AARP FOUNDATION FINANCES 50+Sponsored by and developed in collaboration with

PART 1 – WHERE YOU ARE. WHERE YOU WANT TO GO.

HOW TO GET THERE.

Overview• Have a better understanding of where you stand

financially

• Understand how key money decisions affect your life

• Know how to set realistic, attainable goals

• Understand some tools and techniques for effective budgeting

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Introductions

3

• What interested you about this program?

• What is one thing you hope to understand better after this workshop?

• What would make you consider this session time well spent?

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Net Worth

4

• Where you stand financially is called your net worth

• It is the value of all your assets (what you own), minus the total of all your liabilities (what you owe).

• Your net worth can be positive (you own more than you owe) or negative (you owe more than you own)

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Orson’s Net Worth

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Assets Value Liabilities ValueHome Mortgage

Car Furnace Line of Credit

Collectibles Personal Loan

Furnishings/Household items

Credit Card

Checking Account

Medical Debt

Savings Account

Cash

Total Assets: Total Liabilities:

Net Worth (Total Assets – Total Liabilities)

Goal Setting

6

• You need to know where you want to be in order to establish a plan for getting there.

• Think about what’s most important in your life. How would improving your financial situation benefit what matters most to you?

• Focusing on your goal can help you make the every day decisions that will help you get there.

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Budgeting

7

• A budget serves as a starting point toward your goals.

• It shows you how much money you have and what you can afford to spend.

• By creating a budget and distinguishing between wants and needs, you can prioritize when, where, and how to spend money.

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Balancing Betsy’s Budget

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Monthly expense Monthly cost Budget SavingsRent $600

Utilities 250

Cable TV subscription 50

Local coffee shop 50

Newspaper subscription

25

Cell phone 50

Antique Shopping 100

Home Phone 50

Gifts for grandchildren 75

Internet 50

Balancing Betsy’s Budget

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Monthly expense Monthly cost Budget Savings Hair salon 50

Restaurants 75

Auto insurance 75

Bingo entry fees 50

Gas 100

Medication 50

Groceries etc. 175

Movie Tickets 25

Credit card payments 300

Totals $2,200

Key Takeaways• I have a better understanding of where I stand

financially.

• I understand how money decisions affect my life.

• I can see that setting a goal is an important step in taking control of my finances.

• I know budgeting can help me create a plan that will allow me to reach my goal.

Part 110

Next Steps

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• Action Plan (Turn to page 75)

• Money Mentors (Visit aarp.org/finances50plus or send an email to finances50plus@aarp.org for more information)

• http://www.aarp.org/finances50plus

• Resources (Turn to page 103)

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Thank You!

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“Faith is taking the first step even when you don’t see the whole staircase.”

- Martin Luther King, Jr.

Part 1