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
2 Part 1
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?
Part 1
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)
Part 1
Orson’s Net Worth
5 Part 1
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.
Part 1
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.
Part 1
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
9 Part 1
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 [email protected] for more information)
• http://www.aarp.org/finances50plus
• Resources (Turn to page 103)
Part 1
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