You and Your Money - PowerPoint PPT Presentation

Loading...

PPT – You and Your Money PowerPoint presentation | free to download - id: 62674-Nzc2N



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

You and Your Money

Description:

United States Military Academy. Department of Social Sciences ... Wedding. House Down Payment. Spouse's Tuition. Long Term Goals. Retirement. Kid's College ... – PowerPoint PPT presentation

Number of Views:38
Avg rating:3.0/5.0
Slides: 36
Provided by: maggieb
Category:
Tags: money

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: You and Your Money


1
You and Your Money
  • Briefing to Class of 2008
  • No Mission Too Great!
  • 7 January 2007

2
Why We Are Here
  • Talk about your pay and your money
  • Give some standard advice about savings
  • Help you think about your Cow Loan plan
  • Motivate you to start planning and saving today

3
Your Pay
Remainder AY07 AY08 ENTITLEMENTS Cadet
Pay 4317.30 10361.00 Pay
Advance - - TOTAL ENTITLEMENTS
4317.30 10361.00 DEDUCTIONS FITW
183.75 441.00 SITW 62.50 150.00
FICA 330.25 792.60 SGLI 135.00 324.00
Repayment of Advance 550.00 1320.00
TOTAL DEDUCTIONS 1261.50
3027.60 ENTITLEMENTS LESS DEDUCTIONS
3055.80 7333.92 CHECKING
ACCOUNT ALLOWANCE 2000 6000 DEPOSIT TO
CADET ACCOUNT 1055.80 1333.92
State Tax is variable
This is your discretionary pay
4
Your Pay
Remainder AY07 AY08 ENTITLEMENTS Cadet
Pay 4317.30 10361.00 Pay
Advance - - TOTAL ENTITLEMENTS
4317.30 10361.00 DEDUCTIONS FITW
183.75 441.00 SITW 62.50 150.00
FICA 330.25 792.60 SGLI 135.00 324.00
Repayment of Advance 550.00 1320.00
TOTAL DEDUCTIONS 1261.50
3027.60 ENTITLEMENTS LESS DEDUCTIONS
3055.80 7333.92 CHECKING
ACCOUNT ALLOWANCE 2000 6000 DEPOSIT TO
CADET ACCOUNT 1055.80 1333.92
You still Owe 1870
5
Your Budget
Have you topped-off?
Cadet Account AY 07 Jun 07-graduation Balan
ce Forward xxxx.xx xxxx.xx DEPOSITS Initial
Deposit - - Deposit From Cadet
Entitlements 1055.80 1333.92 Interest Earned
23.08 55.39 Rations Earned
178.75 429.00 TOTAL DEPOSITS 1290.63 1818.31
EXPENSES Laundry/Dry Cleaning 159.75 38
3.40 Personal Services 121.70 292.08 DCA
Fee/Eisenhower Hall Tickets 95.83
230.00 Class Activities 55.42 333.00 Cadet
Publications 39.17 99.00 Athletic Fees
30.00 72.00 Uniforms Equipment 59.17
142.00 Books Supplies 834.00 1310.00 Compute
r Supplies 157.08 177.00 Class Fund -
- Information Tech Fee 82.06
196.94 Newspapers NY Times 20.83
50.00 Miscellaneous - - Inflation Factor
- - TOTAL EXPENSES 1655.01
3285.42
These are set-asides by the Treasurer
Notice whats not here….. RING 2LT Uniforms Car
Insurance Credit Card Pmts etc. etc.
6
Your Budget
Minimum Account Balance is required Just for
you to meet Expenses
Cadet Account AY 07 Jun 07-graduation Balan
ce Forward xxxx.xx xxxx.xx DEPOSITS Initial
Deposit - - Deposit From Cadet
Entitlements 1055.80 1333.92 Interest Earned
23.08 55.39 Rations Earned
178.75 429.00 TOTAL DEPOSITS 1290.63 1818.31
EXPENSES Laundry/Dry Cleaning 159.75 38
3.40 Personal Services 121.70 292.08 DCA
Fee/Eisenhower Hall Tickets 95.83 230.00
Class Activities 55.42 333.00 Cadet
Publications 39.17 99.00 Athletic Fees
30.00 72.00 Uniforms Equipment 59.17
142.00 Books Supplies 834.00 1310.00 Compute
r Supplies 157.08 177.00 Class Fund -
- Information Tech Fee 82.06
196.94 Newspapers NY Times 20.83
50.00 Miscellaneous - - Inflation Factor
- - TOTAL EXPENSES 1655.01
3285.42
1467.11
Total Expenses Exceed Total Deposits
7
Should you Top-Off?
Reasons to Top-Off
Get out of Credit Card Debt Avoid Credit Card
Debt
  • Reasons not to Top-Off
  • Save for your Class Ring 1200
  • Save for your Uniforms 2000
  • Money is in an interest bearing account

8
Review Budget Basics
Short Term Goals Ring Uniforms Spring Break Car
9
Should you Top-Off?
Between now and graduation you will collect 8000
in discretionary pay
Class Ring 1200 LT Uniforms 2000 Travel
Home x 5 1500 Spring Break x
2 1600 Total 6300
8000 - 6300 1700
There are 17 months until graduation
You have about 100 per month for incidentals
10
Should you Top-Off?
Between now and graduation you will collect 8000
in discretionary pay
Class Ring 1200 LT Uniforms 2000 Mom and
Dad pay for travel and vacations Total 3200
8000 - 3200 4800
There are 17 months until graduation
You have about 282 per month for incidentals
11
Credit Card Debt is Bad
Initial Amount Charged 5,000 _at_18 Total Pay Off
_at_ 2 Minimum Payment. How Long would it
take? 472 months (almost 40 Years) Total
Interest Paid 13,397 Total Pay Off _at_ 100
Every Month. How Long? 94 months (almost 8
Years) Total Interest Paid 4,311
12
Avoiding Credit Card Debt
Do not use your credit card for routine expenses
if you are not currently paying it off every
month Establish and maintain an Emergency
Fund Emergencies are unscheduled trips home and
car repairs Plan ahead for your known major
expenses Avoid impulse purchases on
credit Dont try to keep up with the Joneses
13
Myth Ill start saving after graduation
Your financial planning will never be simpler
than it is now If you havent learned to live
within your budget now what makes you think
youll do it when youre paying for groceries and
rent? If youre not eating in the mess hall now,
what makes you think youll stop eating fast food
later The green zone in Baghdad has
Subways AAFES is in Iraq, too If you have
access to the internet you can spend money
14
The Cow Loan
Should I take the loan? What should I do with it?
15
Background
  • Cadets sign for 30k loan with very favorable
    interest terms second semester Cow year
  • Repayment represents 25 of base 2LT pay (30
    after tax)
  • We have seen an increase in financial vendors and
    interest from financial vendors in the last
    several years
  • We have many reports of vendors pressing cadets
    to purchase products that are not always in their
    best interest

16
Concerns
  • Many cadets have no plan for the loan
  • Cadets are bombarded by vendors who are selling
    products they dont need
  • Cadets are not planning ahead for major purchases
    and are taking on credit card debt in addition to
    the loan
  • Cadets believe USMA sanctions the vendors that
    are selling them inappropriate products

17
Cow Loan Basics
Its a good deal -- take it!!
BUT!!!!
Its a COW LOAN not a CASH COW! Know thyself!!
18
Review Budget Basics
Short Term Goals Ring Uniforms Spring Break Car
MediumTerm Goals Wedding House Down
Payment Spouses Tuition
Long Term Goals Retirement Kids College
19
Cow Loan Basics
1 Priority is to pay off credit card debt 2
Priority is to plan for known expenses without
going into credit card debt Class ring and
uniforms Any known travel
20
Cow Loan Basics
3 Priority is to pay for your car
Do not take on additional debt to buy a car You
are already maxed out!
21
Cow Loan Basics
The ideal plan is to save and invest Max out your
Roth IRA Invest the rest according to your medium
and long term financial needs
22
Financial Goals
Short Term Goals Ring Uniforms Spring Break Car
Medium Term Goals Wedding House Down
Payment Spouses Tuition
Long Term Goals Retirement Kids College
23
Max Out Your Roth IRA
Invest 4000 toward 2006 before filing your
taxes Invest an additional 4000 against 2007
24
Max Out Your IRA
Where?
25
Invest the Rest
Okay, but where?
26
Investing
Do Your Homework!
27
Resources
Yahoo! Finance MSN Money About.com Investopedia.co
m Investment Company Websites
28
Investing
You can do it!
29
Financial Planners
Are guaranteed to make their commission on load
funds and annuities You are not guaranteed a
return Must disclose how they are compensated
30
Financial Planners
If you do not feel like you are in charge of
YOUR MONEY you have the wrong financial planner
31
Cow Loan Don'ts
Do not invest in an instrument that you do not
understand Do not transfer responsibility for
your finances to your room mate Do not trust
someone just because they have permission to sell
products on post
32
Cow Loan Don'ts
Do not take on a car loan in addition to your cow
loan Do not take on credit card debt in addition
to your cow loan Do not invest in a financial
instrument that you do not understand
33
Recommendations
Plan ahead starting today Get out of Credit Card
debt ASAP Avoid Credit Card debt by planning
ahead Max out your Roth IRA
34
The Way Ahead
  • Company meeting with an Econ Instructor M hour
  • More specifics on the Cow Loan
  • More specifics on products and plans
  • Opportunity to answer questions/dispel rumors

35
Additional Resources
  • Economics Faculty
  • Investment Club holds a special seminar for the
    cow loan

36
No Mission Too Great!
About PowerShow.com