CBCF Financial Literacy Workshop I:

Building Wealth, Eliminating Debt, and Reducing Costs of Living Friday, June 28, 2019

AGENDA

Ø Welcoming Remarks

Ø Introduction of Speakers

Ø Evaluation of Needs vs. Wants

Ø Evaluating Monthly/Annual Expenses and Calculating Net Income

Ø Building a Budget and Calculating Disposable Income and Savings Surplus

Ø Creating Savings Plans to Achieve Specific Long-Term and Short-Term Financial Goals

Ø Audience Questions

THANK YOU TO OUR GENEROUS SPONSORS

Triangle Financial Independence

Britepaths

Financial Empowerment Center at South County

Domino's Pizza (2029 K Street NW)

Pepsi Cola

Nando's Peri Peri Chicken (2631 Connecticut Ave NW)

University of California-Washington DC Center

Bank of America

CBCF Financial Literacy Workshop I: Building Wealth, Eliminating Debt, and Reducing Costs of Living

Friday, June 28, 2019

SPEAKERS

Mr. Aaron Goldfarb is the co-founder and owner of the Triangle Financial Independence Group, which is a financial consulting firm based out of Raleigh, NC. Through his work with Triangle Financial Independence, Aaron has developed and taught several educational workshops such as these, which focus on building wealth, eliminating debt, cutting the costs of living expenses, and increasing quality of life. As a financial consultant, Aaron primarily focuses on sustainable business development. However, driven by his passion for traveling and the deep belief in the power of traveling to broaden one’s worldview and appreciation for diverse cultures, Aaron is also the founder and owner of the Triangle Travel Lovers Group. Between his work with Triangle Financial Independence and Triangle Travel Lovers, Aaron has traveled all over the world, circling the globe and building a network of international relationships, while also teaching others how to take advantage of financial systems in order to achieve financial independence and attain their financial goals. For more information, visit: https://trifigroup.com/ Mr. Terrance Carty is a volunteer Financial Coach with Britepaths Inc. at the Fairfax County Financial Empowerment Center. He conducts sessions addressing key personal finance topics such as understanding credit, debt repayment, budgeting, and strategies for saving. Mr. Carty also facilitates workshops with high school student groups and community assistance organizations in Northern Virginia. Before becoming a volunteer, Mr. Carty served 20 years in the United States Navy. He rose to the rank of Chief Petty Officer, where he was responsible for the training and development of enlisted sailors and junior officers. As a Chief, Mr. Carty became aware of the financial challenges experienced by the junior enlisted service members. He frequently mentored sailors on taking control of their finances and identified available resources to help reach their financial goals. Although he retired in 2010, Mr. Carty continues to serve his country as a Senior Geospatial-Intelligence Analyst. He provides his expertise to a software and algorithm development company that designs software for government agencies. While on active duty, Mr. Carty obtained a Bachelor of Business Administration from Strayer University and a Masters of Science in Strategic Intelligence from the National Defense Intelligence University. He holds a certification as a Program Management Professional (PMP) from the Project Management Institute and is currently working on his Financial Fitness Coach (FFC) certification from the Association for Financial Counseling and Planning Education (AFCPE). Mr. Carty enjoys running in his spare time and has completed five Marine Corps marathons. Additionally, he gives of his time to his local church and is involved with the Military Care and United Voices Choir ministries. For more information, visit: https://britepaths.org/

CBCF & Financial Literacy Cost of Living Workshop

Please answer these questions before the start of our workshop. You will not be asked to show your answers to anyone, we merely want you to be able to answer these questions for yourself.

● How long can you sustain yourself if you lose your job tomorrow?

● Do you believe social security will exist by the time you’re ready to retire?

● What long term dreams do you have and how much money do you think they will cost?

● What does financial independence mean to you?

● What do you consider a need versus a want?

Presented by Aaron Goldfarb of the Triangle Financial Independence Group For further information please contact Aaron at: hello@trifigroup.com or visit his site at: www.TriFIGroup.com

Triangle Financial Independence Group - Goal Timeline

Below you will find a goal timeline template to help you break down the steps toward

your goals into more manageable sections. Take a moment to think about each aspect of your life such as housing, travel, family, transportation, health, romance, career, hobbies, etc. Set long term objectives and research what steps you’ll need to progress. List each incremental step to reach your goal over the next 15 years, 10 years, 5 years, 3 years, 1 year, 6 months, 3 months, 1 month, and each week. Then think about what the largest barriers you will face in achieving each goal. These challenges may be more than just financial, they could be physical or psychological, or anything really. For example if you want to climb Mount Everest you don’t just need to save up the money for the flight and the gear, you also have to ready your body and mind to conquer the mountain, literally and metaphorically. Goal: Start date:

● 15 Years -

● 10 Years -

● 5 Years -

● 3 Years -

● 1 Year -

● 6 Months -

● 3 Months -

● 1 Month -

● Weekly - What are your biggest challenges slowing your progress toward this goal?

Presented by Aaron Goldfarb of the Triangle Financial Independence Group For further information please contact Aaron at: hello@trifigroup.com or visit his site at: www.TriFIGroup.com

FinancialFitnessChecklist

Reviewevery6months,whenalifeeventorchangeinincomeoccurs.

ü Doyouhave3-6months'oflivingexpensessavedinanemergencyfund?ü Areyousavingforre/rement?Worktosave10-15%ofyourincome.ü Conductareviewofyourbudget

o Makenecessarybudgetadjustmentsü LookatcurrentexpensesanddetermineNeedsvs.Wants

o Reviewmonthlyspending(useaweeklymoneytracker)o PayessentialNeedsfirst,putsomemoneyintosavings,beforepaying

forWantsü Listoutalldebt,bytotalamountandinterestrateforeachdebtorcredit

cardo Createdebtrepaymentplan

ü Reviewfinancialandsavingsgoals,thinkshort,mid,andlong-termo Createsavingsplantomeetfinancialgoals

ü Pullyourfreecreditreportandreviewforaccuracyatwww.annualcreditreport.com

ü Reviewyourinsurancepoliciesü Reviewincometaxes

o Areyouwithholdingtoomuchortoolittleü Reviewyourestateplanningdocumentseveryyearandwhenyouhavea

majorlifeevent.

8350 Richmond Highway, Suite 125

Alexandria, VA 22309

703-704-6101

A budget is one of the most important tools you can use to manage your money and save for retirement. Limiting your spending and living within your means can have a huge impact on your financial security throughout your life, since you generally have more control over your spending than on your income from work or investments. As seen below, even small changes can add up in the long run. Cutting spending can be a great way to contribute extra money to a retirement account, build up an emergency fund, or reduce your debt.

Budgeting Worksheet

» Weekly Savings » 1 Year » 5 Years » 10 years » 20 years » $10 » $ 520 » $ 2,600 » $ 5,200 » $10,400 » $20 » $1,040 » $ 5,200 » $10,400 » $20,800 » $50 » $2,600 » $13,000 » $26,000 » $52,000

Use this worksheet to examine how much income comes into your household on a monthly basis. Be sure to include all sources of income you receive, as well as your spouse or partner’s income if applicable. You should use your take home pay, not your income before taxes, for the best results.

Income Source Your Income Your Spouse/Partner’s Income Total

Salary/Wages from Employment

Income from Self-Employment

Rental Property Income

Alimony

Monthly Investment Income

Social Security

Pension Benefit

IRA Income (Distribution)

401(k) Income

Veteran’s Pension

Annuity Income

Inheritance/Trust

Gifts

Other

Total

Your Income

Your Expenses

Expense Category Expense Item Column A

Fixed ExpensesColumn B

Flexible Expenses

Housing Rent/Mortgage/Taxes

Maintenance/Condo fee

Lawn/Garden

House Cleaning

Utilities Electric

Gas/Oil

Water/Sewer

Garbage

Phone

Internet

Food Groceries (average)

Restaurants

Snacks (coffee, etc.)

Entertaining (food/beverages, etc.)

Transportation Car payment/Lease

Gas

Car Insurance

Subway/Bus/Parking

Medical Health Insurance

Regular Prescriptions

Out-of-Pocket

Fitness Programs

Appearance Clothing

Dry Cleaning

Hair Care

Miscellaneous

Other

Next, look at how this money is spent on both fixed expenses, like rent and groceries, and flexible expenses, like entertainment. While filling out the next worksheet, think of some ways you can cut costs and work towards a secure financial future.

Expense Category Expense Item Column A

Fixed ExpensesColumn B

Flexible Expenses

Childcare

Entertainment Movies

Newspapers/Books

Cable TV

Sports (Golf, etc.)

Theatre, Concerts

Travel

Savings Retirement Contributions

Other Savings

Reserve Fund Contributions

Creditors Credit Cards

Other

Other Business Expenses

Alimony

Other

TOTAL

Putting It all Together

Total Income

Subtract Total From Column A

Subtract Total From Column B

Savings or shortfall

Your Expenses, continued

Now that you have recorded your income and expenses, it’s time to combine them to find your monthly savings or shortfall. Subtract both your fixed and flexible expenses from your total income. If you get a negative number, it means you are not living within your means. You should find ways to cut your expenses to avoid going further into debt. If you get a positive number, you can use that extra cash to boost your savings or reduce debt.

Financial Security601 E Street NWWashington, DC 20049

www.aarp.org

D20037 (0714)

©AARP 2014.

Your To-Do List Q Work to find ways to decrease your

spending, from buying generic brand groceries and going out less to reducing your debt and the monthly interest you pay on it.

Q Check out our tipsheet Managing Debt for more advice on paying down your debts. It can be found at www.aarp.org/orderfinancialpubs.

Q Visit www.aarp.org/jeffyeager for cost-cutting advice from the Ultimate Cheapskate Jeff Yeager.

Q For an interactive budgeting experience, you can use our Home Budget Calculator. It can be found in the tools section of our website at www.aarp.org/money.

Q Visit www.aarp.org/retirementcalculator to estimate how much income you will have in retirement.

Employerhealthcareplanoptions HSA FSA

EligibilityMusthaveaqualifiedhigh

deductiblehealthplan(HDHP).Self-employedcancontribute.

Allemployeesareeligibleregardlessofwhethertheyhaveinsuranceor

not.Self-employedcannotcontribute.

2019ContributionLimit $3,500IndividualCoverage$7000FamilyCoverage $2,700

ContributionSource Employerand/oremployee Employerand/oremployee

AccountOwner Employee Employer

Rollover Unusedcontributioncanberolledovertothenextyear.

Unusedcontributionislostatendofyear.

Withdrawals Allowed,butincludestaxwithholdingplus10%penalty. Notallowed.

InterestEarned Interestearnedintheaccountistax-free. Accountdoesnotearninterest.

Portability Employeekeepsaccountevenifs/hechangesjobs.

Accountisforfeitedafterajobchange.

Accessibility Canonlyaccesswhathasbeencontributedintotheaccount.

Completeaccesstotheannualelection,regardlessofwhethertheaccounthasbeenfundedornot.

ContributionAmendment Employeecanchangecontributionamountduringtheyear.

Employeeisstuckwiththecontributionamountchosenatthe

beginningoftheyear.

Source:https://www.investopedia.com/insurance/hsa-vs-fsa/ 1

Presenter:TerranceCartyJune28,2019

WhycreateaSpendingPlan(budget)?

• Reduce anxiety about bills

• Have a sense of control over your money

• Save and build assets that will improve your life

• Identify spending leaks

2

A spending plan is a step-by-step plan for meeting expenses in a given time period.

Following a spending plan helps you:

StepstoCreateaSpending&SavingsPlan

1.  Determine financial goals 2.  Track spending for at least two weeks 3.  Know your net income 4.  Determine Needs versus Wants 5.  Determine monthly bills/expenses 6.  Prepare budget 7.  Use budget to create a savings plan 8.  Review and revise

3

SettingFinancialGoals

Make your goals specific to what you want within a certain

time period

4

1. Identify and write down your financial goals

2. Organize your financial goals

3. Educate yourself

4. Evaluate your progress

SettingFinancialGoals

•  Identify and write down your financial goals •  Make them specific and state time

period •  Incorporate savings plan to reach

goals into budget

• Organize them into time period •  Short-Term (under 3 years) •  Mid-Term (3 – 10 years) •  Long-Term (more then 10 years)

• Once goal list is complete, prioritize your goals

• Achieving Foundational goals are the first priority •  Obtain proper insurance •  Building an emergency fund

5

ExamplesofFinancialGoals

• Short-term (< 3 years) • Establish a budget • Build a emergency fund • Purchase insurance coverage • Build credit

• Mid-term (3 – 10 years) • Purchase or rent a home • Plan for additional educational expenses or payoff student loans • Begin building savings for life events

• Long-term (> 10 years) • Retirement savings • Start a business

6

FoundationalGoals

Obtain proper insurance coverage Types of Insurance

• Property • Rental or homeowners

• Automobile • Health • Life

• Disability

Remember to include monthly premiums into your budget! Create a savings account for deductibles and co-pays

OR Create a health savings account (HSA) or flexible spending

account (FSA) with your employer 7

Employerhealthcareplanoptions HSA FSA

EligibilityMusthaveaqualifiedhigh

deductiblehealthplan(HDHP).Self-employedcancontribute.

Allemployeesareeligibleregardlessofwhethertheyhave

insuranceornot.Self-employedcannotcontribute.

2019ContributionLimit $3,500IndividualCoverage$7000FamilyCoverage $2,700

ContributionSource Employerand/oremployee Employerand/oremployee

AccountOwner Employee Employer

Rollover Unusedcontributioncanberolledovertothenextyear.

Unusedcontributionislostatendofyear.

Withdrawals Allowed,butincludestaxwithholdingplus10%penalty. Notallowed.

InterestEarned Interestearnedintheaccountistax-free. Accountdoesnotearninterest.

Portability Employeekeepsaccountevenifs/hechangesjobs.

Accountisforfeitedafterajobchange.

Accessibility Canonlyaccesswhathasbeencontributedintotheaccount.

Completeaccesstotheannualelection,regardlessofwhethertheaccounthasbeenfundedornot.

ContributionAmendment Employeecanchangecontributionamountduringtheyear.

Employeeisstuckwiththecontributionamountchosenatthe

beginningoftheyear.

Source:https://www.investopedia.com/insurance/hsa-vs-fsa/ 8

FoundationalGoals

Build an emergency fund • An emergency fund is a separate savings or bank account used to cover unexpected expenses such as, an unexpected illness, accident, job-loss, car or home repair

• Serves as a safety net, to be tapped into when a financial crises occur

•  It shouldn’t be considered a nest egg or calculated as part of your mid or long-term savings plan

• The goal is to tap your emergency savings only for expenses directly related to an unexpected emergency.

9

BuildinganEmergencyFund

How much money should be in an emergency fund?

• This will depend on your lifestyle, household size, monthly costs, and income •  Rule of thumb is to have 3 – 6

months of basic living expenses in an emergency fund •  If homeowner, account for

unexpected home repairs as well

Steps to building & maintaining an emergency

fund: • Determine a specific dollar

amount that should be in that account

• This amount can seem daunting •  Look at your budget to

determine how much you can put away each paycheck even if it is a small amount every month

•  Use your tax refund or unexpected source of money

•  When/if you draw from the emergency savings it’s important to immediately start rebuilding it back to the desired amount

10

TrackDailySpending

• Understand where your money goes by tracking your spending

• Using a budgeting app, a planner or spending diary to track your spending

• Track your spending for at least 2 weeks •  Include all cash, debit and credit card purchases

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Do you know where your money goes each month?

Income •  Total amount of your salary before taxes and other deductions are taken out

•  Typical Payroll Deductions •  State and Federal Income Tax •  FICA •  Health Insurance •  Retirement contributions

Gross Income

•  the amount of money you receive per pay period after payroll deductions

•  Also known as disposable income

Net Pay (Take–Home Income)

•  The amount of money leftover after all necessities have been paid

Discretionary Income

12

DetermineNeedsvs.Wants

13

Wants – Not a necessity but

strongly desired

•  Expensive clothes •  New car •  Going out to dinner

or buying take-out •  Expensive cell

phone plans

Needs – Essentials items necessary to

live

•  Affordable clothing •  Transportation

(public or used car) •  Making meals at

home, bringing lunch to work

•  Basic cell phone or pay as you go

DetermineMonthlyBills&Expenses

Fixed Expenses •  An expense that does not change from time period to time

period

Variable Expenses •  Variable expenses are monthly expenses or bills that the amount

owed varies from month to month. •  Typically, the higher the usage rate the higher the monthly

amount owed. •  Look at the past three months of amounts owed to determine a

monthly average •  Adjust when necessary; i.e. increase monthly average of gas bill in

wintertime

Discretionary Expenses •  Discretionary expenses are optional expenses or purchases that

a person or family chooses to pay or buy per month. •  i.e. gym membership, Hulu membership, eating out

•  They are typically not necessities (needs) but instead are wants.

14

TypicalBudgetingGuidelinesforAllocationofNetIncome

• Savings for Retirement and Financial Goals = 5-10% •  includes employer matching

• Housing = 25-35% •  mortgage/rent, internet,

phone, utilities, insurance, repairs, taxes

• Food = 5-15% •  groceries, dining out

• Healthcare = 5% • Transportation = 5-15%

•  insurance, loan payments,

gas, repairs, registration, public transit

• Insurance Premiums = 5% • medical, homeowners,

rental, life

• Debt Repayment = 0-5% •  Includes student loan

repayment • Does not including

mortgage and auto loans • Goal to be as close to 0%

as possible

• Personal Care = 5% • Miscellaneous = 10-15%

•  cash, gifts, pets, dues, child care, allowances

• Entertainment = 5% 15

PrepareaBudget•  Fill in fixed expenses and average

amount for variable expenses •  Include due dates for each expense

•  Determine monthly spending of the discretionary expenses:

•  Use the money tracking list you created as a base for establishing your new budget

•  Critically review ALL expenses and spending

•  Strive to find areas where you can realistically reduce expenses to SAVE money

•  Eliminate or reduce WANTS to find money for saving towards financial goals

•  Determine how much additional money you can allocate per month for savings, debt reduction or towards financial goals

•  Track your progress each month and redefine budget as necessary

16

UsingtheBudget

When getting paid monthly When you are paid once a month, it is easy to go through your money quickly, leaving you falling short at the end of each month. • Pay all your bills when you get

paid to include paying yourself by putting money into your savings/investments for future financial goals

•  If you cannot pay all bills at time of pay set money aside in a savings account for the budgeted upcoming bills, draw from savings when bill comes due

• Create a weekly spending limit for your discretionary expenses to ensure you have enough to get through month

When getting paid bi-monthly Typically, a person will be paid on the 30th or 1st then on the 15th of every month. • Pay all bills due between the 1st and

15th with first of month paycheck •  Treat the paycheck on the 30th as the first

paycheck for the following month.

• Pay all bills due between the 16th and 30th with mid-month paycheck

•  If need to use part of a paycheck to pay for a larger expense due later in month set a portion of the amount aside into a savings account to draw at later date

• Remember to pay yourself! • Create weekly spending limits for

discretionary expenses to ensure you have money for the in-between paychecks

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HowtoBudgetwithBi-WeeklyPay

• Complete budget using two paychecks per month •  Ten months out of year you

will only get two paychecks •  Two months of the year you

will earn three paychecks

• When you get paid, look at budget and pay bills due between the two pay periods

• Consider the 3rd paychecks as bonus pay •  Use for debt repayment •  Savings towards financial

goals •  Put into an emergency fund

• Save a portion of your paycheck for big expenses due later in month such as, rent

• Create weekly spending limits for discretionary expenses to ensure you have money for the two weeks between paychecks

• This allows you to put aside money ahead of time for larger bills and goals as opposed to using one paycheck to pay a big expense and trying to make the remaining amount stretch throughout the entire month.

• Remember to pay yourself first! Look at budget to determine when you set aside money for your financial goals

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StarttheSavingHabitEarly!The earlier you start to save and invest the more wealth you can accumulate

The consistent habit of saving is more important than the amount of money saved

STRIVE to ALWAYS Pay yourself first •  Systematic approach to saving

and investing •  View the amount you put into

savings a fixed monthly expense •  Invest same dollar amount at

regular intervals •  Set up a monthly automatic

allotment to go directly into an investment or savings vehicle

•  Increase amount saved as net income increases

For short-term goals, use a savings account, CDs, or bonds to save money

For mid to long-term financial goals, put money into inflation-beating investments (such as mutual funds or investment accounts).

19

CreateaSavingsPlan

Be proactive in managing money and create a savings plan

Critically look at budget to determine how much you can set aside for regularly monthly savings

Determine the percentage of the amount you are saving you want to apply towards each of your financial goals

•  Remember to make sure you have funded or are funding your foundational goals first!

•  Such as an emergency fund or savings for insurance co-pays and deductibles

As you receive pay raises, increase the percentage you allocate towards savings

20

CreateaSavingsPlanReview your financial goals and establish “savings buckets” for your goals: • Emergency fund savings • Short-term goals savings • Mid-term goals savings • Long-term goals savings • Tax protected retirement saving Use automatic savings methods • Set up an automatic transfers from your checking account or

paycheck to each of the savings buckets each month preferably on same day as your payday.

Save all or part of a infrequent or unexpected income • Designate your tax refund, annual bonus, tip money or proceeds

from garage sales to savings.

21

Canyouaffordafinancialgoal?

To see if you can afford to borrow money for a car, student loan, mortgage Research how much money you will need to borrow

Review your credit report

Use online loan calculator to see how much the monthly payment will be

•  Determine current interest rate •  Use Bankrate or other online banking website •  The higher your credit score the better interest

rate you will receive

To see if you can afford to move into a more expensive apartment or home

Research how much more your rent will be (remember to factor in higher utility costs!)

Begin saving the monthly payment or the difference between your current rent and the higher rent into a savings account as if you were making the payments. If you can save the monthly payment/rent for at least 3 months without having to take it from savings and without having to use credit to cover your regular monthly expenses, then you can afford the financial goal.

Use money you saved for a down payment, rental deposit or moving expenses! 22

WaystoSaveMoney

Look at your budget and your spending habits to identify spending leaks!

Some typical spending leaks: •  Soda, energy drinks, coffee •  Dining out •  Fast food •  Convenience store shopping •  Habits (cigarettes, alcohol, lottery tickets) •  Downloads

23

WaystoSaveMoney•  Pay bills on time to avoid late

fees •  Think before you make a

purchase •  Do you really need it? •  Is there a cheaper option?

•  Control credit card spending •  Use credit cards only when

necessary •  Budget/track credit card

purchases •  Strive to pay off credit card

balances every month

•  Make your own lunch to bring to work

•  Make your own coffee •  Buy reusable items instead of

convenient throw-away items

•  Meal Plan •  Save energy

•  Turn off lights and appliances •  Invest in energy efficient

appliances •  Weather proof windows and

doors •  Do full loads of laundry

•  Reduce spending on your “Wants”

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ReviewandRevise!

• Continue to track spending and variable expenses • Use money tracking/budgeting apps such as

•  Mint •  Money Manager

• Review budget and spending after one month • Make adjustments as necessary • Note: life happens so no monthly budget will be exact

• Once you have a good working budget review and revise budget and financial goals • At least once a year • When your money or life situation changes • When you have added or deleted expenses • When the expenses have increased or decreased

•  Such as, increase in property taxes, decrease in gas bill due in warmer months

25

TheFinancialEmpowermentCenterCanHelpYou!

•  Financial literacy classes •  Financial mentoring •  Financial wellness check-ins •  Pull and review credit report •  Provide credit scores •  Assist in creating a budget •  Assist in developing action plans

to achieve financial and savings goals

•  Assist in developing action plans and steps to help reduce debt

26

FECcsoco.org Email: info@fecsoco.org

703-704-6101 8350 Richmond Hwy Ste.125

Alexandria, VA 22309