HUMS 202: Module 4: Money MattersSet Financial Goals- Financial Goalso Specific to what you want to do with your money within a certain time period.- Do the followingo Identify and write down your financial goals Examples- Savings for college- Buying a car- Making a down payment- Taking a trip- Building an emergency savings fund- Retiring Goals should be realistic and specific They should include a time frame to when you wish to accomplish this goal Don’t forget to include the actions you take to work toward this goalo Organize your financial goals Break you goals into several goals- Short-term (less than a year)- Medium-term (1-3 years)- Long-term (5 or more years)o Identify small steps for working towards these goalso Monitor your progress Review your progress- Monthly- Quarterly- At least every 6 monthsCreate a Spending Plan- Step-by-step plan for meeting expenses in a given period of time- Whyo Helps you reduce the anxiety of not knowing whether you have enough money to pay your bills when they are dueo Gives you a sense of control over your money, rather than letting money have control over youo Helps you build assets that will help improve the quality of life for you and your family- Spending Plan Stepso Keep track of your daily spendingo List your monthly income and expenseso Find ways to decrease spendingo Find ways to increase incomeTrack Daily Spending- Understand where you money goes by tracking your spending- Use a personal spending diaryDetermine Income and Expenses- Income is money that comes to you from:o Wageso Self-employment incomeo Public assistanceo Child support or alimonyo Interest, dividends, or investmentso Social security or other federal benefitso Other sources, like tips- Incomeo Gross income Total income without reductionso Net income Gross income – Deductions Also called take home pay- Expenseso Fixed Expenses Do not change from month to month Don’t have control over how much you pay Ex: Rent or fixed loan paymento Flexible Expenses Often change from month to month You have some degree over how much you pay - Decrease Spendingo Tips to help you decrease spending Develop and follow a spending plan Carry small amounts of cash to limit spending Consider keeping your credit cards in a safe place at home  Use coupons to save money and only buy items you need Use a grocery shopping list to avoid impulse buying Take your lunch to work instead of eating out Pay your bills on time to avoid penalties Use direct deposit for all sources of income- Keep Accurate Recordso Keep records in a safe placeo Organize your files so it is easy to find important financial informationo Keep your tax records for at least 3 yearso Pay bills online or mail check to pay bills at least one week before they are due to avoid late fees- Budget Toolso Monthly Payment Scheduleo Monthly Payment Calendaro Budget Box System Small box with dividers for each month o Expense Envelope Systemo Computer Spreadsheet System- When there are more expanses than incomeo Pay your necessary household expanses first Rent, mortgage, food Think about the health and safety of your family when prioritizing bills Seek assistance to help cover expenses.- Paying your loanso Pay off loan with the highest interest rate o Talk to your creditorso Get credit