a home
       –   Get a job
       –   Set up phone and power service.
       –   Buy „big-ticket‟ items without cash
       –   Borrow money
       –   Obtain a credit card
       –   Rent a car
MoneyWi$e: Money Management
To build good credit...

      Pay your bills on time.
      If you carry a balance, pay as
       much as you can each month.




MoneyWi$e: Money Management
Rebuilding credit

      If you have damaged your credit,
       try applying for credit with local
       businesses or for a secured
       credit card (a bank credit card
       backed by money you deposit in
       a bank account)




MoneyWi$e: Money Management
Home equity loans

      Home equity loans can be used
       to consolidate debt.
      Be very careful before taking out
       a loan secured by your home (a
       home equity loan or line of
       credit).
      If you fail to make a payment,
       you risk losing your home.

MoneyWi$e: Money Management
Good credit

      Try to avoid these expensive
       credit options:
       – Pawn shops, pay day loans, and car
         title pawn shops
       – Offers to buy things on credit with
         deferred interest
       – Credit cards with rates higher than
         the national average (currently
         about 13.50%)

MoneyWi$e: Money Management
Overwhelmed by debt?

      The National Foundation for
       Consumer Credit - (800) 388-2227
       or www.nfcc.org can refer you to
       a credit counselor in your area.
       Low- or no-cost services help
       you establish a repayment plan.
      Debtors Anonymous (781) 453-
       2743; debtorsanonymous.org

MoneyWi$e: Money Management
Let‟s take a break


      Please come back in 15 minutes.




MoneyWi$e: Money Management
Money management activity

      Break into small groups.
      Review sample profiles.
      Discuss how the people in the
       sample profile can get back on
       track.
      Select a spokesperson from
       each group to present your
       ideas.

MoneyWi$e: Money Management
Take-home budget worksheet

      In your folder you‟ll find a budget
       worksheet.
      Track your spending for a while
       and then complete this
       worksheet at home.
      Keep yourself focused on
       creative ways to save money.


MoneyWi$e: Money Management
Questions?

      Let‟s try to answer some of your
       questions about money
       management.




MoneyWi$e: Money Management
Now you can grade us!

      Please fill out the seminar
       evaluation form and leave it with
       me on your way out.




MoneyWi$e: Money Management
Congratulations!

      Congratulations on completing
       the Money Wi$e “Manage Your
       Money Wisely” seminar!
      You‟ve taken a big step toward
       wise money management.
      Put what you‟ve learned into
       practice—you can do it!


MoneyWi$e: Money Management

								
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