Save More,

Spend Less

Presented by

Financial Personalities

SQUARE: You are good with detail and tend to be very logical, analytical and task oriented. You are good with savings and are able to stick to a structured plan.

RECTANGLE: You are good with detail but are more flexible than the square. You are an organized team player and usually very fair. You are best at savings because

you are flexible and have a desire to involve family members.

TRIANGLE: You are a sharp powerful risk taker. You make lists and act. You control your money but are willing to take risks with it. You have a ready-aim-fire personality

CIRCLE: You are a lover. You are nurturing, sensitive, talkative, and very social. Plainly put, you are good with people. Because you are giving, you have difficulty

saying no and this is hard on your savings

SQUIGGLE: You are very open-minded and creative and have many friends. You have a love of freedom but do not care for detail. You change quickly, so it may be difficult to pin you down. Your spontaneity can make you an impulsive spender who

has difficulty saving.

Saving?

• 43% of Americans live paycheck to paycheck

• 50% of Americans have less than $1,000 in liquid assets

• Average household owes 20% more than what it makes in one year

• National Saving Rate is 3.6%

National Savings Rate

Reasons to Save

Some reasons to save:

� Retirement

� Emergency Fund

� Set aside

� Buy things you need

“If you have a purpose for saving, you are most likely to save…”

Where does your money go?The little things add up…

"What are the most important

strategies for saving money?"

A. Time

B. Consistent Savings

C. Higher Rate (or rate of return)

D. Compounding

E. All of the Above

E. All of the Above

Put time on your side

$4,000 a year, 10 percent return

AGE BILL TOM

25 to 34 0 40,000

35-44 40,000 0

Amount invested 40,000 40,000

VALUE at age 45 68,850 186,380

Watch your Savings Grow

6143,400

7,764

29,775

76,301

1 year 5 year 10 year 25 year 40 year

Save $50a MonthWith a5% Yield

Rates of Return- How long?

A savings account pays a 4% Interest rate,

how long until your money doubles?

____72_______=

Dividend/Interest Rate

72 divided by 4 = 18 years

What are your options?

• Regular Savings Accounts

• Money Market Accounts

• Holiday Savings Accounts

• Term Investments

• 401 K

• Traditional IRA

• Roth IRA

• Saving Bonds

Regular Savings Accounts

• Minimum opening Balance (around $25.00)

• Minimum Daily balance in some cases(some accounts don’t require minimum balance)

• Dividends calculated on daily balances,paid quarterly

• ATM access

Money Market Account

• Higher minimum opening balance

• Minimum balance required (higher balance)

• Dividends calculated on daily balances,generally paid monthly

• Rates based on Balance Ranges

Term Investments Accounts

• Minimum opening balance required

• No additional deposits permitted in some cases

• Fixed Rate, higher rates for higher opening deposits

• 90 day to 10 year terms

• Penalty may apply for withdrawal of principal before maturity date.

401K• Retirement Savings through workplace savings plan• You can increase your take home pay (due to tax

deferrals)• Some companies match your contributions • Automatic payroll deduction makes it easy to save • Most of your plan's investment choices are managed

by professionals • Most plans allow access to your contributions in an

emergency• Maximum pre-tax amount per year: 15,000 (in 2006)• Catch-up contribution up to 5,000 (2006) when you are

turning 50• Must take first withdrawal at 70 ½

Traditional IRA• Traditional IRA contributions are generally tax deductible

• Annual Contribution is 4,000 for single individuals

• Distributions may begin at age 59½ and are required to begin at age 70½.

• Distributions taken prior to age 59½ may be subject to a 10% IRS early withdrawal penalty, exceptions:

– Purchase of a first home ($10,000 lifetime limit)

– Qualified higher education expenses

– Disability

– Death

– Substantially Equal Period Payments (early retirement)

• Medical exceptions

Roth IRA• Contributions are not tax deductible

• Annual contributions of 4,000 individually

• Unlike the Traditional IRA, your Roth IRA earnings are tax-free when distributed, rather than tax-deferred, if you meet certain criteria. This is a great benefit when saving for retirement.

• Earnings from the Roth IRA are tax-free and penalty free if:

– The contributor has participated in a Roth IRA for at least 5 years and

– The contributor is at least 59½ years old, dies or is disabled, or if the funds withdrawn are used to buy a first home.

• Contributions can continue past 70 ½ if still earning income.

Credit Cards

Use Credit Wisely

• Bad debt means borrowing money strictly for consumption purposes:

• Necessary debt means borrowing money to obtain a home, a vehicle, or an asset needed in your work. (will provide long term wealth)

Credit Card Balances

• Under 15%:

RELAX

• 15%-30%:

BE CAUTIOUS

• Over 30%

DANGER

The Cost of Credit

� Outstanding balance $1,000.00

� Interest rate 16.9%

� Minimum monthly payment (2%) $20.00

� Years to pay off

� Interest cost over loan period7 Years!$742.00

The Cost of Credit

� Outstanding balance $1,000.00

� Interest rate 16.9%

� Minimum monthly payment $45.00

� Years to pay off

� Interest cost over loan period

2 years & 3 months

$208.00

By paying just $25.00 more than the minimum,you would save over $525 and be paid off 5 years earlier!

Revolving credit card crunch

1A lower credit limit

Can increase debt-to-credit

ratio5

A higher balancecould mean an even worse debt-to-creditratio, an even lower

credit score andeven higher

rates

4A higher rate means

your credit tab goes upIf the balance is notpaid off each month

2A higher ratio leads toa lower credit score(about 1/3 of score)

3A lower credit score

leads to higher interest rates

Ideally, a debt-to-credit ratio should be below

50 percent.

Use Credit Wisely

� Only charge what you can pay in full

� Eliminate late payment fees; pay on time

� Understand terms and conditions of each card