How to Budget

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How to Budget A presentation by Illiana
Financial Denise Prince Training Manager
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Banks and Credit Unions Whats the
Difference? Banks Credit Unions For
profit Member-owned, not for profit Face no
restriction Fields of membership Earnings go to
stockholders / members Different rates and
fees Insured through FDIC / NCUA
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• Choosing a Financial Institution
• For your Consideration
• Just like at the mall, banks and credit unions
  offer different products and services
• Some offer special rates
• Shop around! It pays!
• Stop in, call, and look at website
• Shop at least two locations

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• Choosing a Financial Institution
• Convenience
• Distance
• Hours
• ATM locations and fees
• Online banking
• What services are offered?
• Charges?

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• Choosing a Financial Institution
• Account Opening and Access
• Identification requirements
• Online account access
• Over the phone account access
• Fees or minimum balances required
• Parent or guardian signature required
• Do rules change after you are 18?

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• Choosing a Financial Institution
• Savings Accounts
• Minimum amount to open
• What happens if the balance falls below the
  minimum
• Withdrawal or transfer charges
• Current interest rate
• Minimum balance to earn that interest?

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• Choosing a Financial Institution
• Checking Accounts
• Cost of checks
• Minimum amount to open
• Fee if falling below minimum?
• Overdraft fees/protection?
• What happens to NSF checks?
• Earn interest? At what rate?
• Monthly service fees? Per check charges?
• Debit card and fees
• Money orders and fees
• Monthly statement or e-statement

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• Choosing a Financial Institution
• Credit Card
• Age and credit history requirements
• Parent or guardian signature requirements
• Credit limit
• Interest rate (APR)
• Fees
• Cash advance
• Over Limit
• Late payment
• Annual fee

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• Choosing a Financial Institution
• Loans
• Types
• Parent or guardian required to co-sign?
• Requirements for co-signers
• Credit score
• Flexible term limits?
• Fee for paying off early?
• Special relationship rates?

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• Choosing a Financial Institution
• Online Banking
• Bill Payment
• E-statements
• Fees
• Minimum account requirements to be eligible?

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• Choosing a Financial Institution
• Personal Preferences
• Staff communication
• Courtesy and respect
• Helping versus selling
• Products
• Services
• Do you like doing business with them?

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• Choosing a Financial Institution
• Philosophy and Community Involvement
• Community support
• Excess revenue who decides?
• Involvement
• Services that appeal to you
• Student loans
• Financial literacy education

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Did you know? Almost 60 percent of
millionaires use a budget to manage their
money. The Millionaire Next Door The
Surprising Secrets of Americas Wealthy
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Benefits of Budgeting Reduces stress and
money-related anxiety Gives you control of
your financial situation Helps build assets
to improve your quality of life Helps you
become a smarter consumer Helps you set and
achieve financial goals Paves the way to a
secure financial future
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The Budgeting Process Phase 1 Assess your
personal and financial situation Make a WANT
list and a NEED list Ask yourself the
following questions º Why do I want it? º How
would things be different if I had it? º What
other things would change if I had it? (for
better or worse) º What things are truly
important to me? º Does this match my
values?
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The Budgeting Process Phase 2 Set personal
and financial goals Get SMART Specific Mea
surable Attainable Relevant Time-related
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Specific
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Measurable
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Attainable
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Relevant
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Time-related
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The Budgeting Process Phase 3 Create a
budget based on expenses and projected income
The most important expense Saving. º Pay
Yourself First! º Use direct deposit and
arrange for a certain amount from each
paycheck to be placed in a savings
account
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Sample Monthly Budget Income After
taxes 2,100 Balance -Pay Yourself
First -100 2,000 -Rent/Mortgage -750 1,250
-Car Insurance/Pmt -375 875 -Cable
TV/Internet -75 800 -Utilities -150 650 -
Food -200 450 -Gas -200 250
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Other Expenses Where your leftover 250 could
go Cell phone bill, clothing, household items,
tuition/school expenses, day care, furniture,
utensils, home cleaning supplies, repairs,
gifts/contributions, license plates, credit
cards, medical expenses, etc. Money still
leftover? Save it!
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The Budgeting Process
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The Budgeting Process Phase 4 Monitor
current spending and saving patterns. º
Watch out for cash leakage. If you find
yourself returning to the ATM more than
once a week or so, you need to examine
where that cash is going.
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The Budgeting Process Phase 5 Compare your
budget to what you have actually spent. º
Government figures show that many
households with total income of 50,000 or
less are spending more than they bring in.

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The Budgeting Process Phase 6 Review
financial progress and revise budgeted amounts
regularly to keep pace with your changing
situation. º For example, new job, a child, new
house, new car, etc.
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What Is Your Goal? A new MP3 Player? Your
first car? Picture your goal in mind and you can
resist the temptation to buy that pair of shoes
and stick to your savings plan! Use the Mint
Calculator at www.themint.org/kids/mint-calculato
r.html
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What To Pay First
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Loan Payment Decisions Pay all credit
card balances to below 50 percent of the
card limit. Balances above this level cause
your credit score to diminish. Then pay off
loans and credit cards with the highest
interest rates
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If You Get in Trouble Talk to your
creditors Get credit counseling Enroll
in a debt management plan Consider
bankruptcy only as a last resort
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Use Credit Wisely Never borrow more than
20 percent of your yearly net income
(take-home pay after taxes) Monthly
payments shouldnt exceed 10 percent of your
monthly net income If you carry a balance on
your credit card, be worried most about the
interest rate. Make sure it is the lowest you
can find. Limit yourself to one major card
with a credit limit you can handle Pay
the bill in full each month
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Cost of Making the Minimum Payment
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Tips for Saving Money Save up to 100 a
year on gas by keeping your engine tuned and
your tires inflated to their proper pressure.
Pay for your new car in cash or make a
large down payment to save thousands in
finance charges. Always get the shortest
term loan possible as this will lower your
interest rate. Shorter term mortgages can
save tens of thousands of dollars in interest
charges. (Example, 15-year fixed rate
100,000 mortgage at 7 APR will save
75,000 compared to a 30-year fixed rate
mortgage.)
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Illiana Financial Can Help Checking
Money Maker, MaxReturns, Debit/ATM card
Savings Insured Money Market, Money Market IRA,
Share Certificates, IRA Loans
SmartLoan, Loans Youll Love, Parent Loan,
Mortgages, Personal Direct Deposit Payroll
Deduction Home Banking E-statements
Bill Payment Mobile Banking Alerts (MBA)
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Beware of little expenses a small leak will
sink a great ship.
- Benjamin Franklin Thank
you! Denise Prince Training Manager Phone
[phone] Email denise_at_illiana.org Main
Number [phone]