Default Prevention Workshop 2001

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• Achieving Your
• Financial Goals

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Achieving Your Financial Goals

• Agenda

• Identify financial goals
• Develop a budget
• Establish a savings plan
• Achieve your financial goals

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Identify Financial Goals

• Identify Financial Goals

• Buy a car
• Take a vacation
• Buy a house
• Retire comfortably
• Pay off student loans

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Identify Financial Goals

• First Step to Financial Goals

• Invest in yourself
• Feature Improved education/better job
• Benefit More income/enjoyable job

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Develop a Plan

• Perception vs. Reality

Average Expenses Source Consumer Expenditure
Survey, 1998-99, Bureau of Labor
Statistics Average Salary Source JobTrack.com
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Develop a Plan

• Realistic Budgeting

• Where money goes
• Track each expense
• Visit www.edwise.org
• Write out a budget
• Stick to it
• Adopt a thrifty lifestyle

R01
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Develop a Plan

• College Budget

• Education costs
• Tuition and fees
• Books and supplies
• Travel/airfare
• Computer and software

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Develop a Plan

• Post-College Budget

• Dont forget to include
• Commute expenses
• Work clothes and dry cleaning
• Health insurance taxes
• Student loans
• Savings

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Develop a Plan

• Dont Cramp Your Style

• Use grocery list
• Dont shop when hungry
• Clip coupons and buy bulk foods
• Combine errands
• Bring lunch to work a few times a week
• Leave credit cards at home
• Estimated monthly savings 50

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Develop a Plan

• Might Cramp Your Style

• Shop at consignment/thrift stores
• Use economy car or public transportation
• Eat only one meal out each week
• Cancel cable TV or cell phone service
• Rent a video vs. going to the movies
• Lower winter thermostat - raise in summer
• Estimated monthly savings 250

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Develop a Plan

• Will Cramp Your Style

• Eat out only once a month
• Use public transportation often
• Cancel cable TV, cell phone, Internet
• Visit the library vs. bookstore
• Share living costs with a roommate or two
• Read books on ways to be thrifty
• Estimated monthly savings 500

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Establish a Savings Plan

• Starting a Savings Plan

• Todays habits pay off tomorrow
• Start saving today
• Sign up for employers retirement plan
• Include savings in budget

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Establish a Savings Plan

• Rule of 72

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Establish a Savings Plan
Power of Compound Interest

• Student A
• Age 25
• 100/month
• 8 years
• Contributes 9,600
• 48,899 at age 55

• Student B
• Age 40
• 100/month
• 16 years
• Contributes 19,200
• 32,270 at age 55

Savings growth calculated at 6 interest.
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Establish a Savings Plan

• Power of Compound Interest

R04
Savings growth calculated at 6 interest.
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Establish a Savings Plan

• Savings Growth

• 50 a month
• 8,235 in 10 years
• 250 a month
• 41,175 in 10 years
• 500 a month
• 82,349 in 10 years

Savings growth calculated at 6 interest.
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Achieve Your Financial Goals

• Savings Choices

• 8,235 buys a nice vacation
• 41,175 buys a car
• 82,349 is a
• Down payment on a home
• Starting a retirement
• Saving also helps pay off your student loans

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Achieve Your Financial Goals

• Pay Down Student Loans

• 15,000 student loan
• 10-year term
• 8.25 interest rate
• Monthly payment is 184
• Total interest paid is 7,077

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Achieve Your Financial Goals

• Pay Down Student Loans

• An extra 50 a month
• 3 years fastersaves 2,231 in interest
• An extra 250 a month
• 6 years fastersaves 4,892 in interest
• An extra 500 a month
• 8 years fastersaves 5,762 in interest

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Achieve Your Financial Goals

• How to Succeed

• Identify financial goals
• Track expenses and list your debts
• Create a financial plan
• Save in ways that fit your lifestyle
• Start a savings planand stick to it!
• Pay off debt

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Achieving Your Financial Goals