There's a Lot to Learn about Money YOU CAN TAKE CHARGE OF YOUR FINANCIAL FUTURE Federal Reserve System "No matter who you are, making informed decisions about what to do with your money will help build a more stable financial future for you and your family." - Alan Greenspan Take Charge It's possible to meet your financial goals - whether your income is small, medium or large. By looking for good information on managing your finances, along with choosing to budget, save and use credit wisely, you can: Buy a home. Send your child to college. Start a business. Pay off debts. Put money away for a rainy day. Save for retirement. No matter who you are, you can take charge of your financial future. Start today! To get you started, here are some simple tips. Set Goals Most people who have money didn't get it overnight. They set goals and worked hard to reach them. TRY THIS: Write down your short-term and long-term goals. An example of a short-term goal is saving up for holiday gifts; a long-term goal is saving for a home. Set due dates for reaching your goals. Be realistic. Be flexible. (It's OK to adjust your goals and strategies.) Go back and look at your goals after six months to check your progress. Develop a Budget Find out where your money is going. Unless you're tracking your money, it's probably not going where you really want it to. TRY THIS: Write down your total monthly take-home pay. Then list your monthly expenses. At the end of the month, subtract those expenses from your total pay. Look for places to save. Use this information to set a monthly budget that includes saving. Review how things are going each month. TIP: Carry a small notebook. Write down everything you spend. Include small things like candy bars. Start Saving Small amounts of money saved regularly add up fast. Compound interest, which lets you earn interest on interest, will make your savings grow even faster. TRY THIS: Open a savings account. Have part of your paycheck deposited directly into your savings account every month. Shop for the best interest rates. Understand all fees and charges. Take advantage of your company's 401 (k) or invest in an IRA (individual retirement account). As your income rises, increase the percentage you save. Know that the greater the potential profit on an investment, the greater the potential risk of losing your money. TIP: The earlier in life you start saving, the more you'll have later. Manage Credit Wisely Borrowing can help you meet your long-term goals for an education, car or home. But borrowing for day-to-day needs and wants gets many people into financial trouble. TRY THIS: Before using your credit card, getting a payday loan, renting-to-own or borrowing against your home's equity, ask yourself if you really need to borrow the money. Avoid spur-of-the-moment purchases. Set a monthly limit on credit card charges. Pay more than the minimum on your credit card bill. TIP: THE MINIMUM PAYMENT TRAP It would take 61 years to pay off a $5,000 credit card balance if you make only the minimum monthly payment. You would pay almost $16,000* in interest! * Assuming a 14% interest rate and minimum payment of 1.5% of the outstanding balance. TIP: SAVE MONEY WITH THE RIGHT LOAN        Get the Lowest Rate $15,000 Car Loan for 5 Years Lender Interest rate Total interest Pixley Bank 6.5% $ 2,609.53 ABC Car loan 7.5% $ 3,034.15 XYZ Finance Company 8.75% $ 3,573.51        Choose the Shortest Term $15,000 Car Loan at 10 Percent Interest   3-year 4-year 5-year Number of payments 36 48 60 Payment $ 484 $ 380 $ 318 Total paid $ 17,424 $ 18,261 $ 19,122 Interest saved $ 1,698 $ 861 $0   Take Control Getting the right information can help you gain control of your finances. TRY THIS: When you need information, make sure the source is reliable. Know who you are dealing with. Make sure the resource is credible and properly trained, accredited or certified. Ask for references. Understand any fees or charges. Make sure they're not trying to sell a product or service. Avoid resources that charge excessive fees. Ask questions. Learn More About Money There's a lot to learn about money, and there's plenty of free information available. The Federal Reserve education web site, www.federalreserveeducation.org, offers personal financial education information and links to many useful resources. TRY THIS: Look for organizations in your community that can help you learn more about setting financial goals, budgeting, saving, using credit wisely and getting the best deal. Here are some possibilities: Nonprofit credit counseling service Library Community college Bank or credit union Nonprofit community development corporation Nonprofit housing organization Religious organization Senior citizen center Employee assistance program Cooperative extension service