1. April 21, 2015  Entry task: List two advantages to having a high credit score. List two disadvantages to having a low credit score.  Target: Identify tools to get out of debt.

3. Today  Understanding Credit Reports worksheet  Take notes on the following presentations:  Payday loans (BAD!!)  Envelope System  Debt snowballing  Credit test Friday!!!  Review ABCs of Credit Booklet on my website and study notes

4. Debt Snowball and Envelope System FROM DAVE RAMSEY’S FINANCIAL PEACE UNIVERSITY

5. The Envelope System  The envelope system is a great way to control spending for in- person purchases (i.e. groceries, entertainment, pet supplies, gifts, etc.).  By planning ahead, you can prevent over-spending.  Also, the brain processes cash purchases differently than credit card purchases. Seeing the money leave your wallet/envelope will make you more aware of how much you’re spending.  *From Dave Ramsey’s Financial Peace University

6. The Envelope System  How it works: 1. First write out a written budget.  Each month, plan out how/when you are going to pay ALL of your expenses for the month. Have a plan for how you are going to spend every dollar that you are earning.

7. The Envelope System 2.After you’ve got your budget in place, on pay day, withdraw cash for all of your in-person expenses (groceries, gifts, clothing, etc.)  Note: You can divide up the month’s expenses across several pay periods.  Example: You budget $400 per month for groceries and get paid 2x per month. You can budget $200 per paycheck for groceries rather than taking all $400 from one paycheck. Groceries Entertainment Gifts

8. The Envelope System  3.Put the money for each expense category into separate, appropriately labeled envelopes.

9. The Envelope System 4.Purchase your supplies using ONLY the money in the envelope.  When it’s gone, it’s gone, no dipping into savings, checking account, etc. If you only have $20 left for groceries, that’s all you can spend. Plan accordingly.

10. Debt Snowball*  The Debt Snowball is a method for paying off debt quickly in a systematic fashion.  You approach paying off your debts in order from smallest to largest to gain momentum over time.  *From Dave Ramsey’s Financial Peace University

11. Debt Snowball  How it works: 1. List your debts in order from smallest balance to largest.  Don’t be concerned with interest rates. 2. Attack the smallest debt by paying as much on it as possible each month.  Pay the minimum balance on your other debts during this time. Start here

12. Debt Snowball 3.Once you pay off one debt, take what you were paying on that debt and add it to the minimum payment of the next debt.  As you pay off each debt, the payments you’re making get bigger (like a rolling snowball picking up more snow, understand?).