Achieving Your Financial Goals.ppt

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1、Achieving Your Financial Goals,Presenter Name | Presenter Title,Americas Financial Literacy,The average American family spends $1.22 for every dollar it earns. One in five American families with annual household income of less than $50,000 is spending 40% of after-tax income to service its debt. Cre

2、dit card debt has tripled in past two decades, and the average American household owes more than $9,000 ($2600 in 1989).,Americas Financial Literacy,2 out of 3 households will probably fail to realize life goals Financial illiteracy is passed to the next generation Average high school senior failed

3、2006 financial knowledge survey,What is Financial Literacy?,Financial Literacy,The ability to effectively evaluate and manage ones finances in order to make prudent decisions toward reaching lifes goals The understanding of: Money Cash flow Basic economic/financial concepts Debt/risk management,Fina

4、ncial Literacy,Key areas of personal finance: Money & income Spending & debt Savings & investments Risk management Lifes milestones,Money & Income,Money & Income,Time is money How many hours do you need to work to pay for your mortgage, car insurance, electricity bills, extras, etc?,Money & Income,D

5、eveloping a budget: A plan for coordinating income and expenses No average budget to follow Unique to your financial situation Depends on set savings/spending priorities,Money & Income,Budget exercise: Enter your net income or take-home monthly income. Enter your fixed expenses, such as car payments

6、 and rent. Enter your flexible expenses, using figures you gathered from a typical month, such as your phone or electricity bill. Enter your discretionary expenses, such as clothing and entertainment. Enter the amount you put into savings. Now total all of your expenses and your savings and subtract

7、this total from your net income. If you have money left over, you may want to use it to increase your savings.,Spending & Debt,Spending & Debt,Weigh benefits and costs of spending alternatives Credit can be a friend and not a foe as a basic financial tool,Spending & Debt,Use credit wisely: Beware of

8、 credit card intro rates Avoid having multiple credit cards Pay in full every month Pay on time Avoid cash advances,Spending & Debt,Use credit wisely: Stay within your credit limit Review your statements carefully Protect your credit history Report lost/stolen cards immediately Protect personal info

9、rmation Access and review your free credit report annually at ,Spending & Debt,How to reduce debt: Cut back on spending Consolidate your debt Seek out payment options Dont miss payments or default Homeowners: use your equity Home equity credit is often cheaper,Saving & Investing,Saving & Investing,S

10、aving means not spending money. Investing means that you earn a return on the money you put into it.,Saving & Investing,Saving money: Save on a regular basis Willpower + a good plan = success Youll feel the power Youll be motivated,Saving & Investing,Small changes add up: Get out your piggy bank aga

11、in! Feed the Pig Small amounts add upto big savings,Saving & Investing,7 steps to get started: Think small Be consistent Make it easy Pay yourself first Allow for slip-ups Team up Congratulate yourself,Saving & Investing,Small money saving tips: Brew your own coffee at 1/8th the price of latte Cook

12、on the weekends; eat portions during the week Borrow library DVDs; save on rental and cable fees Use your own banks ATMs; avoid other banks charges Find out whether your health insurer covers gym dues Dont spend your next raise; bank it Sign up for payroll deductions Invest in savings bonds or CDs S

13、ign up for payroll direct deposit,Saving & Investing,Investing money: Compound interest Rule of 72 Planning for wealth Make the most of a 401(k),Saving & Investing,Compound interest: Consistent steps, even small ones, can add up $25/week for 10 years 5% = $16,950 Add $1 a week, and youll have $17,84

14、0!,Saving & Investing,The Rule of 72,Saving & Investing,Short-term investment options: Certificate of Deposit (CD) Money Market Funds Savings Account,Saving & Investing,Long-term investment options: Mutual fund Stocks Bonds,Saving & Investing,Retirement investment options: 401(k) Individual Retireme

15、nt Account (IRA) Social Security,Risk Management,Risk Management,Insurance Identity theft,Risk Management,Health care insurance: Types of Managed Care Plans Health Maintenance Organizations (HMOs) Preferred Provided Organizations (PPOs) Point-of-Service Plans (POS),Risk Management,Long-term disabili

16、ty insurance: Benefit amount Term Elimination period Noncancelable Guaranteed renewables Own vs. any occupation Workers compensation Social security disability Veterans benefits Federal Employees Retirement System,Risk Management,Life insurance: Choosing coverage premiums family need time period Ter

17、m vs. Permanent,Risk Management,Permanent life insurance options: Whole life Universal life Variable life,Risk Management,Identity theft: Make a list of all of your credit cards, and store in a secure place that is easily accessible. Keep your credit card in sight when you use it to pay for a purcha

18、se, if possible. Dont carry your birth certificate or Social Security card in your wallet. Install a locked mailbox to prevent mail theft. When dining out, keep your purse or wallet secure. Use drive-through ATMs or use only in safe, well-trafficked area, if possible.,Risk Management,Identity theft:

19、 Shred pre-approved credit card or loan applications. Check your bank statements as soon as you receive them, and order a copy of your free credit report once a year. Ask DMV to remove Social Security number on your drivers license and assign random number. Never give your Social Security, credit ca

20、rd or bank account numbers to anyone who calls you. If you are concerned about a potential scam, call the local police.,Lifes Milestones,Lifes Milestones,Buying your first home: Establish good credit Understand “real costs” Assess risks,Lifes Milestones,Getting married: Understand “financial partner

21、ship” Establish separate and joint credit/bank accounts Create wills and trusts Identify beneficiaries Choose owners on title assets,Lifes Milestones,Finance a family: Budget Education Health care Child care Manage risk, insurance Create wills Instill financial literacy,Lifes Milestones,Starting a b

22、usiness: Understand cash flow expense timing Manage income and expenses,Lifes Milestones,Planning for retirement: Determine how much money you will need. Determine where your retirement income will come from. Devise a budget and investment strategy to help you meet your goals.,Lifes Milestones,Prepa

23、ring a will: Designate beneficiaries Determine asset distribution Identify insurance,Lifes Milestones,Tax planning: Make the system work for you Get a tax credit for any dependent care you provide Keep good records to document your deductions Deduct mortgage interest and real estate taxes Plan your

24、investment gains to minimize taxes Bank your tax refund,Lifes Milestones,Planning for unexpected milestones: Loss Sandwich generation Divorce,Financial Education Resources,Financial Education Resources,Lifelong learning courses Financial media Internet resources Your CPA Organizations: Virginia Soci

25、ety of CPAs () American Institute of CPAs (www.aicpa.org) Virginia Jump$tart Coalition for Personal Financial Literacy (www.vajumpstart.org),Financial Education Resources,Virginia Society of CPAs: www.FinancialFitness.org Financial planning articles Personal budget guide & spending plan E-newsletter

26、 “Ask a CPA” E-mail Program (free advice from CPAs) Financial check-up quiz Consumer workshops Speakers Bureau Nonprofit pro bono assistance Tax help programs,Financial Education Resources,American Institute of CPAs:www.360financialliteracy.org Financial education to help consumers at every life sta

27、geFeed the Pig Ad Council campaignwww.feedthepig.org,Financial Education Resources,Your friend Benjamin Bankes: A joint creation of the AICPA, state CPA societies and the Ad Council. Help is available at www.FeedthePig.org Take charge of your money and your life!,Free weekly e-mail savings tip: www.FeedthePig.org,Financial Education Resources,Financial Literacy: Knowing What You Need To Know To Achieve Your Financial Goals,Thank You!,