(A Look At) Personal Financial Planning

An ongoing habit of examining your resources and financial obligations and your financial obligations and taking purposeful actions in order to protect your reputation, mental health, and relationships. 

 

Smart Financial Moves

● Limit your debt

● Maximize your income (how to get the most with your money, look for waste)

● Naming and claiming your priorities regularly

● Identify both short-term and long-term goals

 

Credit Cards – Trap or Tool?

● Using credit cards to build up your credit score

● Maintain one credit card with a low credit line

● Choose a card with a low-interest rate and/or cashback rewards program

● Exercise restraint and discipline

– Pay off your balance every month to avoid interest charges

– Use a credit card only for purchases that you could pay for with cash or your debit card and then pay the balance on or before the due date

 

● Abusing credit with impulse buying – being a slave to immediate gratification

– Shopping sprees

– Expensive gifts for other people

– Impulsive road trips you cannot afford

– Entertainment experiences that offer short-term or temporary satisfaction

 

● Digging the debt hole

– Pay the minimum payment each month

 

Renters Insurance 

● Protects all of your personal possessions located within an apartment that you are renting

● Negotiate a policy with the company where your parents already have homeowners or life insurance policies

● Affordable protection for things you can’t afford to replace

● The average policy premium for renters insurance is less than $200/year

 

Student Loan Debt

● Income-Driven Repayment Plan – apply for this at StudentLoans.gov

● Direct Consolidation Loan – apply for this at StudentLoans.gov

– Additional information at StudentAid.gov

● Deferment vs Forbearance

– Push off payments, more interest, but you get more time to pay

● Delinquency (when you are late) and Default (when you stop paying) 

– Both affect credit score

 

Making a Plan

● Use the worksheet to begin assessing your assets, liabilities, income, and expenses