BUDGETING & SAVING Schell Stubbs, MBA, LLM 21 th March, 2019 - - PowerPoint PPT Presentation

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BUDGETING & SAVING Schell Stubbs, MBA, LLM 21 th March, 2019 - - PowerPoint PPT Presentation

Mar 15, 2024 153 likes •343 views

FINANCIAL SERVICES LITERACY PROGRAM BUDGETING & SAVING Schell Stubbs, MBA, LLM 21 th March, 2019 Budgeting If you fail to plan, you are planning to fail. Benjamin Franklin www.cfasociety.org/bahamas Why is Budgeting

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FINANCIAL SERVICES LITERACY PROGRAM

“BUDGETING & SAVING”

Schell Stubbs, MBA, LLM 21th March, 2019

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www.cfasociety.org/bahamas

“If you fail to plan, you are planning to fail.” – Benjamin Franklin

Budgeting

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Why is Budgeting Important?

§ Prioritizes your money. § Controls and tracks spending. § Helps you to save. § Helps you meet goals. § Keeps you out of debt. § Reduces stress.

www.cfasociety.org/bahamas

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The 50/30/20 Rule

www.cfasociety.org/bahamas

§ Rent/Mortgage § Groceries § Utilities § Transportation § Car Insurance § Health Insurance § Home Insurance § Min Credit Card Payment § Vacation § Entertainment § Shopping § Pampering § Gym Membership § Emergency Fund § Debt Repayment § Down payment § Retirement

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Simple & Useful Budgeting Tips

www.cfasociety.org/bahamas

§ Track every expense. § Budget before you get paid. § Stick to 50/30/20 rule. § Use Cash instead of debit/credit cards. § Budget for large purchases. § Budget for annual/semi-annual expenses. § Update budget regularly.

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The Budget

www.cfasociety.org/bahamas

  • Step 1: Know Your Income.
  • Step 2: Document your expenses.
  • Step 3:.Analyze Your Spending Habits
  • Step 4: Set goals

Simple Budget Template

Monthly income for the month of: ____________ Item Amount Salary Spouse's salary Dividends Interest Investments Reimbursements Other Total Monthly expenses for the month of: ___________ Item Amount Giving Groceries Mortgage Credit cards Gas Personal care Entertainment Car loan Utilities Clothing Daycare/school fees Medical/Dental Insurances Household repairs Property taxes Other savings, pension plans Savings Other Total

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www.cfasociety.org/bahamas

State of the Nation

1 2 3 4

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www.cfasociety.org/bahamas

“Saving money should never feel like a downer….You should enjoy it.” – Suze Orman

Saving

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Simple & Useful Saving Tips

www.cfasociety.org/bahamas

§ 8-12 months living expenses for emergencies. § Pay yourself first. § Save with a purpose or goal in mind. § Be disciplined. § Avoid credit cards and unnecessary loans. § Shop around. Haggle. Negotiate. § Join company pension plan. Make max contribution.

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Simple & Useful Saving Tips

www.cfasociety.org/bahamas

§ Start saving early and often to take advantage

  • f compound interest.

Example:

Age Years to Grow Monthly Savings Interest Rate 18 47 100 2% 25 40 100 2% 30 35 100 2% 40 25 100 2% 40 25 200 2%

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www.cfasociety.org/bahamas

Compound Interest

WHEN you start saving outweighs how much you save.

$93,025 $73,146 $60,540 $38,790 $77,576 10000 20000 30000 40000 50000 60000 70000 80000 90000 100000

18 25 30 40 40

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How to Save in this Environment

§ Credit Unions § Brokerage Accounts § Term Deposits § Annuities § Money Market Funds § Your Company’s or a Personal Retirement Plan § Repay Debt Early § Invest in Yourself

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8 Common Ways We Waste Money

1. Brand Name Products 2. Grocery Shopping 3. Using Credit/Debit Cards

www.cfasociety.org/bahamas

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8 Common Ways We Waste Money

  • 4. Gambling
  • 5. Fast Food/Eating Out

www.cfasociety.org/bahamas

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8 Common Ways We Waste Money

  • 6. Cable
  • 7. Not taking Care of Your Health
  • 8. Disorganization
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THANK YOU QUESTIONS?

www.cfasociety.org/bahamas

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End Notes

1 “PM: Bahamians need to increase savings.” The Nassau Guardian. June 15, 2017. https://thenassauguardian.com/2017/06/15/pm-bahamians-

need-to-increase-savings/

2 “Economist: Address personal debt as ‘national priority’. “The Nassau Guardian. April 4, 2016.

https://thenassauguardian.com/2016/04/04/economist-address-personal-debt-as-national-priority/

  • 3. Xian Smith. “Rolle: 90 percent of Bahamians have poor savings.” The Nassau Guardian. Sept 2, 2017

https://thenassauguardian.com/2017/09/02/rolle%e2%80%8890-percent-of-bahamians-have-poor-savings/

4 Xian Smith. “Central bank: Non-performing loans up to $731 million.” The Nassau Guardian. September 11, 2017.

https://thenassauguardian.com/2017/09/11/central-bank-non-performing-loans-up-to-731-million/ 5 “Central Bank: Reduction in the Discount Rate by 50 basis points to 4.00%” December 22nd, 2016 http://www.centralbankbahamas.com/news.php?cmd=view&id=16225 www.cfasociety.org/bahamas