Creating A Spending Plan

Presented by: Sponsored by:

Wendy Perkins, Credit Union of OhioFinancial Counselor

Tools for a Successful Plan A good spending plan is made up of several

parts: A strong organizational system Clearly defined priorities and goals Putting the information on paper An easy bill-payment system Monitoring and tracking your progress

Getting Started Why is planning so important?

It allows you to make the most of every penny you earn

Helps you to achieve your financial goals

Why do budgets fail? They are too complicated They have unrealistic goals and objectives They are inconsistent

Getting Organized De-clutter. Take the time to get rid of

unnecessary financial records. Gather all needed information including:

pay stubs, creditors statements, bank statements etc.

Create a centralized place to organize and manage your finances.

Set Priorities and Goals Short term goals – Goals that can be attained within

12 months.

Long term goals - Goals that can be attained in 3-5 years.

Goal Setting Tips Specific Reasonable Measurable

Putting the Budget on Paper

Convert all pay to a monthly figure Weekly pay x 4.33 = Monthly Pay Bi-weekly pay x 2.167 = Monthly Pay

Should be based on consistent Net Pay - not gross Understand your pay stub

What deductions do you have? Review your withholdings – The IRS has a withholding

calculator at www.irs.gov.

Expenses

List all your monthly expenses Fixed, Flexible, Periodic and “Misc”

Avoid underestimating your expenses It helps to track expenses for 4 weeks to ensure accuracy.

Break down periodic expenses Put all expenses into a monthly cost

Debt Reduction Write down all debts including balance, interest rate

and minimum payment. Determine how much extra you can afford to pay

and pick one account to apply the extra amount. Prioritize your debts – pay off credit cards first, then

unsecured loans, car loans, student loans and lastly your mortgage.

Try to pay at least the interest + minimum payment

Building Savings Payroll deduction is key Start small and be consistent Ideal goal is to have 3 months of net pay

saved for emergencies Look at various savings options to meet goals

Savings and Holiday Clubs Money Markets and CD’s IRA and 401K

Questions

If you have questions or need help creating or maintaining your monthly spending plan, please call me at the Credit Union of Ohio at 487-6650 ext 1729.

Email: wperkins@cccservices.com