ON TARGET - PowerPoint by zhangyun

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									ON TARGET




                  FINANCIAL SAVVY:
            Keeping Your Budget
                      On Target
ON TARGET

            Steps for Keeping Your Finances On Target
                                          Getting Started


                                          Track your spending


                                          Identify Income and Expenses



                                          Compare Income with Expenses


                                          Make Adjustments


                                          Balance Your Budget!


                 This presentation is a general overview of best financial literacy practices regarding managing personal
                 finances and financing higher education and are not intended to be financial, tax or legal advice. The
                 laws, regulations and other rules applicable to specific situations are complex, subject to change and
                 are dependent on the facts of each particular case. You should consult your financial, tax or legal
                 advisors with questions regarding your specific situation.
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            Budgeting is Essential
            Budgeting is an important
            step to financial security.
            It is about choices: choosing
            how to make money and
            how to spend money.
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            Getting Started
            Creating a budget is easy! Sticking to it is challenging
            but achievable. To start, you have to be honest with
            yourself. You must first look at how you are spending
            your money – where does it go every month? Then,
            look at your income. Set savings goals – you
            shouldn’t spend more than you make nor should you
            spend all that you make. Follow these simple rules
            and you will be on your way to meeting your financial
            goals!
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            Make Saving Your Priority
            Most people say that they would save but they
            have no money at the end of the month. Treat
            saving as seriously as you would paying your
            phone bill. The easiest way is to set aside the
            amount you want to save at the beginning of the
            month. If you saved just $25 a month, at the end
            of the year you would have $300.
                    That might mean just missing a few visits
                    to Starbucks or McDonald’s but the savings
                    do add up!
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            Make Saving Your Priority
            Another way to save is to “pay ahead”.
            Don’t pay just the minimum payment each month
            for your credit cards. Not only will it take you
            MANY years to pay off the balance, but the
            interest continues to accrue each month.
                    By paying more than the minimum
                    suggested by the credit card company,
                    you will save money by reducing both the
                    principal amount owed and the interest
                    being charged monthly.
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            Make Saving Your Priority
            A third way to save money is another “pay
            ahead” strategy - start paying your student loans
            now. Even if you are not in repayment for your
            unsubsidized federal student loans, making
            payments while you are in school will decrease
            the total amount owed when you graduate.

                   Your budget is your plan for handling debt
                   and expenses. It is your vehicle for taking
                   control of your financial destiny.
             Track Your Spending: Know where your
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             money goes each month




                   Set Goals                List Expenses         Keep a Personal Diary
            • A budget can help you    • A budget will show you   • A budget will tell you
              meet personal goals.       where your money goes      what you can afford and
              Define needs vs. wants     each month.                help you increase your
              when setting goals.                                   savings goal.
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            Setting Goals
            Do you really need a new car or can you
            fix your current car? Is that shopping
            trip to the mall necessary?
            Be realistic and specific. Create a time
            frame for achieving your goals and set
            milestones. Celebrate when you
            achieve a milestone!
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            List Your Expenses
            Start with categories. Go through your checkbook
            or bills for the last two to three months. Think
            about hobbies and habits and add categories for
            these expenses as well.
            Don’t try to fit your expenses into someone else’s
            budget categories. Tailor the categories to fit
            YOUR situation.
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            Keep a Personal Expense Diary
            Keep track of your spending for at least a
            week, preferably for a month. This will give
            you a realistic picture of where your money
            goes each month.
            Be prepared for emergencies. Stay out of
            debt, keep accurate records, and think about
            long-term planning.
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            INCOME AND EXPENSES
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            Identify Income Sources
            Your income may come
            from several different
            sources:

             •   Financial Aid
             •   Work Study
             •   Family Help
             •   Job Income
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            Identify Fixed and Variable Expenses
            Fixed Expenses                 Variable Expenses

            Certain expenses you           Other expenses, although they
            know you will have             may recur every month, will vary
            every month and it will        in amount from month to month.
            usually be the same amount.    These include:
            These may include:
                                           • Utilities (electricity, oil,
                     •   Planned Savings      gas, water)
                     •   Tuition           • Food and clothing
                     •   Housing           • Books
                     •   Car Payment       • Entertainment/eating out
                     •   Phone Bill        • Emergencies
                     •   Insurance         • Car (fuel, maintenance)
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            Compare Your Expenses to Your Income
            After you have identified all of your
            expenses, subtract them from your
            income. This difference will show
            you how much you have left to work
            with for increased savings or for
            extras, like entertainment or eating
            out. Sounds simple - that’s really
            all there is to it.

                        The trick is to be
                        honest about tracking
                        your spending so that
                        you really see where
                        your money goes.
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            A Sample Budget
            Here is a sample of
            how a monthly budget
            might look. Remember
            to create categories
            that are relevant to
            you and to include all
            expenses – both fixed
            and variable. And
            lastly – SAVINGS FIRST!
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            YOUR FINANCIAL FUTURE
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            Adjust Your Budget As Needed
            Your budget is not static – it needs to
            be evaluated and adjusted often to              Graph Title Here
            meet your needs.
               • Remember your savings goals.
               • Cut expenses by carrying little
                  cash and controlling credit card           23%
                  use.
               • Don’t shop for fun.                                               10%
               • Buy only what you need.                           19%
               • Pay bills on time to avoid extra                                  9%
                                                      58%
                  fees/charges.
                          • Increase your income
                            by increasing your
                            hours or getting a
                                                        1st Qtr          2nd Qtr
                            second job!
                                                        3rd Qtr          4th Qtr
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            Reducing Your Expenses
            Look at all the ways you can cut down on spending:
              • Shop when there is a sale
              • Use coupons – both manufacturer’s and store coupons. The
                savings add up!
              • Comparative shop – look at several sources to get the lowest
                price
              • Consider the warehouse stores like Costco, BJs and Sam’s for
                big ticket items and things you can buy in bulk such as paper
                products
              • Plan your purchases – do not buy on impulse.
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            More Cost-Savings Tips
            • Buy used books from the book store. Buy text books online or
              from upper classmen.
            • Avoid the college book store if possible - many of the items are
              more expensive.
            • Share a meal with a friend and split the cost; plan pot luck
              meals or join a food co-op to save on food items.
            • Keep in touch by email, Skype or Facebook; limit calls and text
              messaging.
            • Share costs with your roommate, i.e., shampoo, detergent,
              laundry, snacks, text books, room furnishings.
                       • Make travel plans early to take advantage of
                         promotions and lower fares.
                       • Limit entertainment costs. Be creative in finding
                         ways to have fun on a college budget.
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            Balance Your Budget!
            Make sure you balance                Your Income
            your income and your
            expenses monthly. Are
            you meeting your
            savings goals? Are you
            spending more than you   Tweaking
                                                                   Your
            are making? Look where      and
                                                                 Expenses
            you can cut back if      Targeting
            needed.

                      Learning to balance
                      your budget is the         Keeping Track
                      most important step
                      on the road to your
                      financial future!
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