American Debt Counseling Presentation
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American Debt Counseling provides consumer education to teach financial skills. The document discusses setting financial goals, organizing financial records, understanding debt-to-income ratios, preparing spending plans, saving money, understanding credit reports, and repairing credit. Tips are provided on budgeting, debt management, and avoiding bankruptcy when dealing with financial issues.
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American Debt Counseling Presentation
- 1. American Debt Counseling is a consumer education organization dedicated to teaching the skills necessary for a secure financial future. The information we provide is designed to train and motivate consumers to spend, save, and use credit wisely.
- 9. Clarifying Financial Goals Questions??????
- 11. Does this look familiar?
- 20. Organizing Financial Records Questions?????
- 21. What is Debt-to-Income Ratio ?
- 30. Preparing a Spending Plan
- 36. Preparing a Spending Plan Questions?????
- 37. Saving Money
- 44. Credit Reports – Facts & Myths
- 50. What’s in my Credit Score?
- 61. Credit Reports – Facts and Myths Questions??????
Notas del editor
- INTRODUCE FEDERATED FINANCIAL YOURSELF ANY OTHER SPEAKERS
- Clarifying Goals. LIKE I SAID, CHANCES ARE YOU’LL HAVE TO WORK TO GET WHAT YOU WANT, AND GETTING WHAT YOU WANT FINANCIALLY REQUIRES THE SAME DEDICATION, PERSEVERANCE, AND THE KNOW HOW NECESSARY TO ACHIEVE ANY GOAL. TO GET WHAT YOU WANT YOU HAVE TO SET GOALS. HOW MANY OF YOU HAVE BEEN IN THE SITUATION WHEN THE TV OR REFRIGERATOR GOES BAD, AND YOU HAVE NO SUITABLE MEANS OF REPLACING IT IMMEDIATELY ???? I HAVE HAD THAT HAPPEN TO ME AND UNFORCUANTLY I HAD TO LEARN THE HARD WAY. THAT IS THE REASON I AM STANDING HERE TODAY TALKING TO YOU ABOUT SETTING GOALS, AND FINANCIAL PLANNING. PLANNING FOR GOALS REQUIRES A REALISTIC EVALUATION OF WHAT IS IMPORTANT TO YOU, AS WELL AS PLANNING FOR THE UNEXPECTED.
- I THINK WE CAN ALL RELATE TO THIS….. NOTHING IS EASY – EVEN IF YOU DID WIN THE GAME SHOW, YOU WOULD STILL HAVE TO DO FINANCIAL PLANNING……… IT REALLY DOESN’T MATTER IF YOU HAVE $1000 OR A MILLION DOLLARS, THE PRINCIPLES ARE THE SAME, JUST THE FIGURES ARE DIFFERENT. HOW MANY OF YOU HAVE HEARD OF THE BIG LOTTERY WINNERS BEING BROKE IN A FEW YEARS????????
- WHAT ARE GOALS???? It’s simple, a goal is something you are willing to work for, and you get what you want by planning, And, following the plan.
- DO YOU THINK THAT ALL GOALS ARE THE SAME?????? NO – THERE ARE SHORT TERM, MIDDLE TERM AND LONG TERM GOALS – EACH OF WHICH REQUIRE PLANNING…….. Determine whether each goal is short, middle, or long term? Short Term Goals take less than a year to achieve and could include: Buying a refrigerator, taking a vacation, or Replacing a TV. Mid-Term Goals: Can’t be achieved right away, but shouldn’t take years to accomplished, these include: buying a home, purchasing a car, finishing your education, or paying off a debt. Long Term Goals: Take more than 5 years to accomplish, a longer commitment and more money, these include: paying for your child’s college education and or planning for your retirement. It’s a good idea to start with a small goal, one you can achieve, achieving smaller goals can help you plan for and help you accomplish larger goals, let’s look at one of your short term goals now Interaction: have some people list a short term goal of theirs. WHAT DO YOU THINK THAT BUYING A REFRIDERATOR IS ??
- IT’S VERY EASY TO LOOSE SIGHT OF YOUR GOALS, ESPECIALLY WITH INFLUENSES FROM THE WORLD AROUND US. TV TELLING US TO SPEND SPEND SPEND AND PAY FOR IT IN 2010…………. PUT REMINDERS IN THE CLOSET, REFRIGERATOR, MAKE THEM HUMOROUS – SO IT MAKES YOU SMILE JUST LIKE HAVING FRIENDS HELP WHEN LOSING WEIGHT – GET YOUR FAMILY AND FRIENDS TO HELP MOTIVATE YOU TOWARDS YOUR FINANCIAL GOALS ……… LOOK FOR WAYS TO ACHIEVE YOUR GOALS IN A SHORTER TIMEFRAME – REVIEW YOUR SPENDING PLANS REGULARY TO SEE IF YOU HAVE ANY MORE SPARE CASH TO USE …….. WE WILL TAKE ABOUT SPENDING PLANS LATER.
- Consider these two families, the smiths and the browns. ORIGINAL NAME EH!!! These are two families who both know what they want, now which one do you think will succeed? “ Why not ask them?” Ok, choose the family you think will actually get what they want. --Interaction, poll the class to see which family they believe will succeed. Smiths: The Smiths know what they want, that’s true! But unlike the browns they don’t have a plan to get there, and so the smiths may find their goals are just dreams. Browns: Notice how the browns have a strong game plan with actual timelines and deadlines for obtaining their goals.
- RIGHT – THE JONES FAMILY WHY? THEY HAVE SET THERE GOALS WITH A PLAN TO ACHIEVE THEM EACH AND EVERY ONE OF US CAN DO THIS. IT JUST TAKES A LITTLE TIME, YET IN THE LONG RUN IT SAVES A TREMENDOUS AMOUNT OF TIME.
- IF 2 PRESENTERS CAN DO AS A SKETCH BETWEEN THE 2. IF 1 PRESENTER – DO AN OUTLINE OF THE CALL. Hello Ms. Smith, this is Mr. Peterson from Acme Fidelity, You have a credit card with us? “ “ Yes” We understand you’re questioning a charge on your account, which charge was that? “ yes that wasn’t my charge” What is your account number ma’am. “ Uhm, I can’t put my hands on that right now, can I call you back?” IF ONLY ONE PRESENTER.. Have any of you (the audience) disputed a charge or gotten a call from a creditor and can not find the statement or paperwork? You know that you needed to speak with them,yet you though you put it right on the counter and now suddenly it is gone. I KNOW THAT HAS HAPPENED TO ME DOES THAT FAMILIAR TO YOU? THIS NEXT SECTION DEALS WITH ORGANIZING YOUR FINANCIAL RECORDS AND HOW TO KEEP TRACK OF YOUR SPENDING
- I THINK THAT WE HAVE ALL POSSIBLY BEEN HERE………. IN FACT I THINK MY FILING TRAY HAS BEEN EVEN BIGGER THAN THIS ONE. THAT’S WHEN I KNEW THAT I HAD TO GET CONTROL AND DO SOME THING.
- THERE IS NOTHING MORE FRUSTRATING THAT NOT BEING ABLE TO FIND THINGS WHEN YOU NEED THEM – REMEMBER LOOKING FOR THE CAR KEYS???? AND THERE IS NOTHING MORE FRUSTRATING WHEN THAT RELATES TO your financial information AND THAT could cost you money. Remember you can’t lose your money if you always know where it is.
- TO BE ORGANIZED YOU DON’T HAVE TO OUT AND BUY AN EXPENSIVE FILING SYSTEM, YOU CAN USE SOMETHING VERY SIMPLE – LIKE A BOX. Set aside time every week or two for filing records and preventing your “file pile” from becoming a mountain. TELL SOMEONE WHERE TO FIND THINGS IF YOU ARE AWAY ETC
- NOW THAT YOU HAVE AN ORGANIZED FILING SYSTEM, LETS LOOK AT OTHER IMPORTANT DOCUMENTS THAT YOU NEED TO KEEP……. THESE ARE SOME EXAMPLES, EACH OF YOU MAY WELL HAVE OTHER DOCUMENTS THAT YOU WANT TO KEEP WITHIN YOUR FILE.
- WHATS THE FIRST THING TO DO WHEN YOUR STATEMENT ARRIVES? OPEN IT, DO NOT PUT IT OFF TILL TOMORROW……YOU KNOW THAT TOMORROW NEVER COMES. CHECK THE STATEMENT TO MAKE SURE THAT ALL THE CHARGES ARE YOURS, WHO HAS FOUND CHARGES ON STATEMENTS THAT WERE NOT YOURS???? Also make sure any payments you made were credited to your account. And finally, contact your credit card issuer immediately if you have any questions about charges or payments. The statement says we had a $114 charge at MMJ’s Auto Clinic, but we saved the receipt which says the charge should have been $56. DO NOT WAIT TILL NEXT WEEK TO PHONE, BECAUSE YOU KNOW WHAT? SOMETHING WILL COME UP NEXT WEEK AND YOU WON’T MAKE THAT CALL………………
- SAME AS YOUR CREDIT CARD STATEMENT – AS SOON AS YOUR BANK STATEMENT ARRIVES……………………… THERE ARE TWO TRANSACTIONS YOU WILL FIND – CREDITS – FUNDS PAID INTO YOUR ACCOUNT DEBITS – FUNDS COMING OUT OF YOUR ACCOUNT
- A well organized checkbook allows you to pay for goods and services without carrying large amounts of cash, or relying on credit, as long as you have the necessary funds in the account. DATE THE CHECK WRITE WHAT IT WAS FOR, SOMETIMES PUTTING “PIZZA” IS NOT SUFFICIENT, WHICH PIZZA? DOMINOES, PAPA JOHN’S ETC HOW MANY HERE WRITE DOWN WHEN YOU HAVE BEEN TO THE ATM? BEGIN A RULE THAT YOU WRITE THIS DOWN IN YOUR CHECKBOOK REGISTER – AN DON’T FORGET TO RECORD THE FEE ALSO.
- OH NO!!!!! the balances are different, you have more work to do. DON’T ACCEPT – IT’S ONLY OFF BY $10. IF YOU DO THAT EVERY MONTH YOU’VE LOST $120 FOR THE YEAR. FIND THE ERROR AND FIX IT.
- Here are some tips on making your checking account work for you!
- This may sound familiar..Mr. Smith, sorry for putting you on hold, about your loan application, I’m afraid, It’s been declined.
- This is the phone call, no one wants to get, unfortunately you might have a bad credit report and not even know it, and this is definitely not the way to find out. “Stress meter maxed out!”
- One of the easiest ways to get a picture of your current financial standing is to CALCULATE YOUR DEBT TO INCOME RATIO, that’s what lenders use to help determine your credit worthiness. THIS IS NOT SOME MISTICAL SECERT FORMULA – IT’S SOMETHING THAT WE CAN ALL DO.
- BY keeping track of your DTI can you avoid creeping indebtedness, Or the gradual rising of debt.
- First we need to calculate the monthly take-home pay, WHAT’S THE DIFFERENCE IN TAKE HOME PAY TO WHAT MY WAGE IS? This is the amount of money you have after all deductions have been taken out of your paycheck. Mr. Smith gets paid every other week, so we’ll multiply the take home by 26 to get the annual take home pay, then divide by 12 to get the monthly income.
- Next you need to calc your total monthly debt, Here you need to add up all of the current minimum monthly payments. NOT INCLUDING YOUR MORTGAGE OR RENT. In this example Mr. smith has loan payments and credit card payments that add up to $400, so that’s the total monthly debt.
- Finally, you divide the monthly debt payments, by your monthly take home income, to get the monthly debt to income ratio SO MR SMITH HAS A DTR OF 20% - NOW WHAT EXACTLY DOES THAT MEAN?
- WELL IT LOOKS LIKE MR SMITH IS RIGHT ON THE BORDER……………
- “ Honey did you take that $20 bill I had in my purse? I need it for Shannon’s field trip.” Why would I take it, I use my own account if I need any money, you didn’t lose that money did you? “ I had it right here” I don’t know why you don’t just keep the money in your account and write a check like I do.
- Talking about money can be hard, family arrangements may make it impractical for one person to control the household finances. ALSO SOME CULTERAL DIFFERENCE MAY ALSO INTERFER WITH THIS. BUT THAT IS WHAT WE ALL NEED TO DO IN ORDER TO BE FINANCIALLY ORGANIZED AND ACHIEVE THOSE GOALS.
- Learning how to communicate can make managing your money matters a lot easier, be objective and recognize there is no single right way to manage the household finances. DECIDE WHO WILL MANAGE THE KIDS SPENDING MONEY? HOW MUCH CASH YOU WILL KEEP AROUND? Finally, accept that negotiation and compromise are vital to resolving these differences.
- IT’S AMAZING TO SEE WHERE THE ODD $1 OR $2 GOES, SO To really see where your money is going, you’ll need to monitor your spending for a full month, no tricks here, you just need to write down everything you spend, whether you have used cash, checks, or credit cards. Be sure to record all your spending. THAT COFFEE ON THE WAY TO WORK, THE NEWSPAPER FROM THE STREET VENDOR, THAT QUICK NAIL REPAIR ON THE WAY HOME……………
- What makes a good spending plan? A good spending plan allows you to see where your money is going, so you can pay your bills, cut expenses, save, and invest. IF YOU DON’T KNOW HOW MUCH MONEY YOU HAVE HOW CAN YOU BE IN CONTROL?
- A good spending plan can also help you spot problems with your finances.
- “ Stan, I think the bulb blew out in the refrigerator” Actually the bulb is just fine, it’s the fridge that’s not working. “ Oh great, now all this food is going to rot, what are we going to do now?”
- I know what you are thinking, how can you save money? Especially if you are trying to climb out of debt, but there are ways to cut back on expenses and increase the amounts you save.
- Why is it important to save ? AVG life expectancy is going up with advances in tech, so more money is needed as well.
- How can I save if I am in debt? There are 3 ways to save money if you are in debt, it all depends how much debt you have and how much you intend to save, you need to strike a balance between paying down debt and saving for an emergency savings fund.
- Saving money is often difficult especially when bills will not wait. However, it is not impossible and is very imperative for your future. Listed are some tips to help.
- THREE TO SIX MONTHS SOUNDS A LOT ? BUT IT WILL HELP TAKE THE STRESS AWAY SHOULD YOU NEED IT
- “ What do you mean our credit application has been denied? Our Credit is ok!” “ Sorry sir, they must have run across something in your credit report” “ What did they run across? We don’t have any credit problems?” “ Sorry sir, now if you’ll excuse me I have another customer; there’s nothing I can do.”
- Why a credit report is so important. There’s more to your credit report than just your credit history. Your credit report can affect your life. A good credit report can make it easier to buy a car, rent or buy a home Or qualify for the job you want. That’s why it is important to review your credit report at least once a year, and make sure it’s accurate.
- Ordering your credit report. When you order the report, write a letter giving them the personal information given here. Then mail the letter to these addresses, that’s right all three. Since these companies do not share info with each other, you’ll need to request a report from each one, to ensure that each is accurate.
- Ordering your credit report. You can order a copy of your credit report from any or all of the big three credit bureaus.
- Y our credit score or rating is a number that summarizes the information on your credit report. Lenders use your score to determine whether or not they shall extend credit to you. The number is based on a statistical formula and is designed to tell creditors how likely you are to repay a debt.
- You wont find these personal details on you credit report, however you may find your credit rating or credit score. To improve this score you need to correct any errors that may appear on your report.
- Everyone has this question. How can I improve my credit? Here are some ways. Discuss how the dispute (to bureau) of negative info differs from the request (to creditors) not to include it.
- JUST LIKE YOUR CREDIT CARD STATEMENTS AND BANK STATEMENTS, IFNORMATION ON YOUR CREDIT REPORT CAN BE WRONG – When you receive your credit report, you may also receive a dispute form. Fill this out to identify incorrect information, and send it to the credit bureau. The credit bureau has 30 days to investigate your claim and respond to you. If any disputed claim is found to be accurate, you still have the right to include a explanation up to 100 words to be included in future credit reports.
- Co-signing legally obligates you to repay the debt, if the original borrower defaults, and the results could damage your credit record. If you already cosigned for someone and they failed to make payments negotiate with the creditor to reach an acceptable repayment arrangement, and make sure the creditor puts it in writing.
- Credit repair is a term that is often misunderstood, it usually falls into one of these two categories.
- 10 YEARS IS A LONG TIME, ESPECIALLY IN A COUNTRY WHEN YOU NEED A CREDIT HISTROY FOR NEARLY EVERYTING, INCLUDING GETTING A JOB……………………..
- Bankruptcy – WILL IT WORK FOR ME? AS WITH EVERYTHING ELSE, THERE ARE PRO’S AND CON’S -
- YOU DON’T HAVE TO FILE FOR BANKRUPTCY , THERE ARE Alternatives-