# Presentation: 809273

## Date
Speaker Name

- Speaker Name

**Understanding Money and Credit**

- Improving lives through financial education.

## What We Will Cover

- Upon completion of this program, you will have an understanding of how to:
- set and achieve financial goals
- determine net worth
- calculate gross and net income
- identify fixed, variable and periodic expenses
- develop a spending plan
- distinguish between wants and needs
- keep adequate financial records
- understand the wise use of credit and alternatives to credit use
- commit to a savings plan

## Take Control of Your Finances

- Assess your current situation
- Do you need to control your finances and practice better money management skills?
- Are you giving it a good try but need to make changes to improve your financial well being?
- Do you have the ability to keep your finances under control?

## Calculate Your Net Worth - Assets 

- Assets – What you own
- Market Value of Real Property
- Investments
- Retirement Accounts
- Other assets such as business interests

## Calculate Your Net Worth - Liabilities

- Liabilities – What you owe
- Mortgage principle
- Other debt
- Taxes owed
- Contractual obligations

## Set Financial Goals

- Financial Priorities Worksheet
- Determine what you consider a “want” and what is a “need”
- Prioritize the wants and needs to help set your goals

## Set Financial Goals – cont’d

- Financial Goals Worksheet
- Short term goals – within two years
- Mid-term goals –within two – five years
- Long term goals – over five years

## Set Financial Goals – cont’d

- Goals should be:
- Specific and measurable
- Realistic cost for each goal
- Keep goal list visible as a reminder
- Review goals at least once a year and adjust if necessary

## Insurance – Do You Need It?

- Auto insurance
- Homeowner’s insurance
- Health insurance
- Life insurance

## Create a Budget

- Keep good financial records
- Income Worksheet
- Gross income – income before deductions
- Net income – income after deductions

## Create a Budget – cont’d

- Record of Daily Expenditures
- Fixed expenses
- Variable expenses
- Periodic expenses

## Create a Budget – cont’d

- Expense Worksheet
- Record expenses
- Record Income
- Subtract expenses from income

## Create a Budget – cont’d

- Positive number
- Are you saving enough money?
- Did you include all expenses?
- Are you paying off your debts aggressively?
- Do you have adequate insurance protection?

## Create a Budget – cont’d

- Negative number
- Increase income
- Reduce expenses
- Increase income and reduce expenses

## Budget Allocation

- A successful budget will:
- Help increase savings
- Prevent impulse spending
- Decide what you can afford
- Identify expenses that can be reduced
- Help you repay debt
- A budget must work for a family, there is no single formula

## Use Credit Wisely

- Is your credit under control?

## Avoid Credit Dilemmas

- Shop around for best interest rates
- Make timely payments
- Keep balances low
- Pay more than minimum
- Contact creditors if unable to pay
- Use credit for emergencies
- Spend only what you can afford

## Debt to Income Ratio

- What ratio is reasonable?
- Under 15% - relax
- 15 – 20% - be cautious
- Over 20% - you are in danger

## Credit Costs

- Borrowing on future earnings
- Reduce amount of future savings

## Commit to a Savings Plan

- Essential part of any money management plan
- Provide for regular financial obligations
- Periodic living expenses
- An emergency fund
- Short, mid and long term goals

## Make a Commitment

- Communicate
- Cooperate
- Control

## Summary

- Today we discussed:
- How to assess your financial situation
- Set financial goals
- Create a budget
- Use credit wisely
- Commit to a savings plan

## Thank you for coming.

- Questions?

- s

- 866.515.2227
- www.MoneyManagement.org

- Presented by: