2Take Charge of Your Finances

Reality Check

– Salaries, Expenses, Budgets

Credit and Debt

Saving and Investing

3Roadmap for Success

Plan for Success: Security, Freedom, Legacy, Happiness

Set realistic and measurable goals

– Short- and long-term

Make a plan with timeframes

Create a budget

Reevaluate goals, plan and budget regularly

4The “Real” Real World

What can you expect to make?

Where will it go?

How much is left?

How to pay yourself more?

5

Snapshot: 2007 Starting Salaries

Source: National Association of Colleges and Employers, Salary Survey – Summer 2007

Degree/Field Average Salary Offer - 2007

Chemical Engineering $59,361

Computer Science $53,396

Finance $47,239

Accounting $46,718

Business Administration/Management $43,701

Marketing $40,161

Political Science/Government $34,590

Elementary Education $34,565

Communication $33,798

Psychology $31,631

6Housing CostsThe cost to rent an apartment can often exceed $1,000 a month – excluding utilities, cable, or phone bills

Moving back home for a year could save you $12,000 or as much as $19,440 for certain cities! Average Rental Prices: Nation’s Most Expensive Real Estate Markets New York, NY $2,507San Francisco, CA $1,863Los Angeles, CA $1,709Boston, MA $1,476Washington, DC $1,358Miami, FL $1,148Chicago, IL $1,016

Source: Property & Portfolio Research 2007 (PPR)

7

Benefits are as Important as SalarySalary vs. total package

Job 1 offers a salary of $50,000 with no benefits

Job 2 offers a salary of only $47,000 but pays

80% of your $350 per month health insurance premium and contributes 3% of your salary to a 401K

Job 2’s $47,000 base salary could actually be worthmore than $51,700

8Where Does $50,000 Go?

Graduate #1

Transportation 13%

$6,300

Housing 25%

$12,500

Social Security/Medicare 8%

$3,800

Federal/State Taxes 30%

$15,000

What’s Left 8%

$4,000Utilities

7%$3,600

Health/Dental Insurance 9%

$4,800

9Where Does $50,000 Go?

Graduate #2

Utilities 7%

$3,600

Savings 6%

$3,000

What’s Left 13%

$6,338

401 (k) Savings6%

$3,000

Transportation 11%

$5,550

Housing 20%

$10,000

Social Security/Medicare 7%

$3,572

Federal/State Taxes 28%

$14,100Health/Dental Insurance

2%$840

10Who has the Better Deal?

What’s Left?$4,000 / $333 per

month

What’s Left?$6,338 / $528 per month PLUS $3,000 Savings &

$3,000 Retirement Savings

Graduate #1$50,000 Salary

Total Taxes $18,800

Health Insurance $4,800

Rent $12,500

Transportation $6,300

Utilities $3,600

Graduate #2$50,000 Salary

Total Taxes $17,672

Health Insurance $840

Rent $10,000

Transportation $5,550

Utilities $3,600

11In Summary

Realistic salary expectations

Where will your money go?

Weigh your options before you spend

12Managing Debt

What is debt?

How can you manage debt?

How much debt can you afford?

How long will it take you to pay off debt?

Whose responsibility is it to pay off debt?

Is all debt bad?

13Student Loans

Repaying a student loan can be a big chunk of the monthly budget  – The average student loan debt among graduating seniors

nationwide is $19,646 – Paying an additional $100 a month could reduce a 10-year

loan to 7 years and save $2,141 in interest.

http://studentaid.ed.gov

Student loan repayment is also key to establishing good credit

Source: The Project on Student Debt 2007

14How Credit Works

What is credit?

How to establish credit?

What determines your credit score? www.myfico.com

What’s in your credit report?www.annualcreditreport.com

Length of Credit History

15%

New Credit10%

Amounts Owed 30%

Types of Credit Used 10%

Payment History 35%

What is Your FICO Score?

15Why Credit Matters Who cares about

your credit?

Good credit = better interest rates

How can you control your credit history?

The Cost of Interest$20,000 Car Loan Over 48 Months

Interest Rate Monthly Payment

Interest Paid

6.0% Interest $469 $2,546

8.5% Interest $492 $3,662

16Avoiding the Credit Card Trap

Minimize the number of credit cards you have

Comparison shop for best rates and terms

Limit credit card use

Avoid impulse buying

Pay off balances in full each month

17

Booking a “cheap” $1,000 spring break trip on your credit card and paying just the minimum balance each month will take you 16 years to pay it off.

After paying interest, the trip will wind up costing $2,100!

*Based on 12% interest rate and $15 minimum payments

Did You Know…

18In Summary

Establish good credit early

Look at your credit report every year

Understand how credit affects your life

Keep debt manageable

Ultimately, credit and debt are your responsibility

19Why Save Money?

Establish an “emergency fund”

Plan for future purchases

Build wealth

Plan for retirement– Don’t count on Social Security

20Time Value of Money

Start early

The power of compounding

– Earn interest on your investment

– Earn interest on your interest!

Inflation

21Compounding Example

Starting Early Can Make a Big DifferenceBased on an 8% annual return, compounded monthly

Monthly Contribution

AnnualContribution

What You Could Have In: 5 Years 10 Years 20 Years 30 Years

$50 $600 $3,698 $9,208 $29,647 $75,015

$100 $1,200 $7,397 $18,417 $59,295 $150,030

$150 $1,800 $11,095 $27,625 $88,942 $225,044

$400 $4,800 $29,390 $73,178 $235,608 $596,143

22What Happens if You Wait?

If you put away just $400 a month starting at age 25, your savings would be $500,000+ by the time you were 55

If you wait until you are 35 to start, your savings would be less than $250,000

23Types of Investment Vehicles

Savings Account

CDs

Bonds

Money Market

Stocks

Mutual Funds

24Choosing the Best Vehicles

Timeframe

Risk/return tradeoff

Diversification

Do your research

25Choosing a Financial Advisor

Seek help from someone with verifiable credentials

Meet with a potential advisor to make sure they understand your needs and objectives

Find out up front how payment works

For more information visit:www.sec.gov/investor/pubs/invadvisers.htm http://www.finra.org/index.htm

26In Summary

Start early!

Invest on a regular basis

Understand your risk tolerance

Educate yourself

Do your homework on potential financial

advisors

27Gameplan for Success

Set goals, make a plan, develop a budget

Be responsible

Protect your credit rating

Start today – time is on your side

Reevaluate your plan regularly