Getting in Control of My Getting in Control of My MoneyMoney

Family Housing Advisory ServicesFamily Housing Advisory Services2401 Lake Street Omaha, NE 681112401 Lake Street Omaha, NE 68111

Julia Craig 934-6749 julia@fhasinc.org Julia Craig 934-6749 julia@fhasinc.org

Psychology of MoneyPsychology of Money

Views of MoneyViews of Money Where did we learn about moneyWhere did we learn about money Social and Family ValuesSocial and Family Values Personal EmpowermentPersonal Empowerment

How does money makes us feel?How does money makes us feel? Gives us a sense of freedomGives us a sense of freedom Safety, Security, and StabilitySafety, Security, and Stability Personal power, success and statusPersonal power, success and status Social StatusSocial Status Express love in personal relationshipsExpress love in personal relationships Enhance friendships and family ties Enhance friendships and family ties

WHERE DO YOU FIT IN?WHERE DO YOU FIT IN? PlannersPlanners- control their financial affairs . They - control their financial affairs . They

budget to save.budget to save. Strugglers- Strugglers- have trouble keeping their heads have trouble keeping their heads

above rough financial waters. They find it above rough financial waters. They find it difficult to budget to save. difficult to budget to save.

Deniers-Deniers- refuse to see that they’re in refuse to see that they’re in financial trouble. They don’t see a need to financial trouble. They don’t see a need to budget to save.budget to save.

Impulsives- Impulsives- see immediate gratification. see immediate gratification. They spend today & let tomorrow take care of They spend today & let tomorrow take care of itself. They couldn’t care less about itself. They couldn’t care less about budgeting to save.budgeting to save.

Money BasicsMoney Basics

Money is alive and active through Money is alive and active through compounding and inflation.compounding and inflation.

You must manage it actively.You must manage it actively. Money itself is neither good nor bad.Money itself is neither good nor bad. What we do with it and the “stuff” we What we do with it and the “stuff” we

accumulate is what others judge.accumulate is what others judge. Money is an “equal opportunity” employee. Money is an “equal opportunity” employee.

Your age, sex, race, and religion are no Your age, sex, race, and religion are no factors. The variables are the amount you factors. The variables are the amount you have, the amount you waste, and the time have, the amount you waste, and the time available for growth.available for growth.

Money BasicsMoney Basics

Money tends to be misused when spending Money tends to be misused when spending is driven by emotions such as love, revenge, is driven by emotions such as love, revenge, jealousy, comfort, and control.jealousy, comfort, and control.

Money makes you rich or poor based on your Money makes you rich or poor based on your daily decisions as to how you use it. Slow daily decisions as to how you use it. Slow and steady saving builds security and wealth.and steady saving builds security and wealth.

Financial MistakesFinancial Mistakes

Poor debt management through excessive Poor debt management through excessive borrowing – not being able to live within your borrowing – not being able to live within your means.means.

Failure to monitor their financial position.Failure to monitor their financial position.

Lack of motivation (desire) to take action.Lack of motivation (desire) to take action.

Lack of foresight in looking ahead.Lack of foresight in looking ahead.

Failure to set financial plans for the future. Most Failure to set financial plans for the future. Most people don’t plan to fail, but people don’t plan to fail, but fail to plan.fail to plan.

Financial MistakesFinancial Mistakes

Lack of knowledge. Financial ignorance can Lack of knowledge. Financial ignorance can prove expensive.prove expensive.

Inadequate protection against unforeseen Inadequate protection against unforeseen events (life and general insurance) such as events (life and general insurance) such as death, disability and physical losses.death, disability and physical losses.

Procrastination in taking remedial action.Procrastination in taking remedial action. Most importantly, lack of discipline in saving Most importantly, lack of discipline in saving

habits.habits. Poor investments: you either pay too much tax Poor investments: you either pay too much tax

on them or inflation eats into your return, or on them or inflation eats into your return, or both…so that money actually goes backwards.both…so that money actually goes backwards.

Financial MistakesFinancial Mistakes

KnowledgeKnowledge:: financial knowledge is vital for financial knowledge is vital for all people to survive in the financial “jungle” all people to survive in the financial “jungle” that is today’s world. Gaining financial that is today’s world. Gaining financial knowledge takes time, effort, and discipline.knowledge takes time, effort, and discipline.

You are the manager of your financesYou are the manager of your finances so make a plan to research your financial so make a plan to research your financial goals and then implement it.goals and then implement it.

ACTION is the key word!!!!ACTION is the key word!!!!

Financial “Rules of Thumb”Financial “Rules of Thumb”

Always pay yourself first even if it’s only Always pay yourself first even if it’s only $5 to get into the “saving mode.”$5 to get into the “saving mode.”

Prioritize your spending; pay rent, utilities and Prioritize your spending; pay rent, utilities and basic needs before other bills.basic needs before other bills.

Never spend all that you earn.Never spend all that you earn. Plan before you purchase.Plan before you purchase. You can’t spend more than you earn You can’t spend more than you earn

indefinitely.indefinitely. Change your attitude from spontaneous free Change your attitude from spontaneous free

spender to one who carefully considers many spender to one who carefully considers many options before buying.options before buying.

Financial “Rule Of Thumb”Financial “Rule Of Thumb” SAVE for that “rainy day” because it SAVE for that “rainy day” because it

ALWAYS comes!ALWAYS comes!

Watch your quarters; the dollars take care of Watch your quarters; the dollars take care of themselves.themselves.

Never charge anything that won’t last as long Never charge anything that won’t last as long as the bill.as the bill.

Distinguish WANTS vs. NEEDS. Distinguish WANTS vs. NEEDS. Give up short term wants for long term goals.Give up short term wants for long term goals.

Know your financial limitations.Know your financial limitations.

Redo your spending plan to reflect life Redo your spending plan to reflect life changes. changes.

Steps To Wise Money ManagementSteps To Wise Money Management Set up goals as a FamilySet up goals as a Family List all sources of IncomeList all sources of Income List all of your AssetsList all of your Assets List all of your DebtsList all of your Debts Open a Savings AccountOpen a Savings Account Pull your Credit ReportPull your Credit Report Track your Daily ExpensesTrack your Daily Expenses Create a Spending PlanCreate a Spending Plan Save for Periodic ExpensesSave for Periodic Expenses Reevaluate your Plan OftenReevaluate your Plan Often

Smart GoalsSmart GoalsGoals are dreams with deadlinesGoals are dreams with deadlines

Short- Term Short- Term Mid-TermMid-Term Long-TermLong-Term

SpecificSpecific MeasurableMeasurable AttainableAttainable RelevantRelevant Time-RelatedTime-Related

WEALTH CREATIONWEALTH CREATION

Assets – Liabilities = NET WORTHAssets – Liabilities = NET WORTH

A wealth-creating A wealth-creating AssetAsset is a possession that is a possession that generally increases in value or provides a generally increases in value or provides a returnreturn

Liability, Liability, also called debt, is money you owealso called debt, is money you owe

Net worth- Net worth- is the difference between your is the difference between your assets and your liabilitiesassets and your liabilities

Develop a Budget and Live By ItDevelop a Budget and Live By It

FIXED EXPENSESFIXED EXPENSES

PERIODIC EXPENSESPERIODIC EXPENSES

FLEXIBLE EXPENSESFLEXIBLE EXPENSES

EXPENSE ENVELOPE SYSTEMEXPENSE ENVELOPE SYSTEM

HOW DOES CREDIT AFFECT USHOW DOES CREDIT AFFECT US

CREDITWORTHINESSCREDITWORTHINESSThe 4 C’S of CreditThe 4 C’S of Credit

CapacityCapacity

CreditCredit

CommitmentCommitment

CollateralCollateral

WHO IS KEEPING SCOREWHO IS KEEPING SCORE

Equifax Equifax 1-800 685-1111; www.equifax.com1-800 685-1111; www.equifax.com

Experian Experian 1-800-397-3742; www.experian.com1-800-397-3742; www.experian.com

TransUnion TransUnion 1-800-888-4213; www.transunion.com1-800-888-4213; www.transunion.com

www.annualcreditreport.comwww.annualcreditreport.com1-877-322-8228 1-877-322-8228

MY CREDIT SCOREMY CREDIT SCORE

Your credit score is based on the information in Your credit score is based on the information in your credit reportyour credit report

35% Payment history (35% Payment history (is the aggregate of is the aggregate of derogatory informationderogatory information))

30% Amounts owed (30% Amounts owed (balance should be 35% balance should be 35% less then credit limitless then credit limit))

15% Length of credit history (15% Length of credit history (close new credit close new credit first, keep cards with long historyfirst, keep cards with long history))

10% New credit10% New credit 10% Types of credit used10% Types of credit used

MY CREDIT SCOREMY CREDIT SCORE

How to Establish a Good Credit HistoryHow to Establish a Good Credit History

Prepare A Spending PlanPrepare A Spending Plan Correct Inaccurate information on your Credit Correct Inaccurate information on your Credit

ReportReport Pay Your Bills On TimePay Your Bills On Time Close Accounts Not UsedClose Accounts Not Used Reduce Credit LimitsReduce Credit Limits Limit your Inquiries Limit your Inquiries

KNOW YOUR CREDIT REPORTKNOW YOUR CREDIT REPORT

Avoid ScamsAvoid Scams

Debt Relief OffersDebt Relief Offers

Advanced Loan Fee ScamsAdvanced Loan Fee Scams

Guarantee Approved CreditGuarantee Approved Credit

Credit Repair ScamCredit Repair Scam

RESOURCE GUIDERESOURCE GUIDE

Federal Trade CommissionFederal Trade Commission

1-877-382-4357 1-877-382-4357 www.ftc.govwww.ftc.gov www.consumer.gov/idtheftwww.consumer.gov/idtheft

1-877-4343381-877-434338 www.fraud.orgwww.fraud.org

1-800-876-70601-800-876-7060

RESOURCE GUIDERESOURCE GUIDE

American SavesAmerican Saves(202) 387-6121 (202) 387-6121 www.americansaves.orgwww.americansaves.org National Endowment for Financial EducationNational Endowment for Financial Education(303) 742-6333 (303) 742-6333 www.nefe.orgwww.nefe.orgwww.smartaboutmoney.orgwww.smartaboutmoney.org National Foundation for Credit CounselingNational Foundation for Credit Counseling(800) 388-2227 (800) 388-2227 www.nfcc.orgwww.nfcc.org