1. SPED 664
Consultants:
Nathan Rowe, Rita Holter, Sarah
Streyle

2. In this stage a representative of an organization
contacts a consultant for the purpose of exploring
the possibility of initiating a consulting
relationship.
We have set up a class for the surrounding
community for couples who are in debt and
need to create a workable budget in order
to live within their means. We will be using
1 of those couples as our example.

3. Consultants: Nathan Rowe; Rita Holter, Sarah Streyle
Consultees: Mr. and Mrs. Smith
• 2 children
• Dog
• 4 bedroom house (own, mortgaged)
• 2 cars (1 car loan)
• Enjoy going to their in-laws cabin where they jet ski, tube,
and fish
• Own 2 jet skis
Mr. Smith works as a machinist and Mrs. Smith is a school
teacher. They had a combined income of $ 80,000, but Mr.
Smith’s hours have recently been cut so their income has
been reduced to $ 75,000.

9. • In our scenario, we would have an
informal contract in which the
consultees agree that if they take
our advice, they will be responsible
for the outcome of that advice.

10. • In our case this would simply be
when the class meets once a week.

11. • In this phase the consultant builds trust and a
relationship with the consultee(s). This can
include: Introducing ourselves, learning names,
and telling a personal story about our own
budgeting troubles that we’ve had in the past and
what techniques we used to create a good
working budget. This phase should also include a
confidentiality statement saying that whatever is
talked about in the class will not be kept
confidential.

12. Smiths’ Monthly Fixed Expenses:
• House Payment: $1700
• Home Equity Loan: 350
• Electricity: 200
• Propane gas: 100
• Car Loan: 550
• Car Insurance: 200
• Jet Ski Payment: 200
• Jet Ski Insurance: 50
• Garbage, Water, Sewer 100
• Mrs. Smith’s School Loan: 200
• Life Insurance: 100
• Cell Phone: 75
• Cable/Internet: 150
– (inc. premium channels and high speed internet)
• Health Insurance: 100
• Credit Card: (minimum) 40
• YMCA membership: 50
• Monthly Fixed Expenses Total: $4,165

13. Smith’s variable payments: average last 6 months
• Entertainment Dining out, movies, etc.): $300
• Gas for cars: ($200 to cabin) 600
• Groceries: 450
• Car Repairs: 100
• Misc: 200
• Couple’s Gold League: 200
• Total Average Monthly Variable Expenses: $1850

14. Smith family Gross income $75,000
Income Taxes - 12,000
Take home pay/year $63,000
Take home pay/Monthly $5250.00
Total Monthly Expenses $6,015.00
Monthly Shortage -$ 765.00

15. • The Smiths need to commit to
attending weekly class.
• Agree on one budget option/sign
contract.
• Agree to be honest with consultants.
• Confidentiality will be honored by
consultants.

16. Option #1:
• Sell Jet Ski’s $200.00
• Jet Ski gas 100.00
• Jet Ski Insurance 50.00
• Remove Movie Channels 65.00
• Cancel YMCA membership 50.00
• Cancel Golf League 200.00
• Keep golf course membership 0.00
• Eat out only once a week 100.00
• Sell off jet ski & pay off credit card 40.00
• Monthly Savings $805.00

17. Option #2:
• Rent out extra bedroom $750.00
• Increase in Utility bill -50.00
• Remove Movie Channels +65.00
• Drop YMCA membership +50.00
Monthly Savings $815.00
Option #3:
• Refinance home at 5% interest rate
and consolidate monthly debt (credit card,
student loan, jet skis, home equity loan,
& car loan). Go from a 15 year mortgage
to a 30 year mortgage. $665.00
• Lower car insurance to liability 100.00
• Savings account 50.00
• Extra Money 50.00
Monthly Savings $865.00

18. • Consultants will review all three
options with the Smiths.
• Smiths select an option. The Smith’s chose
to sign a contract using Option 3. Although they did not
like the idea of implementing a 30 year mortgage, they felt
that this was the option that allowed them the highest
success rate. Option 3 allows them to continue their
lifestyle while reducing their monthly spending.

19. • Smith sign contract with each other and the
Consultants. Contract will include behavioral
agreement that Smith’s will not use credit cards
or exceed allowed monthly variable budget.
• Smith’s will electronically transfer $50.00 into
savings account each month to build an
emergency fund.

20. To control variable spending, the Smith family opted to divide
up variable budget dollars into envelopes broken down into
weekly spending.
Entertainment: $ 75.00/per week
Gas $150.00/per week
Groceries $112.50/per week
Misc. $ 50.00/per week
Golf League $ 50.00/per week
Total variable spending allowance: $437.50/per week (4
Weeks = $ 1750.00)

21. • Variable Weekly Spending: $1,750.00
• Consolidated Mortgage Loan: 2,475.00
• Electricity: 200.00
• Propane gas 100.00
• Jet Ski insurance 50.00
• Water, sewer, garbage 100.00
• Life insurance 100.00
• Cell Phone 75.00
• Cable/internet 150.00
• Health insurance 100.00
• Savings 50.00
• YMCA 50.00
• Extra Money 50.00
• Total $5,250.00

22. • The Smiths attended the weekly meetings for six weeks.
Each week the Smiths brought a detailed log of their
expenditures. At the end of the six weeks, the Smiths
found that they were able to stay on budget but needed
more money for groceries as they were not eating out as
frequently. They cancelled their movie channels which
gave them an extra $65.00 each month in their grocery
budget.
• Upon completion of the class, the Smiths completed a
survey. The survey showed that their satisfaction rated
very high. The Smiths were able to achieve their financial
goals of staying within their monthly budget.

23. In our example, disengagement will not be a
surprise to the Smiths. This was a 6 week class
and will no longer be meeting after that time.
The survey given earlier will be used to evaluate
how we, as consultants, did throughout the
process. We will mail a follow-up evaluation to
be completed 1 month after the class ends to
“check in” with the couples to see if they are
continuing to remain on budget.