Financial Freedom. Super Savings. Ginger L. Hack, FACS Educator, USU Extension

Transcription

1 Financial Freedom Super Savings Ginger L. Hack, FACS Educator, USU Extension Utah State University is an affirmative action /equal opportunity institution.

2 Stock market Crash October 29 th, 1929 Black Tuesday An enormous drop in stock prices on the stock exchange. Contributed to the Great Depression of the 1930 s, which lasted almost 10 years. Crowds gather outside the New York Stock Exchange on Black Tuesday.

3 Three Main Reasons to Save Emergency Funds Purchases Wealth Building or Retirement

4 Pay Yourself First Use direct deposit and automatic transfers into savings account Envelope/Purchases Retirement Accounts

5 $1000 emergency Fund #1 Savings priority One-half of all Americans have no savings Start now. Pay the minimum on credit cards until you have reached this goal After you have reached this goal, keep adding to your savings until you reach..

6 3 To 6 Months of Expenses What would happen if you suddenly became: Unemployed Seriously ill Widowed Divorced Most households should save approximately $10,000 in a money market account.

7 Sinking Funds Save a small amount each month for a certain amount of time before making your purchase. This is more specific than a savings account since you know how much you contribute and when you will use it. Christmas Car Household repairs Big ticket items

8 Leading Causes of Overspending The latest and greatest syndrome Using credit instead of cash Eating out Impulse buying Emotional/Stress spending Keeping up an image or lifestyle Not knowing how much you have to spend--not keeping track Spending money on things you don t use Keeping up with the Jones

9 Ways To Save Money Quit using credit cards Use the envelope system Stop eating out Quadruple casserole recipes and freeze the extra ones Wash your own car Cook from scratch Get a crock-pot Grow a garden and preserve the harvest Cancel gym memberships Brown bag your lunch Use the 24-hour rule before making purchases Invite friends over instead of going out Repair clothing instead of tossing it out Make gifts instead of buying them Swap babysitting with neighbors Fix things yourself Use a simple razor Make your own cleaning supplies Use the library Cancel the cable channels you don t watch Buy in bulk

10 Ways to Save Money (cont.) Don t incur overdraft or late fees Keep tires inflated Review cell phone, cable, satellite, and internet service costs shop around and ditch services you don t use Live in a smaller house Shop for cheapest interest rates Buy used when you can especially cars Check out free events in town Make your own personal care items Air seal your home Do your own manicures Give up daily trips to Starbucks make your own coffee Use coupons and shop sales Write a list before shopping and stick to it Negotiate rates with credit card companies or do a balance transfer Clean out closets-have a garage sale or sell to consignment store Pack food for road trips Design your debt snowball plan

11 Step Down Principle Movie theatre, new release, night show $9.50 Movie theatre, new release, matinee $6.50 Movie theatre, less recent release, night show $3.00 Movie theatre, less recent release, matinee $2.00 Rental $ $3.00 Local Library $0

12 What Are Your Goals? Vacations Taxes Christmas Retirement College New Car Home

13 Where To Deposit Your Savings Certificates of Deposit Money Market Savings Accounts Savings Bonds

14 Investment? Certificates of Deposit Money Markets Bonds Stocks Mutual Funds Annuities

15 Certificate of Deposit A certificate issued by a bank to a person depositing money for a specified length of time. A CD bares a maturity date, a specified fixed interest rate, and can be issued in any denomination.

16 Money Markets A money market account is a financial account that pays interest based on current interest rates.

17 Bonds A bond is an investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period of time at a variable or fixed interest rate.

18 Stocks A stock is a type of security that signifies ownership in a corporation and represents a claim on part of the corporation s assets and earnings.

19 Mutual Funds A mutual fund is an investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks.

20 Annuities A contract sold by an insurance company designed to provide payments to the holder at specified intervals defines annuities. Usually done after retirement. All annuities are tax deferred.

21 Retirement Funds Fully fund all retirement plans Max out your employers contributions How much can you contribute to your retirement without tax penalties? 401K IRA Roth

22 Pay off Your House 30 year Mortgage vs. 15 year

23 How do you know if you are better off? Assets Liabilities = Equity

24 Questions? Do not save what is left after spending, but spend what is left after saving. -Warren Buffett Utah State University is an affirmative action /equal opportunity institution.