1. Avoiding Financial Trouble
Slide 1 - This workshop is designed to provide an overview of the things we need to accomplish to maintain good financial health. We will introduce you to basic financial principles and hopefully, the result will be to improve your financial management literacy and money management skills. But first let me tell you about Cooperative Extension:
Virginia Cooperative Extension (use as much of this as you see fit).
1) Historically, CES grew out of the U.S. Congress’s concern for the education of the average citizen,
…originally addressing the needs of people who made their Livelihood from agriculture.
In 1863, Congress passed the Morrill Act which provided for a university in every state which would educate citizens in agricultural and mechanical fields.
These colleges today are known as “land Grant” Universities.
2) Congress realized that education must be based on research so it passed the Hatch Act in 1887.
The Hatch Act provided for the establishment of facilities where colleges could conduct research into agricultural, mechanical, and other problems faced by rural citizens.
These research facilities are out in the community.
3) Finally in order to pass the benefits to even the remotest parts of the state, Congress passed the Smith Lever Act of 1914.
Smith Lever provided for the establishment of the Cooperative Extension System.
As a result, there are Cooperative Extension offices in almost every one of the nation’s 3,150 counties (and in some cities too).
Cooperative - a nation wide network of educators who serve in the national interest
Extension - means that these offices extend to the public the information developed on the campuses and research stations of the land grant universities.
Cooperative Extension is a unique educational system that partners federal, state , & local government using funds from these three sources.
Prince William Area
Financial Education Program

2. A Way to Look at Personal Finances
Overview
Goal Setting
Five Leading Causes of Overspending
Credit Cards
A Way to Look at Personal Finances
Your Financial Net Worth
Debt & Savings
Income & Expenses
Slide 2
There are three sections to the workshop:
1) The first section introduces goal setting, why we overspend, and the impact of credit card abuse
2) The second section goes into how we can compute financial measures such as net worth and cash flow to determine our financial health
3) The final section introduces some individual actions we can pursue to begin improving our financial health
Record Keeping
“Bare Bones” Budget 4 4

3. Why Financial Education?$
Out of every 100 people entering the workforce today:
1 will retire wealthy
4 will retire financially secure
20 must continue to work during retirement
26 won’t live to retirement
46 will rely on Social Security to meet basic living needs (poverty level)
Slide 2
Unfortunately, our education system in America with few exceptions does not provide for personal finance education.
Only two states require a course in personal finance as a requirement for high school graduation (New York and Illinois).
In Virginia, the standards of Learning (SOL’s) do not cover personal finance, although selected schools do bring personal finance education into the classroom.
Sound financial education allows the business of “us” to continue on a financially sound basis into retirement.
As the figures* above show, 46% of people who enter the workforce will rely only on social security in retirement, and this will allow them to live at the poverty level.
(Note: if you add the numbers above, and someone in the class will, they total 97. This is because three out of 100 drop out of the system and are not accounted for).
* Obtained from a professor at Virginia Tech in 1999

4. Perceptions About Money
Who Taught You About Money?
Do You Talk About Money at Home?
Who handles the money in your family?
This will let them understand that different people grew up with different perceptions about money and how it plays in one’s life.
Some families prepared their children to deal with personal financial management, some did not.
As a counselor, this information will help you to gain insight into the person you are helping. 6 6

5. Money Problems Involve
Value Conflict
Unrealistic Goals
Emotional Uses of Money
Lack of Planning
Most families face money problems because of a lack of planning and communication. These problems generally fall under four categories.
Value Conflicts - No two persons have exactly the same values, but when there are sharp differences in values in a household, negotiation is vital. To save or spend, to buy life insurance or a new car, to pay for college tuition or stereo equipment-these choices reflect values and potential conflicts.
Unrealistic Goals - Striving immediately for the same quality house, furnishings, and car that took your parents 30 years to earn is a common problem. Insisting on unrealistic standards often results in frustration and , worse, over-indebtedness. Setting priorities, resisting outside pressures of advertising and peers, and taking satisfaction from the “no cost” aspects of life can help.
Emotional Uses Of Money - Buying status, friendship or love; controlling or punishing others by withholding money; and overspending to get back at another family member are all emotional uses of money.
Lack Of Planning - Impulse buying with credit cards, daily trips to the store, inadequate health insurance, and low-yield investments all indicate a lack of financial planning. Setting new goals and seeking alternatives are necessary for successful financial management. In times of inflation and rapid change, relying on old habits can be costly.
(Note: Advise the participants to refer to the “Values Test” worksheet, have participants complete in class. If training volunteers advise the group to also use the test on their clients.

6. Needs vs. Wants FOOD Steak or Hamburgers SHELTER 2, 3, or 4 Bedrooms
CLOTHING
Nike or Payless
Needs – need the basic requirements of life.
Wants – make life easier.
Go through slide.
In our society , we are bombarded daily with advertisements telling us we need the product being advertised. As a result, many people have trouble distinguishing between needs and wants.
A need is something that is thought to be a necessity and is basic for survival, wants are desirable to make your life more comfortable. For example, most people need transportation to and from work, but they do not need a new automobile for this purpose. Needs should be distinguished from wants before you make a decision to buy.
Financial planning involves managing all your resources to achieve your goals and objectives. Your time, talents, and money are some of those resources. Knowing the difference between your needs and wants will help you manage your money better.
CARS

7. Setting Goals Clearly define your goals Goals should
Personal, financial, career, social, etc.
Goals should
Be realistic
Be measurable
Have a time frame (deadline)
Be visual
Slide 4
Define your Goals - There are all types of goals, but tonight we are interested in setting and achieving financial goals.
It sounds really simple, but setting goals is a powerful method to get things accomplished. Think of this from a sports context. If I handed you a football, which direction would you go? Obviously, you head towards your goal, and you have 4 quarters to do it. That’s why they call it a goal – it’s what you want to accomplish! Your goal has given you a direction, something to work towards. Perhaps more importantly, the goal gets your whole family (your team) working together and moving in the same direction. It sounds simple, but goals are extremely important in financial management.
For example:
My goal is to save $1,200 over the next twelve months toward my next vacation.
This example satisfies all the requirements of a goal:
Realistic but challenging- I make enough money or I can change my behavior to save $100 a month, but saving is not something I’m used to doing.
Measurable - $1,200
Time frame (deadline) - over the next 12 months
Visual - you can see yourself at your vacation spot lying on the beach or skiing in the mountains
Now ask participants to take out the goal sheet in the packet (this sheet is included at the end of this presentation) and set one goal when they go home and post it where they can see it. A university study found that people who write down their goals are nine times more likely to achieve them than people who don’t write them down.
Tell “Visual” story:
Ask people if they are familiar with the Olympics (most are).  Then
say...
During the mid 1970's East German women swimmers dominated Olympic
swimming events.  Does anyone know why? Most people attribute it to the
use of performance enhancing drugs, which is only part of the reason.
The East German women's swimming coaches practiced visualization
techniques with their athletes.  The way they did it was that during
practices when the swimmers were competing against one another for
various spots on the team, at the end of each heat, the coaches would
have the top three finishers get out of the pool, go to a podium and
hang the gold, silver, or bronze medal around the neck of the swimmers.
This created the vision in the mind of the athletes that their goal was
winning the medal, not just the race.  Several heats must be won to
qualify for the medal round at the Olympics, so the coaches wanted the
athletes to focus on the ultimate goal - winning the medal, not just
winning a race.  So it is with things we are trying to achieve, we need
to visualize the final result we want.

8. Five Leading Causes of Overspending
Creditors
5 - Thinking That Money Can Buy Happiness
4 - Wanting Only the Best for Your Children
3 - Trying to Keep Current
2 - Taking Out Car Loans
1 - Abusing Credit Cards
Slide 6 - Animated slide - Here are the five top reasons people overspend. We will go from #5 to #1 - the top reason why people overspend.
5 - Thinking that money can buy happiness (ask the participants if money can buy happiness. Discussion. For most people it can not, or at least it can not for long. Exercise - Have everyone close their eyes for 3 seconds.. While their eyes are closed, ask them this question: Think of the event in your life where you were the happiest and hold the first thought that comes to mind. Then ask - “did anyone’s thought have to do with money (normally very few if any thoughts of happiness had to do with money).
4 - Wanting only the best for our children - Ask participants if they want only the best for their children (all usually say yes). Then ask if spending large amounts of money provides “the best” their children need. Then ask how many people with children spend more money for their children’s shoes than their own shoes.
3 -Trying to keep current - Buying the latest version of things when what they are replacing is still fine (whether cars, CD’s, electronic equipment, clothes, etc).
2 - Taking out car loans is the number 2 reason why people overspend. We get a job and think we can buy that Lexus, when a Saturn is better for our financial health. Or the salesperson asks what can we afford for a monthly payment rather than what we can afford to spend in total including car insurance, maintenance, personal property tax, etc. Or we don’t consider that we may be committing ourselves to 5 or 6 years of monthly payments of the amount quoted.
1 - Abusing credit cards - the number one reason - let’s go into more detail on this...
OOF!

9. CONGRATULATIONS!
“This is your new platinum card, which is meant to replace your current card.
To get the most value from your new card, just sign the back now and START USING IT.” $
Slide 6
Congratulations! – no animation
This is an actual note included inside the envelope of a new platinum card that came to me.
The point to make with this slide is that the card company’s pitch is that just by signing the back and using the card you will then get the most VALUE from your new card (which is not true of course).
The little bomb on the figure signals the danger in believing what you read from credit card marketers using this approach.

10. Paying Off Credit Cards
Situation
18.5% interest rate
Debt is $2,000
Slide 8 - animation
Paying Off Credit Cards
This slide illustrates a real life situation where a person has a credit card at 18.5% interest, buys a $2,000 entertainment center at Circuit City, and pays the minimum balance on their credit card when the bill comes.
Click once – interest rate appears
Click again – Debt amount appears
Click again - Pays minimum balance appears
Click again – Happy guy comes into picture
He is happy because he has a “good deal.”
Pays minimum balance

11. Paying Off Debts Result Takes 11 years to pay off
Interest charge is $1,934
Slide 9
Paying off Debts – animation
This is the real cost of paying the minimum balance on a credit card at 18.5% starting with a balance of $2,000.
Click once and 11 years to pay off appears
Click again and Interest charge appears
Click again and total coast appears
Click again and sad guy appears
(He realizes he doesn’t have a “good deal.”)
Bottom line: It takes almost 11 years and another $2,000 to get the card to zero.
Total cost is $3,934

12. Why?
Credit Card Issuers often require a minimum monthly payment of 2% to 3%
Payment
$2,000 Times .02 = $40
Interest
Rate
18.5% divided by 12 = 1.54%
$2,000 times 1.54% = $31
Slide 10
Why? – animation
Here is the credit card company math on why making minimum monthly payments is so costly – and dangerous.
Credit card issuers normally require 2 to 3% of outstanding or average monthly balance when they compute the “Minimum Payment”
Click once (2,000 times .02 = $40)
Then they compute the monthly interest payment, but first they must divide the annual rate by 12 since payments are monthly.
Click again (18.5% divided by 12 = 1.54%)
Click again(2,000 times = $31)
Click again
What is left after the interest is computed goes towards principal ($40 minus $31 = $9)
So they still owe $1,991 after the first payment, not $1,960 as many people think.
Note that the amount of interest they pay on this first payment is more than 75% of their payment ($31 divided by $40).
Interest
$40 - $31 = $9
Principal

13. “Financial Assets minus Financial Liabilities”
Financial Net Worth
“Financial Assets minus Financial Liabilities”
Financial Value of “You”
A Snapshot in Time
Shows Your Capacity to Accomplish Major Financial Goals ?
Slide 11
Financial Net Worth – animation
This is pretty simple: It is your assets minus your liabilities. Or
What you own (at what you can sell it for) minus what you owe (what it would take to pay off what you owe)
Financial Net Worth is the Financial Value of “You”
a snapshot of your financial health (you do not have to compare your number to your friends or neighbors).
It is not a scorecard of life.
Shows your capacity to accomplish major financial goals such as
buying a house,
retiring,
or withstanding unexpected losses of income.
Whether or not the numbers are good or bad:
Now let’s look at Assets and Liabilities in a little more detail; we will start with assets…
(Page 24 of “Personal Finance for Dummies” Book)
Can be used to answer the question:
“Am I getting ahead?”

14. Assets Are Worth Real Money Can be Converted into Hard Dollars
Generally Include:
Your Home
Money in Bank Accounts
Stocks & Bonds
Mutual Funds
Businesses Owned
Real Estate Owned
Slide 12
Assets – no animation
Are worth REAL money. Assets are valued a what you could sell them for, not what you paid for them.
You can turn assets into cash now or in the future.
HAND OUT ASSETS SHEET, GO OVER SHEET (assets and liabilities sheets are included in an Excel file in the PowerPoint section of the website. The file is called Avoiding addendum—assets and liabilities).
Now let’s look at liabilities.
Page 24 of “Personal Finance for Dummies” Book.

15. Liabilities Due Now! Generally Include: Home Mortgage Debt
Discover
VISA
MasterCard
Remit!
Generally Include:
Loans and Debts Outstanding
Credit Cards
Auto Loans
Money Borrowed from Family or Friends
Home Mortgage Debt
Slide 13
Liabilities – no animation
HAND OUT LIABILITIES SHEET, GO OVER SHEET
Only include money borrowed from friends or family that you expect to pay back.
As we know, if we subtract our liabilities from our assets, we have our Net Worth
After we compute our net worth, we are in a position to interpret our own net worth…
Page 25 of “Personal Finance for Dummies” Book.

16. Interpreting Net Worth Results
!!!
Negative
About Zero
Several Times Annual Income
Slide 14
Interpreting Net Worth Results – no animation
Negative:
- The majority of Americans fall into this category
- Not so bad if you are in your 20’s and just starting to work
Actions needed:
- Get rid of debts (highest interest ones first).
- Build a safety reserve: 3 to 6 months of living expenses. (The idea of the safety reserve is very important.)
About zero
- REDUCE SPENDING AND ACCELERATE SAVINGS and investing.
More than a few years annual income:
- You are on track or ahead of the game!
See pages 27 to 29 of “Dummies” book.
Now, there is something that you need to remember…

17. Something To Remember...
Your financial net worth has absolutely, positively, no relationship to your worth as a human being.
Slide 15
Something to Remember
Your financial net worth is not your net worth as a person, although some people may choose to interpret it that way
Avoid that temptation whether your net worth is large or small
Now that we covered Net Worth, let’s look at debt...

18. Tips on Debt Bad Debt Good Debt Borrowing for Consumption
From Personal Finance For Dummies™, 2nd Edition by Eric Tyson. Copyright © 1996 by Eric Tyson. All rights reserved. Reproduced here by permission of IDG Books Worldwide, Inc. …For Dummies is a registered trademark under exclusive license to IDG Books Worldwide, Inc., from International Data Group, Inc.”
Tips on Debt
Bad Debt
Borrowing for Consumption
“Consumer” Debt
Good Debt
Borrowing for Long term Investment
Slide 16 Tips on Debt – no animation
Debt is bad when the things bought eventually become worthless.
Putting your grocery bill on your credit card and not paying your card bill off when your statement comes.
Same with eating out.
Using up the item before it is paid off.
Bad debt is also called “consumer debt.”
************************
Debt is good when the things bought generally increase in value over the long term (most health care can be included here).
Click and “Should be…? appears
The amount of good debt you have is determined by your objectives. If your objective is to buy a house, you will have more good debt than someone who chooses to rent.
Just because it is good debt, it doesn’t mean you can have as much of it as you want. Good debt means it is a good use of debt. Too much good debt will get you into trouble.
For example, you can spend too much for a home or for an education.
Slims’s Diner

19. Consumer Debt Ratios (Bad Debt)
Debt to Income Ratio
Monthly Consumer Debt Payments
Although there are many different debt ratios lenders use to evaluate borrowers and planners use to assist their clients, we are going to focus on these two. They measure ‘bad debt” or consumer debt.
Debt Burden Ratio
Total Consumer Debt

20.  Debt to Income Ratio = $500 $2,500 20% Less than 15% - Good!
Total Monthly
Debt Payments
(Exclude Mortgage) 
Monthly After
Tax Income =
Debt to
Income Ratio
$500
$2,500
20%
Less than 15% - Good!

21.  Debt Burden Ratio = 40% $12,000 $30,000 Less than 25% - Good!
Total Bad
Debt
(Exclude Mortgage)
Gross Annual Income
(After Taxes)  =
Debt Burden Ratio
40%
$12,000
$30,000
Page 23 “Dummies.”
Debt Grows like cancer - you can’t pay off the principle, so you just pay interest.
In this example we are only considering bad debt. The Total Bad Debt of $10,000 includes an auto loan and credit card debt.
The $30,000 is the gross annual income.
For northern Virginia, an allowable bad debt ratio of 25% may seem not high enough. However, the point here is that over our lifetimes we need to get this ratio down to zero.
When you use this ratio along with the monthly debt to income ratio you can see if your monthly payments are too high and if you total debt is getting out of hand. Using only one of these can mask our true debt picture. One measures our ability to meet our monthly obligations (Debt to Income Ratio), while the other (Debt Danger Ratio) measures whether we have taken on too much debt in total.
Now that we have discussed debt, let’s look at the other side - savings...
Less than 25% - Good!
…but should be zero!
From Personal Finance For Dummies™, 2nd Edition by Eric Tyson. Copyright © 1996 by Eric Tyson. All rights reserved. Reproduced here by permission of IDG Books Worldwide, Inc. …For Dummies is a registered trademark under exclusive license to IDG Books Worldwide, Inc., from International Data Group, Inc.” 17 17

22. Tips on Saving $ Pay Yourself First!
Treat Savings as a Fixed Expense
Try to Save at Least 5% - 10% of your Gross Salary
Build up 3 to 6 Months of Living Expenses
Liquidity Account (safety)
Start Investing
Slide 20
Tips on Saving – no animation
Pay yourself first simply means that you make savings an expense, just like paying the rent or electric bill – only you pay your savings account.
You need to build up enough money in a savings account or money market fund to cover 3 to 6 months of expenses. This money should not be in a mutual fund or other investment vehicle because it is an emergency reserve and emergency means it must be there when you need it.
This is to cover emergencies such as losing your job, and still allow you to live in your home, buy food, and make the car payment, etc. until you find another job
Alternatives could include borrowing money from friends and family (if they will lend it to you, or moving back in with your parents, if they will let you. But what you need is the financial independence to take care of yourself – an emergency reserve helps provide that independence.
Let’s take a look at how money grows if invested properly…

23. How $100 A Month Will Grow Over $182,000 Dollars YEARS (8%)
Slide 22 – animation
How $100 per month will grow.
Can you invest $100 per month?
Click once, blank chart appears - What do you think happens if you invest $100 per month for 30 years (at an 8% return)
Click again filled chart sowing growth appears
It doesn’t really start to grow until about year 10, just like we have already seen – but it grows to over $180,000.
This happens in just 30 years – so if you are 25 now (or know someone who is) just look at what you will have at age 55!
And if you can’t put away $100, put away $50 – you’ll have over $90,000!
The point is, do not wait… let’s look at what procrastination does…
YEARS
(8%)

24. Procrastination (Waiting to Start)
+$109,236
$18,000
9 Years
Jill
$579,488
$70,000
35 Years
Jack
Slide Animation Procrastination (Waiting to Start)
Let’s take an example of Jack & Jill (you remember them don’t you)? Went up the hill for water, Jack fell down, so did Jill but she didn’t get hurt. Jack broke his crown and spent some time in the hospital.
Click once – Jack’s info comes out.
Jack started slower, set back by his time in the hospital. So he started at 31 and put $2,000 away in an IRA for 35 years for a total of $70,000.
Click again – Jill’s info comes out
So Jill got a job and began investing right away. She was 21. She put $2,000 in an IRA for the first 9 years she was working for a total of $18,000. Then she quit working after she got married to raise her family.
Now they are 65 and ready to start cashing in on their IRA’s. Who has more money?
Click again – Jack’s total comes up (over $470,000).
Click again – Jill’s total comes up (almost $580,000).
Click again – or over $109,000 more than Jack – the cost of waiting.
Now, while Jill does have more money even though she put in less money, this also shows that it is never too late to save or invest. After all, Jack still has over $470,000!
So how do you get started – well you start by living within your means...
$470,249 22 30 31 65
Age
$2,000 per Year at 9%

25. Income and Expenses Living Within Your Means: Spend Less Than You Earn
Save What You Do Not Spend
Invest What You Save
Take a break to hand out mints now
Slide Income & Expenses – no animation
Explain what Living within your means is:
Spending Less Than You Earn
Saving What You Do Not Spend (saving is a habit)
Investing What You Save
You must categorize yourself - Do you:
Spend more than you earn?
Spend what you earn?
Save?
HAND OUT MONEY MANAGEMENT QUIZ
Go thru quiz. Discuss.
Now ask what is the one thing you can do to live within your means? Answer - To live within your means you must practice “DELAYED GRATIFICATION” Hold up the mint you did not eat. Ask who ate their mint. These people practiced instant gratification.
Now, in order to live within your means, you must begin with an earnings and spending analysis...
Pg of Dummies book
Income
Expenses

26. Earnings & Spending Analysis
Record What You Earn
Understand Where Your Money Comes From
Record What You Spend
Figure Out What you Typically Spend Your Money On
Compute the Difference
Slide 25 Earnings & Spending Analysis - Animation (pig “oinks” – no sound just picture)
Discussion
Why do an earnings and spending analysis?
You aren’t saving enough money to meet your financial goals.
You believe your spending is out of control or you don’t know where all your income goes.
You’re anticipating a significant life change:
marriage/divorce
children
new career/job loss/relocation
retirement
sickness/death
aging parents
You need to set up an emergency fund.
Now let’s see how you do an earnings & spending analysis…
See page 61 and following of Dummies.
Spending Analysis –
1) You record what you earn – HAND OUT INCOME SHEET – GO THRU SHEET BRIEFLY
Understand Where Your Money Comes From
2) You record what you spend – HAND OUT EXPENSES SHEET (the income and expense sheets are part of the Avoiding Addendum Excel file) – go thru expenses categories briefly
Figure Out What you Typically Spend Your Money On
3) You compute the difference (is it plus or minus) This is your “cash flow”
This helps you:
Establish Good Financial Habits like saving, paying bills on time
(Just like washing your face, brushing your teeth, and exercising are good health habits)
Maintain a Regular Automatic Savings Routine.
Oink!

27. Tracking Expenses Track Spending On Paper
Put Your Spending Into Categories
Slide 26 – no animation Tracking Expenses
(Refer them to expenses sheet)
Tracking spending on paper
Put what you buy into categories
Total the categories – see if this is how you really want to spend your money.
Now you have all the figures for
Net Worth
Cash Flow
Bad Debt Ratio
HAND OUT MEASURES OF FINANCIAL HEALTH SHEET
Ask yourself questions like:
Does your spending fit in with your goals and values?
What habits, both bad & good, pop out?
Is there a better way to do things?
and you are in a position to build a budget...
Because tracking income & expenses is not building a budget…
Page 62 & 63 of “Dummies.”
Total the Categories

28. Record Keeping Keep all records in one place & organized
Decide which family member has the major responsibility
Set a specific time to handle your filing and records maintenance
Source: Managing Your Money Lesson 6 – Keeping Records in Order
Keep all records in one place & organized – Make it easy to get to them and to maintain them, don’t just throw the information in a box
Decide which family member has the major responsibility – But everyone needs to understand how the system works and cooperate
Set a specific time to handle your filing – establishing a regular routine will save time and effort
Why keep records?
Makes it easier to find information when you need it
Provides security for hard to replace items
Provides proof of transactions
Helps in emergency situations
Helps someone else if you are not available
Proves ownership in a lawsuit, inheritance or property fight
Helps with property settlement in a divorce
Sample records to keep:
Home ownership or home rental related
Home improvements
Income tax related
Insurance papers
Sales receipts for major purchases
Pay stubs

29. Bare Bones Budget Savings Insurance Housing Food Health 6% Clothing 6%5%
Housing
11%
30%
Food
14%
Health 6%
Clothing 6%
Entertain 5%
Charity 4%
Misc 2%
17%
Slide 27
Bare Bones Budget
Explain that this is a minimum level budget – what you need to start out with for most people. It doesn’t reflect Bill Gates’ budget nor does it reflect “Bill Smith’s” budget.
What is missing from the pie is a piece for debt payments. The point is that when you take on debt and must make debt payments, those payments must come from some other part or parts of the pie. The question is where? Eventually too much debt will lead to bankruptcy because a person will not have enough money to pay for the essentials in the pie.
By the way, it is usually better if only one person maintains the records in your family, because then everything recorded will be done with the same system. Everyone is responsible for proper spending and record keeping, but only one person should actually maintain the records (that person should show the other person how though)
So, what is next for you….
23%
Transportation
Note: percentages are averages, your individual budget may vary.

30. Bare Bones Budget "Safe" Debt Amount Debt All Other 15% 85% Slide 28
So let’s look at that same picture with 15% of debt payments - where did the 15% come from? It had to come from some of the other categories. Consider that each dollar of debt you incur will come from somewhere in your available funds
The larger the debt, the less you have available for other things. Eventually debt payments can become such a large part of your expenses that they overwhelm you ability to pay them, eventually leading to bankruptcy.
Most financial counselors recommend that your monthly debt payments (excluding mortgage payments) be no more than 15% of your gross monthly income. When you start approaching 20% you are heading for trouble.
"Safe" Debt Amount

31. Determine your financial health. Call Virginia Cooperative Extension
What’s Next for You?
Determine your financial health.
Get an assessment!
Call Virginia Cooperative Extension
So…what is next for you? Get an assessment or do it yourself.

32. What to Expect We Provide We Do Not Provide Education Guidance
Confidentiality
We Do Not Provide
Investment Services
Legal or Marital Advice
Financial Assistance
Slide 30
What to Expect- animation
Click and What We do not provide appears
We do not provide...
Investment Services
Legal Advice or marital advice
Financial Assistance
Note: - Also, we do not provide miracles – overnight at least. You need to explain that it took some time to get where they are financially, so it will take some time to get things in order.
Now let me leave you with some final thoughts...

33. 4 Components of Discipline
Some Final Thoughts
4 Components of Discipline
Delayed gratification
Acceptance of responsibility
Dedication to truth
Balance
Slide 31
Successful financial management requires discipline Basically there are four components of discipline . (A Road Less Traveled, Scott Peck)
Delayed gratification
We have already experienced and discussed this aspect of discipline
Acceptance of responsibility
This simply means that wherever we find ourselves financially it is our responsibility and no one else’s if we wish to improve it.
Dedication to truth
This component means above all that we do not lie to ourselves. For example, putting down incorrect information on assessment forms hurts no one but ourselves, since it is our assessment. Only by knowing the truth about our financial situation can we help ourselves to improve it.
Balance
Balance is simply the ability to say no. Sometimes this is the most difficult component of all.

34. Goal Sheet
Short Term
LongTerm