10 smart money moves
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Move 1: Create A
Financial Plan
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Think…Where Do You Want Your
Money To Go?
• Retirement?
• Down Payment For A House?
• School?
• Porsche 911?
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Now Set Those GoalsShort Term – An iPhone 4
Medium-Term – Cruise To Mexico
Long-Term – Down Payment For A Home
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SMART Goals OnlyS pecific – I want to take a cruise this February
M easurable – I need $1500 for the cruise.
A ttainable – I will put aside $300 a month
R ealistic – I can save $150 a month by cutting Cable TV and Internet and another $50 a month by not eating out.
T ime-Bound – I will save $1500 in 5 months
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So, How Do You Start?
The Dirty B Word… BUDGET!Free Budget Tool At www.choosetosave.org
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Move 2: Choose The
Right Products
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Think About This…Most of us spend hours researching when we buy a
new car.
- We read reviews- We think about our situations
(kids, gas mileage, etc)- We shop around for a good deal
Yet, many of us don’t do this with our finances?
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Research Products
1) Does the financial product fit your need/goal?
2) Are you getting the most bang for your buck?
3) Are there similar products?
4) What are the risks/rewards?
5) Investment? Is the product registered?
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How to Research• Savings Vehicles
Call around for rates or terms that suit your needs or visit websites like www.bankrate.com
• InvestmentsRead prospectus. Review rating websites such as www.morningstar.com and check with DFI to see if investment is and person selling is registered www.dfi.wa.gov.
• MortgagesAttend a free Washington Homebuyer class http://www.wshfc.org/
Check rates and forecasts with the Mortgage Bankers Association www.mbaa.org
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Who Can Help• Certified Financial Planners (
http://www.cfp.net/search/)
• Investment Advisers (Check license/background with DFI)
• Certified Public Accountants (http://www.wscpa.org)
• Your Local Bank or Credit Union
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Move 3: Save For A Rainy Day
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Emergency Savings
Needs To Cover 3-6 Months
Recession? 6-12 Months
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How Much Do I Need?
Role-Play (Job Loss, For 6 Months)
How Much Do You Need For:
• Bills• Loans• Food• Things like toothpaste, and toilet paper
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Where To Store Emergency Money
Liquid AccountAccount you can access easily
Options:• Savings Account• Money Market Account• Talk To Your Bank Or Credit Union
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Move 4: Check
Backgrounds Of Financial
Professionals
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Who To Check With• Financial Professionals
Investments, Mortgage Brokers, Payday Lenders, Lending Companies, Money Transmitters
Department of Financial Institutionswww.dfi.wa.gov or 1-877 RING DFI
• Other CompaniesAsk and see if they are registered with the BBB or area registered business. Research to see if they need to belicensed to do business in the state.
Better Business Bureauwww.bbb.org
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Move 5: Use Credit
Wisely
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Who Looks At Your Credit These Days?
• Future employers
• Insurance companies
• Cell phone companies
• Lenders
• Other credit card companies
• Landlords
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Who Stores Your Credit Information?
3 Major Credit Bureaus Monitor You
1) TransUnion
2) Equifax
3) Experian
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FICO ScoresDeveloped By Fair Isaac Corporation
Used By Majority Of Lenders
Score For Each Of 3 Credit Bureaus
750-850 Excellent 700-749 Very good 650-699 Good credit 600-650 Fair 550-600 Poor
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How You’re Scored
Payment History35%
Amounts Owed30%
Types Of Credit10%
New Credit10%
Length OfHistory
15%
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Avoiding Credit Trouble
• Pay Your Bills On Time
• Pay Down Debt (Remember 30%)
• Use Credit Wisely & Lightly
• Check Credit Report For Errors
• Monitor Your Score
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Move 6: Review Important
Financial Documents
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Your To Do List Check Account Statements (1 x month)
-- Look for inaccuracies, fraudulent charges
Check Credit Card Statements (1x month)-- Look for inaccuracies, fraudulent charges
Review Loan Statements (1x month)-- Look for any changes to loan terms
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To Do List Continued… Check Your Free Credit Report (3 x year)
-- www.annualcreditreport.com-- Look for inaccuracies, report errors
immediately
Check Investment Statements-- Don’t freak out!
Review Financial Goals & Plan (1 x year)-- Adjust allocations as necessary
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Move 7: Protect Your Finances and
Identity
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1 In 5 Washington Residents
Victim Of ID Theft In Past 5 Years
Identity Theft 911 Report, 2007
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Tactics ID Thieves Use
• Dumpster Diving
• Old Fashion Theft
• Technology/Hacking/Skimming/Phishing
• Pre-Texting
• Smishing
• Wireless Hacking
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How To Protect Yourself• Cross Cut Shred Documents With Your Info
• Stop Junk Mail – Opt Out Of Credit Offers
– www.optoutprescreen.com
• Register For The Do Not Call List
– www.donotcall.gov
• Lock Up Important Documents
• Check Account Statements and Credit
Report for fraudulent charges
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Warning Signs You’re A VictimDenied Credit
Unexpected Bill
Bills Stop Arriving
Fraudulent Charges
Credit Cards Show Up
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Move 8: Stay Up To Speed On
Latest Scams
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The Latest Scams• Employment Scams
– Protect Your SSN, Don’t Pay To Work
• Foreclosure Rescue Scams– Beware Of Too Good To Be True Offers
• Credit Card Authorization Scams– Call Your Bank Directly If Someone Calls
Asking For Information
• Facebook/Social Media Scams– If A Friend Is Trapped Overseas, Hopefully
They’ll Call
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More Information On Scams
DFI – www.dfi.wa.gov/consumers/alerts.htm
Attorney General’s Office - www.atg.wa.gov
Federal Trade Commission- www.ftc.gov
OnGuardOnline- www.onguardonline.gov
Better Business Bureau - www.bbb.org
Local News
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Move 9: Take Advantage
Of Free Resources
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Free Resources1) DFI’s Publications and Blog
www.dfi.wa.gov/consumers/publications.htm
www.finlit.blogspot.com
2) Financial Education Clearinghousewww.dfi.wa.gov/financial-education
3) Local Money Management Class Calendar
www.dfi.wa.gov/financial-education/calendar.htm
4) MyMoney.Gov
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Move 10: Know Where To Get Help
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Help• Complaint?
DFI or Attorney General’s Officehttp://www.dfi.wa.gov or http://www.atg.wa.gov
• Identity Theft Attorney General’s Office or Your Local Bank/Credit Union
• Foreclosure – Free Counselinghttp://www.homeownership.wa.gov
• Credit HelpNational Foundation for Credit Counselinghttp://www.nfcc.org/
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More Help• General Consumer Issues
Federal Trade Commission or Attorney Generalhttp://www.ftc.gov or http://www.atg.wa.gov
• Banks or Credit UnionsDFI http://dfi.wa.gov
• Investment BrokersDFI http://www.dfi.wa.gov