Citi Money Management 101

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MONEY MANAGEMENT 101

INTRODUCTION TO PERSONAL FINANCE

November 2022
November 2022
OVERVIEW
INTRODUCTION TO PERSONAL FINANCE

Chapter 1: Budgeting

Chapter 2: Saving

Chapter 3: Managing Credit and Debt Management

Chapter 4: Avoiding Financial Scams


CHAPTER 1: BUDGETING
CHAPTER 1: BUDGETING
Think of a budget as a map with clear directions that may
What help you reach your financial destination.

is a budget? A budget gives you a clear plan to live within your means,
not overspend and achieve goals.

Map out your expenses


RENT: $800 TRANSPORTATION: $200 RECREATION: $50 SAVINGS: $25

FOOD: $300 UTILITIES: $75 HEALTH: $50

ILLUSTRATIVE ONLY Total Monthly


Budget: $1,500
CHAPTER 1: BUDGETING

Define your goals:


Short term goals might be something that you hope to achieve
within the next year or so:
• New phone or computer.

• Vacation or weekend getaway.

• Leasing or purchasing a car – this may require a more aggressive savings


strategy.

Long term goals stretch further into the future —


saving for a home, college or retirement:
• Saving for your education.
• Saving for your retirement.
• Purchasing a home and/or moving — this will require a longer, more
consistent strategy.
CHAPTER 1: BUDGETING

Make adjustments to your budget and


recalibrate
• Once a budget is in place, you can’t just set it and forget it. Check in regularly to
ensure you're on track to meet your budget goal and make adjustments as needed.

• Following your budget can help you better understand the sacrifices needed to meet a
goal and clarify how much it really means to you.

• A budget helps establish a mindset — and good


habits — that put you in charge of your money
and on the path to spending that's in line with
your goals.
CHAPTER 1: BUDGETING

Creating a budget can help you track expenses

BUDGET WEEK 1 WEEK 2 WEEK 3 WEEK 4 CALENDAR


1 2 3 4 5 6 7
RENT $800 - - -

TRANSPORTATION $50 $50 $50 $50 8 9 10 11 12 13 14

FOOD $100 $100 $50 $50

15 16 17 18 19 20 21

UTILITIES $0 $25 $50 $0

22 23 24 25 26 27 28
SAVINGS $5 $10 $5 $5

RECREATION $25 $25 $0 $0


29 30 31

HEALTH $10 $10 $10 $20


Total Monthly Budget:
ILLUSTRATIVE ONLY $1,500
CHAPTER 2: SAVING
CHAPTER 2: SAVING

Establishing financial wellness

Saving your money now will help you with two things:
• Security – Helps you take care of financial obligations.
• Financial Freedom – Helps you live the life you want.
allow you c

Get organized: Think it, plan it, dream it, live it


• Manifest the life you want to live.
• Set appropriate savings goals.
CHAPTER 2: SAVING

Money mindsets: abundance vs scarcity


How you think and feel about money shapes how you spend or save. Understanding whether you are
more inclined to an outlook framed by abundance or scarcity — and how to strike a balance between
the two — is instrumental in creating the financial life you most desire.

Scarcity mindset
• Believing there's never enough money or that if there’s enough, you’re not
deserving of it.
allow you c
• Desiring more money but feeling frustrated because you don't know how to
attract or create it.
• Lacking confidence in your decisions about saving and spending.

Abundance mindset
• Believing you have the exact amount of money you need.
• Feeling you can earn the money you need.
• Being confident in the decisions and choices you make with your money.
CHAPTER 2: SAVING

Bank accounts: Checking


Setting up a checking account is your first step
to saving money

Benefits of a checking account:


• Can set up a direct deposit through your employer.

• Ability to auto pay your bills – removes the need to manually pay bills,
establishing on-time payments.

• Develop a relationship with your bank for future needs (e.g.


auto loans, mortgages, or business/personal loans).
CHAPTER 2: SAVING

Bank accounts: Savings


Understanding a savings account
• A savings account stores money that you do not plan to
spend immediately. It is not used for everyday spending
like a checking account.

Am I saving enough? – set a savings goal based


on your income
• Add money to your savings every time you get a pay
raise.
Cost Comparison
• Evaluate your everyday small purchases.
• For example, let’s say a daily cup of coffee costs ~$140
per month or $1,680 per year. Cutting back on this
expense could help you afford something you really want
or help your savings account grow.
CHAPTER 2: SAVING

Emergency money stash


An emergency money stash is an essential part of your
financial plan
• Place this money into your savings account. Use only as needed in an
emergency situation, such as losing your job or a health emergency that
requires cash influx.
allow you c
• The amount you need may change as your life circumstances change. Be
flexible.

• Strive to set aside money each month. Ideally, your goal is to be able to
cover your basic living expenses for at least 3 months.

• Decide what’s important for you and your savings goals and go for it.
Figuring out what works for your income, lifestyle and mindset is key for
success.
CHAPTER 2: SAVING

Tips for saving like a pro:


Set a savings goal Track monthly spending
What can you realistically afford to save? Are there purchases you could
How often will you put money into your savings eliminate? Watching how you spend
account? money will inform how you are able
to save.

Prioritize where your money goes Invest in yourself


Decide what you will spend money on and Paying for personal development
why. Gifts for loved ones, new clothes for classes or going back to school is an
work or school are all important, but should investment in yourself that can pay
be prioritized based on your financial goals. off in the long run. Don’t be afraid to
spend money on self-improvement.
CHAPTER 3: MANAGING CREDIT AND DEBT
CHAPTER 3: MANAGING CREDIT AND DEBT

So what’s credit?
Let’s start with the basics
At its core, credit is borrowed money.
A lender, card issuer, bank or grantor gives
you a set amount of money to use with the
expectation you’ll repay it, according to
agreed-upon terms. Those terms can
include repayment dates, required
minimum payments, interest rates, fees
and more.
CHAPTER 3: MANAGING CREDIT AND DEBT

People who have good credit scores may


qualify for one of these three categories

740+

670+ 800+

Note: Credit score ratings fluctuate, this is an approximation


CHAPTER 3: MANAGING CREDIT AND DEBT

Who cares how my credit is, anyway?


Many businesses, such as utility companies, landlords,
insurance companies, and potential employers, may
request your permission to view your credit report. Before
extending you a loan or line of credit, a lender will want to
assess your credit score.

There are significant benefits to having a good credit


score – it can give you access to premium credit cards,
better loan products, and more favorable (less expensive)
interest rates.

There are also significant disadvantages if you have a bad


credit score, which is typically below 600. Disadvantages
include paying higher interest on credit cards, loans,
and mortgages. It could also impact your ability to rent an
apartment or get a job.
CHAPTER 3: MANAGING CREDIT AND DEBT

Learn about your credit report


and credit score
Credit Report – your current and historical credit activity and payment history: Credit Score can be impacted by:

• The balance • Your credit limit and the Payment history:


timeliness of your approximately 35%
• Notes on any payments
bankruptcies, Credit utilization:
foreclosures and • The age of the account approximately 30%
repossessions Length of credit:
• Notes on any outstanding
debts that have gone to approximately 15%
• Details about the
loans that are in your collections Managing new accounts:
name approximately 10%
Types of credit:
approximately 10%
CHAPTER 3: MANAGING CREDIT AND DEBT

Follow some Pay your bills on time every time.

basic rules Limit the amount you charge on your


cards relative to their credit limits –
stay under 30% utilization.

Keep your older credit cards active and


paid on time to build credit.

Don’t use credit to fill a cash


gap.

Don’t believe the myth that carrying a


credit card balance builds your credit.
CHAPTER 3: MANAGING CREDIT AND DEBT

Am I paying off my debt the


right way?
• Consider consulting a financial coach about the
spread of your debt and determine what an
aggressive, yet realistic, pay-down plan would look
like.

How’s my credit?
• Do a little digging to learn about what credit is, why
it matters and ways to potentially improve your
score.
CHAPTER 4: AVOIDING FINANCIAL SCAMS
CHAPTER 4: AVOIDING FINANCIAL SCAMS

Financial Scam Examples


Charity fraud
• This type of fraud can be prevalent in times of a high-profile crisis, such as political unrest or natural
disasters.

Bank impersonation
• You receive what sounds like a legitimate call or seems to appear as an email from your bank, a
reputable vendor, or your insurance company about suspicious activity or a problem with your
account.

Downloading remote access software


• You receive a call, email, or text from what you think is a reputable company
that you use and are asked to download a remote access app so they can fix a
billing issue or send you a gift reward.
CHAPTER 4: AVOIDING FINANCIAL SCAMS

Additional examples of financial scams


A surprise account in your name
• You receive a call from a debt consolidation or settlement company that offers to negotiate with
creditors and put all of your debt into one account to make it easier to pay off. Soon after, you
discover that you have a new banking or credit card account opened in your name with an exorbitant
service fee added.

Mobile phone takeover


• Your mobile phone abruptly stops working and there are no bars for cellular coverage, plus phone calls
aren't coming in.
CHAPTER 4: AVOIDING FINANCIAL SCAMS

Ways to help protect yourself


Bad players are after your personal information because it’s the key to your
accounts. Here are some steps you can take to help safeguard those details

1. Be guarded with your private information


Cyber criminals are using more sophisticated, targeted techniques on victims. They may often already know
some information about you, like what state you live in or that you're a customer of a particular bank or
company. Don’t make it easier for criminals to gain access to your accounts; avoid disclosing personal or
financial information when posting on social media.

2. Vary your passwords


Don't use the same password on multiple accounts. That
makes it easier for cyber criminals to break into all of your
accounts since all they have to do is use one password.

3. Be suspicious of any unsolicited contact


Given the growing number of scam calls pretending to be
legitimate companies, be wary of offering any additional
information over the phone or through a link.
Resources
INTRODUCTION TO PERSONAL FINANCE

• Life and Money by Citi – Insights and tips on money, well-being, and culture

• Financial Guidance Center by Citi – Boost your financial knowledge with these tools, videos, and articles

• Interested in learning more about how Citi provides financial education in communities around the
U.S.? Please reach out to: communityinvesting@citi.com

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