Financial Jigsaw Puzzle Financial Jigsaw Puzzle 2011 2011 Financial Jigsaw Puzzle Financial Jigsaw Puzzle 2011 2011

Brought to you by Congressional Federal Credit Union Brought to you by Congressional Federal Credit Union

AgendaAgendaAgendaAgenda

Our Goals & DreamsOur Goals & Dreams Spending Habits – Psychology 101Spending Habits – Psychology 101 Who’s it hurting? Who’s it hurting? How do we Budget?How do we Budget? Repay Debt while saving for Other GoalsRepay Debt while saving for Other Goals Set your Own Credit Score #Set your Own Credit Score # Investing Investing SummarySummary

Our Goals & DreamsOur Goals & Dreams Spending Habits – Psychology 101Spending Habits – Psychology 101 Who’s it hurting? Who’s it hurting? How do we Budget?How do we Budget? Repay Debt while saving for Other GoalsRepay Debt while saving for Other Goals Set your Own Credit Score #Set your Own Credit Score # Investing Investing SummarySummary

Goals & Dreams Goals & Dreams Goals & Dreams Goals & Dreams

Grad SchoolGrad School First Paying JobFirst Paying Job MarriageMarriage First HomeFirst Home Sports CarSports Car Kids/FamilyKids/Family Great JobGreat Job Early Retirement Early Retirement

Grad SchoolGrad School First Paying JobFirst Paying Job MarriageMarriage First HomeFirst Home Sports CarSports Car Kids/FamilyKids/Family Great JobGreat Job Early Retirement Early Retirement

The Psychology of it The Psychology of it allall

The Psychology of it The Psychology of it allall

Spending Choices/Self-Evaluation Spending Choices/Self-Evaluation Keeping up with the JonesKeeping up with the JonesThe Role of AdvertisingThe Role of AdvertisingSpending HabitsSpending HabitsImpulse Buying/Retail TherapyImpulse Buying/Retail Therapy

Why should we change these behaviors? Why should we change these behaviors?

Spending Choices/Self-Evaluation Spending Choices/Self-Evaluation Keeping up with the JonesKeeping up with the JonesThe Role of AdvertisingThe Role of AdvertisingSpending HabitsSpending HabitsImpulse Buying/Retail TherapyImpulse Buying/Retail Therapy

Why should we change these behaviors? Why should we change these behaviors?

Who’s it hurting?Who’s it hurting?Who’s it hurting?Who’s it hurting?

1 medium cup of white chocolate 1 medium cup of white chocolate mocha specialty coffee = $4.35mocha specialty coffee = $4.35

1 coffee a day per month = $130.001 coffee a day per month = $130.00 365 cups = $1560365 cups = $1560

Brewing at home - $171.55 annually Brewing at home - $171.55 annually What else could we do with $1388.45?What else could we do with $1388.45?

1 medium cup of white chocolate 1 medium cup of white chocolate mocha specialty coffee = $4.35mocha specialty coffee = $4.35

1 coffee a day per month = $130.001 coffee a day per month = $130.00 365 cups = $1560365 cups = $1560

Brewing at home - $171.55 annually Brewing at home - $171.55 annually What else could we do with $1388.45?What else could we do with $1388.45?

Our Costly VicesOur Costly VicesOur Costly VicesOur Costly Vices

Our Vices Ave. Weekly Cost

Estimated Annual Cost

Estimated 5- Year Cost

Night Out w/ Friends $57.50 $2,990.00 $14,950.00

Lunches Out X 3 $30.00 $1,560.00 $7,800.00

Venti Specialty Coffee/Frap X 3 $15.00 $780.00 $3,900.00

Unused Gym Membership $10.00 $502.00 $2,600.00

Junk Food from Vending Machine $6.00 $312.00 $1,560.00

Bottled H2O $4.00 $208.00 $1,040.00

Total Cost $6,352.00 $31,760.00

How do we Budget?How do we Budget?How do we Budget?How do we Budget?

Stick to a BudgetWhat is your income?What are your fixed expenses?What are your variable expenses?Keep good records of incoming & outgoing fundsNeeds vs. Wants80 vs. 20

Stick to a BudgetWhat is your income?What are your fixed expenses?What are your variable expenses?Keep good records of incoming & outgoing fundsNeeds vs. Wants80 vs. 20

““Do something every day that you don’t want to do; this is the golden rule Do something every day that you don’t want to do; this is the golden rule for acquiring the habit of doing your duty without pain.”for acquiring the habit of doing your duty without pain.”

-Mark Twain-Mark Twain

Track Where It Goes Track Where It Goes & Construct the Budget& Construct the Budget

Track Where It Goes Track Where It Goes & Construct the Budget& Construct the Budget

Write it all downWrite it all downPaper budget formPaper budget formSpreadsheetSpreadsheet

Computer TrackingComputer Tracking MoneyTracker & GoalBuilder w/ CFCUMoneyTracker & GoalBuilder w/ CFCU

Use checks or debit cardsUse checks or debit cardsPut aside that credit cardPut aside that credit card

Monitor ATM useMonitor ATM use

Write it all downWrite it all downPaper budget formPaper budget formSpreadsheetSpreadsheet

Computer TrackingComputer Tracking MoneyTracker & GoalBuilder w/ CFCUMoneyTracker & GoalBuilder w/ CFCU

Use checks or debit cardsUse checks or debit cardsPut aside that credit cardPut aside that credit card

Monitor ATM useMonitor ATM use

Expect setbacks! Reward yourself along the way!Expect setbacks! Reward yourself along the way!

Repay Debt While Repay Debt While Saving for Other Saving for Other

GoalsGoals

Repay Debt While Repay Debt While Saving for Other Saving for Other

GoalsGoals Pay off High Interest Rate Credit Cards

• A $2000 Balance CC @ 20% int. rate w/ only min payments will take 31 yrs to payoff

Don’t use Credit Cards for Emergencies Don’t wait to save until bills are all paid

Consider yourself an essential expense!

Pay off High Interest Rate Credit Cards• A $2000 Balance CC @ 20% int. rate w/ only min

payments will take 31 yrs to payoff

Don’t use Credit Cards for Emergencies Don’t wait to save until bills are all paid

Consider yourself an essential expense!

Set your own Credit Score Set your own Credit Score ##

Set your own Credit Score Set your own Credit Score ##

How FICO

Scores are

Determined

How FICO

Scores are

DeterminedAmount owed on Revolving Debt

30%

35%

Payment History10%

Types of Credit Used

10%

New Credit

15%

Lengthof Credit History

FICO Score Mortgage Loan FICO Score Mortgage Loan ExampleExample

FICO Score Mortgage Loan FICO Score Mortgage Loan ExampleExample

FICO ScoreFICO Score APRAPR Monthly paymentMonthly payment

760-850760-850 5.125%5.125% $2723$2723

700-759700-759 5.5%5.5% $2839$2839

660-699660-699 5.875%5.875% $2960$2960

620-659620-659 6.5%6.5% $3160$3160

580-619580-619 7%7% $3327$3327

500-579500-579 7.5%7.5% $3497$3497*Example purposes only: $500 K – 30 YR Fixed Mort.*Example purposes only: $500 K – 30 YR Fixed Mort.

Keep Your FICO Score Keep Your FICO Score HighHigh

Keep Your FICO Score Keep Your FICO Score HighHigh

Pay on time, every time Pay off collection accounts Keep your old accounts Avoid “maxing out” accounts Limit balance transfers Avoid excess credit applications

Annualcreditreport.com

Pay on time, every time Pay off collection accounts Keep your old accounts Avoid “maxing out” accounts Limit balance transfers Avoid excess credit applications

Annualcreditreport.com

InvestmentsInvestmentsInvestmentsInvestments

Small or BigSmall or Big Find a company you frequentFind a company you frequent Do some research Do some research Buy a little-be willing to write it offBuy a little-be willing to write it off Don’t look at your statements too oftenDon’t look at your statements too often Speak to a Licensed Professional Speak to a Licensed Professional

Start Now because Time is Money!

Small or BigSmall or Big Find a company you frequentFind a company you frequent Do some research Do some research Buy a little-be willing to write it offBuy a little-be willing to write it off Don’t look at your statements too oftenDon’t look at your statements too often Speak to a Licensed Professional Speak to a Licensed Professional

Start Now because Time is Money!

Sooner You Start the BetterSooner You Start the BetterSooner You Start the BetterSooner You Start the Better

Retirement @ 65

$2,845,836

$1,017,220

$341,716 $0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

Age 25 Age 35 Age 45

*Calculation based on $450 monthly contributions @ 10% ave. annual rate of return *Calculation based on $450 monthly contributions @ 10% ave. annual rate of return

SummarySummarySummarySummary

We saw… The impact of society, situation, and

advertising on spending How little purchases can hurt a lot Budgeting techniques and steps How to pay off debt and save How to manage your credit score Investing for beginners Retirement planning

We saw… The impact of society, situation, and

advertising on spending How little purchases can hurt a lot Budgeting techniques and steps How to pay off debt and save How to manage your credit score Investing for beginners Retirement planning

Tell Everyone!Tell Everyone!Tell Everyone!Tell Everyone!

Tell your friends, family, co-workers!

Knowledge is power,

so share what you’ve learned with others!

Wherever life takes you, we’re there!

Tell your friends, family, co-workers!

Knowledge is power,

so share what you’ve learned with others!

Wherever life takes you, we’re there!

Contact Information Contact Information Contact Information Contact Information

CONGRESSIONAL FEDERAL CREDIT UNION CONGRESSIONAL FEDERAL CREDIT UNION 800.491.2328 / 800.491.2328 / www.congressionalfcu.orgwww.congressionalfcu.org

BALANCEBALANCE is a financial education and counseling is a financial education and counselingservice available as a benefit of credit unionservice available as a benefit of credit unionmembershipmembership

• Money management counselingMoney management counseling• Debt repayment optionsDebt repayment options• Credit report reviewCredit report review• 888.456.2227 / 888.456.2227 / www.balancepro.netwww.balancepro.net

Or see your Financial Representative today!Or see your Financial Representative today!

CONGRESSIONAL FEDERAL CREDIT UNION CONGRESSIONAL FEDERAL CREDIT UNION 800.491.2328 / 800.491.2328 / www.congressionalfcu.orgwww.congressionalfcu.org

BALANCEBALANCE is a financial education and counseling is a financial education and counselingservice available as a benefit of credit unionservice available as a benefit of credit unionmembershipmembership

• Money management counselingMoney management counseling• Debt repayment optionsDebt repayment options• Credit report reviewCredit report review• 888.456.2227 / 888.456.2227 / www.balancepro.netwww.balancepro.net

Or see your Financial Representative today!Or see your Financial Representative today!

Questions or Comments?Questions or Comments?

Thank you!Thank you!