Tips and Tools For Financial Success - Newton Free Library

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Develop a Spending Plan A spending plan is a step-by-step plan for meeting expenses and financial goals in a given period of time. Following a spending plan: • Helps you know what your income and expenses are every month • Reduces the anxiety of not being able to meet your expenses • Gives you a sense of control over your money because a spending plan is all about choices—choosing how to use your money • Helps you build assets that will improve the quality of life for you and your family Spending Plan Tools Select the tool you are most comfortable with: Monthly Payment Schedule or Calendar These tools let you record in advance when you will receive income and when bills are due so you can manage your expenses. Assign dates to pay your basic necessities, or set aside money for monthly expenses, (e.g., food) and high priority expenses immediately following the dates you are paid to ensure those bills are covered. You can cross out or check off expenses as you pay them so you can keep track of what has been paid. Expense Envelope System This tool is useful if you pay your bills in cash each month. Make an envelope for each expense category (e.g., rent, gas, food). Label the envelope with a category name, amount, and due date. Divide the income you receive into the amounts to cover the expenses listed on the envelope. Pay bills right away so you are not tempted to spend the money on something else. Budget Box System The budget box is a small box with dividers for each month, with one divider for each day of the month. When you receive a bill, check the due date and place it behind the divider that represents the bill’s due date. As you receive income, pay your bills right away so you will not be tempted to spend your money on something else. Computer Spreadsheet System If you have access to a personal computer you can create your own spreadsheet with a column for income sources, income dates, expenses, and expense due dates. At the end of the income sources and expenses columns, add the function and formula to total each column. Free personal finance tools are also available online and you can purchase personal finance programs. Once you set up the system, updating information is quick and easy. It is important to enter transactions frequently to track your financial position. Recordkeeping Keeping accurate records helps you successfully implement and follow a spending plan. Keep financial records in a safe place or in a safe deposit box. Organize your files so it is easy to find important financial information. Keep your tax records for at least three years. 49
Activity 3: Financial Recovery Plan (from FDIC Money Smart) A financial recovery plan will help you determine strategic ways you can save money, pay your bills, and reduce or eliminate your debt. Your financial recovery plan should include financial goals and a spending plan to meet these goals. To reach your financial goals it is extremely important to involve all family members, including older children, in determining how you might increase your income or decrease your expenses to meet your financial goals. Set Financial Goals 1. Identify and write down your financial goals to keep yourself accountable and focused on your goals. Make sure your financial goals are SMART: Specific Measurable Attainable or Achievable Relevant Time-bound or time-based 2. Organize your financial goals by timeframes. 3. Evaluate your progress and reevaluate your goals. My Financial Goals List your main financial goals and any supporting goals to help you reach them. Make sure each goal is Specific, Measurable, Attainable, Relevant, and Time-bound. Main Financial Goals Supporting Financial Goals 50
Page 1 and 2: Financial Literacy at the Library T
Page 3 and 4: Background and Acknowledgments Fina
Page 5 and 6: Chapter V. Credit Overview of Credi
Page 7 and 8: 6 Newton Free Library hosted Financ
Page 9 and 10: 8 © 2011 American Consumer Credit
Page 11 and 12: Goal Setting & Financial Planning (
Page 13 and 14: Financial Goals Worksheet (SMART)
Page 15 and 16: Planning For Unexpected Life Events
Page 17 and 18: 1. Determine what to keep at home a
Page 19 and 20: 5. Keep a close watch on your bank
Page 21 and 22: 20 Kip Child, FDIC Community Affair
Page 23 and 24: Introduction to Banks (from FDIC Mo
Page 25 and 26: 24 Debit Cards • Fees? • Fee wa
Page 27 and 28: Ways to Take Money Out of Your Acco
Page 29 and 30: Using Electronic Banking (from FDIC
Page 31 and 32: Activity 1: Checking Account Fees (
Page 33 and 34: Activity 3: Record Transactions in
Page 35 and 36: Sample Check Register Check Number
Page 37: Paper Money Copy, cut, and put the
Page 40 and 41: III. Budgeting Practice Good Habits
Page 42 and 43: Create a Budget—and Pay Yourself
Page 44 and 45: Household Budgeting Worksheet Housi
Page 46 and 47: Read the scenario, review the Month
Page 48 and 49: Increase Your Income How might how
Page 52 and 53: Implement Your Plan Seek Assistance
Page 54 and 55: • Educate yourself and learn more
Page 56 and 57: Budgeting Quiz 1. How long should y
Page 58 and 59: Budgeting Quiz -Answers 1. Correct
Page 60 and 61: IV. Saving and Investing Preparing
Page 62 and 63: The true magic of compound interest
Page 64 and 65: 9. Pay off high-interest credit car
Page 66 and 67: Risk-Return Relationship Table (FIN
Page 68 and 69: Compounding with Tables (FINRA Inve
Page 70 and 71: Retirement Savings Vehicles (FINRA
Page 72 and 73: In most cases, you roll over a trad
Page 74 and 75: Activity 2: Savings Goals Worksheet
Page 76 and 77: Investing Quiz 1. Which of the foll
Page 78 and 79: Investing Quiz - Answers 1. Correct
Page 80 and 81: Making your First Investments http:
Page 82 and 83: V. Credit Overview of Credit What i
Page 84 and 85: What Is a Credit Report? (from FDIC
Page 86 and 87: How the Credit Report Is Used (from
Page 88 and 89: How to Get Your Free Annual Credit
Page 90 and 91: Credit Cards: What Are They Used Fo
Page 92 and 93: Credit Card Comparison Chart (from
Page 94 and 95: ACCOUNT ACTIVITY Date of Transactio
Page 96 and 97: Activity 1: Maria’s Credit Report
Page 98 and 99: Activity 3: Who Poses the Most Cred
Page 100 and 101:
Credit Terms and Definitions Bankru
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8. All of the following appear on y
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VI. Borrowing Basics Types of Loans
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Car Loans (from FDIC Money Smart) T
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To Rent or To Own? (from FDIC Money
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Activity 1: Which Loan Is Best? (fr
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Activity 3: How Much Mortgage Can P
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Note: Make sure you compare loan of
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Estimated prepaid amounts for inter
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Borrowing Basics Quiz 1. Which of t
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Answers for Borrowing Basics Quiz 1
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VII. Life Skills Menu Planning Work
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Grocery Shopping Tips 1. Clean out
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Computer Terms and Definitions Comp
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Housing Terms and Definitions Appli
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8. According to the 2010 Consumer E
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VIII. Glossary Glossary (excerpted
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Compounding: Interest paid on money
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Interest: A percentage of your bala
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Stocks: Parts of a company, called
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IX. Recommend Resources Bibliograph
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Careers and Life Skills Bostick, Na
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Heath, Julia A. Personal finance es
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Debt information for teens: tips fo
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Tutor/Teacher Cordell, Jane. Cambri
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Newton Free Library Financial Educa
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I. Learning English Online Resource
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Investor Knowledge Quiz - http://ww
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American Consumer Credit Counseling
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Nationwide Resources (from American
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This publication is made possible b
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