Transcript Building A Better Budget

Creating A Spending Plan
Presented by:
Sponsored by:
Wendy Perkins,
Credit Union of Ohio
Financial Counselor
Tools for a Successful Plan
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A good spending plan is made up of several
parts:
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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
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Why is planning so important?
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It allows you to make the most of every penny you
earn
Helps you to achieve your financial goals
Why do budgets fail?
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They are too complicated
They have unrealistic goals and objectives
They are inconsistent
Getting Organized
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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
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Short term goals – Goals that can be attained within
12 months.
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Long term goals - Goals that can be attained in 3-5
years.
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Goal Setting Tips
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Specific
Reasonable
Measurable
Putting the Budget on Paper
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Convert all pay to a monthly figure
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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
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What deductions do you have?
Review your withholdings – The IRS has a withholding
calculator at www.irs.gov.
Expenses
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List all your monthly expenses
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Avoid underestimating your expenses
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Fixed, Flexible, Periodic and “Misc”
It helps to track expenses for 4 weeks to ensure accuracy.
Break down periodic expenses
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Put all expenses into a monthly cost
Debt Reduction
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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
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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
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Savings and Holiday Clubs
Money Markets and CD’s
IRA and 401K
Questions
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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.
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Email: [email protected]