Making Your Money Work for You

Financial Classes

Personal Coaching

Making Your Money Work for You Today we’ll talk about…

• Using a spending plan to set goals. • Loan repayment strategies.• Managing your credit report.

“Coaching to support learning has been proven to be an effective and dynamic process that drives the sustainability of training…”

Source: Scott Blanchard, founder, Coaching.com

A spending plan is the foundation of a solid financial future

A spending plan helps you

• Cover necessary expenses, while saving for the future.

• Pay bills on time.

• Be debt free.

• Establish and maintain good credit.

• Reach short and long term goals.

Where do you start?

Develop strategies to increase discretionary income

For effective cash flow management • Compare actual versus estimated monthly

cash; make necessary adjustments.• Identify variable expenses to trim or budget

monthly.• Be realistic about expenses.• Identify needs vs.wants.

Watch out for “cash flow traps”

• Steadily increasing credit card debt.• Trade-up syndrome – spending more as

income rises.• Maintenance expenses (failing to budget

for home maintenance, car repairs, etc.)• Failing to track cash expenditures.

Whenever possible, make your finances “automatic”

• Direct deposit of paycheck.• Bill pay service through checking account.• Payroll deduction/auto-transfer to build savings.• Automatic deduction of insurance premiums, etc.• Automatic “sweep” account for investable cash.• Dividend reinvestment for stock and mutual

funds.

Take control of your debt

• Student loans may be your most significant debt.

• Other life goals are often contingent upon reducing student loan debt.

• Debt repayment strategies should reflect your personal goals.

Student loan options

• Deferment

• Forbearance

• Loan consolidation

• Loan repayment and forgiveness programs

Consumer debt options

• Negotiate a lower rate

• Balance transfer

• Debt consolidation

• Credit Counseling services

• Debt settlement

• Bankruptcy

• Consolidate debt from accounts or loans with higher interest rates to reduce the interest paid.

Pros Cons•Is there a time limit on the low interest rate? •Is there a balance transfer fee?•Some companies will raise rates to 20% or more and charge a late fee if payment is late.

Consumer Debt StrategyBalance transfer to a lower rate card

Consumer Debt StrategyDebt consolidation to an equity loan

Pros• Transfer to a secured loan with lower interest rate. • Interest may be tax deductible (check with a tax advisor).

Cons• Many people feel the burden of debt has been removed and soon can pile up new debt on fresh credit cards. • Missed payments could result in foreclosure and loss of your home.

Beware of Payday Loans!

Should I use extra cash to pay off student loans and credit cards, or contribute to my employer’s retirement plan?

New borrowing

In the next several years, you may need to secure additional credit:

Car loan Home mortgage Education expenses

Good credit is important in achieving these spending goals

Five categories of data determine credit score.

35% Payment history

15% Length of credit history

10% New credit

30% Amounts owed

10% Types of credit used

Percentages show relative importance in determining credit score

Your credit score affects the interest rate you payHow your credit score could affect the cost of a 30-year mortgage for $250,000

FICO score

Annual % rate

Monthly payment

Total interest paid

720-850 5.888% $1,481 $283,132

700-719 6.011% $1,500 $290,232

675-699 6.548% $1,588 $321,705

620-674 7.698% $1,782 $391,540

560-619 8.531% $1,928 $444,000

500-559 9.289% $2,063 $ 492,952

Source: Fair Isaac

Ways to improve and maintain credit score

• Pay bills on time• Minimize credit inquiries• Keep debt to available credit ratio (utilization)

at 30% or less.• Pay off debt instead of moving it around• Avoid closing unused accounts as a short-

term strategy to improve your credit score

79% of credit reports surveyed contained either serious errors or other mistakes…

Source: www.uspirg.org (Federation of State Public Interest Research Groups)

You are entitled to a free credit report (one from each of the 3 national bureaus) every 12 months

•Check for errors that can lower your score •Order your reports through the website, www.annualcreditreport.com, by phone,

877-322-8228, or by writing:

Annual Credit Report Request Service

P. O. Box 105281

Atlanta, GA 30348-5281

What is the best way to develop an effective spending and debt

repayment plan?

It’s Important to Set Specific, Measurable Financial Goals

What is the best way to achieve financial goals that you set?

Financial Coaching

• Create clear goals and accomplish them• Increase self-confidence and make financial

decisions more easily• Explore financial road blocks/challenges

and learn how to get through them• You and your partner are more likely to

work together regarding finances!

Did you know?

Source: Scott Blanchard, founder, Coaching.com

“Successful training takes more than putting people in a classroom and hoping that they will learn, absorb, and retain the material that’s presented…”

“According to industry research, coaching helps people organize their increasingly complex lives, providing focus, a clear direction for setting goals, and the ability to develop meaningful action plans.”

Source: “E-Coaching” by Merry Lee Olson

My Secure Advantage™ (MSA™)

Financial Coaching

Our program helps you focus on the major areas of your finances:

• Improve your budget • Improve your credit • Maximize savings • Retirement planning

My Secure Advantage™

Financial Coaching

MSA™ is a financial wellness program

MSA™ provides a confidential relationship with a professional to help you set and achieve financial goals.

By attending today’s class…

• You have 30-days free access to the MSA™ financial coaching program.

• Let’s get started!

This presentation, and any handouts, were created and/or distributed by CLC Incorporated (CLC) and its Employee Assistance Plan (EAP) client. The presenter hereof is an independent provider of financial and/or insurance services.  The presenter, and his/her broker-dealer or insurance agency, are neither employees nor agents of CLC or the EAP.  This presenter has been retained as an independent contractor for the sole and exclusive purpose of making this CLC and EAP approved presentation.

The information presented is not to be a substitute for seeking advice specific to your situation from a legal or financial professional. If legal or financial advice is required, contact an attorney or financial advisor.

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