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Financial Jigsaw Puzzle Financial Jigsaw Puzzle 2011 2011 Financial Jigsaw Puzzle Financial Jigsaw Puzzle 2011 2011
Brought to you by Congressional Federal Credit Union Brought to you by Congressional Federal Credit Union
AgendaAgendaAgendaAgenda
Our Goals & DreamsOur Goals & Dreams Spending Habits – Psychology 101Spending Habits – Psychology 101 Who’s it hurting? Who’s it hurting? How do we Budget?How do we Budget? Repay Debt while saving for Other GoalsRepay Debt while saving for Other Goals Set your Own Credit Score #Set your Own Credit Score # Investing Investing SummarySummary
Our Goals & DreamsOur Goals & Dreams Spending Habits – Psychology 101Spending Habits – Psychology 101 Who’s it hurting? Who’s it hurting? How do we Budget?How do we Budget? Repay Debt while saving for Other GoalsRepay Debt while saving for Other Goals Set your Own Credit Score #Set your Own Credit Score # Investing Investing SummarySummary
Goals & Dreams Goals & Dreams Goals & Dreams Goals & Dreams
Grad SchoolGrad School First Paying JobFirst Paying Job MarriageMarriage First HomeFirst Home Sports CarSports Car Kids/FamilyKids/Family Great JobGreat Job Early Retirement Early Retirement
Grad SchoolGrad School First Paying JobFirst Paying Job MarriageMarriage First HomeFirst Home Sports CarSports Car Kids/FamilyKids/Family Great JobGreat Job Early Retirement Early Retirement
The Psychology of it The Psychology of it allall
The Psychology of it The Psychology of it allall
Spending Choices/Self-Evaluation Spending Choices/Self-Evaluation Keeping up with the JonesKeeping up with the JonesThe Role of AdvertisingThe Role of AdvertisingSpending HabitsSpending HabitsImpulse Buying/Retail TherapyImpulse Buying/Retail Therapy
Why should we change these behaviors? Why should we change these behaviors?
Spending Choices/Self-Evaluation Spending Choices/Self-Evaluation Keeping up with the JonesKeeping up with the JonesThe Role of AdvertisingThe Role of AdvertisingSpending HabitsSpending HabitsImpulse Buying/Retail TherapyImpulse Buying/Retail Therapy
Why should we change these behaviors? Why should we change these behaviors?
Who’s it hurting?Who’s it hurting?Who’s it hurting?Who’s it hurting?
1 medium cup of white chocolate 1 medium cup of white chocolate mocha specialty coffee = $4.35mocha specialty coffee = $4.35
1 coffee a day per month = $130.001 coffee a day per month = $130.00 365 cups = $1560365 cups = $1560
Brewing at home - $171.55 annually Brewing at home - $171.55 annually What else could we do with $1388.45?What else could we do with $1388.45?
1 medium cup of white chocolate 1 medium cup of white chocolate mocha specialty coffee = $4.35mocha specialty coffee = $4.35
1 coffee a day per month = $130.001 coffee a day per month = $130.00 365 cups = $1560365 cups = $1560
Brewing at home - $171.55 annually Brewing at home - $171.55 annually What else could we do with $1388.45?What else could we do with $1388.45?
Our Costly VicesOur Costly VicesOur Costly VicesOur Costly Vices
Our Vices Ave. Weekly Cost
Estimated Annual Cost
Estimated 5- Year Cost
Night Out w/ Friends $57.50 $2,990.00 $14,950.00
Lunches Out X 3 $30.00 $1,560.00 $7,800.00
Venti Specialty Coffee/Frap X 3 $15.00 $780.00 $3,900.00
Unused Gym Membership $10.00 $502.00 $2,600.00
Junk Food from Vending Machine $6.00 $312.00 $1,560.00
Bottled H2O $4.00 $208.00 $1,040.00
Total Cost $6,352.00 $31,760.00
How do we Budget?How do we Budget?How do we Budget?How do we Budget?
Stick to a BudgetWhat is your income?What are your fixed expenses?What are your variable expenses?Keep good records of incoming & outgoing fundsNeeds vs. Wants80 vs. 20
Stick to a BudgetWhat is your income?What are your fixed expenses?What are your variable expenses?Keep good records of incoming & outgoing fundsNeeds vs. Wants80 vs. 20
““Do something every day that you don’t want to do; this is the golden rule Do something every day that you don’t want to do; this is the golden rule for acquiring the habit of doing your duty without pain.”for acquiring the habit of doing your duty without pain.”
-Mark Twain-Mark Twain
Track Where It Goes Track Where It Goes & Construct the Budget& Construct the Budget
Track Where It Goes Track Where It Goes & Construct the Budget& Construct the Budget
Write it all downWrite it all downPaper budget formPaper budget formSpreadsheetSpreadsheet
Computer TrackingComputer Tracking MoneyTracker & GoalBuilder w/ CFCUMoneyTracker & GoalBuilder w/ CFCU
Use checks or debit cardsUse checks or debit cardsPut aside that credit cardPut aside that credit card
Monitor ATM useMonitor ATM use
Write it all downWrite it all downPaper budget formPaper budget formSpreadsheetSpreadsheet
Computer TrackingComputer Tracking MoneyTracker & GoalBuilder w/ CFCUMoneyTracker & GoalBuilder w/ CFCU
Use checks or debit cardsUse checks or debit cardsPut aside that credit cardPut aside that credit card
Monitor ATM useMonitor ATM use
Expect setbacks! Reward yourself along the way!Expect setbacks! Reward yourself along the way!
Repay Debt While Repay Debt While Saving for Other Saving for Other
GoalsGoals
Repay Debt While Repay Debt While Saving for Other Saving for Other
GoalsGoals Pay off High Interest Rate Credit Cards
• A $2000 Balance CC @ 20% int. rate w/ only min payments will take 31 yrs to payoff
Don’t use Credit Cards for Emergencies Don’t wait to save until bills are all paid
Consider yourself an essential expense!
Pay off High Interest Rate Credit Cards• A $2000 Balance CC @ 20% int. rate w/ only min
payments will take 31 yrs to payoff
Don’t use Credit Cards for Emergencies Don’t wait to save until bills are all paid
Consider yourself an essential expense!
Set your own Credit Score Set your own Credit Score ##
Set your own Credit Score Set your own Credit Score ##
How FICO
Scores are
Determined
How FICO
Scores are
DeterminedAmount owed on Revolving Debt
30%
35%
Payment History10%
Types of Credit Used
10%
New Credit
15%
Lengthof Credit History
FICO Score Mortgage Loan FICO Score Mortgage Loan ExampleExample
FICO Score Mortgage Loan FICO Score Mortgage Loan ExampleExample
FICO ScoreFICO Score APRAPR Monthly paymentMonthly payment
760-850760-850 5.125%5.125% $2723$2723
700-759700-759 5.5%5.5% $2839$2839
660-699660-699 5.875%5.875% $2960$2960
620-659620-659 6.5%6.5% $3160$3160
580-619580-619 7%7% $3327$3327
500-579500-579 7.5%7.5% $3497$3497*Example purposes only: $500 K – 30 YR Fixed Mort.*Example purposes only: $500 K – 30 YR Fixed Mort.
Keep Your FICO Score Keep Your FICO Score HighHigh
Keep Your FICO Score Keep Your FICO Score HighHigh
Pay on time, every time Pay off collection accounts Keep your old accounts Avoid “maxing out” accounts Limit balance transfers Avoid excess credit applications
Annualcreditreport.com
Pay on time, every time Pay off collection accounts Keep your old accounts Avoid “maxing out” accounts Limit balance transfers Avoid excess credit applications
Annualcreditreport.com
InvestmentsInvestmentsInvestmentsInvestments
Small or BigSmall or Big Find a company you frequentFind a company you frequent Do some research Do some research Buy a little-be willing to write it offBuy a little-be willing to write it off Don’t look at your statements too oftenDon’t look at your statements too often Speak to a Licensed Professional Speak to a Licensed Professional
Start Now because Time is Money!
Small or BigSmall or Big Find a company you frequentFind a company you frequent Do some research Do some research Buy a little-be willing to write it offBuy a little-be willing to write it off Don’t look at your statements too oftenDon’t look at your statements too often Speak to a Licensed Professional Speak to a Licensed Professional
Start Now because Time is Money!
Sooner You Start the BetterSooner You Start the BetterSooner You Start the BetterSooner You Start the Better
Retirement @ 65
$2,845,836
$1,017,220
$341,716 $0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
Age 25 Age 35 Age 45
*Calculation based on $450 monthly contributions @ 10% ave. annual rate of return *Calculation based on $450 monthly contributions @ 10% ave. annual rate of return
SummarySummarySummarySummary
We saw… The impact of society, situation, and
advertising on spending How little purchases can hurt a lot Budgeting techniques and steps How to pay off debt and save How to manage your credit score Investing for beginners Retirement planning
We saw… The impact of society, situation, and
advertising on spending How little purchases can hurt a lot Budgeting techniques and steps How to pay off debt and save How to manage your credit score Investing for beginners Retirement planning
Tell Everyone!Tell Everyone!Tell Everyone!Tell Everyone!
Tell your friends, family, co-workers!
Knowledge is power,
so share what you’ve learned with others!
Wherever life takes you, we’re there!
Tell your friends, family, co-workers!
Knowledge is power,
so share what you’ve learned with others!
Wherever life takes you, we’re there!
Contact Information Contact Information Contact Information Contact Information
CONGRESSIONAL FEDERAL CREDIT UNION CONGRESSIONAL FEDERAL CREDIT UNION 800.491.2328 / 800.491.2328 / www.congressionalfcu.orgwww.congressionalfcu.org
BALANCEBALANCE is a financial education and counseling is a financial education and counselingservice available as a benefit of credit unionservice available as a benefit of credit unionmembershipmembership
• Money management counselingMoney management counseling• Debt repayment optionsDebt repayment options• Credit report reviewCredit report review• 888.456.2227 / 888.456.2227 / www.balancepro.netwww.balancepro.net
Or see your Financial Representative today!Or see your Financial Representative today!
CONGRESSIONAL FEDERAL CREDIT UNION CONGRESSIONAL FEDERAL CREDIT UNION 800.491.2328 / 800.491.2328 / www.congressionalfcu.orgwww.congressionalfcu.org
BALANCEBALANCE is a financial education and counseling is a financial education and counselingservice available as a benefit of credit unionservice available as a benefit of credit unionmembershipmembership
• Money management counselingMoney management counseling• Debt repayment optionsDebt repayment options• Credit report reviewCredit report review• 888.456.2227 / 888.456.2227 / www.balancepro.netwww.balancepro.net
Or see your Financial Representative today!Or see your Financial Representative today!
Questions or Comments?Questions or Comments?
Thank you!Thank you!