budgeting deep dive
Post on 13-Apr-2017
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B U D G E T I N G D E E P D I V EW I T H K AT E D O R E
FROM BURNT OUT AND BROKE TO FRUGAL AND FREE
IS YOUR FINANCIAL HOUSE IN ORDER? MINE WASNT.
BUDGETING DEEP DIVE
K E Y Q U E S T I O N S How much do I earn?
How much do I spend?
What is my credit score?
How much debt
How does my debt
do I have?
compare to my income?
YOU NEED TO KNOW
HOW MUCH IS COMING IN
VS. HOW MUCH IS GOING OUT
NO ONE LIKES
FACING THE NUMBERS,
BUT YOU NEED TO KNOW
EXACTLY WHERE YOU STAND.
BANK STATEMENTS + SPREADSHEETS
BANK STATEMENTS + SPREADSHEETS +
BRUNCH & BUDGET
BUDGET DATE NIGHT
LOOK CLOSELY AT EXPENSES
ARE THERE MONEY LEAKS?
MONEY LEAKS YOU MAY NOT HAVE THOUGHT OF
RIDE SHARINGFOOD DELIVERY
BANK FEESCELL PHONE
HEATING & COOLING
DID YOU KNOW NEARLY EVERY BILL IS NEGOTIABLE?
COMPANIES THAT WILL NEGOTIATE YOUR
BILLS FOR YOU:
BUT THEY DO CHARGE A FEE
GOT A PROBLEM AREA?
SWITCH TO A 30-DAY
CASH DIETFOR YOUR
TIRED OF BUDGETING SPREADSHEETS?
YOU NEED A BUDGET (YNAB)
COST: $50 PER YEAR
COST: FREE - $95 PER YEAR
TWO THINGS ARE CRITICAL:
3-6 MONTH EMERGENCY FUND
KNOWING YOUR BARE BONES BUDGET
WHATS THE RIGHT AMOUNT FOR YOU?
Does your employer or union provide a loss of income protection plan like short or long-term
How robust is your medical insurance plan?
What is your level of fixed expenses and debt? You should still have an emergency fund of at
least $1,000 if youre dealing with debt.
Does your family have additional sources of income?
Do you have access to a home equity line of credit?
WHERE TO STASH YOUR EMERGENCY FUND:
CHECKING SAVINGS MONEY MARKET DEPOSIT CERTIFICATE OF DEPOSIT
WHAT IS YOUR BARE BONES BUDGET?
WHAT MAKES A CREDIT SCORE?
WHAT MAKES A CREDIT SCORE?
35% - Payment History
30% - Total Debt & Utilization
15% - Length of Credit History
10% - Types of Credit in Use
10% - New Credit
WHAT IS A GOOD CREDIT SCORE?
WHY DO CREDIT SCORES MATTER?
BEING APPROVED FOR CREDIT
Refinancing Student Loans
AFFORDABLE INTEREST RATES
30-year fixed rate mortgage for $240,000
840 - 850 score:
3.5% interest - $147,975 total
680 - 699 score:
4.375% interest - $191,382
THATS $43,407 EXTRA IN INTEREST!
DO YOU KNOW WHO ELSE CHECKS YOUR CREDIT SCORES?
Your written request
Satisfying a federal court order or subpoena
Financial institution completing a credit application for a loan
Government agencies for certain licenses or government benefits
Current creditors for collections efforts
Child support enforcement
Prospective employers (only with your written consent)
Yup, 47% of employers conduct credit checks!
WHERE CAN YOU GET YOUR CREDIT SCORE?
Free, once per year Raw credit scores from Experian, TransUnion, Equifax
WHY MONITOR YOUR CREDIT REPORT?
1 in 4 people have an error in one of their credit reports.
1 in 20 people have a SERIOUS error in one of their credit reports.
WHERE TO MONITOR FOR FREE
Credit Karma - Experian & TransUnion
Quizzle - Equinox
Credit Sesame - TransUnion
These arent FICO scores, but some banks are starting to offer those for free, as well.
WHAT IS YOUR DEBT-TO-INCOME RATIO?
GROSS MONTHLY INCOME /
WHY DEBT-TO-INCOME MATTERS
40 - 50% DEBT TO INCOME IS RISKY
50% OR MORE DEBT-TO-INCOME CAN BE DANGEROUS
A STRONG CREDIT SCORE & LOWER DEBT-TO-INCOME RATIO EQUALS MORE OPTIONS
BALANCE TRANSFER CREDIT CARDS LOW-INTEREST PERSONAL LOANS
BUDGETING, YOUR CREDIT SCORE, AND DEBT PAYOFF ARE TOOLS
THESE TOOLS MAKE ROOM FOR THE MOST IMPORTANT QUESTION:
HOW MUCH IS AN HOUR OF YOUR LIFE WORTH?