budgeting & personal finance
TRANSCRIPT
Budgeting & Personal Finance
It’s Never Too Late to Start!
Grandma was RIGHT!
• “Always Live Within Your Means.”
• Build savings into your budget
• Worth more later, than now
• Can help with future moving expenses
• Or save for a down payment on a house or car
Protect Yourself!
• Life Insurance
• Term
• Disability Insurance
• Dental & Vision Insurance
• Renter’s Insurance
• Auto Insurance
Yearly Expenses –BUDGET!
• Plan a Budget for Gifts
• Christmas
• Birthday
• Wedding
• Traveling Home for the Holidays
• DO NOT PUT THESE ON A CREDIT CARD!
Keep a Budget• Use envelope system to save cash
• Rent / Mortgage
• Utilities
• Medical costs / prescriptions
• Groceries
• Unexpected Repairs
• Entertainment
• Special purchases
• New car
• Down payment on a house
• Vacation home
• Boat
Financial Peace Advocate ~ Dave Ramsey
Seven Baby Steps to Get You Started
1. Have a $1,000 emergency fund in the bank
2. Pay off all debt using the Debt Snowball Technique
- pay off smaller balances first
3. Build 3 to 6 months of expenses in savings
4. Invest 15% of household income into Roth IRAs and
tax-advantaged retirement accounts
5. College funding for children
6. Pay off your house early
7. Build wealth and give!
Always save SOMETHING
• Budget your savings from each pay check
• It is NOT against the law to have a second job if this is what it takes!
• Hustling early in your career to save on a regular basis will pay off
What is the Most Powerful Law?
• The Law of Compound Interest• Start Your Retirement Plan EARLY
• Increase contributions every year
Start Retirement Savings NOW
• Who likes free money?• Check with your Employer about matching your
contribution each pay period
• If you work at an Educational Institution, the Plan is called a 403(b) plan
• Educators often get the highest Employer Match available.
Responsible Rachel vs. Procrastinating Pete
As you can see, Responsible Rachel already has approximately $78,227.44 in the account before Procrastinating Pete even puts in a dime.
Responsible Rachel vs. Procrastinating Pete
At age 65, Responsible Rachel will have a whopping $1,070,944.07 in her account while Procrastinating Pete will only have $856,584.02.
That’s a difference of $214,360.05!
Student Loans
• Pay them off AGGRESSIVELY to get Financial Freedom
• Standard schedule for pay off is 10 years
• 120 MONTHS
An Example:Student Loan Summary
LOAN TYPE: DOE CHASE # 1 CHASE # 2 CHASE # 3
AMOUNT: $ 21,330 $ 13,340 $ 12,300 $ 17,300
INTEREST RATE: 3.000% 3.750% 9.300% 9.550%
ALL
PAYBACK PERIOD: LOANS R E Q U I R E D M O N T H L Y P A Y M E N T
Implied Annual
Salary @ 15%
10 YRS $721.59 $205.96 $133.48 $157.82 $224.33 Note A & B $57,727
15 YRS $552.45 $147.30 $97.01 $126.96 $181.17 $44,196
20 YRS $472.26 $118.30 $79.09 $113.05 $161.82 $37,781
30 YRS $399.44 $89.93 $61.78 $101.64 $146.10 $31,955
Note A: Can pay-off Chase #3 in 44 months with an extra $250/month in principal payments.
Note B: Chase #2 would then be fully paid after #3 in Month 67 if the extra paymetns were continued.
Income Tax
• Make sure that all available deductions and credits are listed
• Use a Tax Organizer to assist with needed information
• Personal Information
• Social Security Number
• Dependents
• Wage / Salary Income / Self-Employment
• Interest / Dividend Income
• Qualifying Expenses
• Business Income
• Tax Credits
Dan Osberger, CPA, MBA
Oasis Financial Solutions, Inc.17903 State Road 23
South Bend, IN 46635
574-246-1165574-514-7453